Dismissal and Redundancy for Small business

Dismissal and Redundancy for Small business

Terminating an employee is often a traumatic and difficult time for all concerned.  This is not only from an interpersonal basis but also from a legal perspective. A wrong decision or interpretation can catapult you into the world of courts, significant legal expenses, fines, reinstatements and most importantly loss of focus on the business imperatives. This article therefore attempts the provide clarity as to your obligations, as a small business, and how to ensure that the termination is enacted in a manner that best protects your interests against unfair dismissal claims

Dismissal or Redundancy

Determining whether a termination is a dismissal or a redundancy is an important distinction to make in that it reflects directly on your obligations as a small business.
A good way to answer this question is to ask if the termination is a consequence of the position significant changing, or disappearing altogether, or whether the employee is not meeting the requirements implicit in Job description that defines the position. The former will be defined as a redundancy and the latter a dismissal.  

There is a simple Fair Dismissal Code checklist (available below) for small business employers to follow to ensure that they do not unfairly dismiss an employee. If an employer has strictly followed the checklist then the dismissal will be deemed to be fair.

Under the Fair Dismissal Code, employees of small businesses cannot make a claim for unfair dismissal in the first 12 months after being hired. Employees of larger businesses are able to make a claim for unfair dismissal at 6 months.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning/(s), a statement of termination or signed witness statements.
The Fair Work Ombudsman has provided a checklist for small employers to ensure that the termination is fair. If the employer follows the checklist, then the termination will be deemed as fair.