How to protect yourself from unfair dismissal claims

Two days into the brave new world of the Rudd Government’s Fair Work industrial relations regime and there’s one item terrifying small and medium business owners – unfair dismissal.

Under the previous WorkChoices regime, businesses with 100 staff or less were protected from unfair dismissal but under Fair Work, protection is limited to employers with 15 staff or less.

Even then, these small businesses with 15 or less staff must follow the Government’s Small Business Fair Dismissal Code, which includes a supposedly simple checklist that, if followed, should protect small employers from unfair dismissal claims.

But as workplace lawyer Peter Vitale from CCI Lawyers says, exactly how the Code and Checklist will work relies a lot on the interpretation of the new IR umpire, Fair Work Australia.

“It’s all about how Fair Work makes their assessment of these issues. Are they going to take a strict approach or is the Fair Dismissal Code going to give a bit of slack to employers, for the reasons that have been covered in the debate around this issue?”

To help you better protect yourself from unfair dismissal code, we’ve asked Vitale to go through the checklist point by point. Remember, his advice is general in nature and concerned employers should always seek legal advice – particularly in the early days of the new regime.

Q1. How many employees are employed in the business? (Include full time, part time and regular long-term casual employees, as well as the dismissed employee and any other employee dismissed at the same time.)
– Under 15 employees
– 15 employees or more

COMMENT: This question establishes whether you meet the criteria of a small business under Fair Work.

Q2. Has the employee been employed in this business as a full time, part-time or regular casual employee for 12 months or more?
• Yes
• No

COMMENT: If the answer is ‘No’, the employee cannot make an unfair dismissal claim.

Q3. Did you dismiss the employee because of genuine redundancy, as set out in the Code?
• Yes
• No
If ‘Yes’, explain the reason for the redundancy. (For example, economic downturn, introduction of new technology, therefore requiring less staff, or another such reason.)

COMMENT: This question goes more to the new “genuine redundancy” provisions of the new laws. If the answer is ‘Yes’, you’ll need to provide evidence and documentation to support your claims.

 
Q4. Do any of the following statements apply?

I dismissed the employee because I believed on reasonable grounds that:

a. The employee was stealing money or goods from the business.
• Yes
• No

b. The employee defrauded the business.
• Yes
• No

c. The employee threatened me or other employees, or clients, with violence, or actually carried out violence in the workplace.
• Yes
• No

d. The employee committed a serious breach of occupational health and safety procedures.
• Yes
• No

COMMENT: Pete Vitale says the above reasons are typically given for summary dismissal and usually more clear-cut than termination for performance reasons.

However, you need to make sure you have evidence of a misdemeanor described above, such as police reports, surveillance tapes, financial records that prove fraud or other alleged crimes and statements from witnesses.

“It’s important that you put the allegations to the employee and get their response,” Vitale says. And of course, take notes of that response.”

Q5. Did you dismiss the employee for some other form of serious misconduct?
• Yes
• No

If ‘Yes’, what was the reason?

COMMENT: This question is designed to catch reasons other than those outlined in Q4.

Q6. Did you dismiss the employee because of the employee’s unsatisfactory conduct, performance or capacity to do the job?
• Yes
• No

If ‘Yes’:
a. Did you clearly warn the employee (either verbally or in writing) that the employee was not doing the job properly and would have to improve his or her conduct or performance, or otherwise be dismissed?

COMMENT: Vitale says a warning needs to be given under the new system and it is always preferable that it is in writing – for your sake and the sake of the employee.