Small Business Fair Dismissal Code

Small Business Fair Dismissal Code


During the course of your business, you may be required to terminate an employee. The Small Business Fair Dismissal Code operates to help employers follow a fair process and protect against unfair dismissal claims when terminating employees.

The Fair Work Commission will deem a dismissal to be fair if an employer follows the Code and can provide evidence of this. The Code defines a small business as one with fewer than 15 employees. These can include both permanent or casual workers employed on a regular and systematic basis. Staff members who have been employed for less than 12 months are not eligible to place an unfair dismissal claim. If a worker is terminated after this period of time but the employer has followed the Code, then the dismissal will be regarded as fair by the Commission.

The Code outlines when it is fair to dismiss an employee in the following instances:

  • Summary dismissal:
    If an employer believes that a staff member’s conduct is sufficiently serious to justify immediate dismissal, then it is fair to terminate that employee without notice or warning. Serious misconduct includes theft, fraud, violence and significant breaches of occupational health and safety procedures.
  • Other dismissals:
    In some cases, an employer must give their employee a reason as to why they are being dismissed. This must be valid and based on the worker’s conduct or capacity to do the job required. The employer must provide the reason either verbally or in writing, and give the employee the chance to respond and potentially rectify the problem.
  • Procedural matters:
    If an employee is aware that dismissal is possible, they can choose to have another person present to assist them or be a witness. This person, however, cannot be a lawyer acting in a professional capacity. This can be helpful in the circumstance of an unfair dismissal claim to Fair Work which requires evidence of compliance with the Code.

The Small Business Fair Dismissal Code includes a checklist that is designed to help employers ensure they follow a fair and systematic process when terminating their staff. It would benefit employers to read the Code thoroughly prior to filling out the checklist to determine their responsibilities, the employee’s rights and the procedural requirements they need to follow for a fair process.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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