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If you don't follow the dismissal procedure correctly or the impact of terminating an employee is considered harsh in the circumstances, the dismissal might be deemed 'unfair' – even though there may be good reason for it.
You cannot terminate or disadvantage an employee for:
- Reasons that breach discrimination laws
- Temporary absence for personal illness or injury (less than three months unpaid personal leave)
- Making an enquiry or complaint about their employment
- Exercising a workplace right, such as a right to carer’s or parental leave
- Absence due to a workplace injury (for a period of 12 months).
These restrictions apply even if your employee doesn’t meet the requirements for unfair dismissal.
An employee can make an unfair dismissal claim if they:
- Have been employed with your business for a minimum of 12 months (for small businesses with less than 15 employees) or six months (for all other employers)
- Are covered by a Modern Award or enterprise agreement
- Aren’t covered by an Award or agreement but earn less than $145,400 (rate at 1 July 2018).
A casual employee might claim unfair dismissal if they were employed on a regular basis and reasonably expected their employment to continue.
Fair Work Commission assessment
To decide whether termination was unfair, the Fair Work Commission will consider the impact of the termination on the employee – taking into account their age, family responsibilities and prospects for re-employment. It will also consider whether:
- There was valid reason for dismissal based on the employee’s capacity or conduct
- The employee was notified of the reason for termination
- The employee was given an opportunity to respond to any allegations
- The employee was unreasonably refused a support person
- Warnings were given (if related to performance)
- An alternative to termination would have been more reasonable in the circumstances.
Small business dismissals
Businesses with less than 15 employees (including associated companies) can demonstrate that a dismissal is fair by following the steps outlined in the Small Business Fair Dismissal Code.
An employer doesn’t have to follow this code, but if the FWC is satisfied the dismissal is consistent with the code, the employee will not be unfairly dismissed.
If you’re a small business operator you may be able to dismiss an employee without notice or warning if you reasonably believe the employee’s conduct is serious enough to justify immediate dismissal.
Examples of serious misconduct include theft, fraud, violence or serious breaches of occupational health and safety procedures.
For a dismissal to be deemed fair, the theft, fraud or violence allegation should be reported to the police – though this isn't essential. You must however, have reasonable grounds for making the report.
If you need help managing an employee without breaching general protections or actioning a dismissal in a fair and legal way, contact Master Builders’ Workplace Relations team.
Need more information?
If you haven’t found the answer to your questions on our website, give us a call or email us.