Tips for small businesses to avoid unfair dismissal pitfalls

Recently, SmartCompany reported on the contrast between unfair dismissal proceedings that were successful and those that were unsuccessful in the Fair Work Commission and noted some pitfalls for companies, in particular, small businesses, to avoid.

1. Unauthorised work 

Employers who discover an employee performing unauthorised work for company clients ‘on the side’ may have grounds for dismissal. While a business certainly can’t stop aspiring entrepreneurs from striking out on their own, the would-be entrepreneurs may want to think twice about working for company clients outside of work hours: See: Monteith v Brandon Electrical Pty Ltd T/A Brandon Electrical [2013] FWC 4348.

2. Procedural Noncompliance

Technicalities and faults with procedure are often the cause of lost cases, with many cases being dismissed or decided against a party simply because that party has not followed procedure to the letter. In a case earlier this year, the Fair Work Ombudsman emailed an applicant about a registration fee of $65.50. The applicant failed to pay so the application was dismissed. In other cases, decisions have been made in an applicant’s favour simply because the respondent employer failed to appear at a scheduled hearing.  A key lesson from this is for businesses to keep track of correspondence and turn up at hearings to avoid a ruling in favour of the applicant, simply because there is no other evidence presented.

4. No Termination

In an unfair dismissal proceeding, the first question is always – has the person been dismissed? Many unfair dismissal claims have arisen in circumstances where the applicant was never actually fired, showing the importance of clarity when providing information on a person’s employment. For example, in December 2010, Stephen Baulch suffered a back injury and was unfit for work for two months; however, a workplace injury claim was rejected, and stated that Baulch was fit to return to work.
Baulch claimed he had been told by his employer, “there’s no work for you” whereas the employer, Armistead disputed this, arguing that it was the medical certificate stating that Baulch was unfit to work that explained why he had said Baulch was not able to return to work at the relevant time.
While the Commission found Baulch was indeed preparing to terminate Baulch’s employment, he did not actually terminate it in this case. As a result, the application was dismissed.

There is a Small Business Fair Dismissal Code which applies to small business employers in the national workplace relations system. A small business is defined as a business with fewer than 15 employees. There is a straightforward Fair Dismissal Code checklist (available here) for small business employers to follow to make sure that they do not unfairly dismiss an employee. Under the Fair Dismissal Code, employees of small businesses cannot make a claim for unfair dismissal in the first 12 months after being employed. Employees of larger businesses are able to make a claim for unfair dismissal at 6 months. If an employer has stringently followed the checklist then the dismissal will be considered to be fair.
 

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