Small business and dismissal – what do you need to know
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving an employee, a leading hand carpenter, who was summarily dismissed after seven years of employment. The business in question had less than 15 employees so the dismissal needed to comply with the Small Business Fair Dismissal Code ('the Code").
The case centred on allegations of serious misconduct, including workplace bullying, timesheet fraud, and unauthorised use of company resources.
The employee argued he was dismissed without proper procedural fairness and several of the allegations were never actually raised during any meetings. He also disputed claims about timesheet irregularities and workplace bullying and he was also allowed to work in an outside activity and as such there was no employment breach as he had previously disclosed this to the employer.
When examining whether valid reasons existed for dismissal, the FWC scrutinised each allegation and found insufficient evidence of bullying and harassment, that the evidence of timesheet fraud was problematic due to the timing of the timesheet analysis and therefore the inability to assess the source data's accuracy and reliability; but that he had breached the Company Vehicle Policy, acknowledging he may have used his company vehicle for non-work related purposes.
The FWC found serious procedural failures throughout the dismissal process – a decision was made by the employer to dismiss the employee before the employee was given a genuine opportunity to respond to the allegations and that in the meeting with the employee, most of the misconduct allegations were not actually discussed. The FWC also made note that the employer lacked examples and details of the alleged misconduct.
The FWC ordered compensation of $7,335 gross after finding the termination unfair and inconsistent with the Code. However, the FWC applied a 25% reduction for the worker's misconduct regarding unauthorised vehicle use, explaining "While that misconduct was not sufficiently serious to establish a valid reason for his dismissal I am satisfied that the misconduct contributed to the employer's decision to dismiss him."
Key take home lessons include:
Small businesses cannot just fire an employee – it is important that the business follows the Small Business Fair Dismissal Code
Before terminating employment for poor performance or misconduct, ensure you follow an appropriate performance management and disciplinary action framework
If employees have access to company assets, ensure there is a company policy clearly outlining company expectations
Ensure your contract of employment has a clause around working for other companies at the time of employment. If you don’t want this to happen, make it clear!