Small Business Employers will have an easier job of complying
with the Fair Dismissal Code in summarily dismissing employees
following a recent unfair dismissal judgment by Fair Work Australia
(FWA) in Banana Tree Café 
The employer owned a restaurant and the employee was a cook in
The employer noticed that thousands of dollars in cash had been
taken over a period of several months and the only employee present
during almost all of those days was the cook.
On being told of the employer's evidence, the employee did
not accept or deny that he took the money, but offered to repay it.
He later claimed he did so out of fear that he would be deported if
the matter went to the Police; he was on a 457 visa at the
The employer suspended the employee for some weeks during which
several attempts to contact the employee were made but the employee
refused to meet.
The employer also contacted the Police but was advised by the
Police that it would be difficult to secure a conviction on the
evidence, so no report was made.
The employee was then summarily dismissed by letter stating that
"... it is clear that you are responsible for the theft of
monies from your employer".
Decision and Implications for Employers
FWA considered whether the employer, a Small Business Employer,
had complied with the Code. If the summary dismissal was in
compliance, then it would be fair and the employee's claim
In finding that the employer had complied with the Code, FWA
FWA's role is not to determine on the evidence whether a
valid reason for dismissal existed (i.e.: whether the employee did
or did not steal the money)
FWA's role is to determine whether there were
"reasonable grounds on which the [employer] reached the view
that the [employee]'s conduct was serious enough to justify
The determination by FWA will:
be based on the knowledge available to the employer at the time
of the dismissal; and
involve an "assessment of the reasonableness of the steps
taken by the employer to gather relevant information on which the
decision was based"
There is no obligation in the Code that:
the employer must report the theft to Police or
the employer must invite an employee to have a representative
present at a meeting where dismissal is possible (only that the
employer must not frustrate that right if the employee chooses to
Are you a "Small Business Employer"?
Up to 31 December 2010, an employer is a Small Business Employer
if the employer's number of full-time equivalent employees is
less than 15 at the earlier of:
the time when the person is given notice of the dismissal,
immediately before the dismissal.
From 1 January 2011 an employer is a Small Business Employer if
they employ fewer than 15 employees. All employees employed by the
employer (and any associated entities) are to be counted unless
they are irregular casuals.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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