In response to some recent decisions of Fair Work Australia, the
Government has made a number of changes to the Small Business Fair
Dismissal Code Checklist ('the
Checklist'). It is prudent that small businesses are
aware of the changes made to the Checklist as the changes may
affect their current procedures relating to termination of
employees, particularly redundancies.
For the purposes of the Code, a small business is a business
which employs less than 15 full time equivalent employees
(including casual employees who work on a regular and systematic
basis). The Small Business Fair Dismissal Code Checklist
('the Code') came into effect on 1 July
2009. Primarily, the Code provides:
The doubling of the minimum employment period from 6 to 12
months, during which time employees cannot take a claim for unfair
A short and simple Fair Dismissal Code which, if followed by
the small business owner, will ensure a dismissal is not
Fair Work Australia has developed the Checklist to give some
guidance to small business owners on how they need to approach
problems where they may need to consider terminating or retrenching
employees. The preamble to the Checklist and the Checklist itself
can be accessed using the following link (part of the Fair Work
The key changes implemented on 16 July 2010 relate to
redundancies and the rights of an employee to have a support person
present during discussions about potential performance or
The following is a summary of the recent changes made to the
The Checklist now refers to section 389 of the Fair Work Act
2009. This section provides the requirements for employers to
determine whether a dismissal was a genuine redundancy. It is
important that in addition to completing the checklist that
employers ensure all requirements set out in section 389 of the
Fair Work Act 2009 have been complied with prior to making
final decisions on the retrenchment of employees
Previously, the Checklist simply asked employers to answer
'Did you dismiss the employee because it was a genuine
redundancy?'. This has been expanded to include; 'In other
words, was the dismissal because you didn't require the
person's job to be done by anyone because of changes in the
operational requirements of your business?'
Further to the questions regarding redundancy, the checklist
includes a question which is intended to remind small business
owners that employees or their representatives must be consulted,
in accordance with consultation clauses provided for in modern
awards, prior to decisions regarding redundancy
One further change made to the Code was to highlight the
importance of employees being afforded the opportunity to have a
support person present during discussions relating to possible
Whilst the Checklist is an excellent guide in assisting small
business owners to develop employment practices relating to
termination and redundancy in line with the legislation;
the preamble to the checklist now clearly states that
'completing the Checklist does not mean that the Code has been
complied with' and that the purpose of the document is to
simply to 'help small business employers assess and record
their reasons for dismissing an employee'.
We can provide assistance to you or your small business clients
with respect to compliance with the Fair Work Act 2009 and / or
development of employee management practices.
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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