on Monday, 02 November 2015.
A decision last week by the Fair Work Commission in Sydney highlights small employers' right and obligations concerning unfair dismissal in New South Wales. The case concerned an apprentice butcher, James Deeth, employed at Milly Hill, a small retail and wholesale butcher based in Kempsey. James Deeth was summarily dismissed (dismissed without notice) by Milly Hill , after he was charged with being an accessory after the fact to murder. The crime had no direct connection to his employer or the business.
Milly Hill, a small business employer, was found by the Commission to have dismissed James Deeth unfairly and to have failed to follow the Small Business Fair Dismissal Code.
Small Business Fair Dismissal Code- what is a small business?
The rules for small business relating to unfair dismissal differ from those for larger businesses. Employees of a small business cannot make a claim for unfair dismissal in the first twelve months following the start of their employment (the period is six months for larger businesses). A small business is defined as one having less than 15 employees (which head count includes regular casual staff). After twelve months , small business employees are able to make such a claim in the event of a dismissal.
In addition, a small business is required to follow the Small Business Fair Dismissal Code in respect of any dismissal of an employee whose employment period has been more than 12 months. The Code does not apply to larger businesses. In the main, if a business follows the Code to the letter , it is likely that a dismissal will be fair. The Code also includes a checklist to assist the employer in deciding whether a dismissal is likely to be fair - while the checklist is not decisive , it does act as a practical procedural guide.
What happened in the Milly Hill case ?
The Fair Work Commission primarily found against Milly Hill because the employer hadn't followed the rules set out in the Small Business Fair Dismissal Code . Under the Code, for a dismissal without notice, the employer has to satisfy two tests. Firstly, the employer must show that he or she believes that the employee's conduct is sufficiently serious to justify instant dismissal. Serious misconduct includes theft, fraud and serious breaches of occupational health and safety procedres. Secondly, the employer must show that there are reasonable grounds for that belief - usually supported by a thorough investigation into the facts leading to the incident leading to the dismissal and its effects.
In the Milly Hill case, the Commission ruled against the employer because he had failed to carry out a proper investigation and formed his opinion as to the seriousness of the conduct without adequate information. For example, he did not give the employee adequate opportunity to tell his side of the story and, in the words of the Commission, 'had a knee jerk reaction to the news that Mr Deeth had been charged '. The Commission also indicated that the employer was more swayed by customer and employee dissatisfaction than he should have been , had he carried out a full investigation into the facts and circumstances.
The case underlines that even though a decision to terminate (even without notice) may be potentially justifiable, getting the procedures wrong around the dismissal can make the dismissal unfair.
Small business owners
All small business owners should be aware of and understand the Small Business Fair Dismissal Code . It sets out a simple process for establishing whether a dismissal is likely to be fair or unfair. The Code covers dismissal without notice for serious misconduct and dismissal following warnings and notice for other dismissals which relate to less serious misconduct.
Counsel on Demand specialises in employment law issues for growing businesses . Call Polly, our principal lawyer on 02 9986 0462.