Dismissing an employee is always an uncomfortable event, particularly for small business owners. In a situation of fewer than fifteen (15) employees, relationships tend to be more intimate due to the smaller number of workers within the facility. When a dismissal occurs emotions can run high causing the situation to be more fraught than usual.
Initially, when handling a claim filed by a disgruntled employee for unfair dismissal, you must ascertain if you fall within the Small Business Fair Dismissal Code. To qualify as a small business, the following criteria must be met;
- You must have less than fifteen (15) employees including;
- the employee and any other employees being dismissed at that time
- regular and systematic casual employees
- employees of associated entities; including those employed overseas
Next, the type of dismissal must be defined. An employee can either be summarily dismissed or dismissed for a number of reasons that need to be defined.
Firstly, the action of the employee is serious enough to justify immediate dismissal. These actions include;
- Serious violations of occupational and safety issues
Or, the dismissal occurs when an employee is being let go for less serious concerns including;
- Poor work performance
- Inappropriate conduct
Regardless of the reason for the dismissal, it is crucial that small business owners take precautionary steps to prevent unfair dismissal claims. These protective measures must be in place at the time of hire.
Small businesses should include the following steps in their hiring procedures to clarify the nature, expectations and compensation structure of the position being offered.
- Clarify the job requirements in writing and provide a printed copy to the new employee
- Review the requirements verbally
- Provide the employee with a copy of the employment handbook
- Require the employee to read and sign a statement that they have read the provided handbook
- Define the expected working hours/days
- State the rate of compensation
- Identify the nature of the position; full time, part time, permanent, casual, contract employee
- Review available benefits including superannuation, vacation, sick and holiday time, and personal and family leave available
Subsequent to hiring a new employee, it is always a good idea to make information available regarding the process of performance review, warnings for insufficient work, absences and expected employee conduct and the proper manner in which the employee can file a work grievance. As the employer, be prepared to address these issues readily and in a timely manner.
Hence, if an employee is not performing up to par, address the issues immediately using the following steps as guidance;
- Request the employee come and speak with two or more management personnel in a confidential setting
- Clearly state the reason(s) for the warning
- Explain the consequences of the act/action continuing; including the number of warnings that will be given prior to taking any action including retraining or possible dismissal from employment
- Provide the employee with a written explanation of the warning and the expected consequences if the behaviour does not change
It is equally as important to remember that the dismissal must be fair. In order for the action to be considered fair, one or more of the following requirements must be met;
- The employee resigns of their own choosing
- Fair warning was given by the employer via an employment review of the issues surrounding the dismissal
- Employee opportunity to respond to the warning
- Genuine Redundancy of the position
- Elimination of the position for business reasons
In the event that a complaint for unfair dismissal is filed against your small business, it is important to review the legal requirements of the employee filing the claim. If the employee does not meet the following legal requirements, the claim can be dismissed for procedural noncompliance.
- The claim must be filed within 21 days of the dismissal
- The dismissal must be proved as harsh, unjust or unreasonable
- There must be no evidence of job elimination due to redundancy
- A violation of the Small Business Code occurred
- The employee must meet the minimum employment period
If any of these conditions are present, it is possible the employee’s claim will be dismissed.
To fully protect your small business from claims of unfair dismissal, it is encouraged that all of the above mentioned criteria be a part of your ordinary standard business practices.
Rolf Howard is Managing Partner of Owen Hodge Lawyers.