A significant part of the recent changes to the unfair dismissal rights for the employees of small businesses under the Fair Work Act 2009 (the Act) was instituting Small Business Fair Dismissal CodeChecklist (the Code). This was in response to latest decisions of Fair Work Australia (FWA).

All small business must be aware of these changes, as they will have a direct impact on the measures involving termination of employees in small business, mainly redundancies.

This new change in law is designed to give small businesses (employing less than 15 employees) with an easy set of procedures for the fair termination of employees. The Code came into effect on1 July 2009. The Code mainly gives two set of guidelines. Firstly, the minimum employment term has been doubled to 12 months; the employees cannot file a claim for unfair dismissal for this period. Secondly, if small business owners carefully follow these simple set of guidelines for the fair termination of employees from the Code, it will automatically guarantee that any dismissal of an employee is not unfair.

Key Changes

The focus of the changes to the Code's checklist is mainly on redundancies and the rights of an employee. Below is the summary of the latest changes to the Code:

Complying with s 389 of the Act – One of the changes include compliance with s 389 all the employers shall comply with all the requirements of this section to make sure that the termination was a fair discharge.

The checklist also consists of another question to remind small business owners that they must follow the consultation clause which states that the before taking a final decision of terminating an employee, the employers must consult either the employee or his/her representative.

Earlier, the checklist asked a simple question to the employers: If the employment was dismissed because of a genuine redundancy? Now this question has been extended to "'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?'.

Another change to the Code is related to the rights of an employee.  Before the final decision regarding the termination, every employee must be provided with a support person to attend the discussion relating to the redundancy issues.

Although, it is true that if the small business employers comply with the Code when dismissing an employee, the dismissal will be considered fair. But the preamble of the checklist evidently states that compliance with the Checklist does not necessarily mean compliance with the Code.

The below link from the FWA website provides the checklist of how the small business owners need to reflect on termination of any employment