Redundancies by small business employers

The Small Business Fair Dismissal Code does not apply to the termination of the employment of employees employed by small business employers on the grounds of redundancy because such dismissals do not relate to an employee’s “conduct or capacity”.

“Compliance with the Code

I will deal first with the Respondent’s contention that the dismissal was consistent with the Code. I adopt the observations of Deputy President Colman in Solway v Vision Blonde concerning the relevance of the Code to dismissals for reason of redundancy, and in particular the Deputy President’s analysis of the interaction between the Code and the dismissal of an employee for reason of redundancy. In essence, the Deputy President concludes that in its application to dismissals that are not summary dismissals, the Code requires that there be a valid reason for dismissal based on an employee’s ‘conduct or capacity’. As the dismissal of an employee for reason of redundancy is not one that is based on conduct or capacity, but rather on the employer’s business or operational needs, the dismissal in those circumstances is not consistent with the Code. In the present case, as there was no reason for the Applicant’s dismissal related to her capacity or conduct, the dismissal was not consistent with the Code.”

Sposito v Maori Chief Hotel  [2021] FWC 700 delivered 12 February 2021 per Cirkovic C