Small Business Fair Dismissal Code and misconduct cases

This extract from a recent unfair dismissal case deals with the somewhat vexed legal issue of the Small Business Fair Dismissal Code and the  standard of proof required of an employer in alleged misconduct cases.

“Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the

employee can have another person present to assist. However, the other person cannot

be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the

Code if the employee makes a claim for unfair dismissal to Fair Work Australia,

including evidence that a warning has been given (except in cases of summary

dismissal). Evidence may include a completed checklist, copies of written warning(s),

a statement of termination or signed witness statements.

[33] In Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana

Tree Cafe9 Deputy President Bartel said:

[60] At the outset it is appropriate to note that unlike a consideration of the dismissal of

an employee of a business that is not a small business employer, the function of FWA

is not to determine on the evidence whether there was a valid reason for dismissal. That

is, the exercise in the present matter does not involve a finding on the evidence as to

whether the applicant did or did not steal the money. The application of the Small

Business Fair Dismissal Code involves a determination as to whether there were

reasonable grounds on which the respondent reached the view that the applicant’s

conduct was serious enough to justify immediate dismissal. As such, the determination

is to be based on the knowledge available to the employer at the time of the dismissal,

and necessarily involves an assessment of the reasonableness of the steps taken by the

employer to gather relevant information on which the decision to dismiss was based.

[34] In Pinawin T/A RoseVi.Hair.Face.Body v Domingo10 the Full Bench of the Commission

affirmed the above finding and said:

[29] We believe that the approach and observations in these two decisions are correct.

There are two steps in the process of determining whether this aspect of the Small

Business Fair Dismissal Code is satisfied. First, there needs to be a consideration

whether, at the time of dismissal, the employer held a belief that the employee’s conduct

was sufficiently serious to justify immediate dismissal. Secondly it is necessary to

consider whether that belief was based on reasonable grounds. The second element

incorporates the concept that the employer has carried out a reasonable investigation

into the matter. It is not necessary to determine whether the employer was correct in the

belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers

may approach the matter differently and form different conclusions, perhaps giving

more benefit of any doubt, but still be acting reasonably. The legislation requires a

consideration of whether the particular employer, in determining its course of action in

relation to the employee at the time of dismissal, carried out a reasonable investigation,

and reached a reasonable conclusion in all the circumstances. Those circumstances

include the experience and resources of the small business employer concerned.

[2023] FWC 1887


[35] I have applied these principles to the matter before me.”


S v CSS  [2023] FWC 1887 delivered 4 August 2023 per Bissett C