Summary dismissal by small business employers

Today I am publishing an extract from a recent Fair Work Commission unfair dismissal decision which sets out the legal principles which apply to  the dismissal of an employee by a small business employer under the Small Business Fair Dismissal Code.

“Consideration

[46] The Full Bench in Grandbridge Limited v Mrs Diane Wiburd (Grandbridge) 19 set out the issue to be considered in determining whether a dismissal was consistent with the Summary Dismissal section of the Code as follows:

“The proper inquiry raised by the Code is relevantly, whether at the time of the dismissal the employer genuinely believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. The Code focusses attention on the employer’s belief which must be based on reasonable grounds, not on whether the employee’s conduct as a matter of fact and law justified immediate dismissal.” 20

[47] The decision in Grandbridge drew on the decision in Jeremy Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services (Ryman) 21 in which the Full Bench stated as follows:

“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:

(1) If a small business employer has dismissed an employee without notice – that is, with immediate effect – on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.

(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.” 22

[48] Drawing on the decisions in Grandbridge and Ryman, in determining the Respondent’s jurisdictional objection the Commission needs to decide whether it genuinely believed on reasonable grounds that Mr King’s conduct warranted immediate dismissal. As also stated in Grandbridge, the question to be determined is not whether the employee’s conduct as a matter of fact and law justified immediate dismissal.

[49] The meaning of reasonable grounds was considered by Deputy President Sams in Peter Williams v P & J Cole Investments Pty Ltd t/a Savins Radiator Services 23 where he observed as follows:

“[76] In my opinion, the meaning of ‘reasonable grounds’ in the Code is that the grounds are ‘reasonable’ when viewed from the standpoint of what a reasonable person would conclude as grounds which are credible, sensible, logical or plausible; see also: Construction, Forestry, Mining and Energy Union v HWE Mining Pty Limited [2011] FWA 8288 (‘HWE Mining’).” 24

King v SA Van Grootel Pty Ltd T/A Shady Willows Holiday Park (2020) FWC 3621 delivered 13 July 2020 per Kovacic