If you are a small business employer wishing to dismiss employees, you must do so according to the Small Businesses Fair Dismissal Code, as breach of the code could result in legal action taken against you. If your business has less than 15 employees, it counts as a small business.
Employees can apply for unfair dismissal if they believe they have been unreasonably dismissed from their job. These cases could include when:
- The dismissal was harsh, unjust or unreasonable
- The dismissal was not a case of genuine redundancy
- The dismissal was not consistent with the Small Business Fair Trading Code.
Employees working for small businesses can only apply for unfair dismissal when they have been employed for at least 12 months. If the business had a change of ownership during their employment, then their time with the first employer may still count as service with the second employer when calculating the minimum employment period.
When dismissing an employee, there are three main valid dismissal reasons:
- Capacity (poor performance)
- Conduct
- Genuine redundancy.
Employers must also adhere to employee entitlements upon dismissal, meaning they must pay:
- Accrued leave and annual leave loading
- Accrued or pro-rata long service leave
- Redundancy pay if applicable
- Outstanding wages.
An employer can make objections to the unfair dismissal claim by submitting an Employer response to unfair dismissal application, or an Objection to application for unfair dismissal remedy.
