Small Business Employers will have an easier job of complying with the Fair Dismissal Code in summarily dismissing employees following a recent unfair dismissal judgment by Fair Work Australia (FWA) in Banana Tree Café [2010] FWA 7891.
Background
The employer owned a restaurant and the employee was a cook in the business.
The employer noticed that thousands of dollars in cash had been taken over a period of several months and the only employee present during almost all of those days was the cook.
On being told of the employer's evidence, the employee did not accept or deny that he took the money, but offered to repay it. He later claimed he did so out of fear that he would be deported if the matter went to the Police; he was on a 457 visa at the time.
The employer suspended the employee for some weeks during which several attempts to contact the employee were made but the employee refused to meet.
The employer also contacted the Police but was advised by the Police that it would be difficult to secure a conviction on the evidence, so no report was made.
The employee was then summarily dismissed by letter stating that "... it is clear that you are responsible for the theft of monies from your employer".
Decision and Implications for Employers
FWA considered whether the employer, a Small Business Employer, had complied with the Code. If the summary dismissal was in compliance, then it would be fair and the employee's claim would fail.
In finding that the employer had complied with the Code, FWA held that:
- FWA's role is not to determine on the evidence whether a valid reason for dismissal existed (i.e.: whether the employee did or did not steal the money)
- FWA's role is to determine whether there were "reasonable grounds on which the [employer] reached the view that the [employee]'s conduct was serious enough to justify immediate dismissal"
- The determination by FWA will:
- be based on the knowledge available to the employer at the time of the dismissal; and
- involve an "assessment of the reasonableness of the steps taken by the employer to gather relevant information on which the decision was based"
- There is no obligation in the Code that:
- the employer must report the theft to Police or
- the employer must invite an employee to have a representative present at a meeting where dismissal is possible (only that the employer must not frustrate that right if the employee chooses to exercise it).
Are you a "Small Business Employer"?
Up to 31 December 2010, an employer is a Small Business Employer if the employer's number of full-time equivalent employees is less than 15 at the earlier of:
- the time when the person is given notice of the dismissal, or
- immediately before the dismissal.
From 1 January 2011 an employer is a Small Business Employer if they employ fewer than 15 employees. All employees employed by the employer (and any associated entities) are to be counted unless they are irregular casuals.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
