The onus for small business with serious misconduct

If you’re a small business employer and you’re confronted with serious misconduct in your workplace, it’s important to use the Small Business Fair Dismissal Code when terminating an employee who has been employed for 12 months or more. The Code provides that a dismissal without warning and notice is fair where there is a reasonable belief that an employee’s conduct is sufficiently serious to justify an immediate dismissal. Therefore, an employer needs to consider whether an employee’s particular conduct is sufficiently serious to be considered ‘serious misconduct’.

Serious misconduct generally includes theft, fraud, violence or breaches of WH&S procedures. In applying the Code, Fair Work Australia will consider whether an employer has taken reasonable steps to gather relevant information in making the decision to terminate an employee. There’s no need to prove an allegation of serious misconduct or report it to the police, but the conduct in question must be fairly and reasonably investigated.

In Khammaneechan v Banana Tree Cafe, the employer believed a cook had stolen money from the cafe because an investigation pointed to a shortfall in takings each shift the cook was rostered to work. When the employer raised his concerns with the cook, the cook didn’t deny responsibility and asked the employer not to forward the matter to the police. Whilst the evidence wasn’t sufficient to prove the cook’s guilt, based on the findings of the investigation and the interactions with the cook, the employer suspended and ultimately dismissed the cook. FWA found that in ‘all the circumstances’ the employer had reasonable grounds to believe the cook had engaged in serious and wilful misconduct. Therefore, the decision to summarily dismiss the employee was not unfair.

Key Point: Small business employers must investigate serious misconduct to ensure that “in all the circumstances” they believe the relevant employee’s conduct is sufficiently serious to justify immediate dismissal. The steps taken to gather information during the investigation must be taken fairly and reasonably. The employer can then rely on the Code to summarily dismiss the employee.