Unfair dismissal and the small business exemption

Business Australia

The term unfair dismissal is taken to mean the dismissal of the employee due to stated unsatisfactory employment performance but which is later found to be ‘unfair’. Callus and Sutcliffe defined unfair dismissal as: “A situation in which an employee, who has been dismissed summarily from a job, is subsequently found by a court or tribunal to have not been, according to the terms of their employment contract, rightfully subject to dismissal.”

This background note discusses the attempts to exclude small business from the federal termination of employment provisions and specifically those provisions allowing employees who perceive their dismissal to have been ‘harsh, unjust or unreasonable’ (unfair) to contest the dismissal via application to the Australian Industrial Relations Commission. It primarily covers the period from 1996 during small business policy formulation, through the unsuccessful attempts to implement the policy via a number of regulations and Bills up to the exclusion based on numbers employed by the employer as it currently appears in the Workplace Relations Act 1996, effective from 27 March 2006. The Rudd Labor Government’s proposal for unfair dismissals and small business is also discussed by way of comparison to the earlier attempts.

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