Australia’s small business ombudsman has recommended changes to workplace relations rules after reviewing the Small Business Fair Dismissal Code.

Kate Carnell’s review into the Small Business Fair Dismissal Code recommended:

  • Amending the code so small businesses know for sure what constitutes a fair dismissal
  • Clarifying the unfair dismissal claims process for small businesses and staff
  • Providing small businesses with checklists to help them meet their obligations
  • Removing ambiguous language, such as ‘reasonable grounds’, ‘valid reason’ and ‘reasonable chance’

The Small Business Fair Dismissal Code, which came into effect in 2009, is not working in the way it was intended, according to Ms Carnell.

“It is ambiguous and open to interpretation, particularly by lawyers, which means too many small businesses are being pulled into unfair dismissal hearings which are costly and impact productivity,” she said.

“The recommendations in this review aim to give small business operators clear guidelines to deliver certainty around complying with the code. Importantly – the recommended amendments and checklists are designed to guide a small business employer through a fair dismissal process, not to make the dismissal process easier.”

Ms Carnell said a more effective code would improve compliance by small business and reduce the need for lawyers.

“Small businesses can’t afford to engage in costly and stressful legal action,” she said.

“That’s why it’s critical for the code to drive fairness, and set out clear expectations for small business employers.”