Laying Off Staff

Effective 1 July 2009 the Fair Work Act 2009 sees a number of significant changes to the unfair dismissal laws that many small business owners/managers need to be aware of. The most significant of the changes is the removal of the exemption from unfair dismissal for employers with less than 100 employees.

This clearly has made firing staff more difficult and increased the risk of an employee lodging an unfair dismissal claim against their former employer.

So here are some tips on how you can manage the process in a manner that will minimise the risk of breaching unfair dismissal laws and reduce resentment:

  • If in doubt seek advice before taking action be it from government, legal or HR sources
  • Ensure that your employment contracts are legally compliant
  • Have a clear workplace policy on acceptable behaviour
  • Have a clear disciplinary and dismissal procedure that is communicated to staff and ensure it is followed
  • Ensure you have a valid reason for dismissal
  • If this is a performance issue then make certain the employee is informed of their unsatisfactory performance and given sufficient time and re-training to address the issue
  • The punishment must fit the crime – any tribunal will review the fairness of the decision. They will take into account the impact of the dismissal on the employee e.g. Are they nearing retirement age and consider their past employment history e.g. Years of service, previous warnings, performance review notes etc

These are but a few fundamental tips that may help but remember firing staff should be a last resort once re-training and counselling have failed. If you need advice on staff performance issues get assistance from an expert from the outset. Remember do it once and do it right for all concerned!


Richard Kemp – Watts Price Accountants

The advice provided on this Article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs.