He threatened violence and punched a whiteboard. The employer still lost.

If you run a small business, you have probably heard of the Small Business Fair Dismissal Code. Plenty of owners treat it like a safety net. Fewer than 15 employees? Follow the Code and you are protected from unfair dismissal claims.

Here is the problem. The Code only protects you if you actually use it. A Fair Work Commission decision handed down this month shows exactly how this goes wrong, even when the employee’s conduct is about as bad as it gets.

What happened

A Melbourne concreting business had a worker blow up after an altercation with a project manager. The employee stormed into the office, yelled and swore at the director, made threats of violence against colleagues, and punched a whiteboard on his way out. Other workers and their spouses were contacting the director, frightened about him returning to the workplace.

If there was ever a case where an employer had a valid reason to dismiss, this was it. The Commission agreed. Threatening and intimidating behaviour is not acceptable in any workplace, grievance or not.

The employer still lost.

Where it fell apart

The business never actually dismissed him properly. No summary dismissal on the day. No warning. No meeting. No letter. The director kept paying him for about a week while they argued back and forth, then simply stopped paying him. The Commission found that stopping the wages was the dismissal.

That meant the case fell into the second stream of the Code, which requires the employer to warn the employee their job is at risk, give them a chance to respond, and a reasonable opportunity to fix the problem. None of that happened. No warning means no Code compliance. No Code compliance means the claim runs like any other unfair dismissal case.

The result: valid reason, unfair dismissal. Both things were true at once.

The sting in the tail

The employer got lucky on remedy. Because the employee’s own conduct contributed so heavily to the dismissal, compensation was reduced to nil. But lucky still meant six months of stress, a formal Commission conference, witness statements and a published decision with the business name on it. All for a case they could have won outright with one proper conversation and a letter.

What the Code actually requires

The Code has two streams. Pick one and do it properly.

• Summary dismissal. If the conduct is serious misconduct, such as theft, fraud, violence or serious safety breaches, you can dismiss immediately, provided you believe on reasonable grounds that the conduct happened and that it justifies dismissal. You still need to make the decision and communicate it clearly, on the spot.
• Everything else. You must tell the employee why their job is at risk, warn them (in writing is best), give them a chance to respond, and a genuine opportunity to improve.

What you cannot do is drift. Letting someone go by cancelling their shifts, going quiet or switching off the pay is the worst of both worlds. You lose the protection of the Code and you hand the Commission an easy finding that no process was followed at all.

Being small is not an excuse

The Commission also considered whether the business’s size and lack of HR expertise excused the process failures. The answer was blunt. No process was followed, so size did not help. Some attempt at procedural fairness was expected. None was made.

Frequently Asked Questions

The takeaway

A valid reason gets you halfway. Process gets you home. Even in the most extreme misconduct cases, you need to make a clear decision, communicate it properly and document it. The Code is short, simple and genuinely employer-friendly, but it is not automatic.

If you are dealing with serious misconduct, the worst thing you can do is wing it. The second worst is going quiet and hoping the problem sorts itself out. Get advice before you act, not after the claim lands. HR Gurus helps small businesses handle dismissals properly, with a risk-managed path that holds up at the Commission. Get in touch.