In Western Australia, employment laws operate under two different industrial relations (IR) systems. Knowing which one applies to your business is an important first step.
Ending an employment relationship is one of the tougher parts of running a small business. While most business owners want to do the right thing, it’s not always clear what that looks like in practice.
Understanding your employer obligations and following a fair process can reduce the risk of disputes and help you move forward with confidence.
We recap what you need to know about managing terminations, including unfair dismissal and practical steps to get it right.
Your right and obligations in WA
National IR system
Many private sector small businesses in WA are covered by the national IR system. This generally applies to businesses that operate under a company structure, which are covered by this system.
If you employ fewer than 15 employees, your business is considered a small business under the Fair Work Act. In this case, employees need to have worked for you for at least 12 months before they can make an unfair dismissal claim.
Small businesses are also covered by the Small Business Fair Dismissal Code. This Code outlines what is considered a fair dismissal and can help guide your decision making.
Unfair dismissal claims under the national system are handled by the Fair Work Commission.
WA state IR system
Some small businesses in WA operate under the state IR system. This includes sole traders, unincorporated partnerships and some trusts.
While the general principles are similar, there are differences in how termination and unfair dismissal rules apply. This can include differences in notice requirements and how claims are handled. For example, minimum employment period rules differ from the national system, and the 12 month threshold for small businesses does not apply in the same way.
Unlike the national IR system, there is no direct equivalent to the Small Business Fair Dismissal Code. This means small business employers in the WA state IR system do not have the same formal dismissal framework as under the national system, so following clear processes and seeking guidance is especially important.
Claims in the state system are generally handled by the WA Industrial Relations Commission.
If you are unsure which system applies to your business, it is worth checking before taking action. Wageline and the Fair Work Ombudsman both provide tools and advice, and our SBDC business advisers can also provide you with general guidance.
Managing employee terminations the right way
Even when there is a valid reason to end employment, the process you follow matters. The requirements you must meet will depend on whether your business is covered by the national or WA industrial relations system.
For businesses in the national system, this includes complying with the National Employment Standards and following the Small Business Fair Dismissal Code (where applicable). Sole traders and partnerships in WA are generally covered by the state IR system and must follow WA industrial relations requirements.
A fair process usually includes:
- Raising issues early: If there are concerns about performance or behaviour, discuss these with the employee as soon as possible. Be clear about what the issue is and what needs to improve.
- Keeping records: Document key discussions, warnings and any support you have provided. This can help show that your approach has been reasonable and consistent.
- Providing an opportunity to improve: Where appropriate, give the employee time and support to address the issue. Set clear expectations and timeframes.
- Being consistent: Apply the same approach across your team. Treating employees differently in similar situations can increase the risk of a dispute.
- Allowing a response: Before making a final decision, give the employee a genuine opportunity to respond to the concerns raised.
Acting quickly without following a fair process can increase the risk of an unfair dismissal claim, even where there are valid concerns.
Setting clear expectations from the start
Many termination issues can be reduced by setting things up clearly from the beginning of the employment relationship, including during the recruitment process.
- Clear and relevant job descriptions: Develop an accurate and up to date job description (JDF) that clearly outlines the role, responsibilities and required skills. This helps attract suitable candidates and sets expectations from day one.
- Recruitment and background checks: Taking the time to recruit the right person is key. Where appropriate, conduct relevant background checks (such as reference checks, qualifications or licences) to ensure the candidate is a good fit for the role.
- Clear job roles: Make sure employees understand their responsibilities and what is expected of them once they commence employment.
- Employment contracts: Have written agreements in place that outline key terms and conditions, including any probation period.
- Using probation periods effectively: Probation is an opportunity to assess whether the employee is the right fit for the role. Address any concerns early during this time.
- Workplace policies: Clear and simple policies around conduct and performance can help guide both you and your employees if issues arise.
Setting expectations early can make it easier to manage performance and have constructive conversations if needed
Practical tips for small business owners
If you are considering ending someone’s employment, it can help to pause and work through a few key questions:
- Have you clearly identified the reason for the decision?
- Have you discussed the issue with the employee?
- Have you given them a reasonable opportunity to respond or improve?
- Have you followed a fair and consistent process?
- Are you meeting your obligations for notice?
Taking the time to check these points can help you move forward with more confidence.
Get support before you act
Employment matters can be complex, and every situation is different. If you are unsure, it is a good idea to seek advice before making a final decision. The SBDC offers a free, confidential business advisory service to WA small businesses, including support with managing employees and handling disputes.
You can also contact Wageline or the Fair Work Ombudsman for guidance relevant to the IR system your business operates in.
Unfair dismissal claims can be complex, and requirements may vary depending on your business structure and circumstances. Seeking independent legal or HR advice can help ensure you follow a fair and compliant process and reduce the risk of disputes.
