The Fair Work Act and unfair dismissal law for NFPs

The Rudd Government’s Fair Work Act is now in effect, with new application of the unfair dismissal laws commencing from 1 July 2009.  The new regime changes the current tests for employment standards, as well as reinstating the place of collective agreements and awards when discussing the terms of employment.

Unfair dismissal and 'small' organisations

Under the former Work Choices regime, ‘small’ organisations with fewer than 100 employees were exempt from unfair dismissal proceedings.  Of significance to Victorian incorporated not-for-profit organisaitons is the shift in policy which now sees unfair dismissal laws applying to smaller organisations of less than 100 employees. 

For Victorian not-for-profit groups that are covered by the new Fair Work Act, the new laws provide that:

• for organisations with fewer than 15 full-time employees, the unfair dismissal laws will apply to those employees that have been employed for at least 12 months; and
• for organisations with 15 employees or more, an employee must have been employed for at least six months before being able to access the unfair dismissal laws.

The ‘Small Business Fair Dismissal Code' provides assistance for small organisations (ie, those with under 15 employees) on how to act in accordance with the workplace laws, and avoid breaches of the unfair dismissal provisions.  The Code provides that small organisations must give those employees that have been with the organisation for at least one year a formal warning about their performance, together with a reasonable opportunity to enhance that performance, before they can be terminated.  A link to the Code can be found under 'Related Resources' below.