Last Updated on 19/09/2025 by Damin Murdock
Small hospitality businesses, such as family-owned cafes or small restaurants, often operate with fewer than 15 employees. Recognising their limited resources, the Fair Work Act 2009 (Cth) provides the Small Business Fair Dismissal Code (the Code) to guide how they manage terminations. Understanding and applying the Code is essential for small hospitality employers to avoid unfair dismissal claims.
Small Business Fair Dismissal Code
The Code allows immediate dismissal without notice where an employee commits serious misconduct such as theft, violence, fraud, or serious breaches of health and safety. However, the employer must hold a reasonable belief that the misconduct occurred, and evidence should be documented.
For all other dismissals, small business employers must provide a valid reason related to conduct or capacity, give the employee a chance to respond, and issue a warning that continued poor performance could result in dismissal.
The Code also requires employers to use a checklist to document compliance. While the Code simplifies the process, the Fair Work Commission will still scrutinise whether the employer genuinely complied.
Common pitfalls for small hospitality employers include dismissing staff without evidence, failing to provide a clear warning, or not allowing the employee to respond. The Commission has found dismissals unfair where employers dismissed staff abruptly without following the Code, even in small businesses.
Practical Steps
- using the Code’s official checklist,
- documenting reasons for dismissal,
- keeping records of warnings and meetings, and
- ensuring staff are given an opportunity to respond.
Employers should also ensure that misconduct allegations are investigated and substantiated before dismissal. The risks of failing to comply include unfair dismissal claims, financial penalties, and reputational harm within the local community.
Bottom Line
The Small Business Fair Dismissal Code offers small hospitality employers a fair and legally compliant pathway for dismissals. Strict adherence to the Code protects employers while ensuring employees are treated fairly.
Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
