Dismissal Laws: What Stantec and ATM West Cases Mean for SMEs

Recent Fair Work Commission decisions and Federal Court rulings are once again shifting the goalposts for Australian business owners, particularly around dismissals. On September 25, 2026, the Federal Court rejected a judicial review, meaning the Stantec dismissal stands even though the employee wasn’t given notice of the reasons. Just days earlier, on September 20, 2026, another ruling found that ATM West’s waiver of a four-week notice period turned what seemed like a resignation into a dismissal. These cases highlight a complex and often counter-intuitive landscape that can cost SMEs a fortune if they get it wrong.

For a time-poor Australian business owner, these aren’t just legal footnotes. They’re real-world examples of how easily a seemingly straightforward employment situation can unravel, leading to unfair dismissal claims, legal fees, and reputational damage. With bosses already worried that industrial relations rules are stacked against them, as reported by the AFR on September 16, 2026, understanding these nuances is more critical than ever. Let’s break down what these recent developments mean for your business and how you can protect yourself.

The Stantec Case: Notice of Reasons and Fair Dismissal

The Federal Court’s decision to uphold the Stantec dismissal, despite the employee not receiving notice of the reasons, is a critical point for SMEs. While it might seem like a win for employers, it doesn’t give you a free pass to dismiss staff without explanation. The specific circumstances of the Stantec case, where a judicial review was rejected, mean that the original Fair Work Commission decision, which found the dismissal was not unfair, stands. This isn’t about employers being able to withhold reasons; it’s about the very high bar for a successful judicial review of a Fair Work Commission decision. For an Australian SME, the practical takeaway is clear: always provide clear, documented reasons for dismissal. Failing to do so, even if a dismissal ultimately stands, opens the door to protracted legal battles, significant stress, and potentially substantial legal costs. The Fair Work Act still requires a dismissal not to be ‘harsh, unjust or unreasonable’. A lack of transparency around reasons can contribute to a finding that a dismissal was unreasonable, even if the underlying reasons for termination were valid. It’s a reminder that process and transparency are key to mitigating risk, regardless of specific court outcomes.

ATM West: When a Resignation Becomes a Dismissal

The ATM West ruling from September 20, 2026, is a stark warning about the technicalities of notice periods. In this case, the employee resigned, but ATM West waived the four weeks’ notice period. The Fair Work Commission determined that this waiver effectively turned the resignation into a dismissal. This might sound like legal hair-splitting, but for an Australian SME, it has serious implications. If an employee resigns and you, as the employer, decide to let them go immediately, paying them out their notice period, you might inadvertently be creating a dismissal. This then opens you up to an unfair dismissal claim, even if the employee initiated the separation. The cost of defending such a claim, even if you win, can be tens of thousands of dollars in legal fees and lost productivity. The lesson here is to be extremely careful when an employee resigns. If you want them to leave immediately, consider whether you are truly accepting their resignation with immediate effect, or if you are effectively terminating their employment by waiving the notice. Documenting the conversation and the employee’s clear intent to resign, and not be dismissed, is crucial. This is an area where a fractional HR partner can provide invaluable guidance, ensuring your processes don’t accidentally expose you to unnecessary risk.

Industrial Relations Shifts: Union Deals and SME Vulnerability

Beyond individual dismissal cases, the broader industrial relations landscape is also in flux. The AFR reported on September 25, 2026, that a landmark union deal imploded, delivering a significant blow to Labor’s work laws. While the specifics of this deal are complex, its failure highlights the ongoing tension and uncertainty in Australia’s industrial relations environment. For SMEs, this means an unpredictable regulatory landscape where new rules and agreements can emerge, or existing ones can collapse, with little warning. This instability can make long-term workforce planning difficult and increases the risk of non-compliance if you’re not constantly up to date. The AFR also noted on September 16, 2026, that bosses are worried IR rules are stacked against them. This sentiment is understandable given the complexity and the potential for significant penalties. Staying informed about these shifts, and understanding how they might impact your ability to negotiate terms, manage your workforce, and even structure your offshore team, is vital. It’s not just about avoiding fines; it’s about maintaining operational stability and protecting your bottom line.

Mitigating Risk: Practical Steps for SME Owners

Given these recent developments, what can an Australian SME owner do to protect their business? Firstly, review your dismissal processes. Ensure you have clear, documented procedures for performance management, warnings, and termination. Always provide employees with clear reasons for dismissal and an opportunity to respond. This aligns with the principles of natural justice, even if the Stantec case had a specific judicial review context. Secondly, be hyper-aware of notice periods. If an employee resigns, and you want them to leave immediately, seek advice. Don’t assume waiving notice is a simple administrative step. It could be interpreted as a dismissal, as seen in the ATM West case. Thirdly, stay informed about broader industrial relations changes. This doesn’t mean you need to become an IR expert, but having access to up-to-date advice is crucial. This is where an outsourced HR solution, like a fractional HR partner, can be incredibly valuable. They can keep you abreast of legislative changes and ensure your policies and practices are compliant, allowing you to focus on running your business. Understanding how ACTIv8 works can show you how this expertise can be integrated into your business without the overhead of a full-time HR department. Regularly reviewing your employment contracts and policies against the latest rulings and legislative changes is a non-negotiable. It’s about proactive risk management, not reactive damage control. You can explore our plans and pricing to see how we can support your business.

Wondering what this changes for your team? Get in touch with ACTIv8. We run HR for Australian businesses every working day, and the first conversation costs nothing.

Sources

• Stantec dismissal stands despite no notice of the reasons, as Federal Court rejects judicial review (onnotice.com.au)
• Landmark union deal implodes in major blow to Labor’s work laws (AFR)
• Resignation was not forced, but ATM West’s waiver of four weeks’ notice made it a dismissal (onnotice.com.au)
• Bosses worried IR rules are stacked against them (AFR)