His coaching career began at Whitburn Junior F.C. before going on to manage Stenhousemuir, however after a dispute with the board over a signing he resigned in October 2001. He then took over at Scottish Junior club Bo'ness United, but controversially resigned on the eve a Scottish Cup semifinal in March 2003 to become the manager at Dumbarton. At the time Dumbarton were in relegation trouble in the Scottish Second Division, but with only 6 games to go of the season he turned fortunes around and kept the club in the league, including a 4-1 win over league winners Raith Rovers.
Fairley led the club to 3rd place in the same league the following season in his only full season in charge. Narrowly missing out on automatic promotion on the last day of the season to 2nd placed Hamilton Academical by 2 points. Dumbarton were unable to repeat that success the following season and Fairley resigned in December 2004.