Reminder to employers of changes to unfair dismissal laws from January 1

22 December 2010

From January 1, there is a change in the way a small business is defined for the purposes of Federal unfair dismissal laws.

Currently, a small business employer is defined as an employer who employs fewer than 15 full-time equivalent employees.

However, from January 1, the method of calculation changes and will be based on a headcount of employees, irrespective of the number of hours they work.

The headcount will include casuals employed on a regular and systematic basis, employees of associated entities and the employee/s being dismissed.

There are special unfair dismissal arrangements that apply to these small businesses with fewer than 15 employees.

They recognise that these small businesses usually don't have human resource staff, can’t afford lost time and are unable to find other positions for employees.

These small business employers will benefit from a minimum employment period of 12 months instead of six months. This means that employees of these businesses cannot make an unfair dismissal claim in this 12-month period.

An updated Small Business Fair Dismissal Code Checklist is available at

Employers or employees seeking assistance or further information should visit or contact the Fair Work Infoline on 13 13 94 between 8am and 6pm weekdays.

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Page reference No: 3742