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Are you a Small Business Employer in an Unfair Dismissal Matter?


It is important to understand whether you are a small business employer as small business employers have different rules when dismissing employees. Under the Fair Work Act 2009, a small business is defined as any business with less than 15 employees.

If you are a small business employer, the rules are less onerous for ending employment. Small business employers are exempt from unfair dismissal claim:

  • If the employee being dismissed has worked for the employer for less than 12 months, or
  • If the employer has followed the Small Business Fair Dismissal Code.

What is a small business?

A small business is defined as any business with less than 15 employees.

To calculate the number of employees, the employer will need to count all employees employed at the time of the dismissal including:

  • The employee and other employees being dismissed at the time,
  • Full-time and part-time employees,
  • Regular and systematic employees employed by the business at the time of the dismissal, and
  • Employees of associated entities.

What are associated entities?

Associated entities are defined in section 50AAA of the Corporations Act 2001. Associated entities are businesses or other bodies that are connected to each other in some way, for example:

  • One business owns the other business for the purpose of a transfer of business,
  • One business has control over the other business,
  • One business has an asset that is an investment in the other business, and
  • One business has an asset that is the beneficial interest in an investment in another entity and has control over that asset.

If you need assistance in relation to an employment matter, please contact our Workplace Relations and Legal Team on (02) 6175 5900.

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