From 1 January 2011, the definition of ‘small business’ for the purposes of unfair dismissal has changed.
Under the national system, if a small business employer terminates someone and they follow the Small Business Fair Dismissal Code, this cannot be regarded as an unfair dismissal.
A small business employer is defined as someone who employs fewer than 15 employees.
Prior to 1 January 2011, the definition of a ‘small business’ was calculated by taking the total number of hours worked by all employees in a business and dividing it by 38 to find the full time equivalent.
From 1 January 2011, this method of calculation has changed and is now based on a simple headcount of the number of employees in the business - irrespective of how many hours they work. The headcount includes casuals employed on a regular and systematic basis and employees of associated entities.
This brings the definition of a small business for the purposes of unfair dismissal into line with most other elements of the Fair Work Act, such as redundancy.
Small business employers need to check their relevant policies and procedures to ensure that they comply with the changes.
The Australian Sign & Graphics Association
www.signs.org.au
