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1 January Change to Unfair Dismissal Remedy Process

Fair Work Australia (FWA) lacks the jurisdiction to deal with unfair dismissal applications of former employees of businesses that are classified as a "small business employer" if they have been unemployed for less than 12 months. For employers who do not fall within the definition of "small business employer" this period is six months.

A change in how the number of employees an employer employs is determined comes into effect on 1 January 2011. On that date For unfair dismissal purposes an employer is considered a small business employer if the number of full-time equivalent employees is fewer than 15 employees at the earlier of the following times:

  • the time when the person is given notice of the dismissal
  • immediately before the dismissal.

The current method of determining an employer’s number of full-time equivalent employees is rather convoluted, it is worked out as follows:

  1. For each person who was an employee of the employer at any time during the period of 4 weeks immediately preceding the day on which the notice or dismissal time occurs, work out the number of ordinary hours (including parts of hours) of the person as the employer's employee during the period.
    • Note: Subitem (3) sets out what are a person's ordinary hours.
  2. If, during the period, the person took leave to which subitem (4) applies, work out the number of hours of leave to which that subitem applies that the person took during the period.
  3. Add together all of the numbers of ordinary hours worked out under step 1, and subtract all of the number of hours of leave worked out under step 2.
  4. Divide by 152 the number worked out under step 3. The result is the employer's number of full?time equivalent employees at the notice or dismissal time.
    • Note: The number 152 is based on the maximum number of hours that a full?time employee would work in 4 weeks (being 38 hours per week) excluding reasonable additional hours.


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