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What is the minimum period of employment for unfair dismissal claims?

24/11/2020

Before an employee is eligible to make an unfair dismissal application, they must have completed the ‘minimum employment period’. If the employee works for a ‘small business’ which has less than 15 employees, the minimum employment period is one year. If the employee works for a business with 15 or more employees, the minimum employment period is six months.

 

How do I know if my employer is a small business?

The number of employees in a business is determined by a simple head count of all permanent employees and regular and systematic casual employees. For example, a business would not be a small business if it had:

  • 5 permanent full time employees;
  • 7 permanent part time employees; and
  • 4 casual employees that regularly work full time hours.

In this scenario, the employer would have a total of 16 employees and would not be considered a small business. As a result, the minimum employment period would be six months.

Conversely, a business would be a small business if it had:

  • 10 permanent full time employees;
  • 2 permanent part time employees; and
  • 4 casual employees who worked occasional shifts.

In this scenario, the employer would only be considered to have 12 employees and would therefore be considered a small business. As a result, the minimum employment period would be one year.

The employee that is actually being dismissed is also counted as an employee, as is any other employee who is being dismissed at the same time. Employees in associated entities are also counted.

How is service calculated?

The period of employment starts on the same day the employee commences and ends on other the day the employee is notified of the dismissal or immediately before the dismissal, whichever is earlier. This is important as an employee may receive notice of the dismissal within the six months however it might only take effect after six months. In this case, the employee will not have completed the minimum period of employment and will not be protected from unfair dismissal.

Certain periods are excluded from service when calculating the minimum employment period. For example, any unauthorised absence from work will be excluded, as will any period of unpaid parental leave or personal / carer’s leave. Community service leave (such as jury service) is counted, as are certain stand downs. Any resignation or termination will obviously break the period of service, as will certain transfers of employment from one entity to another.

What if I am still unsure?

If there is any uncertainty around whether your employer is a small business or whether you have completed the minimum period of employment, it is best to obtain legal advice as quickly as possible.

 

Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances.