The current unfair dismissal exemption for businesses with 100 employees or fewer will be abolished. It is critical that small to midsized businesses understand how the definition of small business is to be applied in the new laws.

In Issue 3 of our Newsletter we reported on the proposed introduction of the Fair Work Bill and new unfair dismissal laws. On the 20th March, 2009 The Federal Government introduced the Fair Work (Transitional and Consequential) Bill 2009 into Parliament. The key elements to commence on 1 July 2009 include the new unfair dismissal scheme, collective bargaining, transfer of business, employee protections and right of entry rules.

A key one for small to medium businesses is the Unfair Dismissal Laws. The current unfair dismissal exemption for businesses with 100 employees or fewer will be abolished. It is critical that small to midsized businesses understand how the definition of small business is to be applied in the new laws.

• Until 1 January 2011, the threshold used to define a small business for the purpose of applying the unfair dismissal arrangements will be businesses with less than 15 Full Time Equivalent employees.
• The number of full time equivalent employees is to be calculated on a straightforward basis by averaging the ordinary hours worked by all employees in the business over the 4 week period immediately prior to the employee’s termination, and dividing that by 38, being ordinary weekly hours.
• From 1 January 2011, the threshold used to define a small business for the purpose of applying the unfair dismissal arrangements will be based on a simple headcount of employees as provided currently in the Fair Work Bill.

If you have any concerns about the new laws as they apply to your business please contact Your HRmanager on (02) 9415 3561.