The unfair dismissal exemption will cover businesses with fewer than 100 employees; and the employee's qualifying period is to be extended to 6 months service.

The 100 employee threshold is a head count and not calculated on a full time equivalent basis.

The impact of these changes for employers who employ 100 employees or fewer is momentous. Overnight the legislation sweeps away the most significant area of risk for SMEs when dismissing an employee.

Casuals are included in the threshold number but only if they have been engaged on a regular and systematic basis for at least 12 months.

The 100 rule applies to individual employers regardless of whether they are related or members of a corporate group.

Similarly, agency temps are not counted.

The unfair dismissal regime will also exclude:

• Applications by employees whose employment was terminated on the grounds of operational requirements, or grounds that include that ground (i.e. redundancy)
• Employees employed on a seasonal (as opposed to Casual) basis

The unlawful termination provisions will remain unchanged and eligible employees will be entitled to apply for up to $4000 worth of independent legal advice.


Chris J Smith
February, 2006