Small Business Minimum Employment Period before Termination

Under the Fair Work Act, a small business employer (a business with less than 15 employees), are able to lawfully dismiss an employee if they comply with the Small Business Fair Dismissal Code when terminating an employee.

Author: Clarissa Sempel

26 July 2021

Under this Code, there is a minimum period of employment of 1 year that must be completed before an employee would be able to consider bringing an Unfair Dismissal Application (among other requirements).

On 14 July 2021 in Brisbane, the case of Sherman -v- NYK Forklift Services was brought before the Fair Work Commission with a question about whether the minimum employment period had been completed.

The employee had commenced employment on 2 March 2020 and had been terminated late on 1 March 2021.

The employer put before the Commission that the employee had not completed the 1 year minimum (which expired the next day).

However, the employee put to the Fair Work Commission that as they had completed their work on 1 March 2021, their dismissal would take effect the next day which would mean he was employed on that day and the dismissal taken effect on the next day. In addition, the employee also said that he was paid 1 week in Lieu of Notice which extended his employment until 8 March 2021.

The Fair Work Commission found that the payment in Lieu of Notice was not relevant and that the difference between Commencement of Employment and Notification of Dismissal was “364 days and approximately 6 hours”, which means that the employee had not completed the minimum period of employment.

This case shows that when looking at minimum employment periods, an employer and employee should consider the timing right down to the wire.

If you have been unfairly dismissed or have a former employee bringing an Unfair Dismissal Application, ALG can assist you to the bring or defend a claim.

Seek our early advice so that you can lawfully dismiss an employee and reduce the chances of a claim being made.

If you are unsure if you have a claim, we would be able to assist you to provide you with that initial advice on the requirements under the Fair Work Act.

Contact the ALG team on (02) 4220 7100 or by email at lawyers@alg.com.au to book a free half-hour initial consultation.

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