Change to small business definition

On 1 January 2011, the definition of what constitutes a small business changed.  From that date, businesses must have fifteen of less employees based on a head count of employees, rather than full-time equivalent employees, to be considered a small business.  Your employee headcount should now include full time, part time and regular casual employees.

This change has the greatest impact on unfair dismissal qualifying periods.  Businesses that are no longer regarded as small businesses will not be able to rely on the small business unfair dismissal exemption.  This exemption stipulates that an employee must have been employed for at least 12 months before qualifying for unfair dismissal coverage.  Instead, employees will able to qualify for such coverage in six months.

It is important to determine whether your business qualifies as a ‘small business’.  If it does not, seek professional advice in order to come up with the best employment strategy.