New rules relating to unfair dismissal claims by employees commence on 1 January 2011.

Under the laws that have operated up until the above date, businesses with fewer than 15 employees are classified as a small business and had an exemption from the unfair dismissal laws for a period of 12 months.  Businesses with 15 or more employees have a six month exemption.

The change relates to the definition of a small business.

The method of calculating if an employer has fewer than 15 employee exemption will change from a full time equivilent basis to a headcount basis.  This means that a part time or regular casual employee will now count as one person rather than being counted on a pro rata basis based upon the number of hours they actually work.

The affect of this will be that fewer business will qualify as small businesses and as such will only have the benefit of the shorter exemption period.