For employees
Dismissed by a small business: the 12-month rule, the Code, and your options
Small business employers, meaning fewer than fifteen employees counted by head, get two concessions in unfair dismissal law: employees need twelve months' service instead of six, and a dismissal that follows the Small Business Fair Dismissal Code is taken to be fair. Those concessions are narrower than many employers think and many employees fear. This page explains what changes, what does not, and how to work out whether a claim is worth pursuing.
Updated . General information, not legal advice.
Time limits that apply
| What | Limit | Source |
|---|---|---|
| Minimum employment period with a small business employer | 12 months' continuous service | Fair Work Act ss 382-383 |
| Unfair dismissal application | 21 days from the dismissal taking effect | Fair Work Act s 394(2) |
| Small business employer | Fewer than 15 employees, counted by head including regular casuals | Fair Work Act s 23 |
Do you need a lawyer for this?
Advice usually pays for itself when
- The head count is arguable. Regular casuals count, and a business that says it has twelve staff may have sixteen once they are included.
- The employer relies on the Code but did not give a warning, did not give you a chance to respond, or accused you of serious misconduct without any real basis.
- The dismissal followed a complaint, leave or a protected attribute. General protections has no twelve-month rule and no small business discount.
The free route is usually enough when
- You had less than a year's service, the employer genuinely has fewer than fifteen staff, and nothing points to a prohibited reason. The honest answer is that unfair dismissal is closed, and the free tools confirm your final pay instead.
- Your question is notice, leave and final pay, which the Ombudsman deals with for free.
How is a small business counted?
By head count, not full-time equivalents, at the time of the dismissal. All employees of the employer count, including part-timers and casuals employed on a regular and systematic basis, and including you and anyone else being dismissed at the same time. Employees of associated entities are added in. So a cafe with an owner, four full-timers and eleven regular casuals is not a small business employer even though the roster never has fifteen people on it at once. Employers get this wrong often, and it is the first thing to check because it changes the qualifying period from twelve months back to six and removes the Code entirely.
What does the Small Business Fair Dismissal Code require?
The Code is short. For serious misconduct, such as theft, fraud, violence or a serious safety breach, it allows dismissal without notice or warning where the employer had reasonable grounds to believe the conduct occurred, and reporting the matter to police where relevant supports that. For other dismissals it expects the employer to have warned you, verbally or preferably in writing, that you were at risk of dismissal if there was no improvement, to have given you a reasonable chance to improve, and to have let you respond and bring a support person to discussions. If the employer complied with the Code, the dismissal is not unfair. If it did not, the ordinary test applies and the Commission looks at the whole picture.
What does the twelve-month rule mean in practice?
If you had less than twelve months' continuous service with a small business employer, an unfair dismissal claim cannot be made, full stop. Continuous service includes periods of authorised leave, and regular and systematic casual work with a reasonable expectation of continuing can count. Transfers between related businesses can carry service across. Once you are past twelve months, the small business status still matters because of the Code, but eligibility is no longer in question. The twelve-month rule has no bearing on general protections, on unpaid entitlements, or on discrimination claims, all of which are available from the first day of employment.
What if the employer says it followed the Code?
The Commission checks. A checklist ticked after the event is not compliance. For a performance dismissal the Commission looks for a real warning that dismissal was a possibility, a genuine opportunity to improve, and a chance to respond. For a misconduct dismissal it asks whether the employer's belief was held on reasonable grounds after some investigation, not whether the conduct is later proved to have happened. Small employers without HR support are given some latitude, and the Act tells the Commission to consider the size of the business and the absence of HR expertise. Latitude is not a free pass, and a dismissal delivered by text with no prior warning rarely survives.
When does a lawyer pay for itself?
When the head count is close to fifteen and the employer's status decides whether you can claim at all. When the employer is claiming serious misconduct and you dispute it, because that finding can follow you. When the dismissal followed a protected event, which moves the matter into general protections with no twelve-month gate and no cap. Liquid Employment Lawyers is FairWork Mate's paid legal partner for these matters. It is a law firm, not free government help, and they explain scope and fees before anything starts. Where the answer is that unfair dismissal is simply closed to you, a short conversation will say so, and the free route to your final pay is where the value is.
What is the free route?
The Fair Work Ombudsman on 13 13 94 confirms notice, leave and final pay entitlements and recovers unpaid amounts at no cost, and it explains the Code in plain terms. FairWork Mate's unfair dismissal checker runs the head count and service questions, the notice period and final pay calculators give the figures, and the general protections checker tests whether a prohibited reason is in play. All free general information, not legal advice, and FairWork Mate is not affiliated with the Commission or the Ombudsman.
Free FairWork Mate tools for this
Talk to Liquid Employment Lawyers about this
Share a few details and their team will be in touch to talk it through. No obligation, and you decide whether to go further after that first conversation.
Liquid Employment Lawyers is an Australian employment law firm and FairWork Mate's paid referral partner, not free Fair Work advice. They discuss scope and any fees with you directly. FairWork Mate is not affiliated with the Fair Work Commission or the Fair Work Ombudsman. For free general guidance, use the tools above or call the Fair Work Ombudsman on 13 13 94.
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Common questions
Do casuals count towards the fifteen?
Casuals employed on a regular and systematic basis count. A casual who works one shift at Christmas does not. The head count is taken at the time of the dismissal and includes employees of associated entities.
I was at a small business for eleven months. Is there anything I can do?
Unfair dismissal is closed. General protections, unpaid entitlements, and discrimination complaints are not, and none of them has a minimum period. If the dismissal followed a complaint, leave or a protected attribute, the 21-day general protections deadline is the one to watch.
Does the Code let a small employer sack me for anything?
No. It sets out a process for performance dismissals and a reasonable-grounds test for serious misconduct. Skip the warning or invent the misconduct and the Code does not apply, and the ordinary harsh, unjust or unreasonable test decides the matter.
Is Liquid Employment Lawyers free?
No. It is an Australian employment law firm and FairWork Mate's paid referral partner. Enquiring is free and there is no obligation. The free official route is the Fair Work Ombudsman on 13 13 94.
Does a small business have to pay redundancy pay?
Generally not under the National Employment Standards, though an award or enterprise agreement can require it. Notice and accrued annual leave are owed regardless of size.
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General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.
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