Termination of employment in Australia is governed by the Fair Work Act 2009 (Cth), which establishes a national framework for minimum employment conditions. A critical threshold within this framework is the minimum employment period — commonly referred to as the qualifying period — which determines whether an employee can lodge an unfair dismissal claim with the Fair Work Commission (FWC). As of 26 August 2024, the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 introduced a new definition of casual employment and altered the pathway to permanent status, indirectly affecting when a casual employee’s service period starts accumulating for unfair dismissal eligibility. For employees of small business employers (fewer than 15 employees), the minimum employment period is 12 months. For employees of non-small business employers, it is 6 months. These statutory timeframes are strict; an application filed even one day before the period is met will be rejected by the Commission. Understanding the precise calculation of this period, the categories of employees excluded from protection, and the narrow exceptions is essential for any worker considering a challenge to their dismissal.
Minimum Employment Period: Statutory Thresholds
The Fair Work Act 2009 sets two distinct minimum employment periods based on the size of the employer. These periods act as a jurisdictional barrier: the FWC cannot hear an unfair dismissal application unless the employee has served the requisite continuous service.
Small Business Employer: 12-Month Requirement
Section 383 of the Fair Work Act 2009 defines the minimum employment period for a small business employer as one year of continuous service. A small business employer is defined in section 23 of the Act as a national system employer that, at the relevant time, employs fewer than 15 employees. All employees are counted, including casuals who are engaged on a regular and systematic basis, and employees of associated entities. The 12-month period must be completed on or before the date of dismissal. If an employee is dismissed on the 364th day of employment, the application is not valid.
Non-Small Business Employer: 6-Month Requirement
For employers with 15 or more employees, the minimum employment period is 6 months of continuous service. This 6-month threshold applies to the majority of medium and large enterprises in Australia. The calculation of continuous service excludes any period of unauthorised absence or unpaid leave that is not covered by the Fair Work Act or an applicable industrial instrument.
Continuous Service Calculation Rules
Continuous service is calculated from the day the employee commences work. The Fair Work Commission applies section 22 of the Fair Work Act 2009 to determine what constitutes service. Periods of authorised leave — including annual leave, personal/carer’s leave, and long service leave — count as service. Unpaid parental leave does not break continuity but does not count towards the minimum employment period. A transfer of business between associated entities preserves an employee’s continuous service. The Fair Work Commission’s Unfair Dismissals Benchbook (updated July 2023) confirms that a casual employee’s service is calculated from the start of the most recent period of regular and systematic employment that immediately precedes the dismissal.
Eligibility Criteria Beyond the Qualifying Period
Meeting the minimum employment period is necessary but not sufficient. An employee must also satisfy several other criteria on the date of dismissal.
National System Employee Coverage
Only national system employees are protected. This includes the vast majority of private sector employees in all states and territories. Public sector employees in Victoria, the Northern Territory, and the Australian Capital Territory are covered. State public sector employees in New South Wales, Queensland, South Australia, Tasmania, and Western Australia are generally not covered and must pursue state-based remedies. Constitutional corporations and Commonwealth employees are covered.
High-Income Threshold Exclusion
Employees who are not covered by a modern award or enterprise agreement and whose annual rate of earnings exceeds the high-income threshold are excluded from unfair dismissal protection. The Fair Work Commission announced on 1 July 2024 that the high-income threshold for dismissals occurring on or after that date is $175,000 per annum. This figure is indexed annually. Earnings include wages, salary, commissions, and salary sacrifice amounts, but exclude superannuation contributions and bonuses that are not guaranteed.
Genuine Redundancy and Other Exclusions
A dismissal is not unfair if it is a case of genuine redundancy. Section 389 of the Fair Work Act 2009 defines a genuine redundancy as one where the employer no longer required the person’s job to be performed by anyone due to changes in operational requirements, and the employer complied with any consultation obligations in a modern award or enterprise agreement. The employer must also have considered redeployment within the enterprise or an associated entity. Other excluded categories include employees engaged for a specified task or season, trainees whose employment is for a specified period, and employees dismissed during a probationary period that is determined in advance and is reasonable in duration.
The Casual Employment Question
The treatment of casual employees under the unfair dismissal framework has been subject to significant legislative change. The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024, which received Royal Assent on 26 August 2024, introduced a new statutory definition of casual employment and a new pathway for casual conversion.
Regular and Systematic Employment
Prior to the 2024 amendments, a casual employee could only access unfair dismissal protection if their employment was on a regular and systematic basis and they had a reasonable expectation of continuing employment. The Fair Work Commission, in decisions such as Yaraka Holdings Pty Ltd v Giljevic (2006), established that a pattern of regular shifts over a sustained period, with a predictable roster, could satisfy this test. The 2024 amendments do not remove this requirement but clarify that a casual employee’s service period for unfair dismissal purposes is calculated from the commencement of the most recent period of regular and systematic casual employment, even if there were breaks between engagements.
The 2024 Closing Loopholes Amendments
The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 amended the Fair Work Act 2009 to insert a new definition of casual employment at section 15A. An employee is casual only if the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work, having regard to the real substance, practical reality, and true nature of the relationship. The amendments also introduced a new employee-initiated pathway to permanent employment for casuals who have been employed for 6 months (or 12 months for small business employers). While this pathway does not directly alter the unfair dismissal qualifying period, it provides a mechanism for casuals to change their employment status, which in turn affects their eligibility.
Application Process and Strict Time Limits
An unfair dismissal application must be lodged with the Fair Work Commission within 21 calendar days of the dismissal taking effect. The Fair Work Commission’s Annual Report 2022–23 recorded 14,579 unfair dismissal applications lodged, of which 34% were resolved at conciliation and 3% proceeded to formal determination.
Lodging the Form F2
The application is made using Form F2 – Unfair Dismissal Application, which can be filed online through the Commission’s e-filing portal. The form requires the applicant to state the date of dismissal, the employer’s name and ABN, the reason given for dismissal, and the remedy sought. The most common remedy is compensation, capped at the lesser of 26 weeks’ pay or half the high-income threshold ($87,500 for dismissals after 1 July 2024). Reinstatement is the primary remedy under the Act but is ordered in fewer than 5% of successful applications.
Extension of Time Applications
If the 21-day period has expired, an applicant may request an extension of time. The Commission applies the principles set out in Brodie-Hanns v MTV Publishing Ltd (1995) to determine whether exceptional circumstances exist. Factors include the reason for the delay, whether the applicant took action to contest the dismissal, prejudice to the employer, the merits of the application, and fairness between the parties. Extensions are granted in a minority of cases; the Commission’s data shows that approximately 12% of late applications are accepted.
Actionable Steps for Employees
- Confirm your service date precisely. Calculate continuous service from your first day of work, excluding only unpaid leave that is not authorised. If you are a casual, identify the date your most recent period of regular and systematic engagement began. Do not file until you have passed the 6-month or 12-month mark by at least one day.
- Check the size of your employer immediately. Request a list of all employees at your workplace and any associated entities. If the total headcount is 14 or fewer, your qualifying period is 12 months. This headcount includes all regular and systematic casuals and employees on leave.
- Determine your coverage status. Verify whether you are a national system employee. If you work for a state government department in New South Wales, Queensland, South Australia, Tasmania, or Western Australia, you are likely excluded and must seek advice on state industrial relations remedies.
- Calculate your annual earnings. If you are not covered by an award or enterprise agreement, add your base salary, guaranteed commissions, and salary sacrifice amounts. If the total exceeds $175,000 (as at 1 July 2024), you cannot claim unfair dismissal. Superannuation is excluded from this calculation.
- File within 21 calendar days. The 21-day clock starts on the day after dismissal. If you are approaching the deadline and cannot complete a full application, file a partial Form F2 with the essential details and supplement it later. Missing the deadline requires an extension of time, which is not guaranteed.