Associated entities

Associated entities refer to businesses or bodies that have a relationship or connection, often in terms of ownership or control. This concept is important in business law, especially when one entity affects the operations or decisions of another. For example, a parent company and its subsidiaries are considered associated entities. The specifics of what constitutes an "associated entity" are detailed in legal documents like the Corporations Act.

Why associated entities matter for employers

The Fair Work Act takes its meaning of associated entity from section 50AAA of the Corporations Act 2001. It matters because employees of associated entities are counted together when working out whether you are a small business employer, which affects unfair dismissal claims and redundancy pay. A redundancy is also not genuine if the employee could reasonably have been redeployed within an associated entity. For example, if you run two related companies with 9 employees each, you are likely to have 18 employees for Fair Work purposes and not be a small business employer.

Read our guide to genuine redundancy and the definition of a small business employer.