Why am i getting This form is not available online when creating an employee record? the form is a custom Entity(Employee form) and is used on all existing employee records. I did notice i have 1 full license available but the role i am adding is the employee center role and show that license as 15/15 however i ran a report and show 18 users with that role.

I saw this recently. I think the issue is that you don't have any Employee Center licenses left. Normally you would be redirected to a form to request additional licenses- that's the form they're referring to. You can check current users under Setup > Users/Roles > Manage Users.

Employee Centre licence covers a user with just employee centre. A full licence covers users with any other role. However, I find when you run out of EC licences, and you want to give just EC to a new employee, it won't allow is as "you're out of licences". So the User get's given EC and a normal role (something harmless and job related) that then means they use a Full licence.