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Pendlebury Workplace Law is a specialist workplace relations and employment law legal practice based in Sydney.

High Income Threshold Rises to $133,000

High Income Threshold Rises to $133,000

The Fair Work Commission has increased the High Income Threshold to $133,000 effective 1 July 2014.

The high income threshold affects how modern awards apply to employees and affects their ability to access unfair dismissal.

The high income threshold affects 3 main entitlements:

  1. Employees who earn more than the high income threshold and who are not covered by a modern award or enterprise agreement, cannot make an unfair dismissal claim;
  2. Employees who are covered by a modern award and have agreed to a written guarantee of annual earnings that is more than the high income threshold, do not get modern award entitlements. However, they can make an unfair dismissal claim.
  3. The maximum amount of compensation payable for unfair dismissal is capped at either half the high income threshold, or 6 months of the dismissed employee’s wage – whichever is less.

What’s counted under the high income threshold?

An employee is affected by this if their ‘earnings’ are more than the high income threshold. To calculate ‘earnings’, include:

  • Wages
  • Money that is paid on their behalf (e.g. superannuation top-ups or salary sacrifice)
  • The agreed value of non-monetary benefits (e.g. laptops and mobile phones).

An employee’s earnings do not include:

  • Payments that cannot be set in advance (e.g. commissions, bonuses or overtime)
  • Reimbursements
  • Superannuation contributions that the employer has to make.

Lessons for employers

The increase will enable more employees to access the unfair dismissal provisions. Employers should remain mindful that employees who cannot access the unfair dismissal provisions of the Fair Work Act may still have other legal options to challenge a dismissal. These other avenues include the general protections provisions of the Fair Work Act, anti-discrimination laws, and the common law for breach of contract claims.

Brooke Pendlebury
Sunday, July 6, 2014
Dismissal, General Protection Claims, News