Access to Unfair Dismissal Affected by High Income Threshold
The high income threshold will increase to $129,300 per annum effective from 1 July 2013. The current threshold is $123,300 and will remain in force until 30 June 2013.
Additionally, the maximum amount of compensation that can be awarded by the Fair Work Commission for unfair dismissal, under workplace law, will increase to $64,650 per annum. The amount of compensation is capped at the lesser of six months’ pay or half the high income threshold.
Why is the high income threshold important?
The high income threshold is important because it affects unfair dismissal eligibility and applicable award provisions in certain circumstances:
- employees who earn more than the high income threshold and who aren’t covered by a modern award or enterprise agreement can’t make an unfair dismissal claim under workplace law
- 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 for a future period of 12 months or more can make an unfair dismissal claim under workplace law
What’s counted under the high income threshold?
An employee is affected by unfair dismissal eligibility and application of award coverage if their earnings are more than the high income threshold. To calculate ‘earnings’ include:
- money that is paid on their behalf e.g. salary sacrifice or superannuation top-ups
- the agreed value of non-monetary benefits e.g. laptops and mobile phones
Do not calculate:
- payments that can’t be set in advance e.g. commissions or overtime
- superannuation contributions that the employer has to make
If you need employment law advice about whether or how to dismiss an employee or if you would like any assistance in other employment law matters including employment contracts or immigration law, please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions team on 9635-7966 to speak with one of our employment lawyers about your employment law issues.