Unfair Dismissal: Remuneration Threshold Increases to $118,100

Posted on 04. Jul, 2011 by andrew in News, Uncategorized, events, research

From 1 July 2011 the high income threshold will increase from $113,800 to $118,100. This is particularly relevant to:

• unfair dismissal eligibility; and

• the application of Modern Awards.

Unfair Dismissal Eligibility

Under the Fair Work Act 2009 only “eligible” employees can bring an unfair dismissal claim with Fair Work Australia. One test for eligibility is whether the employee earns over the high income threshold.

The increase to the high income threshold means that employees who earn over $118,100 (and are not covered by a modern award or enterprise agreement) cannot bring an unfair dismissal claim.

Application of Modern Awards

An employer can exclude the application of Modern Awards in relation to employees who earn over the high income threshold. To exclude the application of Modern Awards, employers must provide high income employees with a guarantee of annual earnings. This guarantee takes the form of an undertaking and can be included in an employee’s contract or set out in a separate agreement.

Calculation of an Employee’s Earnings

To determine whether an employee is earning over $118,100 an employer should calculate their wages, amounts paid on behalf of the employee or at the employee’s discretion (such as salary sacrifice arrangements) and the agreed value of non-monetary benefits.

However, an employee’s “earnings” do not include payments for which a value is not ascertainable in advance (such as variable performance bonuses), reimbursements or employer contributions to superannuation.

Further information

If you require any further information email info@humanhand.com.au