$133,000 the new threshold for award coverage & unfair dismissal claims
The high income threshold has increased from 1 July 2014. The high income threshold affects how modern awards apply to employees. It also affects employees’ ability to access unfair dismissal.
From 1 July 2014:
• The high income threshold increases to $133,000
• The compensation limit under unfair dismissal increases to $66,500.
Why is the high income threshold important?
The high income threshold affects 3 main entitlements:
1. 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.
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, don’t 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.
Modern Award amendments
Every 4 years the Fair Work Commission must review all modern awards. The reviews may result in the Commission making new modern awards, or varying or revoking (cancelling) current modern awards.
The 4 yearly review commenced on 1 January 2014. The President of the Commission starts each review process by issuing a statement outlining the process of the review. Following this year’s review of Modern Awards, it is paramount that businesses are familiar with any variances or transitional clauses that have been included in the updated Modern Awards.
Feel free to call us on (02) 8882 9694 if you have any queries regarding award coverage of your staff.