From 1 July 2010, the high income threshold for determining
eligibility to make unfair dismissal claims will rise from $108,300
to $113,800. The high income threshold amount is calculated and
indexed annually, thus employers can expect changes to this figure
again in 2011.
Employees who earn over the high income threshold are prohibited
from making an unfair dismissal claim against an employer. There
are, however, some notable exceptions to this exclusion. For
instance, an employee who earns in excess of the threshold
will not be precluded from lodging an unfair
dismissal claim if that employee is covered by an award or an
enterprise agreement.
Employers should note that, as of 1 July 2010, the maximum
compensation available for an unfair dismissal will also increase
to $56,900 (this figure amounts to half of the high income
threshold).
Useful information for employers
In assessing whether an employee is earning above this
threshold, the following are to be included in any
calculation:
- wages;
- amounts applied or dealt with in any way on the employee's
behalf or as the employee directs (eg superannuation top-ups,
salary sacrifice);
- the agreed monetary value of non-monetary benefits (eg personal
use of a company car, mobile phone or laptop).
The following are not included in the
calculation:
Conclusion
Along with knowing whether your employees are covered by a
modern award or an enterprise agreement, understanding how to
calculate an employee's "earnings" is vital in assessing whether a
former employee can bring an unfair dismissal application against
your company. We recommend advice be sought whenever a claim is
made by an employee who is paid an amount close to the
threshold.
For more information, please contact:
Tracey Davies, Partner
Phone (direct): +61 3 9608 2177
Email:
t.davies@cornwalls.com.au
or
Virginia Sadler, Senior Associate
Phone (direct): +61 3 9608 2106
Email:
v.sadler@cornwalls.com.au