30/06/2017Wage Rates, Employee Issues, Legislation, Awards

From 1 July 2017, the unfair dismissal salary cap for high income earners will increase.

The 2017 salary cap figure under the Fair Work Regulations for unfair dissmissal is now $142,000 for fulltime employees. This was previously $138,900. 

For part time employees, the salary cap figure is calculated on a pro rata basis. 

To calculate whether an employee is under the the high income threshold, the regulations identifiy that the following need to be included in the calculation; 

-       Employees wages

-       amounts that are applied or dealt with at the direction of the employee (for example, salary sacrifice amounts for additional superannuation or a motor vehicle), and

-       the money value agreed between the parties of any non-monetary benefits that are provided (for items such as car parking, food or accommodation).

Items not to be taken into account include

• compulsory superannuation contributions that are made by the employer in accordance with the Superannuation Guarantee legislation, or other laws

• payments the amount of which cannot be calculated in advance (including commissions, incentive-based payments and bonuses, and overtime that is not guaranteed)

• reimbursements.

How will this affect you?

High income earners (i.e. earning more than $142,000) who are award covered can still lodge an unfair dismissal action. For example, if a high income earner is award covered (e.g. a club manager) they could still lodge an unfair dismissal claim. That could potentially cost you hundreds of thousands of dollars!

If you want some more ideas on regarding employee eligibility unfair dismissal, check out our article here.  

Want more information? 

If you would like more information on how to manage these changes, contact us or visit our website.

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