The high income threshold under the Fair Work Act 2009 (Cth) (FW Act) is subject to indexation from 1 July each year.  The Fair Work Ombudsman has recently confirmed that the high income threshold will increase from $129,300 to $133,000 with effect from 1 July 2014.

The high income threshold under the FW Act is principally relevant to:

  • the ability of an award/agreement free employee to apply for an unfair dismissal remedy; and
  • an employer providing an employee with a guarantee of annual earnings so that a modern award has no application to the employee.

Lessons for employers

Employers should carefully review the level of remuneration being provided to more highly paid employees to firstly ascertain whether the employees should be provided with a guarantee of annual earnings, and secondly to ensure that if employees are in receipt of a guarantee of annual earnings, that the guarantee is still valid.

With the increase to the high income threshold, employers should also review the level of remuneration being provided to employees prior to proceeding with the dismissal of any employee to determine whether the employee will have access to the Fair Work Commission to seek an unfair dismissal remedy.

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