The Fair Work Commission has announced that the new high income threshold will be $138,900 from 1 July 2016, in a change that will feed through to an updated version of the Fair Work Information Statement, also applicable from 1 July 2016.
New high income threshold
The Fair Work Commission has announced that the new high income threshold will be $138,900 per annum from 1 July 2016 (up from $136,700).
The threshold is relevant for the purposes of:
- protection from unfair dismissal – a federally regulated employee, not covered by an award or statutory workplace agreement, does not have access to the federal unfair dismissal jurisdiction if their annual rate of earnings exceeds the high income threshold (s.382 of the Fair Work Act);
- maximum compensation from an unfair dismissal claim – the maximum compensation which might be awarded by the Fair Work Commission for a successful unfair dismissal claim will increase to $69,450 (i.e. half the new high income threshold and up from $68,350) - s.392(5) of the Fair Work Act; and
- considering whether a modern award applies to an employee – a modern award, that would otherwise apply to an employee, does not apply where the employee is a high income employee with a guarantee of annual earnings (s.47 and 329 of the Fair Work Act).
New Fair Work Information Statement
While as at the date of this alert the Fair Work Ombudsman does not appear to have given notice of an updated version of the Fair Work Information Statement to apply from 1 July 2016, the Statement will also change from that date and an updated form of statement should be available here from that date.
It is a requirement under s.125 of the Fair Work Act, that a national system employer give each employee a copy of the Fair Work Information Statement before, or as soon as practicable after, the employee starts employment.
The Fair Work Information Statement informs employees about several matters including the National Employment Standards and the new high income threshold pursuant to s.124 of the Fair Work Act.
Implications for employers
Employers need to be aware of the new threshold when considering an employee’s dismissal and whether a modern award applies to an employee.
Employers will also need to ensure that each new employee is provided with the new Fair Work Information Statement, which is a requirement of the National Employment Standards – a breach of which can expose an employer to civil penalties of up to $54,000 for a corporation and $10,800 for an individual.