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1 July 2018 changes to the unfair dismissal remuneration cap

Introduction

New rates, thresholds and other changes in the employment arena commenced from 1 July 2018. The following article briefly summarises the main amendments that employers should be aware of.

Unfair dismissal threshold (high income threshold) and maximum compensation cap

The high-income threshold increased from the previous $142,000 to $145,400 from 1 July 2018.

This means employees whose annual rate of earnings is $145,400 (which excludes statutory superannuation) or more and who are not covered by an award or enterprise agreement, are unable to pursue an unfair dismissal application.

The change also means that the maximum compensation that can be awarded for an unfair dismissal claim increased from $71,000 to $72,700.

National minimum wage

The national minimum wage has increased to $719.20 per week or $18.93 per hour (calculated on the basis of a 38 hour week for a full time employee). This represents a 3.5% increase.

The increase applies from the first full pay period starting on or after 1 July 2018. 

Minimum award rates

Minimum award rates also increase by 3.5% from the first full payment period starting on or after 1 July 2018. The adjustment to the minimum award rate may also affect penalties and allowances.

Employers should review applicable awards to ensure compliance.

The award wages increase may also impact upon employers who have enterprise agreements if the rates in the enterprise agreements fall below the new award minimums.

When over-award rates are paid, there may be the ability to absorb the increase into the over award payments. In this regard, employers should seek our specific legal advice before doing so.

Filing fee changes

Finally, the filing fee for unfair dismissal, unlawful termination, general protections and anti-bullying applications in the Fair Work Commission increased from $70.60 to $71.90 on 1 July.

There have also be increases to Federal Court and Federal Circuit Court filing fees.

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