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1 July 2019 changes to the unfair dismissal remuneration cap

Introduction

New award rates, thresholds and other changes in the employment arena commence from 1 July 2019. The following article briefly summarises the main changes that employers should be aware of.

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

The high-income threshold will increase from the previous $145,400 to $148,700 from 1 July 2019.

This means employees whose annual rate of earnings is $148,700 (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 will increase from $72,700 to $74,350.

National minimum wage

The national minimum wage will increase to $740.80 per week or by $19.49 per hour (calculated on the basis of a 38-hour week for a full-time employee). This represents a 3% increase.

The increase applies from the first full pay period starting on or after 1 July 2019. 

Minimum award rates

Minimum award rates will also increase by 3% from the first full payment period starting on or after 1 July 2019. The adjustment to the minimum award rate may also affect some allowances.

Employers should review applicable awards to ensure compliance.

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

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 will increase from $71.90 to $73.20 on 1 July 2019.

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

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