Unfair dismissal threshold increase from 1 July 2016

Introduction

New rates, thresholds and other changes in the employment arena commence from 1 July 2016. 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 will increase from the current $136,700 to $138,900 from 1 July 2016.

This means employees whose annual rate of earnings is $138,900 (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 is $69,450.

National minimum wage

From 1 July 2016, the national minimum wage will increase to $672.70 per week or $17.70 per hour (calculated on the basis of a 38 hour week for a full time employee). This represents a 2.4% increase. 

The increase applies from the first full pay period starting on or after 1 July 2016.  

Minimum award rates

Minimum award rates will also increase by 2.4% on the first full payment period starting on or after 1 July 2016. 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.

If you would like more information about the above, please contact National Workplace Lawyers on +61 2 9233 3989.

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.