Changes to the unfair dismissal remuneration cap, national minimum wage, minimum award rates and filing fees

Introduction

New award rates, unfair dismissal thresholds and other changes in the employment arena have been announced, some of which commence from 1 July 2021.

These are some of the main changes.

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

The high income threshold will increase from the previous $153,600 to $158,500 from 1 July 2021. This means employees whose annual rate of earnings is $158,500 (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 $76,800 to $79,250.

National minimum wage

The national minimum wage will increase to $772.60 per week or to $20.33 per hour (calculated on the basis of a 38-hour week for a full-time employee). This represents a 2.5% increase.

This increase applies from the first full pay period starting on or after 1 July 2021. 

Minimum award rates

Minimum award rates will also increase by 2.5%, however, please note there are three separate dates for when the increase will commence (from the first full pay period starting on or after that date) which depends on the particular award. The different dates are: 1 July 2021; 1 September 2021; and 1 November 2021. The adjustment to the minimum award rates 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 wage 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

The filing fee for unfair dismissal, unlawful termination, general protections and anti-bullying applications in the Fair Work Commission will increase from $74.50 to $74.90 from 1 July 2021.

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

National Workplace Lawyers

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