There has been a lot of conjecture recently regarding what the
unfair dismissal high income threshold is and how it is calculated,
which applies under the Fair Work Act 2009 (Cth)
(FW Act). From July 1 2012 this high income
threshold was increased from $118,100 to $123,100.
An employee's income that exceeds the high income threshold
will be excluded from making an unfair dismissal claim. Usually
this can be used as a defence, by way of a jurisdictional
objection, to any unfair dismissal claim.
Currently, a jurisdictional objection still needs to be heard
and argued before a member of Fair Work Australia.
The Federal Government is considering however, allowing the
registry to reject claims if it is obvious that the employee's
wages exceeds the high income threshold.
In most cases the income of any employee is quite clear and the
process of assessing whether the employee is above or below the
income threshold will be an easy exercise.
In some cases however, some employees income are greatly
impacted by employment bonuses or overtime.
In the case of Lesley Mallows v Touch Base Asia Pacific Pty
Ltd t/a Touch Base Asia Pacific  FWA 1695 (18 March
2011) Fair Work Australia had to consider whether performance
bonuses and overtime that increased an employee's income above
the then high income threshold figure ($113,800) excluded the
employee from making an unfair dismissal claim.
Fair Work Australia determined that the amounts the employer
argued for could not be included because they could not be
determined in advance. Fair Work Australia confirmed that
employment bonuses and overtime, unless determined in advance,
could not be included as an income for the purposes of the
threshold. As the commission and bonus payments (in particular)
were contingent on the employee reaching certain employment
targets. It was not determinative whether these targets would
actually be reached. These performance target bonuses and
commissions have been determined to not suit the determinative
income that is required under section 332(2)(a) of the FW Act.
In any unfair dismissal claim, the exercise of whether an
employee earned above the high income threshold should always be
undertaken. However, it is important that an employer does not
solely rely upon this jurisdictional objection to defend a
It is a hurdle that can be put in front of an applicant which
needs to be overcome before discussion or arguments regarding the
substantial claim can be discussed and argued.
When dealing with unfair dismissal claims (or potential unfair
dismissal claims) we suggest seeking legal advice to lessen the
risk of a successful claim.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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