On 1 July 2015, the high income threshold under the Fair
Work Act 2009 (Cth) increased from $133,000 to $136,700.
An employee will not be protected from unfair dismissal unless
they satisfy one of these conditions:
they earn less than the high income threshold; or
a modern award covers their employment; or
an enterprise agreement applies to their employment.
amounts dealt with on the employee's behalf or as the
employee directs; and
agreed money value of non-monetary benefits.
If the employee and employer have agreed on a reasonable money
value for particular benefits, that value will apply. Otherwise, if
the amount of earnings is in dispute, the Fair Work Commission
(FWC) will apply an estimated monetary value for a non-monetary
For example, the FWC has recently been required to consider the
value of the use of an iPad and iPhone for a year. In this
particular case, the values assigned were $431 for the iPad and
$960 for the iPhone, applying percentage discounts to take into
account a proportion of personal use.
Earnings do not include non-guaranteed earnings such as bonuses
or overtime. If however, the bonuses or overtime are legally
guaranteed – ie non-discretionary – these will likely
form part of the employee's earnings.
For example, an employee with a base salary of $115,500 was
recently pushed over the high income threshold (and thus could not
pursue an unfair dismissal claim) because he was contractually
obliged to work 58 hours overtime and had a 5% project allowance.
The FWC did not accept the employee's argument that the
overtime should be excluded because it would not occur in the event
of inclement weather, nor did it matter that, in fact, the employee
had been on sick leave for 12 months and thus not been able to
perform the overtime.
Compulsory superannuation payments are not included in
Where an employee is provided with a fully funded vehicle, it is
only counted towards "earnings" to the extent that it is
utilised for private use.
The increase also brings the maximum compensation payable in the
event of a successful unfair dismissal claim to $68,350.
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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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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