Unfair Dismissal
Employers should be aware of certain changes regarding the unfair dismissal provisions. For the unfair dismissal provisions to apply, assuming the employee has completed the minimum period of employment, the employee must:
- Earn less than the high-income threshold; or
- Be covered by a modern award or enterprise agreement.
Since the start of the financial year at 1 July 2023, the High-income threshold has been increased from $162,000 to $167,500. As such, for the provisions to apply, the employee must either be covered by a modern award or enterprise agreement or earn less than $167,500 per annum.
High Income Guarantees
Further, employers should also note the application of the increase to high income guarantees and making employees award free. A high income guarantee is essentially an undertaking made by the employer to the award-covered employee that they will be paid more than the high income threshold for a period of 12 months. Employees must accept this promise for the guarantee to apply. Once it is in effect, the employee will be a high income worker and will be award free.
However, a mere promise to pay the employee more than the threshold does not mean that they are a high income worker. This was discussed in Association of Professional Engineers, Scientists and Managers Australia v Peabody Energy Australia Coal Pty Ltd [2022] FCA 945. In that case, the court decided that in addition to paying more than the threshold, the employee must agree to the undertaking and the amount of earnings as well as there being a guarantee period for when the employee is paid this amount. Further, the undertaking must be in writing and separate from the contract of employment.
Given the changes in the high income threshold, employers are encouraged to review their contracts and undertaking with employees and assess whether their high income guarantees still apply
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.