The high income threshold increased to $118,100 from 1 July 2011 and affects how a modern award applies to an employee and their ability to access unfair dismissal.
The high income threshold which increased on 1 July 2011 to $118,000 affects three main entitlements:- employees who earn over the high income threshold, and who are not usually covered by a modern award or enterprise agreement, cannot make a claim for unfair dismissal
- employees who have agreed to a written guarantee of annual earnings by their employer that is more than the high income threshold no longer receive their modern award entitlements. However, they are still entitled to unfair dismissal.
- the maximum compensation payable for unfair dismissal is capped at either half the high income threshold, or the equivalent of six months of the dismissed employee’s wage, whichever is lower.
What's counted under the high income threshold?
Earnings do not include payments that cannot be determined in advance (such as commissions, incentive-based payments, bonuses, and even overtime unless the amount is guaranteed); reimbursements, and ordinary contributions to superannuation (that is, the 9% superannuation does not count).
Earnings will include wages, amounts paid on the employees behalf or as the employee directs (thus, will cover additional superannuation contributions paid at the direction of the employee) and the agreed value of non-monetary benefits (such as car, phone or computer). Employers need to take care in assessing wages — for example, providing an employee with a company car will not take an employee over the high income threshold unless there is a prior, agreed value assigned to the use of the vehicle. Employers with senior employees under 'Guarantees of Earnings' should check their contracts and the written Guarantee to ensure they continue to comply.