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New Fair Work Commission changes effective from 1 July 2020 - Are you ready?

30 June 2020
The Fair Work Commission recently advised of a number of financial changes effective from 1 July 2020.
 

Summary of changes

 

Until 30 June 2020

From 1 July 2020

High income threshold

$148,700.00

$153,600.00

Weekly National Minimum Wage

$740.80

$753.80

Maximum compensation (unfair dismissal claims)

$74,350.00

$76,800.00

Filing fees (unfair dismissal, unlawful dismissal, general protections and anti-bullying applications)

$73.20

$74.50

 

What is the high income threshold?

In order to qualify for unfair dismissal protection, an employee must:

  • meet minimum continuous service requirements, which is 12 months for businesses with fewer than 15 employees (excluding genuine casuals), and six (6) months for other employers; and
  • either
    • earn less than the high income threshold; or
    • be covered by a modern award or enterprise agreement.

It is important to note that the high income threshold does not include compulsory superannuation or amounts that cannot be determined in advance (e.g. commissions).

What is the National Minimum Wage (NMW)?

The NMW is the 'bedrock' minimum wage used as a yardstick in setting the various minimum wage rates in Modern Awards. The NMW does not include the extra 'loading' payments made to casual employees of 25%, nor does it include discounted rates applicable for juniors or employees with a disability. 

What do you need to do?

As the NMW has increased by 1.75%, so too must all wages paid to award-covered employees and to employees covered by enterprise agreements which reference award rates. 

For employees on higher incomes (and who are not covered by an award or enterprise agreement), you should review whether the above increases will bring them within the ambit of the unfair dismissal jurisdiction from 1 July 2020.

This will have an obvious impact on managing employee underperformance and / or misconduct moving forward in terms of exposure to unfair dismissal claims.

If you require further information or have any queries in relation to this legal update, please contact a member of our Employment team. 

We would like to acknowledge the contribution of Lachlan Thomas to this article.

Further Reading