Employers should be alert to current worker entitlements: 

• Unfair Dismissal High Income Threshold;
• Compensation Cap for Unfair Dismissal;
• Redundancy Tax Free Amount;
• Employment Termination Payments (ETP) Lower Tax Rate Cap;
• Superannuation Maximum Contribution Base; and
• Civil Penalties for Breaches of the Fair Work Act.

Unfair Dismissal High Income Threshold

From 1 July 2019, the High Income Threshold increased from $145,400 to $148,700

Employees earning more than $148,700 cannot make unfair dismissal claims unless they are covered by a modern award or an enterprise agreement.

The following are included in the High Income Threshold calculation:

• Wages;
• Superannuation;
• Money paid on behalf of the employee (e.g. salary sacrifice); and
• The agreed monetary value of non-monetary benefits (e.g. company car or mobile phone). 

The High Income Threshold calculation does not include:

• Payments which cannot be determined in advance (e.g. commissions, incentive-based payments and bonuses);
• Overtime (unless the overtime is guaranteed); and
• Reimbursements.

Unfair Dismissal Compensation Cap

The maximum compensation for unfair dismissal applications is the lesser of 6 months pay or the equivalent of half the Unfair Dismissal High Income Threshold, $74,350.

Redundancy – Tax Free Amount

The Tax Free Amount for genuine redundancy payments is indexed annually.  From 1 July 2019 the TFA increased from $10,399 to $10,638.  

The additional amount per completed year of service increased from $5,200 to $5,320.

Employment Termination Payments (ETP)

The cap for the lower tax rate on ETPs is $210,000.00 for the 2019-20 income year.

Superannuation

From 2014-15 the Superannuation Guarantee Contributions Rate was frozen at 9.5% and will likely remain at this rate until 1 July 2021 when it will increase to 10%.

From 1 July 2019 the maximum quarterly contribution base increased from $54,030 to $55,270; and the maximum annual contribution base increased from $216,120 to $221,080.

The maximum contribution bases are the maximum salary amounts for which an employer must contribute superannuation guarantee amounts, unless the employer has agreed to pay superannuation contributions on the total salary paid.

Civil Penalties for Breaches of the Fair Work Act

From 1 July 2017 to 30 June 2020, the civil penalty unit for single breaches of the Fair Work Act is $210.00.

The maximum penalty is, for:

• a company:  $63,000.00 for a non-serious contravention, $630,000 for a serious contravention.
• an individual:  $12,600.00 for a non-serious contravention, $126,000 for a serious contravention.

Multiple breaches can result in multiple penalties being imposed.

Contact Peter McNamara today for your workplace law advice.