Changes to unfair dismissal threshold: What you need to know

by Janie Smith18 Jun 2014
From 1 July, the unfair dismissal high income threshold will increase from $129,300 to $133,000, meaning workers earning more than that cannot claim compensation or reinstatement under the unfair dismissal rules, unless they are covered by a modern award or enterprise agreement.
Australian Business Lawyers & Advisors workplace team legal practitioner director Joe Murphy told HC that employers needed to be reminded of what payments should be included when working out whether an employee is under or over the threshold, so they weren’t caught out by assuming that all amounts paid to the employee count, or assuming that a worker’s seniority automatically excluded them from the unfair dismissal jurisdiction.
“In this regard, an employee’s wages, any amounts applied or dealt with in any way on the employee’s behalf or as the employee directs and the agreed money value of non-monetary benefits [are included]. 
“What is not included are payments where the amount cannot be determined in advance (eg discretionary or performance based bonuses or incentives), reimbursements or employer contributions to a superannuation fund.”
Murphy said that in situations where employers were safe from unfair dismissal claims, it was still
best practice to provide reasons for dismissal to avoid other types of claims, such as discrimination, adverse action or other claims under the General Protections provision in the Fair Work Act 2009, where employers are required to prove the reasons for dismissal were not based on unlawful grounds.
Earnings that count towards the threshold:
  • Wages
  • The agreed monetary value of non-monetary benefits, such as extra superannuation
  • Amounts dealt with on the employee’s behalf, such as a salary sacrifice arrangement
Earnings that do not count towards the threshold:
  • Amounts which cannot be determined in advance, such as a bonus
  • Allowances paid to employees that are not used for work-related expenses


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