STOP PRESS22 June 2015
From 1 July 2015 the following increases to wage rates and various annually indexed rates will apply.
Annual Wage Review 2015
The Fair Work Commission handed down its 2015 Annual Wage Review Decision on 2 June 2015. The decision affects a 2.5% increase to the National Minimum Wage and modern award minimum wage rates. The minimum wage rate for employees not covered by an award or enterprise agreement increases to $17.29 per hour or $656.90 per week.
For modern awards, the increase is applicable across the board to all rates and allowances (subject to their formulas). Casual loadings remain unchanged at 25% – except for the Business Equipment Award (20%).
All increases are operative from the first pay period on or after 1 July 2015.
Note: Wage rates for employees receiving payments above the new minimum rate for their particular award classification(s) do not require adjustment, unless it has been specifically agreed to.
The new rates and allowances payable under each award are available at: https://www.fwc.gov.au/awards-andagreements/minimum-wages-conditions/annual-wage-reviews/annual-wage-review-2014-15-16
In late 2014 the Federal government passed legislation placing a hold on the minimum superannuation guarantee charge, until 1 July 2021. The current rate of 9.5% therefore remains unchanged.
Indexed increases under the Fair Work legislation
High Income Threshold
The high income threshold imposed for the purpose of limiting an employee’s ability to pursue an unfair dismissal claim (unless they are award covered), will increase to $136,700 per annum (up from $133,000) for dismissals that take effect from 1 July.
The same indexed figure is used for guarantees of annual earnings. Where stipulated in a contract or agreement, the effect of such a guarantee is that an award that would otherwise apply to the particular employee, does not do so where the employee’s annual salary is in excess of the threshold. In such circumstances however, the employee remains covered by the award for the purposes of the unfair dismissal provisions.
Note: Remember when calculating or determining an employee’s annual earnings for the purposes of the high income threshold, amounts for commissions, bonuses overtime and superannuation contributions are to be excluded.
Compensation for unfair dismissal
The maximum compensation which can be awarded for unfair dismissal, for the stipulated period of 6 months’ pay (capped at half the high income threshold) will rise to $68,350 (up from $66,500)
Note: High income earners still have recourse to other courses of action for dismissal, including the general protections provisions in the Fair Work Act 2000 (Cth), anti-discrimination legislation and common law breach of contract claim.
Fair Work Commission filing fees for unfair dismissal and general protections applications will increase to $68.60 (up from $67.20)
Indexed increases under the ATO legislation
Tax Free Threshold for Genuine Redundancy
The tax free threshold for genuine redundancy payments, which is also subject to annual indexation, will increase for 2015 – 26 as follows:
1. The base amount applicable for the first year or part year of service increases to $9,780 (up from $9,514); and added to that,
2. The amount based on (multiplied by) completed years of service increases to $4,891 (up from $4,758)
The ETP cap threshold will increase to $195,000 from 1 July 2015.
Note: The whole of income cap, which is not indexed, remains at $180,000 per annum.