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Employment Law Update -  What is changing from 1 July 2021?

Employment Law Update – What is changing from 1 July 2021?

Published on July 1, 2021 by Janine Smith, Peter Punch and Wing Ho | 何宛穎律師Janine Smith, Peter Punch and Wing Ho | 何宛穎律師

The new financial year ushers in all sorts of legislative changes.  Below is a convenient summary of the changes taking place in the employment law area from 1 July 2021:

  1. Increase to high income threshold and maximum compensation available for unfair dismissal applications

The statutory high income threshold for unfair dismissal applications will rise from from $153,600 to $158,500.  The operation of s 382(b) of the Fair Work Act 2009 (Cth) means that employees who are not covered by an award or enterprise agreement and earn more than the high income threshold will be prevented from making an unfair dismissal application.

This most recent increase in the unfair dismissal high income threshold should be a matter of interest for employers. When the current unfair dismissal system was first introduced in March 1994, the cap above which non-award employees could not bring unfair dismissal claims was set at $60,000 per annum. The application of the adjustment formula every year after that has resulted in the cap now growing to almost $160,000. The current cap thus sits at about 75% above the annual value of average weekly full time earnings (currently about $90,000).  Many middle management employees, or even senior managers in some sectors of the economy (e.g. the not for profit area) would now, unlike in years gone past, be able to bring unfair dismissal claims.

The maximum compensation that can be awarded in an unfair dismissal claim lodged after 1 July 2021 has increased from $76,800 to $79,250.

  1. Increase to Fair Work Commission (FWC) filing fees

The FWC has increased its filing fee for unfair dismissal, general protections and anti-bullying applications from $74.50 to $74.90.

  1. Increase to minimum wages

The FWC recently completed its Annual Wage Review and decided that the national minimum wage will increase by 2.5% effective from 1 July 2021.  The new national minimum wage will be $772.60 per week, or $20.33 per hour.

The FWC decided that wages under the Modern Awards will also increase by 2.5% but will take effect in a staggered fashion.  Wage increases for most Modern Awards will take effect on 1 July 2021.  However, wages under the General Retail Industry Award will only increase on 1 September 2021, while wages under 22 Awards covering the aviation, tourism, hospitality and some retail industries will increase on 1 November 2021.[1]

  1. Increase to superannuation guarantee contribution

From 1 July 2021, employers will be required to contribute 10% of an employee’s ordinary time earnings.

  1. Increase to tax-free component of a genuine redundancy payment

For genuine redundancy payments made in the 2021-22 financial year, the tax-free component will increase to $11,341 + $5,672 for each completed year of service.

 If you would like further information or advice about an employment related matter, please contact the Workplace Law team at Carroll & O’Dea Lawyers.

To view Carroll & O’Dea Lawyers 2021 Employment Law Fact Sheet, please click here.

[1] For the full list of the 22 Awards, please see paragraph [298] of the Annual Wage Review 2020-21 decision.

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