Modern Awards

Are employees who earn more than the high-income threshold covered by Modern awards?

In response to your enquiry regarding the high-income threshold and its implications for Modern Awards, this pertains specifically to the employment framework in Australia. Employees whose earnings exceed the high-income threshold may discover that they are not covered by a Modern Award or the National Employment Standards (NES) about certain entitlements.

As of the latest update, the high-income threshold is an annually adjusted figure established by the Fair Work Commission. Employees earning above this threshold may still be entitled to the National Employment Standards (NES), but they may not be subject to the conditions of a Modern Award or be eligible to lodge an unfair dismissal claim, provided they have a written guarantee of annual earnings that meet or exceed this threshold.

It is essential to recognise that, although such employees may not be directly subject to a Modern Award, they still possess specific workplace rights and protections under the Fair Work Act 2009, including those outlined in the National Employment Standards (NES). The NES sets forth the minimum employment entitlements in Australia, encompassing, but not limited to, annual leave, personal/carer’s leave, public holidays, and provisions for notice of termination and redundancy pay.

Does the modern award apply to employees earning more than the high income threshold who haven’t been given a guarantee of annual earnings?

In Australia, employees who earn above the high-income threshold may still be covered by Modern Awards if they have not been provided with a guarantee of annual earnings. The high-income threshold is a figure that is adjusted annually and serves as a benchmark for determining various entitlements and conditions under the Fair Work system.

Suppose an employee’s earnings surpass the designated threshold yet lacks a written agreement confirming that their annual income exceeds the high-income threshold. In that case, they remain subject to the applicable Modern Award or Enterprise Agreement stipulations. This coverage encompasses entitlements and protections concerning wages, working hours, leave, and other employment conditions.

The guarantee of annual earnings is a formal mechanism that, if provided, exempts employers from certain award conditions for employees who earn above the threshold. Without this guarantee, the default assumption is that the award conditions continue to apply to the employment relationship.

Are high-income employees those who are guaranteed annual earnings covered by modern awards?

In the context of Australian employment law, high-income employees who have been given a guarantee of annual earnings are, in general, not covered by the conditions of a Modern Award. This is specifically the case when their guaranteed earnings exceed the high-income threshold, which is adjusted annually by the Fair Work Commission.

The guarantee of annual earnings must meet or exceed the high-income threshold and be provided in writing. It’s important to note that while such an agreement can exclude the application of Modern Award conditions, the employee still remains covered by the National Employment Standards (NES).

The Fair Work Act 2009 states that even if an employee’s earnings surpass the high-income threshold and they are therefore not covered by a Modern Award, they still retain various workplace rights and protections under the Act. These include protection against unfair dismissal, safeguards against adverse action, and the right to request flexible working arrangements under specific conditions.

Employers must carefully draft guarantees of annual earnings to ensure they comply with the legal requirements, including specifying which parts of the employee’s earnings count towards the threshold.

Given the complexity of employment laws and the need for specificity in contractual agreements, I recommend that employers and employees alike consider consulting HRSINGAPORE’s HR Consultancy Services for tailored advice. Additionally, our HR Certification, HRLAW Seminars, and HR Training courses can provide further insights and understanding of the employment landscape in Australia.

For the most accurate and up-to-date information, ensure you regularly check resources such as the Fair Work Ombudsman’s website or engage in professional consultancy services.

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