5 key changes to employment laws on 1 July 2019

  1. National Minimum Wage

Each financial year, the Fair Work Commission’s (FWC) Expert Panel for wage reviews undertakes it annual wage review and subsequently publishes its decision. This financial year, the FWC’s decision has resulted in the new national minimum wage being set at $740.80/week or $19.49/hour from the first full pay period on or after 1 July 2019. This constitutes a 3% increase and applies to all national system employees who are paid in accordance with the national minimum wage.

In relation to modern award minimum wages, the FWC decided that from the first full pay period on or after 1 July 2019 minimum weekly wages would also increase by 3%.

The 3% increase is down from the 3.5% increase we saw for the 2018-2019 period. The FWC says it “awarded a lower increase this year than that awarded last year having regard to the changes in the economic environment (in particular the recent fall in GDP growth and the drop in inflation) and the tax-transfer changes which have taken effect in the current Review period and which have provided a benefit to low-paid households”.

  1. High Income Threshold

Access to the unfair dismissal regime under the Fair Work Act 2009 (Cth)  is limited by a number of eligibility factors, including the imposition of a “high income threshold”. This has the effect of limiting an individual’s ability to make a claim for unfair dismissal once their annual rate of earnings exceeds this threshold (unless they are covered by a modern award or an enterprise agreement applies to them).

From 1 July 2019, the high income threshold has been increased to an annual rate of earnings of $148,700 for dismissals which take effect on or after 1 July 2019. For a dismissal which took effect on or before 30 June 2019 the high income threshold was $145,400.

An individual’s wages is not be the only component that forms part of an employee’s annual rate of earnings. For example, if an employee is provided with a fully maintained vehicle, it is likely that the private use of that vehicle will be included in the employee’s annual rate of earnings.

Organisations also need to remain aware that the FWC will not convert a part-time employee’s earnings to what they would have earned on a full-time basis. That is, if the part-time annual rate of earnings falls below the high income threshold the employee will be eligible to bring an unfair dismissal claim.

  1. Increased Whistleblower Protections

From 1 July 2019, reforms to the Corporations Act 2001 (Cth) will have the effect of expanding whistleblower protections.

Employees, officers and suppliers of companies, as well as their family members, can now make disclosures protected by the laws.

All public companies, large proprietary companies and registrable superannuation entities will have to have a whistleblower policy in place from 1 January 2020. A company is a large proprietary company if it satisfies at least two of the following criteria:

  • the consolidated revenue for the financial year of the company and any entities it controls is $50 million or more;
  • the value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $25 million or more, or
  • the company and any entities it controls have 100 or more employees at the end of the financial year.
  1. Modern Slavery

Under the Modern Slavery Act 2018 (Cth) reporting entities are required to submit a Modern Slavery Statement in relation to a reporting period.

A reporting entity includes an entity which has a consolidated revenue of at least $100 million for the reporting period and is an Australian entity at any time in that reporting period or carries on business in Australia at any time in that reporting period.

For reporting entities who have an Australian financial year reporting period, the first full reporting period will be the 2019-2020 financial year. The due date for the Modern Slavery Statement for that reporting period is 31 December 2020.

  1. Maximum Compensation Cap

If an employee is successful in establishing that they have been unfairly dismissed and the FWC may consider awarding compensation. Compensation is considered only after the FWC is satisfied that reinstatement is not appropriate.

Orders for compensation will be reduced if the amount exceeds the compensation cap. The compensation cap is the lesser of:

  • the amount of remuneration received by the employee or that they were entitled to receive (whichever is higher) in the 26 weeks before the dismissal; or
  • half the amount of the high income threshold immediately before the dismissal.

As the high income threshold has now been increased, from 1 July 2019 the compensation cap is now $74,350.