From 1 July 2024, the Fair Work Commission will raise the high income threshold in unfair dismissal claims from $175,000 to $183,100. The compensation cap is also increasing, up from $87,500 to $91,550. These figures are not just abstract legal benchmarks, they carry significant implications for payroll, HR and executive decision makers.
This annual adjustment, mandated by the Fair Work Regulations, is underpinned by data from the Australian Bureau of Statistics on average weekly ordinary time earnings.
This is not a minor update buried in legal fine print. For payroll professionals, it’s another reminder that compliance is dynamic, not static. Employers often overlook that eligibility for unfair dismissal is not just tied to income. Employees covered by a modern award or enterprise agreement may qualify regardless of what they earn.
The salary cap is climbing faster than wages, pulling more executive roles into the jurisdiction of unfair dismissal laws. In practical terms, it means senior managers who once sat outside these protections may now be eligible to bring claims.
For payroll departments, particularly those tasked with generating data for executive remuneration or managing terminations, this is a timely call to action. Systems must be updated to reflect the new threshold. Position descriptions and employment contracts may need review to reflect changes in eligibility for legal recourse. Risk management protocols tied to offboarding should be examined closely.
It’s also worth noting that the Albanese government has linked this threshold to its forthcoming restriction on non-compete clauses. Employees earning under the high-income threshold, soon to be $183,100, will be protected from such contractual restrictions, reshaping post employment obligations and enforceability.
For payroll professionals, this reinforces the need to understand the broader legal and strategic environment. As Tracy Angwin writes in Profit from Payroll, “Payroll is not just a button you press. It is a high risk, high responsibility function that requires deep technical and compliance expertise.”
The impact of these changes cannot be overstated. They affect your organisation’s exposure to legal claims, the way termination decisions are made, and the employment instruments you rely on. In a climate where Fair Work has become more proactive and where fines for non-compliance are increasingly punitive, this is not the time to ‘set and forget’.
Instead, use this change as a trigger to review your payroll governance. Reassess compliance frameworks, review delegations and approvals, and ensure that all terminations are handled with a thorough understanding of employee entitlements and legal standing. The cost of overlooking the implications may be far higher than you expect.
