Increase to the high-income threshold and compensation cap for unfair dismissal

From 1 July 2023 the high income threshold for award-free and agreement-free employees was increased to $167,500 per annum. This means that employees that are award-free and agreement-free earning over this threshold will be unable to bring an unfair dismissal claim under the Fair Work Act 2009 (Cth) where the dismissal takes place after 1 July 2023.

From 1 July 2023 the compensation cap was increased to $83,750. This means that the maximum amount an employee may claim who alleges unfair dismissal will be $83,750.

Next steps

Given such increases to the compensation cap that employees are able to claim, employers should review current employment policies to ensure that fair policies and procedures are in place to handle grievances and misconduct.