1 July 2015 increase to wage rates and other changes

1. Increase to minimum wages

In accordance with the Fair Work Commission’s annual wage review decision earlier this month, minimum rates of pay under awards and the national minimum wage will increase from tomorrow, Wednesday 1 July 2015.

The new national minimum wage will be $17.29 per hour, or $656.90 per week.

Award wages will also increase by 2.5%. The Fair Work Commission has recently published updates notifying that the new, increased wage rates are available in awards published on the Commission’s website (www.fwc.gov.au).

Employers must ensure that employee wage rates are kept up to date with increases to minimum rates to avoid the risk of back pay claims and penalties (both for employers, and directors and managers).

2. Increase to unfair dismissal income cap and compensation cap

The income cap for the purposes of determining unfair dismissal coverage for employees not covered by an award or enterprise agreement will also increase from $133,000 to $136,700 from 1 July 2015.

In addition, the compensation cap in unfair dismissal proceedings will increase to $68,350 (this is the maximum compensation available in lieu of reinstatement to employees in unfair dismissal proceedings).

3. Opportunity to refresh and update employment contracts

The 1 July 2015 wage increases often coincide with annual salary reviews for employees paid above award minimums. Accordingly, this is an opportune time for employers to consider refreshing and updating their existing employment contracts to ensure they are both compliant with all legislative and award requirements, but also that they provide the business with maximum protection. Protections that many employers are concerned to maximise include:

• post employment restraints (which can be unenforceable)
• rights to terminate the employment relationship for employee misconduct
• protections in relation to the employer’s confidential information and intellectual property, and
• protections from employee claims alleging that employment policies are contractually binding upon the employer (which may entitle employees to sue for breach of contract where the employer does not comply with its own policies)

It is important for employers wishing to maximise these types of protections and to ensure legislative and award compliance to seek specific legal advice about their employment contracts.