Tool Box
Issue No. 47 - June/ july
Fair Work Act and the high income employee
by Mr Shayne Bakewell
The new Fair Work Act 2009 has implications for how High Income Employees must be treated with regard to salary and conditions.
A High Income Employee is one who would ordinarily be covered by a Modern Award and who is paid a salary (excluding superannuation) of $106,300 or more, or the pro rata equivalent in the case of a less than fulltime employee.
Under the Act, an employer and an employee can agree to exclude the application of the Modern Award to the employee, subject to several conditions. The concept is that if the employee is receiving such a high income, the Award and its inherent complexity of base rates, allowances, overtime and penalties need not apply.
Condition 1 – Earnings must be guaranteed
The employer must guarantee, for a period of 12 months or more, that the employee will not earn less than the high income amount. The guarantee must be in writing and must be agreed by the employee to be effective under the Act. This is evidenced by the employee’s written consent.
Condition 2 – Employee must becovered by a Modern Award
To qualify as a High Income Employee, the employee must be covered by a Modern Award. If the employee is bound by an Enterprise Agreement, AWA, ITEA or any other form of agreement subject to the terms of the Act, that agreement will continue to apply to the employee until that agreement is terminated.
When does an Employee cease to be a High Income Employee?
Once a...
