Something we hear so often from employers is: “No, that employee isn’t covered by the Award as they earn too much”.
The reality is that earning ‘too much’ is not, of itself, enough to put an employee outside of the coverage of an Award. It can be – if a properly documented guarantee of annual earnings has been put in place – but a written contract of employment that prescribes a salary above the high income threshold is not, of itself, a guarantee of annual earnings and it won’t be enough to put an employee outside of the coverage of an Award. To do that, a separate guarantee of annual earnings is required and it must be a written undertaking that is clearly identified and meets the requirements set out in the Fair Work Act 2009 (Cth).
Are you employing employees who might be covered by an Award, despite earning ‘too much’ (that is, more than the high income threshold – currently $162,000 pa)?
Could/should you be using a guarantee of annual earnings as a tool to manage risk in your business?
