Australia raises Temporary Skilled Income Threshold (TSMIT) to $73,150 starting 1 July 2024
Australia has announced a significant update to its immigration policy, specifically concerning the Temporary Skilled Migration Income Threshold (TSMIT). Effective July 1, 2024, the TSMIT will be raised from $70,000 to $73,150. This change aims to ensure that the wages for temporary skilled migrants remain competitive and fair, aligning with the Australian labor market and economic conditions.
The increase is part of the government’s broader strategy to enhance the skilled migration program, as outlined during the Jobs and Skills Summit in September 2022. The new threshold will apply to all new employer nomination applications for visas such as the Temporary Skill Shortage (subclass 482), Employer Nomination Scheme (subclass 186), and Regional Sponsored Migration Scheme (subclass 494) submitted from July 1, 2024.
This adjustment reflects ongoing efforts to prevent underpayment and exploitation of skilled migrants, ensuring they receive a fair wage comparable to the market rate for their occupations. Employers will need to ensure that any job offers to skilled migrants meet or exceed this new threshold.
The change will not impact current visa holders or applications submitted before the effective date. Employers planning to sponsor new skilled migrants are advised to review their salary structures and ensure compliance with the new TSMIT. This update underscores the importance of staying informed and prepared for changes in immigration policies to maintain compliance and attract top international talent.
Accrued leave must be paid out on day of employees’ termination, Federal Court finds
An employer has been hit with a $17K fine for delayed payment of a terminated employee’s accrued annual leave, plus damages. This case sets an important precedent for employers.
A recent Federal Court ruling has shed light on confusion about when employers are required to pay certain entitlements to an employee following their termination, including payment in lieu of notice, accrued but untaken annual leave and redundancy pay.
The Fair Work Act (FW Act) itself does not prescribe a deadline or express time frame, aside from the general provision governing payments and frequency of salary under section 323(1) of the FW Act that requires all amounts payable to an employee to be paid in full and at least monthly.
However, the Federal Court has recently examined the section of the FW Act governing the payment of accrued but untaken annual leave and found that it must be paid out on the day the termination took place.
The case concerned an employee who received payment of their accrued but untaken annual leave three months after their termination. The Federal Court held that this payment was three months late and in contravention of section 90(2) of the FW Act. As a result, the Court handed down a penalty of $17,000, which comprised approximately 25 per cent of the maximum applicable penalty.
In an unusual twist, the Court also awarded $10,000 general damages to the Applicant due to the material effect the delay had on them, which resulted in distress due to the financial strain he experienced.
Ignorance of the law is “no excuse”
Whether an employee leaves your organisation voluntarily or if they are fired or dismissed because of redundancy, you must pay their unused annual leave.
In this case, the employer submitted that the delay in payment was due to limited knowledge of Australian employment law, and concerns about the accuracy of the leave records.
The payment was processed once the employer was made aware that they needed to meet their obligation to pay the accrued annual leave as they had no explicit proof that the annual leave records were incorrect.
The Court highlighted that to achieve general deterrence, a clear signal needs to be sent to the Australian community that all employers must know and understand their obligations under the FW Act and that lack of care and ignorance of the law is no excuse.
This decision serves as a reminder to not only fulfil your obligation as an employer to know and understand the law, but, if in doubt as to whether an entitlement is payable or not, take adequate steps to investigate or seek expert advice.
Following best-practice guidelines may not be enough to ensure compliance if you’re not up to date with case law.
As summarised by the Court, “It is not sufficient that one can have a mistaken belief and then take no steps to verify the circumstances.”
The legal implications
Interestingly, this decision follows another Federal Court decision concerning paying notice upon termination. On appeal, the Court held that under section 117(2)(b) of the FW Act, payment in lieu of notice is a mandatory prerequisite to lawful termination and must be paid before the dismissal comes into effect.
It has become common practice for employers to provide payments in lieu of notice to outgoing employees after the termination date of their employment due to conflicting information available online. This decision makes it clear that to be considered a lawful termination, notice payments must not occur after the date the employment has ended.
A legal interpretation of the two Federal Court decisions suggests payment of notice and any accrued unused entitlements must be received by the outgoing employee on the day employment ends – something that’s not widely known by employers.
These two decisions are particularly significant because they’re likely to be binding authorities for any junior courts, such as the Federal Circuit and Family Court of Australia, where the majority of termination entitlements disputes are ventilated.
Further, it seems likely that the timing of redundancy payments would follow the same reasoning.
Ensuring compliance
The decision to terminate an employee is generally demanding and can be challenging to enact.
Before moving to terminate, it’s imperative to understand your obligations as set out in the FW Act and any applicable award or agreement. Non-compliance with these obligations will contravene the FW Act and may subject your organisation to pecuniary penalties.
Employers should always practice procedural fairness when determining whether to end an employment relationship.
The employee should receive written notice of their termination, which states the date that the dismissal will take effect from and ensure payment of any owed entitlements on termination. This includes any outstanding wages owed, notice, accrued annual leave, long service leave, the balance of any time off instead of overtime, and any redundancy pay, as applicable.
Can you terminate an employee that’s been arrested at work? Maybe.
A recent judgment discussing s394 of the Fair Work Act (Unfair Dismissal) answered this question. Thankfully, not a question encountered in any great frequency, but the circumstances of such an event may be harmful to an employers reputation or business.
In the case of De La Rue v DPG Services P/L, the Applicant raised an action against his previous employer, claiming that their dismissal was either harsh, unjust, or unreasonable.
The Applicant was employed at an aged care facility and had an appropriately executed employment contract. Their contract of employment required them to disclose any matters that could give rise to a change in the outcome of the employee’s police check. The employment contract also required the Applicant to adhere to a code of conduct, which amongst other things, required them to alert their employer of anything that might impact the employer’s brand or reputation.
The Applicant was being investigated for the breach of a Family Violence Interim Intervention Order, which was granted months earlier, and the theft of a mobile phone. Whilst in no way condoning or minimising the actions of the Applicant, they were outside of and unconnected to their employment.
Police contacted the Applicant’s place of work on the morning of his arrest, asking if he was present at the facility (Police visited the Applicants house the night before to attempt contact, but seeing it was Police at his front door, pretended he was not home). Police later arrived at the facility, handcuffed the Applicant and took him away. During arrest, the Applicant was alleged to have been combative towards Police, which was witnessed by other staff, as well as residents of the facility, and their families.
Between the day of the arrest and their subsequent dismissal, numerous emails were exchanged and meetings had between the Applicant and the Respondent. The Applicant was subsequently given a show cause notice as to why their employment should not be terminated.
The Applicant outlined why they felt they should not be terminated at a subsequent meeting with the Respondent and a few days later was issued with a notice of termination. The grounds relied upon for the termination were that the applicant breached their employment contract and the code of conduct, and that they failed to follow a reasonable direction to discuss the matters that had taken place, which specifically mentioned their arrest.
For the most part, the employment contract and code of conduct can be dealt with almost parallel with one another. The court did not agree with the Respondent that the Applicant, in failing to advise them of the granting of a Family Violence Interim Intervention Order, breached either their employment contract, or the code of conduct. They did however find that failing to follow the reasonable directions of the employer and discuss the matters that had occurred, including the arrest, did constitute reasonable grounds for dismissal.
As the Applicant was aware that the Police were interested in talking with him, and he made no efforts to connect with Police before attending his place of work, he was wholly indifferent as to his employers brand and reputation. This put him in breach of the contractual obligation he had to notify his manager as soon as he became aware of any information or matter that may affect the Respondent’s brand or reputation. This left the Respondent exposed and the Applicant further acted with reckless regard in front of staff, residents, and families when confronted by police.
“I am satisfied the Applicant’s conduct in failing to notify the Respondent in advance of attending work and his response when the police attended his place of work were serious breaches of his employment contract and sufficiently detrimental to the ongoing employment relationship so as to constitute a valid reason for his dismissal.”
