The employee started with the employer in 2013 and at the time of his termination was in a supervisor position with a salary of $150,000 per annum plus superannuation. The employee was terminated on 7 June 2022 when the high-income threshold at the time was $158,500.

The employer asserted that the employee was earning well above the high-income threshold after factoring in benefits such as the private use of company vehicles. The employee argued that this should not be included and that he was covered by either the Building and Construction General On-Site Award 2020 or the Miscellaneous Award 2020 which would protect him from unfair dismissal.

Decision

Employees are protected against unfair dismissal if they have completed the minimum employment period of six months (or 12 months for small businesses). However, an employee who earns more than the high-income threshold (currently $162,000 per annum) and is not covered by an award or enterprise agreement is not eligible to claim unfair dismissal.

The FWC considered what constituted earnings for the employee under section 332 of the Fair Work Act 2009, in the context of the employee’s non-monetary benefits.

The Commission also assessed whether the employee’s position was covered by a modern award as the employer submits that the Building and Construction Award did not contain supervisory classifications for the role in relation to the civil construction sector.

The FWC considered the principal purpose and primary responsibilities of the employee’s position and determined that the employee was not covered by either of the awards as it was not consistent with the classifications under the awards.

The employee worked a pattern of eight days on and six days off, travelling 148 kilometres from his home to work for each roster, which was considered as private use. The FWC calculated that even if the employee didn’t use the car during his six days off, the private use of the vehicle was still worth $10,700, which pushed him over the high-income threshold.

The employee’s use of the private motor vehicle was of significant value and contributed to hisearnings, which pushed his earnings above $158,500.

Learnings for business

Businesses need to be aware that while an employee may be paid above the high-income threshold, they can still make a claim for unfair dismissal if they are also covered by a modern award or an enterprise agreement. This case highlights the importance of understanding what counts towards employee earnings and what is excluded.

It is also imperative that employers understand the modern awards system and how to cover and classify their employees. The awards contain comprehensive information regarding entitlements and other working conditions and incorrect coverage or classifications can have costly consequences.

How the Victorian Chamber can assist

Contact the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222 to understand your obligations and ensure compliance with the Fair Work Act and relevant modern awards.

The Victorian Chamber’s consultants are experienced in dealing with conciliations (conferences) and arbitrations (hearings) facilitated by the FWC. Our consultants can provide employers with easy-to-follow guidance and advice, as well as knowledgeable and experienced representation at both conferences and hearings.

Good HR practices help to ensure your business is legally compliant, attracts high-quality staff, increases output and efficiency and creates a strong and positive workplace culture. Attend our New to Human Resources course to increase your knowledge of effective policies, performance management techniques and payroll and record keeping requirements.

Understand your minimum obligations for the workplace relations regulations by attending our Understanding Awards course. The program will increase your knowledge of common clauses within modern awards and assist in classifying your employees within the modern award system.

Under current employment legislation, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals course to increase your knowledge of counselling and discipline processes and how to best manage an unfair dismissal claim.