Employee’s salary package exceeds unfair dismissal threshold

Employee’s salary package exceeds unfair dismissal threshold

The Fair Work Commission has upheld a jurisdictional objection that a dismissed employee’s salary package precluded them from pursuing an unfair dismissal application.

Under s382 of the Fair Work Act 2009, a person cannot pursue an unfair dismissal claim if they exceed the ‘high-income threshold’ of $158,500.

(Always check the current threshold here:  Award & agreement free wages & conditions – Fair Work Ombudsman)

At the time of the employee’s dismissal for serious misconduct on 14 April 2021, the threshold for the period 1 July 2020 to 30 June 2021 was $153,600 per year.

The employee commenced employment with Benex Civil Pty Ltd (Benex) on 9 October 2017 when she was engaged as an Office Manager (later renamed as Commercial Manager). Benex is a specialised civil works business operating throughout Southeast Queensland since April 2008.

The employee was responsible for overseeing and supervising Benex’s commercial activities, and employees, including ensuring the company met its financial goals, assessing overall company performance, performing human resource activities and other duties.

The employee and the company’s sole Director, Mr Johnson, had been in a relationship since December 2007, subsequently married on 20 December 2012, and have one child together.

Following the breakdown of their relationship during March and April 2021, Mr Johnson summarily dismissed his former partner for serious misconduct, alleging that she accessed various company accounts and refused to provide a copy of the ‘Management Password Register’ when requested.

In hearing the case, Commissioner Paula Spencer first had to determine whether the employee’s salary package exceeded the then current high-income threshold. She cited various cases where consideration of items other than an employee’s base salary have been included in determining an employee’s eligibility for unfair dismissal relief.

At the time of her dismissal, the employee’s annual salary was $125,000 plus superannuation. She also received the following benefits from Benex:

  • Family cover Health insurance ($3,864.61)

  • iPhone and iPad ($2319.48)

  • Payment for costs associated with the employee’s personal car, prior to her being provided with a company vehicle ($4251.76)

  • Purchased laptop ($7,000)

  • Leased company vehicle, ‘Prado’ from 5 March 2021, value of $82,367.

Commissioner Spencer noted the principle that had been previously recognised where an employee is provided with a fully maintained vehicle for use in the course of their employment, and that vehicle is also used for private purposes, the value of that private use can be included in the employee’s annualised earnings.

Commissioner Spencer accepted that the whole costs of the health insurance, and the iPhone and iPad provided, were to be included.

Critically, she assessed the benefit of the Prado on an annualised basis to be worth an amount of $45,056. Although the car had only been issued to the employee on 5 March 2021, in the 40 days following up to her dismissal, she had travelled over 4000kms which both parties accepted was 100% personal use.

Consequently, Commissioner Spencer determined the employee’s total earnings to be $176,239.89 and therefore in excess of the high-income threshold of $153,600, as it was at the time of the dismissal.

The application was dismissed.

RJ v Benex Civil Pty Ltd – [2022] FWC 338

For questions about employment contracts, packaging, high-income thresholds, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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