High-Income Threshold includes remote travel allowance
An employee’s application for unfair dismissal has been rejected on jurisdictional grounds, as it was determined that her compensation package exceeded the statutory thresholds determined in the Fair Work Act 2009 (Act). The case may have relevance for employees engaged under common law contracts working in remote locations, as several remote area allowances were reviewed in the Commission’s assessment.
The case involved an employee who had been employed by Rio Tinto as an environmental advisor at it’s Gove facility in the Northern Territory. She had commenced employment with the company on 15 June 2004 and was dismissed for alleged continued performance issues by way of a dismissal letter on 30 June 2020.
Under section 382 of the Act, to have protection from unfair dismissal, an employee not employed under a Modern Award or Enterprise Agreement, must not have any annual earnings in excess of the high-income threshold as mandated by regulation. Interestingly, superannuation is not included in the assessment. At the time of her dismissal, the relevant threshold as at 1 July 2020 was $153,600. Both parties agreed she was engaged under a common law contract.
The employee’s base salary was $112,810. She also received a remote area travel assistance (RATA) of $22,720 per annum, a Gove remote area allowance of $28,202.50 per annum, and an amount calculated at $29,484 in accommodation benefits provided to the employee and her family. Rio Tinto argued that all four payments should be included in determining her annual earnings, and if accepted, she would exceed the statutory threshold.
In the hearing before Commissioner Spencer, the employee’s representative challenged the inclusion of the RATA payment ($22,720) and the estimated accommodation benefit amount ($29,484). With regard to the first amount, Commissioner Spencer included the assessment on the basis that the payments were not regarded as a reimbursement, were not discretionary, and effectively formed part of the employee’s contract.
With regard to the accommodation benefits paid, however, she took an alternate view. The employee was charged a nominal weekly amount of $13 to offset the provision of a four-bedroom house, electricity and gas. Rio Tinto sought to translate the provision of these amenities into a notional benefit to the employee comprising $29,484 per annum.
However, Commissioner Spencer rejected their argument, determining that the benefit did not constitute “a reasonable monetary value that has been agreed between the parties”. Section 332(1)(c) provides that `earnings’ include the `agreed monetary value of non-monetary benefits’. She accepted the employee’s argument that there was never any agreement as to the value of the amenities provided.
Nevertheless, as the three other amounts combined exceeded the high-income threshold, Commissioner Spencer ruled she had no jurisdiction to hear the application and was therefore dismissed.
For queries about jurisdictional issues, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178 or via email to firstname.lastname@example.org
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.