Non-inclusion of overtime allows dismissed manager to pursue unfair dismissal claim

Non-inclusion of overtime allows dismissed manager to pursue unfair dismissal claim

The Fair Work Commission has rejected an employer’s jurisdictional argument that amounts an employee earned through overtime should have been included in assessing his income, thereby placing him above the high-income threshold and ineligible to pursue an unfair dismissal claim.

The employee had commenced as a casual with I.P.C Pty Ltd (IPC) in or around 2008 and commenced full-time employment with IPC in or around 2015 in the position of Mechanical Maintenance Supervisor. In November 2019, he was promoted to the position of Mechanical Superintendent, where he remained until his dismissal on 15 December 2022.

In April 2016, the employee entered into an employment contract confirming his terms and conditions of employment.

In submissions before Deputy President Abbey Beaumont, the parties agreed that the employee had not been covered by an award or enterprise agreement; therefore, the sole jurisdictional question to be determined was whether his ‘relevant earnings’ placed him above or below the high-income threshold, currently $162,000.

Under the terms of his current contract, the employee was paid a base hourly rate of $50.00 per hour, with an expectation that he works a minimum of 40 hours per week. He was entitled to overtime at $53.00 per hour for work in excess of 40 hours and outside of normal business hours.

In July 2022, he negotiated higher rates of pay when working on shutdowns for a particular client, being $80 for ordinary hours and $88.00 per hour for overtime periods. He was also provided with a company vehicle and provided with a mobile phone, although no specific dollar amounts were ascribed to either entitlement.

In reviewing case law, the Deputy President quoted the Full Bench decision of Sam Technology Engineers Pty Ltd v Bernadou, where it had been concluded,

“that the definition of ‘earnings’ in s 332 is non-exhaustive and as such, ‘earnings’ should be given its ordinary meaning … an employee’s ‘earnings’ are higher than the employee’s ‘base rate of pay’ but are narrower in scope than the ‘full rate of pay’ of the employee, because ‘earnings’ do not include the … payment of amounts which cannot be determined in advance’ such as incentive based payments, bonuses and overtime (unless the overtime is guaranteed”.

The Deputy President noted,

“The Applicant clarified that there was no guarantee or agreement in advance of how much overtime would be worked over the duration of the year or the value of the payments to be made over the year as a result of the Applicant performing the overtime”.

Consequently, in rejecting overtime amounts earned by the employee, she accepted that the Applicant’s salary at the time of his dismissal was $120,640.00 per year.

With regard to the value of the use of a vehicle, the Deputy President factored in a maximum nominal view of an amount of $14,040.00 and to the mobile phone, $1000. She also acknowledged superannuation payments above the prescribed SGC percentages, equating to $5,200.00.

As the Deputy President concluded, the employee’s total earnings of $140,880.00 (comprising the four amounts above) did not exceed the current high-income threshold of $162,000, and he is, therefore, a person protected from unfair dismissal by virtue of s 382 of the Fair Work Act 2009.

The Deputy President dismissed the jurisdictional objection and is soon to issue Directions Orders to the parties, and the matter will be set down for a hearing on the merits and remedy of the matter.

BC v I.P.C. Pty Ltd [2023] FWC 514 (10 March 2023)

For queries about employment contracts, high-income thresholds, dismissals, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178, 1300 WAL LAW or via email to

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.

Ref: 339.0523

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