Unfair dismissal application rejected due to employee exceeding high-income threshold

Unfair dismissal application rejected due to employee exceeding high-income threshold

The Fair Work Commission has rejected an unfair dismissal application on jurisdictional grounds, accepting the submissions of his former employer that the manager was not covered by a modern award and his remuneration package exceeded the high-income threshold as defined in the Fair Work Act 2009 (the FW Act).

Under the FW Act, an employee is protected from unfair dismissal if their employment is covered by a modern award, an enterprise agreement, or they are in receipt of annual earnings not exceeding the current high-income threshold of $158,500 as adjusted from year to year.

The manager commenced employment with K & S Freighters Pty Ltd (K&S), a provider of freight services to national customers,  in May 2007 in the role of Business Development Manager. His title was changed in 2016 to that of ‘National Business Development & Key Client Manager’, where he remained until his dismissal on 20 December 2021. No reasons for his dismissal were given in the transcript.

K&S claimed that the employee was not covered by a modern award and that his collective remuneration package exceeded the high-income threshold of $158,500. Both parties agreed that the position was not subject to an enterprise agreement.

The manager claimed that he was covered by the terms of the Commercial Sales Award 2020 (CS Award) and that his position met the definition of a ‘Commercial Traveller’ under the award. His claims were largely based upon the amount of time he spent away from his work location in Trugannia, Victoria undertaking sales both within Victoria and other states.

Referring to the award definition, Commissioner Tanya Cirkovic noted three elements that the manager’s position needed to meet to be covered under the CS Award.

“First, the person must be employed ‘substantially away from the employer’s place of business’. Secondly, that employment must be for ‘the purpose of soliciting articles, goods, wares or merchandise or material’. Thirdly, the solicitation of orders for, or selling of articles etc, must be ‘for wholesale sale, for resale, or for use in connection with the production and/or preparation and/or distribution of commodities for sale by the customer'”.

In her assessment, Commissioner Cirkovic determined that the manager failed to meet any of the three required criteria.

With regard to exceeding the high-income threshold, the manager’s base salary at the date of termination was $156,999.25.

Using the principles detailed by the  Full Bench in Sam Technology Engineers Pty Ltd v Bernado, Commissioner Cirkovic determined the private benefit of the company car provided to the manager to be worth $6,604.48.

The Commissioner also determined additional earnings to the manager comprising $1,932.39 for a company-provided fuel card and $468.17 for a toll card.

Commissioner Cirkovic, therefore, determined the manager’s annual earnings to be $166,004.29, well in excess of the maximum threshold to allow an unfair dismissal claim to proceed to hearing.

The application was dismissed.

RPM v K&S Freighters Pty Ltd – [2022] FWC 1177

For queries about unfair dismissals, jurisdictional objections, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 130 925 529, 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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