According to s 382 of the Fair Work Act 2009 (Cth) (‘the Act’), those earning more than $162,000 per annum cannot file an Unfair Dismissal claim with the Fair Work Commission (‘FWC’). However, two recent cases have demonstrated a few important exceptions to this rule.
Brian Cowan v I.P.C. Pty Ltd 
In the first case, the FWC rejected an employer’s argument that an employee’s unfair dismissal claim should be thrown out because his earnings exceeded the high-income threshold by almost $40,000. The court found that the mechanical superintendent’s earnings fell below the high-income cap after excluding his overtime payments and work expenses.
The employer, I.P.C. Pty Ltd, claimed that the superintendent’s income came to $201,000 including his salary, company car use, company phone use, salary sacrifice, and overtime pay, putting him well above the high-income threshold. His contract guaranteed “at least” 40 hours a week, and he earned $58 an hour and $63 for overtime, and at times the company paid him a $80 base rate and $88 overtime during the Company’s shutdown periods. However, working during these shutdown periods was not guaranteed in his contract.
Therefore, it was could that if the value of the superintendent’s vehicle use added up to $14,000, the phone use $1000, and salary sacrifice $5,200, his earnings would total $141,000, which fell well below the threshold.
Consequently, the applicant was allowed to proceed with his unfair dismissal claim.
Mr Leneod Lyon v Charles Hull Contracting Co. Pty Ltd 
The second case involved an applicant, Mr Lyon, who claimed that he was protected from unfair dismissal by the Act because the Building and Construction General On-Site Award (‘B & C Award’) or the Miscellaneous Award covered him, or that his earnings fell below the cap. Mr Lyon had been promoted to a supervisor position by Charles Hull Contracting Co. Pty Ltd at the Boddington Gold Mine, receiving $150,000 a year, excluding superannuation, when he was dismissed in June last year. The high-income threshold sat at $158,500 when the company dismissed him in June 2022.
Commissioner Paul Schneider found that neither of the awards covered the worker. s143(7) of the Act excluded Mr Lyon from coverage by the Miscellaneous Award as the nature of his role was not traditionally covered by awards, and he was excluded from the B&C Award as it does not typically cover supervisors in the civil construction industry.
The commissioner then calculated the worker’s use of a car that the company provided to him for work-related and private use. The worker had a roster pattern of eight-days-on, six-days-off, and travelled 148km from his home to work for each swing cycle.
Commissioner Schneider found that even if the supervisor didn’t use the car during his six days off, his private car use would be worth $10,700, pushing him over the high-income threshold and therefore making Mr Lyon unable to proceed with his unfair dismissal claim.
The two cases illustrate the importance of accurately calculating employees’ earnings to determine whether they are covered by the high-income threshold for unfair dismissal claims. Employers need to be mindful of which payments can be included in calculating an employee’s income for this purpose, particularly those that cannot be determined in advance. Employers must also be mindful as to whether employees are using company property such as cars and mobile phones for private use and how this may affect unfair dismissal claims.
As always, employers are encouraged to seek professional legal advice regarding employee entitlements and any potential unfair dismissal claims. If this article raises any questions for you, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Daphne Klianis or Josh Hoggett.