In a recent decision the Fair Work Commission found that a mining employee was ineligible to apply for unfair dismissal due to his high rate of earnings, even though he was not receiving all of those earnings when dismissed.
The Facts
A mining employee in a Coordinator position was terminated after a lengthy period of leave during which he received 75% of his gross salary under the company’s salary continuance policy.
His pay entitlements under his employment contract and company policy were:
- base salary
- site allowance
- family medical allowance
- 3% superannuation contribution that was additional to the compulsory superannuation entitlement
Under the Fair Work Act, an employee is not eligible to apply for unfair dismissal if their rate of earnings exceeds the high-income threshold (currently $175,000) and their position is not covered by a modern award or an enterprise agreement.
The employee applied for unfair dismissal after he was dismissed.
The employer disputed the application on the grounds that he was ineligible to apply for unfair dismissal as his rate of earnings exceeded the high-income threshold of $175,000.
The Decision
The Commissioner dismissed the employee’s application for unfair dismissal, finding that:
- His rate of annual earnings included his base salary, site allowance, family medical allowance and 3% superannuation contribution.
- Together, those exceeded the high-income threshold of $175,000.
- It did not matter that he was at the time of termination receiving less than $175,000 under the salary continuance policy.
Implications
Rights and obligations about dismissal are subject to strict technical requirements under the Fair Work Act.
Employers should understand how those requirements apply in their situation for managing their risks in employment decision-making.
Employees should understand how those requirements apply when considering taking action to dispute a dismissal.
At WorkLegal our experienced team can answer your questions and put you on the right track. A range of fixed-price Initial Consultations will suit most people’s needs in quickly learning what their options are.
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