What is the unfair dismissal high income threshold?
The unfair dismissal high income threshold is currently set by the Fair Work Commission at $142,000 per annum. Under the Fair Work Act a person whose earnings exceed the high income threshold is not protected from unfair dismissal. If an employee is covered by an award or enterprise agreement the high income threshold does not apply. This is common in mining industries.
In most cases the income of an employee is uncontroversial and the process of assessing whether the employee is protected from unfair dismissal is straightforward. In other cases, an employee’s income is made up of a range of components which make that assessment more complex.
There are a number of cases where the Fair Work Commission has been required to determine what are “earnings” and in turn whether the Commission has jurisdiction to deal with an unfair dismissal claim. Those decisions clarify what items are regarded as earnings for the purposes of unfair dismissal.
What items are regarded as earnings ?
monetary amounts dealt with in any way on the employee’s behalf (such as a salary sacrifice)
the agreed value of non monetary benefits (such as personal use of a vehicle)
fringe benefit taxes paid on behalf of an employee where an employee has forgone wages in return for a benefit
What items are not regarded as earnings ?
payments which can not be determined in advance such as commissions, bonuses and overtime
reimbursement of expenses
Importantly, even where there is no agreed value of a non monetary benefits, the Fair Work Commission can exercise the discretion to calculate and attribute a monetary value to a particular component. This normally includes items such as the personal use of a mobile phone or laptop.
If you require further information on the unfair dismissal high income threshold, please contact us on 1800 739 795.