High income cap increases but unfair dismissal claims still possible

The high income threshold for unfair dismissal claims rose to $113,800 from 1 July 2010.  However, employees earning more than this amount can claim unfair dismissal if their job descriptions are covered by a modern award or enterprise agreement.

The Fair Work Act 2009 provides certain employees with the right to lodge an unfair dismissal claim with Fair Work Australia if their dismissal is harsh, unjust or unreasonable.

Employees who can claim are:

• those covered by a modern award
• those covered by an enterprise agreement
• those employees with remuneration below the threshold, which is now $113,800

A decision at Fair Work Australia this week is a good case in point.  Anthony Taylor-Hunt was a “supervisor” with Downer EDI Works Pty Ltd.  He sued his ex-employer for unfair dismissal.  His salary was $123,500 at the time of dismissal, which meant his unfair dismissal claim would only be heard if he was covered by the Building and Construction General On-site Award 2010 (“Building Award”) or one of Downer EDI’s enterprise agreements.

It was found that the highest classifications in the enterprise agreement were Leading Hand Grader Driver, Bitumen Sprayer and Workshop Foreman which were clearly not relevant.

The highest award classification expressly excluded employees with overall responsibility for a project or multiple work teams.  As Mr Taylor-Hunt held these responsibilities, it was found he was not covered by the Building Award either and was therefore not eligible to bring an unfair dismissal claim.

Employers should not assume that an income of in excess of $113,800 will exclude an employee from the unfair dismissal laws.  Advice should be sought before dismissing an employer over the threshold as defending an unfair dismissal claim can be costly and could result in re-instatement.

MST has extensive experience in assisting its clients with complying with the most current workplace relations laws, including advice relating to unfair dismissal claims.  Please contact one of our lawyers in the Workplace Relations Team for further information.

Author: Richard Scougall