What benefits are included when working out if a worker earns more than the upper limit for an unfair dismissal claim?



Under Section 382 of the Fair Work Act, employees who earn more than a certain amount and are not covered by an award are unable to make an unfair dismissal claim in the Fair Work Commission. Currently the high-income threshold is $133,000 per year.

This amount can include non-monetary benefits as set out in Section 332 of the Fair Work Act, but disputes can arise in deciding what should be included.

A recent decision of the Full Bench of the Fair Work Commission ([2014] FWCFB 6735) considered whether an employee's mobile phone and data usage should be included in the employee's earnings. In this case, the employer said that the employee had private use of a laptop and mobile, while the employee said that the equipment was only provided for work use.

In making its decision, the Full Bench referred to a 1997 decision of the Full Bench of the Australian Industrial Relations Commission in Rofin Australia Pty Ltd v Newtown (1997) 78 IR 78:

“... a distinction ... has been made, in our view quite properly, between the provision of a motor vehicle as part of a salary package and the provision of a motor vehicle as a piece of equipment supplied by the employer to enable the employee to perform the job.

Where a motor vehicle is provided to an employee in lieu of salary that might otherwise have been paid, it is appropriate that the private benefit derived by the employee from the provision of the motor vehicle be counted as part of the employee’s remuneration. Where, however, the vehicle is provided for business purposes and the employee’s entitlement to private use is purely incidental, the provision of the motor vehicle should be treated no differently to the provision by the employer of any other tool or piece of equipment essential to the performance of the job.”

The Full Bench decided that in the current case, there had been no agreement between the parties that the employee could use the mobile broadband service for private use. The Full Bench stated:

'...where a person has received a benefit that was not in accordance with an agreement between that person and his or her employer, the Commission’s power under reg 3.05(6) will not be enlivened.' (Regulation 3.05(6) allows the Commission to estimate a monetary value of a benefit where the parties do not agree on the value).

As it turned out, the value of the mobile broadband usage was decisive in working out whether the employee earned less than the high-income threshold and the employee was able to press on with their unfair dismissal claim.

In this case, there seems to have been a pivotal disagreement between the parties as to whether there was any private use allowed of the employer-provided service. This could perhaps be avoided by stating clearly in the employment contract whether private use of business equipment and services is included as part of the salary package, as well as giving thought to whether the value of such private use can be agreed between the parties or is otherwise able to be verified.