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  • What is the Fair Work Commission High Income Threshold?

    Introduction See Fair Work Act s.382 The high income threshold operates as a limit to an employee’s eligibility to be protected from unfair dismissal under the terms of the Fair Work Act 2009. If an employee is not covered by a modern award, or if an enterprise agreement does not apply to them, they must have an annual rate of earnings of less than the high income threshold. The high income threshold is currently $162,000.[1] This figure is adjusted annually on 1 July.[2] For a dismissal which took effect on or before 30 June 2022 the high income threshold was $158,500.[3] What are earnings? See Fair Work Act s.332 Earnings include: wages such other amounts (if any) worked out in accordance with the Regulations amounts dealt with on the employee’s behalf or as the employee directs, and the agreed money value of non-monetary benefits. Non-monetary benefits are benefits other than an entitlement to a payment of money: to which the employee is entitled in return for working, and for which a reasonable money value has been agreed by the employee and the employer. The Fair Work Commission has a discretion to include a benefit that is not a payment of money and that is not a 'non-monetary benefit' (within the meaning of s.332(3) of the Fair Work Act). It may do so where it is satisfied that it is appropriate to take it into account, and it can attribute a ‘real or notional’ value to the benefit, in default of any agreement between the parties.[4] Earnings do not include: payments the amount of which cannot be determined in advance such as: commissions incentive-based payments and bonuses, or overtime (except guaranteed overtime);[5] reimbursements (such as per diem payments),[6] and compulsory contributions to a superannuation fund (superannuation guarantee). Per diem means 'by the day' – a sum of money paid to an employee every day, such as a meal allowance or accommodation allowance. Superannuation Compulsory superannuation contributions are not included in the calculation of an employee’s earnings.[7] Any superannuation paid in excess of compulsory contributions may be included in the calculations of the employee’s earnings. Vehicles Where an employer provides an employee with a fully maintained vehicle the value of the private use of the vehicle can be included in the annual rate of earnings.[8] Use for business purposes is excluded and only the proportion of private usage can be counted as remuneration.[9] Where there is no agreed monetary value of the benefit of the private use of a motor vehicle, the Commission will generally apply the following formula:[10] Determine the annual distance travelled by the vehicle in question. Determine the percentage of that distance that was for private use. Multiply the above two figures to obtain the annual distance travelled for private purposes. Estimate the cost per kilometre for a vehicle of that type (may be obtained from RACV, NRMA or other similar motoring association). Multiply the annual distance travelled for private purpose (obtained at step 3) by the estimated cost per kilometre. The figure obtained is the value of the vehicle to the employee and is added to remuneration.[11] Where an employer provides an employee with a car allowance, the allowance should be treated in the following way for the purpose of calculating an employee’s ‘annual rate of earnings’: If a car allowance is paid to an employee in circumstances in which there is no requirement or expectation that the employee will have to use his or her car for work purposes, then the whole of the car allowance is, in reality, part of the employee’s wages and is therefore included in their ‘earnings’. If a car allowance is paid to an employee at the time of their dismissal in circumstances in which there is a requirement or expectation that the employee will have to use his or her car for work purposes, then it will be necessary to determine and calculate the private benefit, if any, derived by the employee from the car allowance.[12] Fringe benefit tax Fringe benefit tax is a tax that is imposed on an employer when they provide a benefit to an employee,[13] such as personal use of a company owned vehicle. Fringe benefit tax may or may not be counted as earnings depending on whether the amount is found to be an amount dealt with as the employee directs. Where the employer is ‘free to choose whether to provide a particular benefit to an employee’ it cannot be said to be an amount dealt with on the employee’s behalf.[14] Fringe benefit tax may be an amount dealt with at the employee’s direction, in a genuine salary sacrifice situation when an employee has forgone wages in return for a benefit.[15] In this situation fringe benefit tax will be included in the employee’s earnings.[16] Case examples Earnings Tax-deductible work-related expenses Read v Universal Store Pty Ltd T/A Universal Store [2010] FWA 5772 (McKenna C, 23 August 2010). The employee claimed that tax-deductible work-related expenses should be deducted from his wages for the purpose of calculating whether the high income threshold had been exceeded. This submission was not accepted. Pre-determined overtime Foster v CBI Constructors Pty Ltd [2014] FWCFB 1976 (Catanzariti VP, Lawler VP, Lewin C, 24 March 2014). The employee was required to attend 30 minute pre-start meeting every work day which was paid as overtime. It was found the overtime payments could be determined in advance so the 2.5 hours of overtime per week could be included in the calculation of his earnings. Guaranteed overtime Cross v Bechtel Construction (Australia) Pty Ltd [2015] FWC 3639 (Catanzariti VP, 29 June 2015). The employee was contractually obliged to work a 58 hour Extended Work Week (EWW) which was comprised of 40 hours ordinary work and 18 hours overtime. The Commission found that the overtime was guaranteed as the required 58 hour EWW could clearly be determined in advance and therefore should be used as the basis for calculating the annual rate of earnings. Vehicle Zappia v Universal Music Australia Pty Ltd T/A Universal Music Australia [2012] FWA 3208 (Hamberger SDP, 18 April 2012). The employee argued that the provision of a company car was a tool of the trade and should not be considered part of his earnings. It was found that the vehicle was primarily used for private purposes and was a significant part of the employee’s remuneration package. Private use of company provided iPhone and iPad Dart v Trade Coast Investments Pty Ltd [2015] FWC 4355 (Sams DP, 29 June 2015). The employee was provided with an iPhone and iPad at the commencement of his employment with permission for personal use ‘within reason’. The employee accepted that he had used the phone for personal calls, but, as with the vehicle, he argued that this was ‘incidental’ to the phone’s primary business purpose. The phone records disclosed that of 659 national direct calls, it appeared that 412 were direct personal calls (62.5%). When the phone and iPad were returned on termination, there were 610 personal photos on the iPad, and eight videos, as distinct from 21 work related entries. The calculated benefit from the employee’s private use of the phone and iPad resulted in his earnings exceeding the salary cap threshold. Life insurance policy Savannah Nickel Mines Pty Ltd v Crowley [2016] FWCFB 2630 (Hamberger SDP, Hamilton DP, Saunders C, 27 April 2016). The cost of the premium for a life insurance policy, which was paid for by the employer, was found to be an amount applied or dealt with on the employee’s behalf and was included in calculating the employee’s income. NOT earnings Travel allowance Davidson v Adecco Australia Pty Ltd T/A Adecco [2012] FWA 8393 (Booth C, 4 October 2012). The employee was in receipt of an annual travel allowance of $16,000 for the use of his own vehicle for work travel. It was held that the business use component of the allowance was to be excluded from the 'earnings'. Only the personal use could be included in ‘earnings’. Bonuses Jenny Craig Weight Loss Centres v Margolina [2011] FWAFB 9137 (Giudice J, Hamilton DP, Robert C, 23 December 2011). In the previous financial year the employee had received a base salary of $60,000, a 5 year bonus of $100,000 and an annual performance bonus of $42,000. It was found that the 5 year bonus could not be ‘determined in advance’ because the employer reserved the right to alter or discontinue the bonus plan, and it was likely that the same applied to the annual performance bonus. The employee therefore earned less than the high income threshold. Fringe benefit tax Rofin Australia Pty Ltd v Newton, Print P6855 (AIRCFB, Williams SDP, Acton DP, Eames C, 21 November 1997), [(1997) 78 IR 78]. Fringe benefit tax on the provision of a motor vehicle was found not to be part of the employee’s earnings as it was the employer’s taxation liability. This was distinguished from a genuine salary sacrifice situation where it can be said that fringe benefit tax is an amount paid at the direction of and by arrangement with the employee which would otherwise be part of the employee’s salary package. Mobile broadband – personal use Maturu v Leica Geosystems Pty Ltd [2014] FWCFB 6735 (Catanzariti VP, Asbury DP, Spencer C, 29 September 2014). The personal use of a mobile broadband service, on a laptop computer supplied for work purposes, was found not to be a ‘non-monetary benefit’. This was because the mobile broadband service was provided as a piece of equipment that was essential to the performance of the job and there was no evidence of any agreement in relation to the private use of the mobile broadband service. References [1] This figure applies from 1 July 2022. [2] For more information on the high income threshold please see Fair Work Act s.333; Fair Work Regulations reg 2.13. [3] High income threshold for period 1 July 2021 to 30 June 2022. [4] Fair Work Regulations reg 3.05(6). [5] See note in Fair Work Act s.332; incentive bonuses discussed in Jenny Craig Weight Loss Centres Pty Ltd v Margolina [2011] FWAFB 9137 (Giudice J, Hamilton DP, Roberts C, 23 December 2011) at para. 19. [6] See for e.g. Schreuders v Freelancer International Pty Ltd [2015] FWC 3286 (Booth DP, 15 May 2015). [7] Fair Work Act s.332(2)(c); discussed in Ablett v Gemco Rail Pty Ltd [2010] FWA 8124 (Williams C, 22 October 2010) at paras 31‒32. [8] Rofin Australia Pty Ltd v Newton Print P6855 (AIRCFB, Williams SDP, Acton DP, Eames C, 21 November 1997), [(1997) 78 IR 78 at p. 82]; citing Condon v G James Extrusion Company Print N9963 (AIRC, Watson DP, 4 April 1997), [(1997) 74 IR 283 at p. 288]; cited in Slavin v Horizon Holdings Pty Ltd [2012] FWA 2424 (Bissett C, 23 March 2012) at para. 11. [9] ibid. [10] Kunbarllanjnja Community Government Council v Fewings Print Q0675 (AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998); cited in Chang v Ntscorp Ltd [2010] FWA 1952 (Hamberger SDP, 9 March 2010); see McIlwraith v Toowong Mitsubishi Pty Ltd [2012] FWA 3614 (Cribb C, 30 April 2012) at para. 34. [11] Kunbarllanjnja Community Government Council v Fewings Print Q0675 (AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998). [12] Sam Technology Engineers Pty Ltd v Bernadou [2018] FWCFB 1767 (Gostencnik DP, Clancy DP, Saunders C, 27 March 2018) at para. 72. [13] Rofin Australia Pty Ltd v Newton Print P6855 (AIRCFB, Williams SDP, Acton DP, Eames C, 21 November 1997), [(1997) 78 IR 78 at p. 82]. [14] ibid. [15] Chang v Ntscorp Ltd [2010] FWA 1952 (Hamberger SDP, 9 March 2010) at para. 21. [16] ibid.

  • General Protections Case: C2022/5221 Maree Fay Harwood v Southern Youth And Family Services Limited

    Ms Maree Fay Harwood (the Applicant) made an application to the Fair Work Commission (the Commission) under section 365 of the Fair Work Act 2009 (Cth) (the Act) for the Commission to deal with a dismissal dispute. The dispute arose out of the Applicant’s allegations that she was dismissed from her employment with South Youth and Family Services Limited (the Respondent) in contravention of Part 3-1 of the Act. The information provided in the application, and in the employer response form lodged by the Respondent, indicates that the application may have been made out of time. Before considering the merits of the application, the Commission must be satisfied that the application was not made out of time and, if it was, whether there are exceptional circumstances giving rise to an extension of time. At paragraph 71 of the decision, Commissioner Schneider said; "I note the Respondent’s contentions regarding the above giving rise to exceptional circumstances. In response, I highlight the evidence advanced by the Applicant regarding her health concerns. Further, it is not an issue if an application is lodged on the final day of timeframe. It is understandable that one would opt to take ample time to prepare their application and such an act should not be questioned. Additionally, consistent with previous decisions of the Commission, it is not an issue if an applicant mistakenly lodges the wrong application type given this is promptly remedied." The decision was finally determined that the Fair Work Commission did find that there were exceptional circumstances to allow the out of time application, based on the applicant having suffered a medical condition which was deemed as just cause to find 'exceptional circumstances'. If you would like to take advantage of a FREE consultation with one of our Advocates to discuss your Fair Work matter or any workplace or Human Rights matter of concern, please visit our contact page and complete the online form for priority consideration.

  • Unfair Dismissal Case: U2023/719 Sam King v Fingal Bay Service Station & Tyre Service Pty Ltd

    Section 394 of the Fair Work Act 2009 (Cth) provides for an applicant to seek a remedy for unfair dismissal. There are cases, such as the recently settled Sam King v Fingal Bay Service Station & Tyre Service Pty Ltd where the Fair Work Commission can dismiss an application because directions are not complied with in terms of filing submissions. In Sam King v Fingal Bay Service Station & Tyre Service Pty Ltd the applicant (King) was required to file documents and then later given an ultimate deadline to file documents as a 'last chance' and informed by the Fair Work Commission that the unfair dismissal application would be dismissed if the orders not complied with. The orders to file were not satisfied and the unfair dismissal remedy was dismissed. This is one example of why compliance with orders of the Fair Work Commission in unfair dismissal and any other matter before the Fair Work Commission is important. It is often the case that self represented parties get to a point of frustration and hopeless despair because of their l;ack of experience in the jurisdiction. If you need advice on an unfair dismissal appeal, always seek advice from professional advocates or a lawyer specialising in the area of employment law. Call us for a FREE consultation or complete the contact for on this website. 1800 238 622

  • Unfair Dismissal in Australia

    These are some terms you will find when you are accessing unfair dismissal remedies in Australia; Fair Work Commission: This is the main government body responsible for handling disputes related to unfair dismissal in Australia. Searching for this keyword can provide information on the process for making a claim. Unfair dismissal laws: This term can be used to search for the legal framework that governs unfair dismissal in Australia, including the Fair Work Act and related regulations. Small business exemptions: In Australia, some small businesses are exempt from certain unfair dismissal laws. Searching for this term can provide information on the criteria for exemption and how it might affect your case. Constructive dismissal: This is a type of unfair dismissal that occurs when an employer makes working conditions so intolerable that an employee is forced to resign. Searching for this term can provide information on how to prove a case of constructive dismissal. Discrimination: If you believe that you were unfairly dismissed because of your race, gender, age, or other protected characteristic, searching for this term can provide information on how to make a discrimination claim. Remedies: If you are successful in a claim of unfair dismissal, searching for this term can provide information on the remedies available, such as reinstatement, compensation, or a combination of both. Unlawful termination: This is another term that can be used to search for information on unfair dismissal in Australia, particularly in cases where the termination was in breach of contract or other legal obligations. If you need help with a potential unfair dismissal case, call 1800238622 or complete the form on this page to claim your FREE consultation.

  • What are General Protection Rights in Australian Workplace Law

    The Fair Work Commission (FWC) in Australia is responsible for handling disputes related to workplace issues, including general protections. The general protections provisions in the Fair Work Act 2009 provide employees with a range of workplace rights and protections, including the right to: Protection from workplace discrimination, including discrimination based on race, gender, age, religion, disability, and sexual orientation. Freedom of association, including the right to join a union or other workplace organization. Protection from workplace bullying and harassment. Access to leave entitlements, including sick leave, annual leave, and long service leave. Protection from unfair dismissal. The right to request flexible working arrangements, including part-time work, job sharing, and working from home. Protection from adverse action, including being treated unfairly or dismissed because of making a complaint or raising a concern about workplace issues. The FWC has the power to hear and resolve disputes related to these general protections provisions. This includes conciliation conferences, where parties can attempt to resolve their dispute through a facilitated discussion, and formal hearings, where evidence is presented and a decision is made by a commissioner of the FWC. If an employee believes their rights under the general protections provisions have been breached, they can make a complaint to the FWC within 21 days of the alleged breach. The FWC can then investigate the complaint, and if a breach is found, can order the employer to pay compensation or take other action to remedy the breach. Overall, the general protections provisions provide important workplace rights and protections for employees in Australia, and the FWC plays a key role in ensuring these rights are upheld. Need help? Complete the contact form on this website and claim your FREE consultation.

  • General Protections in Australian Workplaces

    In Australia, there are several general protections provided by law to protect employees in the workplace. These protections include: Protection from discrimination: Employees have the right to be free from discrimination on the basis of their age, race, sex, gender identity, sexual orientation, disability, religion or political beliefs. Protection from unfair dismissal: Employees who have been dismissed from their job have the right to challenge the decision if it was unfair or unjustified. Protection from adverse action: Employees have the right to take certain actions, such as making a complaint or inquiry, without fear of adverse consequences from their employer. Protection of workplace rights: Employees have the right to take part in lawful industrial activity and to be represented by a union or other workplace representative. Protection from bullying: Employees have the right to work in an environment free from bullying or harassment. Protection of whistleblowers: Employees have the right to report wrongdoing in the workplace without fear of retaliation. These protections are provided under various federal and state laws, including the Fair Work Act 2009, the Australian Human Rights Commission Act 1986, and the Work Health and Safety Act 2011. Need help with a General Protections matter? Complete the contact form and claim your FREE consultation.

  • Unfair Dismissal in Australia

    In Australia, unfair dismissal occurs when an employer terminates an employee's employment in a harsh, unjust, or unreasonable manner, and the termination was not related to the employee's conduct or performance. The Fair Work Commission (FWC) is the authority responsible for dealing with unfair dismissal claims in Australia. To be eligible to make an unfair dismissal claim, an employee must have been employed for at least six months (or 12 months for small businesses with fewer than 15 employees), and their annual earnings must not exceed a certain amount, which is reviewed annually. If an employee believes they have been unfairly dismissed, they can make an application to the FWC within 21 days of their dismissal taking effect. The FWC will then assess whether the dismissal was unfair, taking into account a range of factors, including the reasons for the dismissal, whether the employee was given a chance to respond to the allegations, and whether the employer followed a fair process in making the decision. If the FWC finds that the dismissal was unfair, it can order the employer to reinstate the employee or pay them compensation. The amount of compensation will depend on the circumstances of the case and can include lost wages, superannuation, and other benefits. It is important to note that some employees are not eligible to make an unfair dismissal claim, including casual employees, independent contractors, and employees who were terminated due to genuine redundancy. Need help with an unfair dismissal matter? complete the contact form below for more information and to claim your FREE consultation.

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