Case Law – Calculating the unfair dismissal high-income threshold

Johnson v Benex Civil Pty Ltd (2022)

A family run business, Benex Civil Pty Ltd (Benex), employed Ms Johnson. In April 2021, Ms Johnson’s employment was summarily terminated for serious misconduct, by her then husband, on behalf of Benex. Ms Johnson commenced unfair dismissal proceedings in the Fair Work Commission (FWC).

Benex alleged Ms Johnson’s income exceeded the then unfair dismissal high-income threshold of $153,600, meaning Ms Johnson could not bring an unfair dismissal claim.

Ms Johnson’s remuneration package included a base salary of $125,000, and company-supplied Toyota Landcruiser Prado, mobile phone, iPad, data plan, health insurance and other benefits.

The Verdict

The FWC held Ms Johnson’s annual earnings exceeded the unfair dismissal high-income threshold, which included:

•            a base salary of $125,000 per annum;

•            the company-supplied vehicle, so far as it was used for private use (as there was no agreed monetary value for the vehicle, the value was calculated by taking the average daily kilometres travelled for private use by the estimated cost per kilometre for a Prado motor vehicle);

•            the mobile phone, iPad and data plan, to the extent used for personal use; and

•            the family health insurance plan, which included the entire family. The value of the whole plan was included given there was no evidence it could be divided or apportioned between family members.

The FWC excluded from the earnings assessment:

•            compulsory superannuation contributions, as required by the Fair Work Act 2009 (Cth);

•            vehicle expenses received prior to Ms Johnson receiving her company-supplied Prado; and

•            fringe benefits tax in relation to Ms Johnson’s company-supplied Prado, as there was no evidence she had forgone salary in return for the use of the Prado vehicle.

The Lessons

It is important to not just rely on an employee’s base salary when assessing whether they fall under or exceed the unfair dismissal high-income threshold. Some other employee benefits may be included in that calculation and need to be considered.

This article has been prepared for information purposes only and is not legal advice. For legal advice regarding your specific circumstances, please contact Workplace Resolutions Law directly on (03) 5499 6131 or by email at admin@wrlaw.com.au

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