Q. Our employees are employed under an enterprise agreement that has been approved by the Fair Work Commission. The terms of the agreement are based on the Black Coal Mining Industry Award. Quite a few of these employees have annual earnings which exceed the current high income threshold. If an employee is dismissed, are they excluded from making an application for unfair dismissal because their annual earnings exceed the high income threshold? Also, does the minimum employment period of six months still apply for larger employers? 

 

A. An employee covered under an enterprise agreement would have jurisdiction to claim unfair dismissal under the Fair Work Act. 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 if they are not covered by a modern award or an enterprise agreement. 

 

Who is included? 

The Fair Work Act (s.396) sets out four matters which must be decided in an application of unfair dismissal involving an employee before the merits are considered by the Fair Work Commission: 

  • whether the application was made within the period required in subsection 394(2) within 21 days after the dismissal took effect (or as extended by the Fair Work Commission) 

  • whether  the person was protected from unfair dismissal (completed the minimum period of employment; covered under a modern award or enterprise agreement; an award/agreement free employee – whose annual rate of earnings is less than the high income threshold) 

  • whether the dismissal was consistent with the Small Business Fair Dismissal Code (where relevant) – a small business employer is an employer employing fewer than 15 employees 

  • whether the dismissal was a case of genuine redundancy. 

 
Minimum employment period 

In the case of an employee whose employer employs 15 employees or more, the minimum employment period is 6 months continuous service, whereas, for an employee whose employer employs fewer than 15 employees, the minimum employment period is 12 months continuous service. For the purpose of calculating the number of employees employed by the employer at a particular time, all employees at that time are to be counted as well as the employee(s) being dismissed, but excluding a casual employee who has not been employed on a regular and systematic basis. 

 

Bottom line 

The high income threshold is only relevant to an unfair dismissal application if the employee is not covered under a modern award or an enterprise agreement.