Australia: Significant Change in Determining Employee Access to Unfair Dismissal Claims

Australia’s Fair Work Commission (“FWC”), the country's industrial relations tribunal responsible for, among other things, setting and maintaining a safety net of minimum wages and other employment conditions under the Fair Work Act 2009 (Cth), recently handed down its decision in Dart v. Trade Coast Investments Pty Ltd (June 29, 2015).  The decision clarifies when personal use of company-supplied devices can be included in the calculation for determining whether the employees are eligible to file a claim alleging unfair dismissal in breach of the Fair Work Act.

Australia’s national workplace relations system allows eligible employees who believe that they were unfairly dismissed to apply for an unfair dismissal remedy with the FWC.  To make an unfair dismissal claim, an employee must either be covered by a statutory modern award1 or earn less than the high income threshold.  The high income threshold is reviewed and adjusted annually. On July 1, 2015, this threshold was increased from $133,000 to $136,700. 

In previous decisions, including Maturu v. Leica Geosystems Pty Ltd (29 September 2014), the FWC held that in determining whether the high income threshold had been met, an employer could not rely on non-monetary benefits such as the employee's non-work-related use of a company laptop and company-paid broadband internet.  Previous FWC decisions were based on Fair Work Regulation 3.05(6), which provides that non-monetary benefits can only be included in calculations for the high income threshold where the benefit has been agreed upon between the employee and the employer.  In the Maturu decision, when looking at the language of the employment contract, the FWC determined that no such agreement existed. Therefore, the FWC held that the cost associated with the employee’s personal usage could not be included in the calculation of salary and benefits to meet the high income threshold.  The employee’s contract in that case did not specify that personal usage was permitted.

In Dart, the employee had been provided with a company phone and iPad and, despite the employment contract's language that did not stipulate that personal use was permitted, the FWC found that the parties had an oral agreement that conferred such authority. Furthermore, the FWC seemed prepared to consider the evidence on the percentage of the employee’s personal versus work-related usage of the devices, including the number of the employee’s personal photos saved in both devices. According to the FWC, this clearly supported the company’s argument that the employee’s personal usage was significant.  Ultimately, the employee’s income was deemed to exceed the then-existing high income threshold and, therefore, Dart’s application for unfair dismissal was dismissed. 

The decision clarifies the importance for employers with operations in Australia of adequately characterizing employee permissible usage of company-supplied devices in employment contracts and policies so that significant personal usage can be appropriately included in the total value of the employee’s compensation package. This is particularly important for any employees who may be remunerated at a level that is close to the high income threshold.  Employers are also advised to review their employment contracts annually around July 1 in line with regular increases to the high income threshold.

See Footnotes

1 Modern awards are industry- and occupation-specific statutorily mandated minimum terms and conditions that apply to certain employers and employees who perform work covered by the award.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.