Dismissals of high income employees

Most Australian employees whose employment is covered by the Fair Work Act, the national workplace relations system, have access to the system’s unfair dismissal jurisdiction which is managed by the Fair Work Commission, subject to an employee having completed a period of employment of at least the minimum defined employment period.

However an employee whose employment is covered by that system and whose rate of annual earnings (meaning at its very basic definition the annual base annual salary excluding add ons such as superannuation and allowances*) exceeds the high income threshold, currently $145,400, are not protected from unfair dismissal unless his or her employment is covered by a modern award or enterprise agreement.

Nevertheless high income employees are protected by what are called the general protections of the Fair Work Act and do have access to what is sometimes called the unlawful dismissal jurisdiction because the general protections prohibit the taking of adverse action (which includes dismissal) because an employee has or has exercised a workplace right or has engaged in industrial activity or been temporarily absent from work due to illness or accident or because of certain specified discrimination and coercion, undue influence or pressure and certain misrepresentations.

Accordingly if you are aggrieved by the termination of your employment but believe that you are not protected from unfair dismissal because of your income, or length of service, you should take urgent legal advice about your rights. There are very tight time limits.

An allegation of the dismissal of an employee by an employer in breach of the general protections provisions of the Fair Work Act is dealt with by the Federal Court if not first settled by conciliation in the Fair Work Commission. There is an exception to this drastic rule and that is that if the parties agree, the matter can be arbitrated by the Fair Work Commission provided the Commission is notified of the joint request within 14 days of failed conciliation. This is very rare though.

In many ways this is unfortunate because the Fair Work Commission is a much more user friendly place than the Federal Courts, namely the Federal Court of Australia and the Federal Circuit Court of Australia, where the practices and procedures are very difficult for an unrepresented litigant to navigate. In contrast the Fair Work Commission is expressly commanded by the Fair Work Act (secs 590, 591) not to be bound by the rules of evidence and procedure which apply in the courts and a lawyer or paid agent is required to obtain leave to represent a party in proceedings before the Commission (although in reality this is a formality normally because the members of the Commission by and large very much welcome the participation of experienced advocates because they speed up such proceedings, focus on what is relevant to the case and do not generally become distracted by red herrings).

A general protections application which involves a dismissal cannot be made to the Federal Court unless the Fair Work Commission has issued a certificate under sec 369 to the effect that all reasonable attempts to resolve the dispute, out of the sec 368 conference (which the Commission must conduct), have been or are likely to be unsuccessful. This is to be contrasted with a general protections application not involving a dismissal, in which case an applicant may initiate proceedings in the Federal Court without having to the Fair Work Commission first or may apply to the Fair Work Commission under sec 372 to deal with the dispute and the Commission must conduct a conference to deal with the dispute if the parties to the dispute agree to participate.

In the case of an application involving a dismissal, the arbitration of the dispute if the matter is not settled at the conference may be through the Federal Court, or by the Commission if both parties agree to consent arbitration. In the case of an application not involving a dismissal consent arbitration is not an option, and an applicant will need to commence court proceedings in the Federal Court within 14 days of the parties not agreeing to conciliation or within 14 days of unsuccessful conciliation.