Calculating remuneration

Cases

Calculating remuneration

An employee not covered by a federal award and earning over $68,000 is not entitled to make an unfair dismissal application under the federal Workplace Relations Act 1996.

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An employee not covered by a federal award and earning over $68,000 is not entitled to make an unfair dismissal application under the federal Workplace Relations Act 1996. Two recent decisions of the Australian Industrial Relations Commission have considered what benefits can be included in that amount for the purposes of the Act.

Overtime not included

The Australian Industrial Relations Commission has found that overtime payments are not intended to be included when calculating the wages component of remuneration for the purposes of determining jurisdiction under the federal unfair dismissal provisions (Flemming v Keith Miller & Sons Builders Pty Ltd; Print R4890, [1999] 506 IRCommA).

The employer submitted that the employee was excluded from making an application for unfair dismissal because his remuneration exceeded the $68,000 limit when overtime payments were taken into account. The employer stated that because the Actwas silent on this point then overtime payments must be included.

The Commission found that overtime payments were not to be included in the employee's remuneration. The Commission referred to a decision of the Full Bench of the Australian Industrial Relations Commission in Bell v McArthur River Mining Pty Ltd (Print Q1629, [1998] 651 IRCommA) which stated that:

"...[t]he measure for the exclusion test would thus be directed to the identification of an annual rate of money paid or payable under the contract applicable to the employee at the time of termination in respect of ordinary work to be undertaken over that period."

The Commission held that the reference to 'ordinary work' relates to work performed at ordinary time salary or wages.

The Commission, in finding that overtime payments were not included in remuneration, also referred to the rate at which payment for annual leave should be calculated.

The Commission held that it was "significant that in the calculation for one of the elements of the wages component of 'remuneration', the Bench determined the ordinary rate of pay to be the basis of the calculation."

Further, the Commission held that the amount of overtime available and the amount of extra wages able to be earned from working overtime is uncertain and that this is an indication "that on the basis that the overtime to be worked is not known that it would not be counted as remuneration."

The Commission concluded that:

"...if overtime formed part of [the employee's] rate of remuneration then it would have been 'declared as a quantified benefit or part of the employees remuneration.' It clearly was not quantified."

The Commission held that the employee's remuneration did not exceed $68,000 and so he was eligible to continue his application for unfair dismissal.

Car and mobile phone - personal benefit

In another decision of the Australian Industrial Relations Commission, the issues of mobile phone and car use were confronted when determining whether the $68,000 remuneration limit had been exceeded (Briggs v RW Recapping t/a Wickham Tyres, Print R4897, [1999] 508 IRCommA).

In relation to the mobile phone, it was found that the phone was provided by the employer for business purposes. The mobile phone accounts were checked to account for private and business use and it was found the amount of personal use of the mobile phone which was of personal benefit was $507. This was added to the employee's total remuneration.

In relation to the amount of personal benefit from the motor vehicle, there was some discrepancy between the parties. On the basis of kilometre records and other information relating to the last 12 months of the employee's employment, the Commission calculated that the percentage of business use of the car was 33% and 67% was private usage. The Commission found this equated to a total of $8,947 worth of personal benefit from the car.

It was noted by the Commission that the total of the employee's remuneration would be close to the $68,000 specified rate. However, the Commission stated that it erred on the side of caution in establishing the rate of remuneration and held that had it accepted all the calculations from the employer, the level of remuneration would have been established at a higher rate.

The amount for the phone and the car were added to the other amounts to bring the employee's remuneration to $68,081. The Commission found the employee was excluded from seeking an unfair dismissal remedy under the federal Workplace Relations Act 1996.

 

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