Extra allowances provided to employees, such as for working outside of their allotted hours, should be included in annual “earnings” for the purpose of unfair dismissal claims, the Fair Work Commission has ruled.

In a decision earlier this month, Fair Work Commission deputy president Abbey Beaumont found that a cyber security worker at a chemicals, energy and fertilisers company was ineligible to make an unfair dismissal claim as their overall salary was above the high-income threshold when an out-of-hours allowance was taken into account.

The ruling offers advice for what is included in a full salary under the law, and is particularly pertinent given the recent launch of the right to disconnect in Australia.

Under new laws, Australian employees cannot be obligated to respond to unreasonable work-related communications out of hours.

This will likely lead many more companies to institute similar out-of-hours allowances and include these in contracts to ensure the necessary workers are still contactable.

The Fair Work Commission case involved the claimant, Sudesh Ranasinghe, attempting to launch an unfair dismissal case against his former employer, Wesfarmers Chemicals, Energy and Fertilisers Limited.

Ranasinghe worked as a senior cyber security and governance, risk and compliance (GRC) specialist at the company from March 2022 until 10 May 2024, when he was dismissed.

In his role, he provided cyber security governance and advice to the company on cyber threats, while also acting as a “lens by which new products and services within the business were considered”.

He attempted to launch a claim at the Fair Work Commission, claiming he was unfairly dismissed, but to do so he must either be covered by a relevant award or earn under the high-income threshold, which at the time of his dismissal was set at $167,500 per year.

‘The fruit of labour’

The claimant was on an annual base salary of $158,202, along with an after-hours technical support allowance of $15,820.20 provided when he was required to work outside of his regular hours to provide cyber security assistance.

Ranasinghe had argued that only his base salary should be included in the definition of “earnings”, meaning he would be below the high-income threshold and able to argue an unfair dismissal case at the Fair Work Commission.

His employer argued that Ranasinghe’s total annual earnings were in fact a combination of his base salary and allowance, making it $174,022 and well over the threshold.

Under the company’s after-hours technical support allowance, Ranasinghe received an allowance of 10 per cent of his annual salary to work a specific roster of one week every six weeks, being available to answer technical support calls between 5.30pm and 7.30am on weekdays, and 24 hours on weekends and public holidays.

The Fair Work Commission ruled that this extra allowance should be seen as part of Ranasinghe’s overall annual earnings under the law.

The Commission found that earnings should be defined as “the fruit of labour”, or “whatever is received by way of remuneration for the services provided”.

“The applicant is not a person protected from unfair dismissal and accordingly his application must be dismissed,” Beaumont said in her ruling.

The ruling indicates that any allowances and benefits provided on top of an annual salary will be included in the definition of “earnings” under workplace laws.

A growing push for allowances

The ruling may also be relevant to a number of Australian companies considering providing allowances to workers for employment-related cost-of-living items, such as commuting costs and home internet bills.

A recent survey found that a growing number of workers now expect more support from their employers for these costs, which also include petrol and home office supplies.

There have been a number of interesting tech-related unfair dismissal cases of late, including late last year, when a Telstra tech worker argued their redundancy was “racially motivated”. This case was eventually thrown out by the Fair Work Commission.

Earlier this month in Ireland, a former Twitter employee was awarded nearly $1 million for unfair dismissal after they did not respond to an email from new CEO Elon Musk which called on workers to be “extremely hardcore”.