The Case

Hayden Thomas v Hanseatic Marine Engineering Pty Ltd T/A Silver Yachts (2018)

Hanseatic Marine Engineering Pty Ltd T/A Silver Yachts (Silver Yachts) dismissed Mr Thomas, a manager of its internal fit-out design team. Thomas' earnings were above the high-income threshold at the time of his dismissal.

Employees earning above the high-income threshold are usually unable to make an unfair dismissal claim in the Fair Work Commission (FWC). However, Mr Thomas made an application for unfair dismissal, claiming that as he was covered by the Manufacturing and Associated Industries and Occupations Award (Award), he could bring the unfair dismissal application despite his high income.

Silver Yachts argued that Mr Thomas was not covered by the Award and, as his income was above the threshold, he was not eligible to bring an unfair dismissal claim.

In their arguments on Award coverage, Silver Yachts focused on the managerial aspects of Mr Thomas’ role and Mr Thomas focused on the technical aspects. Mr Thomas did not have a position description.

The Verdict

The FWC focused on the principal purpose for which Mr Thomas was employed – being the nature of the work and the circumstances in which Mr Thomas was employed to do the work.

The FWC found that Mr Thomas was:

• principally employed to use his technical design skills, expertise and experience to create manufacturing drawings, and ensure the internal fit-out was manufactured correctly;
• not principally employed to manage the internal fit-out design team; and
• covered by the Award and could proceed with his unfair dismissal application.

The Lessons

Just because an employee is paid above the high-income threshold does not mean you are protected from an unfair dismissal claim. A consideration of the principal purpose for the employee’s employment is required when determining whether a modern award covers an employee. To assist in this process, you should ensure each employee has a position description that outlines their role. The position description should be updated on a regular basis.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.