The Salary Trap That Can Block Your Unfair Dismissal Claim

Many employees assume that if they are sacked unfairly, the Fair Work Commission will step in. But there is a little-known rule in the Fair Work Act that can block entire groups of workers from unfair dismissal protection, being the high income threshold.

If you are not covered by a modern award or enterprise agreement, you can only bring an unfair dismissal claim if your annual earnings are below the threshold. From 1 July 2025, that figure is $183,100. The figure is adjusted every year. If you earn above it and are not award or agreement-covered, you lose the safety net entirely.

Earnings are not just base salary. They include wages, guaranteed overtime, agreed non-monetary benefits like private use of a company car, and even life insurance premiums paid on your behalf. But not everything counts. Discretionary bonuses, commissions, per diem reimbursements, compulsory superannuation contributions, and incidental personal use of work equipment are excluded. The difference between these categories can decide whether your claim is allowed.

Real examples show how tight this line can be. One employee argued that his company car was only a work tool. The Commission disagreed, ruling that his private use made it part of his remuneration package, pushing him above the threshold. Another worker received large discretionary bonuses but, because they weren’t guaranteed, his income was still treated as below the cap, keeping his claim alive.

The lesson is clear. If you are on a high salary, don’t assume you are automatically protected. Check whether a modern award or enterprise agreement covers you. If not, calculate your earnings carefully against the high income threshold. Something as simple as the value placed on a vehicle or the treatment of overtime can make the difference between having your unfair dismissal case heard or being shut out altogether.