The Australian Industrial Relations Commission (AIRC) recently decided that a State award operating in the federal IR system under the Work Choices transitional arrangements is an award for unfair dismissal purposes. The decision confirms that high income earners – those earning more than $98,200 annually (or $101,300 from 1 July 2007) – employed under a state award in the Federal IR system can make unfair dismissal claims. While Commissioner Bacon of the AIRC initially found that an applicable state award was not an award for these purposes, he later reversed his decision, stating that, after further considering the matter, he had made an error in deciding that state awards were not awards or workplace agreements.

Facts

An employee of a Queensland coal mine was dismissed in February 2007. He earned more than $98,200 but was employed under the terms of the Clerical Employees Award – State 2002 (Clerical Award). Under the WorkChoices amendments to the Workplace Relations Act 1996 (Cth) (Act), an employee who earns more than $98,200 can make an unfair dismissal claim if they are employed under ‘award derived conditions’ (defined as an award or workplace agreement).
The employee said that he was employed under ‘award derived conditions’ because he was employed under the terms of the Clerical Award.

Issue

The Clerical Award is an award made by the Queensland Industrial Relations Commission (QIRC).
It operates within Queensland. After the WorkChoices amendments to the Act, it became a Notional Agreement Preserving a State Award (NAPSA). Commissioner Bacon said that the starting point in the case was to determine whether the Clerical Award, as a NAPSA, was an award or workplace agreement so that the employee was employed under ‘award derived conditions’.

Decision

In his initial decision, Commissioner Bacon found that the employee was not employed under ‘award derived conditions’ because the NAPSA was not an award or workplace agreement for the purposes of the Act. An award is defined by the Act as an award made by the AIRC or a prereform award. The Clerical Award was made by the QIRC, not the AIRC. The Clerical Award was not an award within the meaning of the Act before WorkChoices was introduced and was therefore not a pre-reform award. The Clerical Award was not a workplace agreement because it was not an AWA or a collective agreement. As the Clerical Award was not an award or workplace agreement the employee was not able to bring an unfair dismissal claim because he was not employed under ‘award derived conditions’ and his salary was higher than the cap allowed for unfair dismissal claims.

In revoking his decision, Commissioner Bacon stated that the Act provides transitional arrangements that mean that an award as defined by the Act includes a NAPSA.

Lessons for Employers

Employees who earn more than $98,200 but whose employment is covered by a NAPSA may be able (subject to various other jurisdictional requirements) to make an unfair dismissal claim. Employers in the Federal system should ensure that their processes relating to termination of employment accommodate the prospect for all levels employees employed under award derived conditions.

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