The Fair Work Commission has accepted that an employee's regular, guaranteed overtime earnings should be counted in determining whether their annual earnings exceeded the high income threshold.

The applicant employee was contractually obliged to work 58 hours per week, with his base salary (for 40 ordinary hours) set at $115,500, plus 18 hours of overtime paid at $55.53 per hour. He was also entitled to a project allowance of 5% of base salary ($5,775).  As such,  his annual income for the relevant period was $167,478.48 and exceeded the then $133,000 (now  $136,700) unfair dismissal income cap.

The employee argued that the 18 hours' overtime per week was not guaranteed because it might not be available in certain conditions. He gave the example of severe weather (he was based on Curtis Island, in connection with the Queensland Curtis LNG Project)  which could interrupt work, and also noted that he had not been entitled to receive overtime payments during an extended period of unpaid leave.

The Commission rejected these arguments, stating that the fact that overtime may not be available due to events of force majeure which are outside the employer`s control, like inclement weather conditions, is not an indicator of whether or not overtime is guaranteed. Likewise, the fact that overtime was not paid during an extended unpaid leave period was not determinative. The Commission noted that the relevant question to be asked was whether the overtime was capable of being determined in advance, if the employee had otherwise been fit to work.

The Commission found that the amount was capable of being determined in advance, and that it should count towards earnings for the purposes of determining whether the employee could bring an unfair dismissal claim. Ultimately, the employee was unsuccessful.

See: Mr Peter Cross v Bechtel Construction (Australia) Pty Ltd [2015] FWC 3639