Adam Fitzpatrick v Royal Equipment Pty Ltd

[2015] FWC 8694

[2015] FWC 8694

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Adam Fitzpatrick
v
Royal Equipment Pty Ltd
(U2015/11591)

COMMISSIONER BISSETT MELBOURNE, 22 DECEMBER 2015

Application for relief from unfair dismissal - Jurisdiction – Not covered by award or enterprise agreement - Annual earnings exceeded the high income threshold – Applicant not protected from unfair dismissal.

[1] This is an application by Mr Adam Fitzpatrick seeking relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act).

[2] Mr Fitzpatrick was employed by Royal Equipment Pty Ltd (Royal Equipment). He commenced his employment with Royal Equipment in May 2013 and his employment was terminated on 17 August 2015.

[3] Royal Equipment submits that the Commission does not have jurisdiction to deal with Mr Fitzpatrick’s application as he earned above the high income threshold at the time he was dismissed and he was not covered by an award or enterprise agreement such that he is not protected from unfair dismissal in accordance with the Act.

[4] Mr Fitzpatrick represented himself in the proceedings. I granted permission for Royal Equipment to be represented by a lawyer having found that it would be unfair not to allow Royal Equipment to be represented as it was not able to represent itself effectively because of its small size.

[5] Mr Fitzpatrick gave evidence on his own behalf. Evidence was given for Royal Equipment by Mr David Kintigh, Managing Director Australia and Mr Chris Schafferius, General Manager Australia.

[6] This decision deals with the jurisdictional objection.

[7] Section 382 of the Act deals with when a person is protected from unfair dismissal:

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

[8] Mr Fitzpatrick says that his employment was covered by the Mining Industry Award 2010 and that he earned less than the high income threshold (which was $136,700 at the time he was dismissed). For these reasons he says he is protected from unfair dismissal.

[9] This decision deals firstly with whether Mr Fitzpatrick’s employment was covered by the Mining Industry Award 2010. It is not argued that his employment was covered by an enterprise agreement. I then consider if he earned above the high income threshold.

Was Fitzpatrick covered by an award or an enterprise agreement?

[10] Mr Fitzpatrick says that his employment was covered by the Mining Industry Award 2010 (the Award).

[11] The coverage clause of the Award states:

4. Coverage

4.1 This industry award covers employers throughout Australia who are engaged in the mining industry in respect of work by their employees in a classification in this award and their employees engaged in the classifications listed in clause 13—Classifications and minimum wage rates, of this award, to the exclusion of any other modern award.

[12] For Mr Fitzpatrick’s employment to be covered by the Award, Royal Equipment must be ‘engaged in the mining industry’ and Mr Fitzpatrick must be within one of the classifications in the Award.

[13] Mr Fitzpatrick was employed by Royal Equipment as the General Manager – Western Australia.

[14] Mr Fitzpatrick claims, in part, that his employment must be covered by the Award because he did not have a contract of employment from the time he commenced with Royal Equipment until July 2015 and because he worked weekends and over time etc.

[15] To determine if Mr Fitzpatrick’s employment was covered by the Award it is necessary to first consider if Royal Equipment is in the mining industry as defined and, if it is, if Mr Fitzpatrick is engaged a classification in the Award.

Is Royal Equipment engaged in the mining industry?

[16] The mining industry is defined in the Award:

4.2 Definition of mining industry

For the purposes of this clause mining industry means:

(a) extracting any of the following from the earth by any manner or method including exploration, prospecting, development and land clearing, preparatory work and rehabilitation during the life of the mine:

(i) any metals, minerals or ores;

(ii) phosphates and gemstones;

(iii) mineral sands;

(iv) uranium and other radioactive substances;

(b) the processing, smelting and refining of the metals, minerals, ores or substances covered by clause 4.2(a);

(c) the transportation, handling and loading of any of the metals, minerals, ores or substances covered by clause 4.2(a) on a mining lease or tenement;

(d) the transportation, handling and loading of any of the metals, minerals, ores or substances covered by clause 4.2(a) by the mine operator, a related company or an entity principally engaged by the mine operator to do such work, using the plant or infrastructure (including rail and/or ports) of the mine operator or a related company;

(e) the servicing, maintaining (including mechanical, electrical, fabricating or engineering) or repairing of plant and equipment used in the activities set out in clauses 4.2(a) to (d) by employees principally employed to perform work on an ongoing basis at a location where the activities described above are being performed; or

(f) the provision of temporary labour services used in the activities set out in clauses 4.2(a) to (e), by temporary labour personnel principally engaged to perform work at a location where the activities described above are being performed.

[17] The evidence of Mr Kintigh is that the company is not engaged in the mining industry.

[18] The evidence of Mr Schafferius is that Royal Equipment is:

a re-manufacturer of components predominantly for electric drive trucks but also including motors and diggers. When I say components, we do essentially two things. We do it at the component level where we will either repair and return, through exchange programs, re-manufacture those components to various clients in the Australian mining industry. And some of the product…are exported. And we also – this is predominantly done out of Henderson [WA], where we will take a full machine and re-manufacture that machine…back to client specifications…We have in the past predominantly in WA, done some on-site labour provision for various clients. I believe we’ve also done in WA some work for one particular entity for the marine industry but that was a little bit outside what we would normally do. And we do have some off-the-shelf items that we supply to customers as well but most of our business involves re-entry business and having those parts, re-manufacturing them and then selling them back… 1

[19] Mr Schafferius also gave evidence that Royal Equipment sells components and services to the mining industry. 2

[20] Royal Equipment’s submission is that majority of its work is carried out on its site in Henderson and not at a mining location. Whilst Royal Equipment agreed that it occasionally performs work at sites where the Award may apply:

the work that Royal does at client sites is generally to provide labour, to perform electrical and mechanical services. But the primary activity of Royal is the re-manufacture of the heavy equipment at its premises in Henderson or in Rutherford. 3

[21] Mr Fitzpatrick suggested, during his cross examination of Mr Schafferius, that he (Mr Fitzpatrick) spent a lot of time on mine sites and the ‘main business was getting sales from a new customer Rio Tinto, covering 25 mine sites across a small Pilbara region.’ 4

[22] Mr Fitzpatrick also gave evidence which suggested that the work done was the maintenance of trucks and the maintenance of ‘our equipment.’ 5

[23] I am not convinced that Royal Equipment is ‘engaged in the mining industry’ such that it is covered by the Mining Award.

[24] In considering the provisions of clause 4.2 of the Award it seems that the only way Royal Equipment could come within the scope of the mining industry is if it satisfied the requirements of clause 4.2(e). Whilst I am satisfied that Royal Equipment may well do ‘servicing, maintaining (including mechanical, electrical, fabricating or engineering) or repairing of plant and equipment’ as described in clause 4.2(e), the clause also requires that the work must be done ‘ by employees principally employed to perform work on an ongoing basis at a location where the activities described [in the clause…are being performed.’ In this respect I have no evidence on which I could confidently conclude that the work of Royal Equipment is done by employees engaged to work at a location where extraction etc of metals, minerals, ors and so on occurs on an ongoing basis. Whilst some work of Royal Equipment may be done at the mining location this is not, of itself, enough to mean that Royal Equipment is engaged in the mining industry as required by the Award.

[25] I have reached this conclusion based on the evidence of Mr Schafferius that the majority of the work is carried out in Henderson, which is a suburb of Perth. Mr Fitzpatrick has not provided me with any evidence that would allow me to reach any other conclusion. To the extent that there is a conflict in the evidence I prefer the evidence of Mr Kintigh and Mr Schafferius to that of Mr Fitzpatrick on this matter. I did not find Mr Fitzpatrick convincing. Mere assertions from the witness box is not evidence that can be relied upon. Whilst I accept that Royal Equipment has or had major customers in the mining industry and Mr Fitzpatrick may have spent substantial amounts of time wooing a particular mining company this does not mean that Royal Equipment is engaged in that industry. In this respect I also note the description of the work undertaken by Royal Equipment and the exclusions from coverage detail in clause 4.3(f) of the Award in particular.

Is Mr Fitzpatrick engaged in a classification in the Award?

[26] For completeness I will also consider if Mr Fitzpatrick was engaged in any of the classifications covered by the Award.

[27] Mr Fitzpatrick says that he spent a lot of time getting new business with Rio Tinto in respect of 25 of its sites in the Pilbara. He also says that he was required to do weekend work and overtime which are provided for in the award. Mr Fitzpatrick also says that, because of the small nature of the operations, he sometimes had to pick up the tools and do the hands on work.

[28] Mr Fitzpatrick gave evidence of his role at Royal Equipment:

What was your role? What was your job?  -My role was general manager, right? And because of the small nature of the business we often had to pick the tools up, we often had to work on site, we often had to work shift work. We often worked weekends. We were not paid the correct penalty rates for this…

Mr Fitzpatrick, when you worked on site, what did you do?  -We were self diagnosing the electric drive dump trucks, so I was utilising my knowledge and my workforce’s experience and qualifications in the service and the support of electric drive dump trucks… 6

[29] Mr Fitzpatrick agreed that he was not a qualified mechanic or diesel mechanic. 7

[30] In giving his evidence as to coverage Mr Fitzpatrick gave conflicting evidence as to whether he had read the coverage or classifications provisions of the Award 8 but when asked what classification cover him, replied:

I just look at the overtime meals, I look at the shift work, I look at the remote locations, I look at flying on your weekend, on Thursday afternoon…we are in the mining industry. We move dirt.  9

[31] Mr Schafferius gave evidence that the work undertaken by Mr Fitzpatrick was similar to the work he performed:

we looked after both the sales and operations. So obviously the promotion of those goods and services to existing and potential new clients. The management of staff. The management of the administration functions, the day to day operations. The overseeing of the operational component of our staff within the workshops. We did have a few (indistinct) over the human resources component, so we worked in conjunction with the global president to hire staff as required. And obviously managing again the issues with staff as required. 10

[32] Mr Kintigh gave evidence that Mr Fitzpatrick was ‘broadly responsible for sales, operations, facilities and personnel’ 11 at the Henderson office in WA. Mr Kintigh attached to his witness statement a position description for the position of General Manager WA12. That positions description confirmed the evidence of Mr Kintigh and Mr Schafferius as to the duties and expectations of the position. Mr Fitzpatrick’s evidence is that he had never seen that position description.

[33] The classifications groups and levels are set out in Schedule B to the Award. Schedule B suggests that, to be covered by the Award, an employee needs to fit within both one of the identified groups and one of the classification levels.

[34] In Carpenter v Corona Manufacturing Pty Ltd 13 the Full Bench laid out the principles relevant to determining if an employee was engaged in an occupation covered by the Award. It said:

In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed.In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not “employed in the process, trade, business or occupation of ... soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials” and was not, therefore, covered by the Award. 14

[footnotes omitted]

[35] This is the principal purpose test. I accept the submissions and the authorities that, in determining if an employee is covered by an award or an agreement, this is the proper test to be applied.

[36] I have carefully considered the work Ms Fitzpatrick says he undertook. Whilst I have no doubt that he does have some appropriate electrical qualifications and I accept that he may have ‘tagged’ machinery I am not satisfied that his primary functions bring him within the coverage of the Award.

[37] I prefer the evidence of Mr Schafferius and Mr Kintigh to that of Mr Fitzpatrick as to the role of Mr Fitzpatrick. I have reached this conclusion because, despite repeated requests, Mr Fitzpatrick put forward no cogent arguments in his material or in cross examination as to why his role was covered by the Award. Mr Fitzpatrick did not provide sufficient detail to the Commission to enable a confident assessment to be made as to how his duties might align to those in Schedule B to the Award or as to in which classification group he sat. In these circumstances it is not possible to find in Mr Fitzpatrick’s favour.

[38] I am satisfied that Mr Fitzpatrick was employed as the General Manager – Western Australia by Royal Equipment and that his responsibilities were directed at sales and management and were not primarily ‘hands-on’ in nature. Mr Fitzpatrick’s evidence that he spent a substantial part of the last six months of his employment seeking to secure Rio Tinto as a client of Royal Equipment suggests that his role was not one covered by the Award. This is not the work of an employee in the mining industry such that he would be covered by the Award. That Mr Fitzpatrick may have some trade skills does not alter the principal purpose of his role.

[39] Further, Mr Fitzpatrick’s primary argument as to why he believes he was covered by the Award do not stand up to any scrutiny. That he did not have a written contract prior to July 2015 is not determinative of award coverage. Whilst Mr Fitzpatrick may not have had a formal written contract for some time during his employment does not mean he did not have a contract of employment. The existence of the contract of employment – whether written or oral – is a separate issue from whether his employment was covered by the Award. Second, that he may have worked weekends or conducted inductions is not indicative of award coverage.

Conclusion as to award coverage

[40] For the reasons given above I am not satisfied that Mr Fitzpatrick’s employment was covered by the Mining Industry Award 2010.

Did Fitzpatrick earn above the high income threshold?

[41] A written employment contract was put to Mr Fitzpatrick for his consideration on 13 April 2015 by Mr Kintigh. Prior to this date he did not have a written contract.

[42] That contract (the ‘Revision A’ contract) provided a similarly structured salary package to the contract eventually signed by Mr Fitzpatrick but had a base salary of $110,000. In putting forward the contract Mr Kintigh said:

Attached is the employment contract which I’ve signed. You can sign if you wish or we can revise per mutual agreement. This is a very basic document so might not be acceptable to you. This was supposed to be the document in place since your hire in 2013. It was to be completed by the head hunter.

I have no excuse nor ulterior motive for not completing this Employment Agreement with you previously… 15

[43] The Revision A contract was not signed by Mr Fitzpatrick.

[44] In July 2015 a further contract was put forward to Mr Fitzpatrick (the Revision B contract). The salary package of that contract was:

Base Salary: $150,000.00pf + 9.5% superannuation
Bonus: At Managing Director’s discretion
Auto: You will receive a monthly auto allowance to be detailed in writing by Managing Director by 31, July 2015
+ 1 x Laptop Computer for all work related tasks
+ 1 x Mobile Phone for all work related tasks
+ 1 x Internet Dongle for all work related tasks 16

[45] The Revision B contract was signed by Mr Fitzpatrick and by Mr Kintigh on 14 July 2015. 17

[46] The Revision B contract forwarded to Mr Fitzpatrick was sent to him at 10.19am Central Daylight Time in North America (Mr Kintigh is based in Houston, Texas).

[47] In sending the contract to Mr Fitzpatrick, Mr Kintigh said:

Per our discussion today, attached is the Employment Contract. Please sign and return to me for signature.

You will receive the $20,000 bonus scheduled for payment this week.

I’ve included an auto allowance, the amount to be determined this month, after we have to (sic) taken care of the final resolution of the previous auto “issues”. Note attached so we can get Bentley’s off our back.

Look forward to this coming year and appreciate all you continued efforts. 18

[48] The reference to ‘Note attached’ appears to be a reference to a promissory note also sent to Mr Fitzpatrick at that time. The promissory note, which Mr Fitzpatrick signed, 19 required Mr Fitzpatrick to pay back to Royal Equipment the sum of $25,000 in weekly instalments of $256.50. This promissory note referred to some apparent (but disputed by Mr Fitzpatrick) actions by Mr Fitzpatrick in trading in a motor vehicle owned by Royal Equipment and then using that money without authority for purchase or part payment on a private vehicle.

[49] The promissory note appears to have originally been sent to Mr Fitzpatrick on 30 June 2015 by Don Wisenbaker, another employee of Royal Equipment. Mr Fitzpatrick signed the promissory note on 14 July 2015 and returned it to Mr Wisenbaker. 20

[50] Mr Fitzpatrick says that, on receipt of the contract (at about 1.00am Australian Western Standard Time) he was required to get out of bed, travel into the office in Henderson, sign the contract, scan it in and return it to Mr Kintigh. In a covering email to Mr Kintigh which attached the signed contract Mr Fitzpatrick said:

Please find attached signed Royal contract as requested. I really appreciate your work on this Boss – look forward to working with you for many years to come, would it be possible to send me a signed copy with your signature on when you get time. 21

[51] Mr Fitzpatrick says that after he signed, scanned and returned the signed Revision B contract to Mr Kintigh he either received another email from Mr Kintigh 22 or, as he drove home, received a phone call from Mr Kintigh23 in which Mr Kintigh demanded he immediately sign, and return, the promissory note.

[52] Mr Fitzpatrick also says that he was put under pressure to sign the Revision B contract and that this pressure was in the form of the $20,000 bonus referenced in Mr Kintigh’s email. Mr Fitzpatrick claims that he would not have been paid the $20,000 bonus if he had not signed the contract. 24

[53] In the ordinary course of events a contract of employment with a base salary of $150,000 would clearly place Mr Fitzpatrick as earning in excess of the high income threshold (currently $136,000). Mr Fitzpatrick however says that he never earned $150,000 per year during his employment and, in any event, the base salary component of his package was inflated to offset the $25,000 promissory note. Mr Fitzpatrick submits that the $25,000 owed on the promissory note needs to be deducted from his $150,000 salary to get his true earnings and that this is proof that he did not earn $150,000 a year from Royal Equipment and earned less than the high income threshold. Mr Fitzpatrick says his group certificates over the last three years and the amounts deposited into his bank account as wages also demonstrate that his earnings were not in excess of the high income threshold.

[54] Mr Fitzpatrick also says that his superannuation statement shows that, for the year ending 30 June 2015, his total contributions were $10,972.39 25 which, if it was paid correctly indicates that he only earned about $120,000 for the year ending 30 June 2015.

[55] Mr Fitzpatrick also claims that he was required to pay, from his own wages, amounts to employees of Rio Tinto in order to secure the contract with them. In his evidence Mr Fitzpatrick says he took $4000 from his own bank account and paid it to a named employee of Rio Tinto 26 although he cannot recall the date he did this27 and that a Ms Saville, Mr Kintigh’s executive assistant, kept track of it.28 Mr Fitzpatrick has offered no evidence to support this claim and I have not had regard to it in reaching my decision.

[56] Mr Fitzpatrick made a range of submissions that go to other amounts paid to him as bonuses that he says were grossed up to avoid taxation obligations. He says in his submission that these amounts were never included in his salary ‘until detailed in an email from Dave Kintigh on the 22^nd August 2015’ after he was dismissed. 29 There is no evidence or submissions that these amounts can, or should, somehow reduce his $150,000 salary and have not been further considered by me.

[57] Mr Schafferius gave evidence of wages paid to Mr Fitzpatrick following the signing of the Revision B contract. 30 He produced pay slips for Mr Fitzpatrick which show a gross weekly payment for ordinary hours of $2884.61 ($75.9109 per hour) plus a weekly car allowance of $430.00. Further payslips show payments to Mr Fitzpatrick for annual leave and termination pay.31 Each of these payslips contains the same hourly rate as the normal pay slips.

[58] Mr Schafferius also gave evidence of the payment records of 4 and 11 August 2015 showing that the amount deposited into Mr Fitzpatrick’s bank account on those paydays was $2252.61. 32 This is the amount shown on Mr Fitzpatrick’s pay slips mentioned above as the net amount owing to him.

[59] Royal Equipment submits that this shows that Mr Fitzpatrick was, at the time of his dismissal, earning $150,000 gross per annum. His payslips show that he was also receiving a car allowance and receiving superannuation in addition to this amount. 33 Royal Equipment refutes submissions of Mr Fitzpatrick to the effect that his payslip was not an accurate record of what he was actually paid.

Determination of earnings

[60] Section 382 of the Act says that a person is protected from unfair dismissal if the person is covered by a modern award or covered by an enterprise agreement or the sum of their annual rate of earnings is less than the high income threshold.

[61] ‘Earnings’ is defined in s.332 of the Act:

332 Earnings

(1) An employee’s earnings include:

(a) the employee’s wages; and

(b) amounts applied or dealt with in any way on the employee’s behalf or as the employee directs; and

(c) the agreed money value of non-monetary benefits; and

(d) amounts or benefits prescribed by the regulations.

(2) However, an employee’s earnings do not include the following:

(a) payments the amount of which cannot be determined in advance;

(b) reimbursements;

(c) contributions to a superannuation fund to the extent that they are contributions to which subsection (4) applies;

(d) amounts prescribed by the regulations.

Note: Some examples of payments covered by paragraph (a) are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).

(3) Non-monetary benefits are benefits other than an entitlement to a payment of money:

(a) to which the employee is entitled in return for the performance of work; and

(b) for which a reasonable money value has been agreed by the employee and the employer;

but does not include a benefit prescribed by the regulations.

(4) This subsection applies to contributions that the employer makes to a superannuation fund to the extent that one or more of the following applies:

(a) the employer would have been liable to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the person if the amounts had not been so contributed;

(b) the employer is required to contribute to the fund for the employee’s benefit in relation to a defined benefit interest (within the meaning of section 291-175 of the Income Tax Assessment Act 1997) of the employee;

(c) the employer is required to contribute to the fund for the employee’s benefit under a law of the Commonwealth, a State or a Territory.

[62] In Francesco Zappia v Universal Music Australia Pty. Ltd. T/A Universal Music Australia 34 the Full Bench found:

[9] On the appeal, Mr I Latham, of counsel, who appeared for the appellant both at first instance and on the appeal, submitted that his Honour had erred in his construction of the expression ‘annual rate of earnings’. In our view his Honour was clearly correct. Section 382 of the Act relevantly provides that a person is protected from unfair dismissal at a time if, at that time, the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold. It is clear that the time at which the annual rate of earnings must be ascertained is at the time of the termination of the person’s employment. What needs to be ascertained is the annual rate of earnings at that time, not the annual earnings to that time (the amount earned in the 12 months to that time).

[emphasis added]

[63] The relevant time at which to determine Mr Fitzpatrick’s earnings is the date at which his employment was terminated – that is, 17 August 2015. What Mr Fitzpatrick earned for the year ending 30 June 2015 or any earlier year is not relevant and is not a matter I need to take into account in making my decision. In that respect his superannuation statement does not assist me in this matter as it related to the 2014-15 financial year.

[64] Section 332(2) of the Act excludes from a determination of Mr Fitzpatrick’s earnings any commissions received by Mr Fitzpatrick (these are earnings that could not be determined in advance). I have therefore not had regard to the $20,000 bonus paid at the time he was asked to sign the Revision B contract; or any other bonuses paid to him; or any reimbursements (none of which have been advised); or superannuation contributions at 9.5% or any other amounts prescribed by the regulations.

[65] At the time his employment was terminated Mr Fitzpatrick had a contract which showed that his ‘earnings’ were $150,000 per annum. The pay shown payslips he received following 14 July 2015 when he signed the contract indicates that his earnings were $150,000 per annum.

[66] I have not had regard ot Mr Fitzpatrick’s claims about how much was shown on his group certificates for previous years. Firstly, it is not relevant and second, even if it was Mr Fitzpatrick was given a number of opportunities to produce these group certificates and he failed to do so.

[67] To the extent Mr Fitzpatrick claims that what is on the payslips is not what he was paid I reject these claims. The evidence clearly points to a concurrence between his payslips and the amount deposited into his account and I accept the evidence of Mr Schafferius in respect of the payslips and record of bank deposits made into Mr Fitzpatrick’s account by Royal Equipment.

How should the $25,000 promissory note amount be treated?

[68] At the time of his dismissal Mr Fitzpatrick was receiving $150,000 in wages.

[69] Mr Fitzpatrick says that the $25,000 he is obliged to pay as per the promissory note should be offset against the $150,000 such that his ‘real’ salary is $125,000. 35

[70] The question is if I should discount Mr Fitzpatrick’s earnings for the $25,000 promissory note Mr Fitzpatrick signed in which he undertook to pay back to Royal Equipment that amount in weekly instalments.

[71] ‘Earnings’ in s.332 of the Act includes any amount that may be dealt with on the employee’s behalf or as the employee directs. This might include, for example, direct payments to a health insurance provider or payments made directly onto a mortgage account at the employees direction. The distinguishing feature of these payments is that they are part of the employee’s earnings although they will not pass through the employee’s hands prior to deposit at the final destination.

[72] If I accept Mr Fitzpatrick’s submission that his salary was inflated by $25,000 to offset the $25,000 he owes through the promissory note then the question arises as to whether that $25,000 can be characterised as an amount ‘to be dealt with…on the employee’s behalf’ or in some other way.

[73] On Mr Fitzpatrick’s submissions the $25,000 was added to his salary and it was then to be dealt with in an agreed manner – to pay off the $25,000 promissory note by payments of $256.50 per week to Royal Equipment. The extra $25,000 in his pay packet, he says, was for no purpose but to offset the amount in the promissory note.

[74] On Mr Fitzpatrick’s best argument it seems to me then that the additional $25,000 is an amount that is to be ‘applied or dealt with in any way on the employee’s behalf or as the employee directs’ as Mr Fitzpatrick has agreed that $25,000 from his wages was to be dealt with by way of a payment to Royal Equipment.

[75] For this reason – even on Mr Fitzpatrick’s reckoning – it is apparent that $25,000 cannot be simply deducted from his earnings and should properly be considered as part of his earnings by virtue of s.332(1)(b) of the Act.

[76] That Mr Fitzpatrick owes Royal Equipment $25,000 does not mean that he can just deduct that from his salary and argue his earnings are only $125,000. It is just a nonsensical approach to the task before the Commission. Just as I will not deduct from his earnings any mortgage payments he may have or tax he is required to pay or health insurance bill he may have so I cannot just take away from his earnings a debt of $25,000, regardless of who that debt is owed to.

[77] Further I note Mr Fitzpatrick’s evidence that he has not repaid any of the $25,000 he is committed to repay in the promissory note:

My question to you, Mr Fitzpatrick, is have you paid back any amount under the promissory note?  -No. 36

[78] Even if Mr Fitzpatrick was correct that his salary was inflated to offset the $25,000 promissory note, that he has not paid any of it back reinforces that his earnings, at the time of his dismissal was $150,000. If his salary had been inflated by the $25,000 for the purpose he says it would reasonably be expected that the amount would have been deducted from his pay. It hasn’t been.

[79] Mr Fitzpatrick’s claim that his salary was artificially inflated to offset the promissory note is without foundation. He has no reliable evidence to support such a claim. Mere assertions by him as to this effect do not satisfy any evidentiary burden of proof.

[80] For these reasons there is no basis to discount the $150,000 earnings Mr Fitzpatrick was in receipt of at the time of his dismissal.

[81] Mr Fitzpatrick also suggests that I should discount his earnings by the $20,000 bonus paid to him at the time or just prior to him signing the Revision B contract in July 2015. 37 There is no basis on which I should discount his earnings by the amount of a bonus already paid to him. There is no evidence that he was paid less than $150,000 because he received a bonus payment. There is no basis to deduct $20,000 from his earnings.

Conclusion as to high income threshold

[82] For all of the reasons given above I am satisfied that Mr Fitzpatrick was earning $150,000 at the time of his dismissal. This is in excess of the high income threshold.

Was Fitzpatrick induced to sign the Revision B contract?

[83] Whilst it is not strictly relevant to the matter I must decide, Mr Fitzpatrick has claimed that he was induced or coerced to sign the Revision B contract.

[84] Mr Fitzpatrick suggested that the $20,000 bonus paid to him was an inducement to him to sign the Revision B contract. The evidence of Mr Kintigh is that this bonus was advised to Mr Fitzpatrick at the time the bonus amounts to other employees in Western Australia were finalised. 38 I accept the evidence of Mr Kintigh on this matter. I consider his evidence to be more credible than mere assertions of Mr Fitzpatrick.

[85] Mr Fitzpatrick further claims that he was required to sign both the contract and the promissory note at the same time. It is on this matter that he gave conflicting evidence as to whether he received an email from Mr Kintigh after he returned the signed contract or whether he received a phone call whilst he was travelling home from having sent the signed contract back to Mr Kintigh.

[86] Mr Fitzpatrick provided no factual evidence of phone calls and, in relation to the alleged email, says that it exists but was not been produced to the Commission by Royal Equipment as was required by the Commission. Mr Kintigh says no such email exists. Mr Fitzpatrick gave conflicting evidence on what occurred after he signed and returned the Revision B contract. His evidence, therefore, should be rejected.

[87] There is nothing before me that would allow me to conclude that Mr Fitzpatrick was coerced to sign the contract in July 2015. The email he sent to Mr Kintigh with the signed contract does not suggest that he felt induced or under any pressure to sign the contract. In that email he said ‘I really appreciate you work on this Boss – look forward to working with you for many years to come…’ suggesting he was happy with the content and the signing of the contract.

Conclusion

[88] I am satisfied that Mr Fitzpatrick’s earnings at the time of his dismissal was $150,000. Mr Fitzpatrick therefore was earning more than the high income threshold ($136,700) at the time of his dismissal.

[89] I am also satisfied that Mr Fitzpatrick was not covered by an award, in particular the Mining Industry Award 2010, or an enterprise agreement.

[90] For these reasons Mr Fitzpatrick is not protected from unfair dismissal.

[91] The Commission therefore does not have jurisdiction to deal with the matter. The application is therefore dismissed. An order to this effect will be issued with this decision.

COMMISSIONER

Appearances:

A. Fitzpatrick with C. Fitzpatrick for the Applicant.

M-C. Foley and R. Wade of Ashurst Australia for the Respondent.

Hearing details:

2015.

Melbourne and Perth (Video Hearing):

October 28 and December 7.

 1   Transcript PN106.

 2   Transcript PN261.

 3   Transcript PN70.

 4   Transcript PN148.

 5   Transcript PN1055.

 6   Transcript PN385-6.

 7   Transcript PN1062-3.

 8   Transcript PN1045-6 and PN1051.

 9   Transcript PN1052-3.

 10   Transcript PN108.

 11   Exhibit R3, paragraph 11.

 12   Exhibit R3, annexure DK-2.

 13   PR925731 (17 December 2002).

 14 Ibid [9].

 15   Exhibit R3, annexure DK-5.

 16   Submissions of Mr Fitzpatrick of 25 November 2015, attachment 2.

 17   Exhibit R1, annexure CS-1.

 18   Exhibit R3, annexure DK-3.

 19   Submissions of Mr Fitzpatrick of 25 November 2015, attachment 1.

 20   Exhibit R3, annexure DK-7.

 21   Exhibit R3, annexure DK-4.

 22   Transcript PN944 and PN955.

 23   Transcript PN945.

 24   Transcript PN1082.

 25   Material filed by Mr Fitzpatrick on 2 November 2015, attachment CT4.

 26   Transcript PN902.

 27   Transcript PN904, 910.

 28   Transcript PN915.

 29   Submissions of Mr Fitzpatrick of 25 November 2015, paragraph 4(d), page 3. See also attachment 6.

 30   Exhibit R1, annexure CS-2, CS-3, CS-4, and CS-5.

 31   Exhibit R1, annexure CS-6 and CS-7.

 32   Exhibit R2.

 33   Royal Equipment do not rely on the car allowance as evidence of Mr Fitzpatrick earning in excess of the high income threshold.

 34   [2012] FWAFB 6108.

 35   Transcript PN844, 1015 and 1025.

 36   Transcript PN1034.

 37   Transcript PN844.

 38   Exhibit R3, annexure DK-6.

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