Brian Hallam v Davbridge Properties Pty Ltd T/A Davbridge Constructions

[2014] FWC 1467

[2014] FWC 1467

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Brian Hallam
v
Davbridge Properties Pty Ltd T/A Davbridge Constructions
(U2013/14020)

DEPUTY PRESIDENT ASBURY BRISBANE, 28 FEBRUARY 2014

Application for unfair dismissal remedy - Jurisdiction - High income threshold - Applicant not covered by a modern award or enterprise agreement.

BACKGROUND

[1] Mr Brian Hallam (the Applicant) applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in relation to his dismissal by Davbridge Properties Pty Ltd t/a Davbridge Constructions (the Respondent). The application is met with a jurisdictional objection on the ground that Mr Hallam is not a person protected from unfair dismissal, because at the time of his dismissal, his annual earnings were in excess of the high income threshold and further, that he was not covered by a modern award or enterprise agreement.

[2] Directions were issued requiring the parties to file and serve submissions and witness statements in relation to the objection and to indicate whether cross-examination of any witness called by the other party was required. The Respondent filed a witness statement made by Mr Paul Ernest Stevens, General Manager of the Respondent. The Applicant also filed a statement. Both parties confirmed that cross-examination of persons who provided statements was not required. In those circumstances I consider that a hearing would not be the most effective and efficient way of dealing with the application and I do not consider that it is appropriate to hold one.

[3] The Respondent contends that the Applicant’s use of a fully maintained motor vehicle, laptop computer and mobile telephone are part of the Applicant’s annual earnings. The Applicant asserts that none of these items are part of his earnings, and that it was never agreed that this was the case.

LEGISLATION

[4] In relation to when a person is protected from unfair dismissal, s.382 of the Act provides as follows:

“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.”

[5] There is no dispute between the parties that the Applicant has completed at least the minimum employment period.

[6] The high income threshold is defined in s.333 as an amount worked out in accordance with the Regulations. The formula for the calculation of the high income threshold is set out in Regulation 2.13. The current amount of the high income threshold is $129,103.55. Earnings for the purpose of the high income threshold are defined in s.332 as follows:

“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.”

[7] In relation to non-monetary benefits, Regulation 3.05(6) provides:

“(6) If:

(a) the person is entitled to receive, or has received, a benefit in accordance with an agreement between the person and the person’s employer; and

(b) the benefit is not an entitlement to a payment of money and is not a non-monetary benefit within the meaning of subsection 332(3) of the Act; and

(c) the FWC is satisfied, having regard to the circumstances, that:

(i) it should consider the benefit for the purpose of assessing whether the high income threshold applies to a person at the time of the dismissal; and

(ii) a reasonable money value of the benefit has not been agreed by the person and the employer; and

(iii) the FWC can estimate a real or notional money value of the benefit;

the real or notional money value of the benefit estimated by the FWC is an amount for subparagraph 382(b)(iii) of the Act.”

EVIDENCE AND SUBMISSIONS

[8] The Respondent submits that the Applicant’s annual earnings amounted to a total of $138.073.55, comprising the following amounts. 1

Cash component $127,103.55

Motor vehicle $10,000.00

Laptop computer $370.00

Mobile Phone $600.00

Total $138,073.55

[9] The “cash component” of the Applicant’s earnings was calculated by the Respondent on the basis of the 12 month period concluding immediately prior to the date of dismissal. In this regard the Respondent filed a “Payroll Report”, for the period of 24 September 2012 to 23 September 2013. 2

[10] The Payroll Report assigns a code to employees. A Personnel Data Report indicates that the Applicant’s code on the Report is “ZHAL05”. 3 The Applicant did not challenge the authenticity of the report, the information portrayed by the report or that it was a report that pertained to his employment.

[11] The Payroll Report indicates that the “TAXABLE INCOME” for the period was $127,103.55. This amount is calculated in two components: wages/salary of $125,000.20 and an amount identified as “SITE ALLOWANCE + CRIB TIME” in the amount of $2,103.35.

[12] The Respondent submitted that the Applicant’s earnings included the use of a maintained motor vehicle, the value of which was $10,000.00. The Respondent arrived at this value by utilising the “RACQ Vehicle Running Costs 2013 Guide” 4 and an estimate that the Applicant’s home was approximately 35.4 kilometers from the place of employment. The calculation was based on the assumption that the Applicant attends work for 48 weeks of the year and travels 17,232 kilometres in that period.

[13] Mr Stevens stated that the Applicant had use of a Navara RX 4x4 2.5 L vehicle. Utilising the RACQ Guide Mr Stevens stated that the running costs attributable to that vehicle was 89.43 cent per kilometre. Applying this rate to the kilometres estimated by the Respondent an amount of $15,410.57 is reached. The Respondent reduced this amount to $10,000 as reflecting “commercial reality”.

[14] In regards to the laptop computer the Respondent submitted an invoice from the supplier of the laptop. 5 The two invoices which were attached to Mr Stevens’ statement indicate a value of $1,390 and $187.50. The two invoices in evidence are dated 11 September 2013 and 19 September 2013 respectively. Mr Stevens did not specify how the value of $370.00 of the total costs of the laptop was assigned to the Applicant’s earnings. It was also not clear how these two invoices, dated a few days prior to the Applicant’s dismissal, are attributable to the Applicant.

[15] The final amount that the Respondent submitted should be included in the Applicant’s earnings is an amount for use of a mobile phone. The Respondent submitted that the Applicant was provided with a mobile phone on the basis that “costs to be met by [the Respondent] for work use”. The Respondent contended that despite this the Respondent met the costs for all use on the phone, personal and work use, and that there was no contribution to these costs by the Applicant.

[16] Mr Stevens stated that he undertook an audit of the phone accounts in relation to the phone held by the Applicant, and that the amount of $600 amounts to approximately 30% of the total of the telephone accounts. No telephone accounts are in evidence and the Respondent has not provided evidence on how it has reached the 30% figure other than the general submissions that it conducted an “audit”. The Respondent also contends that the phone is not able to be used by the Respondent as it is locked by a passcode which is only known by the Applicant and which the Applicant refuses to provide to the Respondent.

[17] Also in evidence is the Applicant’s “Offer of Appointment - Plant Manger” (the Offer of Appointment) dated 3 April 2012. 6 The Offer of Appointment states, in relation to salary:

“$120,000.00 per annum at commencement, with a further $5,000 at the satisfactory conclusion of the probationary period and a further $5,000 at the end of the 5 months based on satisfactory performance review.”

[18] The Offer of Appointment also includes clauses in relation to vehicle, laptop computer and phone. The clauses in relation to both the vehicle and phone state that the items are provided “for work use”. The laptop computer is stated as being “[S]upplied by Davbridge Constructions”.

[19] The Applicant disputed that his income exceeded the high income threshold. In relation to each of the non-monetary benefits, the Respondent asserts were part of his earnings. The Applicant submitted that at no time were these items agreed as inclusions with respect to his earnings. The Applicant also contends that the items were provided to him for work purposes. The Applicant further stated that these items were not reportable income for tax assessment purposes.

[20] In relation to the vehicle the Applicant stated that it was never used for private purposes. The Applicant also stated that the amount of material that he was required to transport in the vehicle filled it to capacity and precluded him from carrying persons, including in a private capacity.

[21] Similarly, the Applicant stated that the laptop was not used for private purposes and did not leave the Respondent’s office at Ormeau. Internet access was not provided at the Respondent’s Beaudesert premises and the Applicant was not provided with mobile internet access.

[22] The Applicant also contended that the mobile phone was entirely used for work purposes, but conceded that he had contacted his wife using the mobile phone. However, the Applicant stated that these calls were for the purpose of having the Respondent included on the “tender list” utilised by the company for which his wife worked. The Applicant also stated that he called his wife’s office to have an administration officer of that company provide copies of “Australian standards” as he did not have access to the service that provided these standards. In any event, the Applicant contended that at no time was private use prohibited or discussed with the Applicant by the Respondent.

CONCLUSION

[23] I am not satisfied that the Applicant’s earnings exceed the high income threshold. On the Respondent’s evidence, the Applicant’s wage was $127,103.55 for the twelve month period immediately preceding his dismissal. Although the contract of employment indicated that the wage could have increased to $130,000.00 per annum there is in evidence that this occurred.

[24] There is no evidence of any other monetary amounts applied or dealt with on behalf of the Applicant, in the manner contemplated by s.332(b). It is clear that there were non-monetary benefits provided to the Applicant. However, I am unable to accept that there was an agreed money value of those non-monetary benefits.

[25] The contract of employment simply states that a vehicle and telephone will be provided for work use and that a laptop will also be provided. The Respondent has attempted to assign a value to those items in circumstances where no value was agreed. It is also the case that the Applicant gave evidence to the effect that he did not use those items for personal use, and no evidence to the contrary was provided by the Respondent.

[26] In those circumstances, I am of the view that I should not consider those benefits for the purpose of whether the high income threshold applies to the applicant, and I am unable to estimate a real or notional money value of the benefits in question. The jurisdictional objection is dismissed and the matter will be listed for hearing.

DEPUTY PRESIDENT

Final written submissions:

18 December 2013.

 1   Respondent’s outline of submissions at paragraph 2.

 2   Witness Statement of Paul Ernest Stevens at attachment 2A.

 3   Witness Statement of Paul Ernest Stevens at attachment 2B.

 4   Witness Statement of Paul Ernest Stevens at attachment 3.

 5   Witness Statement of Paul Ernest Stevens at attachment 4 and 5.

 6   Witness Statement of Paul Ernest Stevens at attachment 1.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR548263>