[2016] FWC 5419

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Christopher Sariman
v
BMD Constructions Pty Ltd
(U2015/16721)

COMMISSIONER HUNT

BRISBANE, 25 AUGUST 2016

Application for unfair dismissal remedy – jurisdictional objection – whether employee is a person protected from unfair dismissal – whether employee covered by Professional Employees Award 2010 – high income threshold – car allowance and fuel card – employee not protected from unfair dismissal – jurisdictional objection upheld application dismissed.

Introduction

[1] Mr Christopher Sariman applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to his dismissal by BMD Constructions Pty Ltd (BMD).

[2] Mr Sariman commenced employment with BMD in May 2012 and was dismissed on 4 December 2015. BMD is a national civil construction contractor that constructs roads and bridges and undertakes urban development and subdivision work. Mr Sariman’s title was Senior Project Engineer.

[3] Following the cessation of the employment, Mr Sariman made application to the Fair Work Commission (the Commission), alleging that his dismissal was harsh, unjust or unreasonable.

[4] BMD objected to the application proceeding on the basis that Mr Sariman is not a person protected from unfair dismissal.

[5] Directions were issued for the filing of evidence and submissions to determine the jurisdictional objection. BMD is represented by Mr Greg Power, a paid agent of Drayton’s Workplace Consulting Pty Ltd.

[6] Leave was granted for Mr Power to appear pursuant to s.596(2)(a) of the
Act. I determined that Mr Power’s appearance would enable the matter to be dealt with more efficiently, taking into account the complexity of the jurisdictional issue.

[7] The matter was listed for jurisdictional hearing in Brisbane, with a video-link to Townsville, on 5 July 2016.

A person protected from unfair dismissal

[8] In relation to when a person is protected from unfair dismissal, s.382 provides:

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.

[9] It is not in dispute that Mr Sariman has completed at least the minimum period of employment with BMD. The minimum period is 6 months, given that BMD is not a small business.

[10] There is no enterprise agreement applicable to the work that was performed by Mr Sariman at BMD.

[11] BMD asserts two jurisdictional objections. The first is that Mr Sariman is not covered by a modern award. The second is that Mr Sariman’s annual rate of earnings exceeds the high income threshold.

[12] Mr Sariman asserts that he is covered by a modern award, the Professional Employees Award 2010 (the Award). Further, Mr Sariman asserts that if he is not found to be covered by the Award, his annual rate of earnings falls below the high income threshold and he is a person protected from unfair dismissal.

[13] The issue for determination by the Commission is firstly, is Mr Sariman covered by the Award? If it is found that Mr Sariman is covered by the Award, the Commission need not have any regard to Mr Sariman’s earnings, and his application may proceed.

[14] If Mr Sariman is not covered by the Award, the issue to determine is did his annual rate of earnings exceed the high income threshold? If the Commission so finds, Mr Sariman is not a person protected from unfair dismissal and his application for an unfair dismissal remedy must be dismissed.

The coverage of the Award

[15] The coverage of the Award is expressed as follows:

4. Coverage

4.1 This award covers employers throughout Australia with respect to their employees performing professional engineering and professional scientific duties who are covered by the classifications in Schedule B—Classification Structure and Definitions of the award and those employees.

4.2 This award covers employers throughout Australia principally engaged in the information technology industry, the quality auditing industry or the telecommunications services industry and their employees who are covered by the classifications in Schedule B.”

[16] Clause 3 – Definitions and interpretations deals with the engineering stream as follows:

3.2 Engineering stream

Experienced engineer means a Professional engineer with the undermentioned qualifications engaged in any particular employment where the adequate discharge of any portion of the duties requires qualifications of the employee as (or at least equal to those of) a member of Engineers Australia. The qualifications are as follows:

(a) membership of Engineers Australia; or
(b) having graduated in a four or five year course at a university recognised by Engineers Australia, four years’ experience on professional engineering duties since becoming a Qualified engineer; or
(c) not having so graduated, five years of such experience.

Graduate engineer means a person who is the holder of a university degree (four or five year course) recognised by Engineers Australia or is the holder of a degree, diploma or other testamur which:

(d) has been issued by a technical university, an institute of technology, a European technical high school (technische hochschule) or polytechnic or other similar educational establishment; and
(e) is recognised by Engineers Australia as attaining a standard similar to a university degree; and has been issued following:

(i) a course of not less than four years duration for a full-time course after a standard of secondary education not less than the standard of examination for matriculation to an Australian university; or
(ii) a part-time course of sufficient duration to obtain a similar standard as a four year full-time course after a similar standard of secondary education.

Professional engineer means a person qualified to carry out professional engineering duties as defined. The term Professional engineer will embrace and include Graduate engineer and Experienced engineer as defined in this clause.

professional engineering duties means duties carried out by a person in any particular employment, the adequate discharge of any portion of which duties requires qualifications of the employee as (or at least equal to those of) a graduate member of Engineers Australia

[17] Schedule B of the Award contains a classification structure and definitions. Mr Sariman contends that he is either a Level 2 or Level 3 employee. The classifications are as follows:

B.1.7 Level 2—Experienced professional

Following development, the Experienced professional plans and conducts professional work without detailed supervision but with guidance on unusual features and is usually engaged on more responsible assignments requiring substantial professional experience.

B.1.9 Level 3—Professional

(a) An employee at this level performs duties requiring the application of mature professional knowledge. With scope for individual accomplishment and coordination of more difficult assignments, the employee deals with problems for which it is necessary to modify established guides and devise new approaches.

(b) The employee may make some original contribution or apply new professional approaches and techniques to the design or development of equipment or products.

(c) Recommendations may be reviewed for soundness of judgement but are usually regarded as technically accurate and feasible. The employee makes responsible decisions on matters assigned, including the establishment of professional standards and procedures. The employee consults, recommends and advises in specialty areas.

(d) Work is carried out within broad guidelines requiring conformity with overall objectives, relative priorities and necessary cooperation with other units. Informed professional guidance may be available.

(e) The employee outlines and assigns work, reviews it for technical accuracy and adequacy, and may plan, direct, coordinate and supervise the work of other professional and technical staff.

Senior Project Engineer

[18] It is Mr Sariman’s evidence that he holds a Bachelor’s Degree in Engineering. He has over 10 years’ experience in engineering.

[19] Whilst employed at BMD, Mr Sariman was required to perform project management, contract administration, procurement and the supervision of subcontractors. Mr Sariman contends that in doing so, he was required to utilise his engineering experience and knowledge, design review experience, and he also gave technical advice.

[20] Mr Sariman contends that holding an engineering degree was a specific requirement for the Senior Project Engineer role. Mr Sariman contends that the organisation structure on the relevant project that he was working on had him reporting directly to the Engineering Manager, and not directly to the Project Manager.

Recent decision of the Commission

[21] On 21 June 2016, Asbury DP determined in a matter involving the same employer, BMD, that a former employee, Mr Whelan was not an employee covered by the Award. The decision is Whelan v BMD Constructions Pty Ltd [2016] FWC 4002.

[22] The Deputy President decided that Mr Whelan, a qualified engineer in the position of Project Manager, was not covered by the Award, and given that Mr Whelan’s earnings were in excess of the high income threshold, dismissed his application for unfair dismissal.

[23] I required the parties in this matter to address the Commission on the decision in Whelan.

Approach to determine award coverage

[24] In the Whelan decision, the Deputy President set out the approach taken by the Commission to determine award coverage, and in particular, with regard to the Award to be considered in this application. The Deputy President stated:

APPROACH TO DETERMINING AWARD COVERAGE

[7] By virtue of s. 48 of the Act, a modern award covers an employee or employer if it is expressed to do so and a reference to a modern award covering an employee is a reference to the award covering the employee in relation to particular employment. The appropriate test for determining award coverage is the principal purpose test, which requires assessment of the principal purpose or primary function for which the employee was employed. 1

[8] In interpreting an award provision, the words of the clause are to be given their ordinary meaning. 2 Award history and subject matter may be considered to resolve any ambiguity.3 In considering whether a modern award covers a person the test has been stated as: to discern the objective meaning of the words bearing in mind the context in which they appear and the purpose they are intended to serve.4

[9] The Award was made as a result of the award modernisation process conducted by the then Australian Industrial Relations Commission (the AIRC). In Halasagi v George Weston Foods Limited 5(Halasagi) Vice President Lawler considered whether an applicant for an unfair dismissal remedy was covered by the Professional Employees Award 2010 and said in in respect of that Award:

“The modern awards made as a consequence of the award modernisation process under Part 10A of the Workplace Relations Act 1996 (WR Act)fall into three categories:

(a) awards that cover an industry or industries;
(b) awards that cover an occupation or occupations; and
(c) hybrid awards that have both an industry coverage and also an occupational coverage.

The Professional Employees Award 2010 is in the third category: it covers employers in the industries specified in clause 4.2 but it also has an occupational coverage as specified in clause 4.1.” 6

[10] His Honour, in considering the meaning of “professional engineering duties”, considered the history of that term and subsequently held:

“I proceed on the basis that:

Particular duties will not be "professional engineering duties" as defined unless it is almost invariably the case that a qualification of the sort referred to in the definition is needed for the adequate discharge of some portion of those duties.

The qualification must relate directly to the duties in question. That is, it is not enough that an employee holds a qualification as (or at least equal to those of) a graduate member of Engineers Australia, the qualification must be a qualification of the sort that is almost invariably needed to perform duties of the sort that are said to be the "professional engineering duties" of the employee. In other words, an employee would generally not be able to rely upon, say, a degree in mechanical engineering to claim coverage by the Professional Employees Award 2010 in a position that involves duties in the field of chemical engineering.

If the advertisement for an employee's position identifies a relevant qualification as required this would be prima facie evidence that the position involved "professional engineering duties" for an employee who held that qualification.

The reference in the definition to "the adequate discharge of any portion of" the relevant duties is intended to ensure that engineers who advance in their career and assume an increasing load of administrative duties remain covered if they still perform some engineering duties, the adequate discharge of which requires the relevant qualification and the definition should be construed accordingly.” 7

[11] Those conclusions were endorsed and adopted by a Full Bench of the Commission in Bateman v Communications Design & Management Pty Ltd 8.

[12] In Halasagi Vice President Lawler went on to state that:

“Of course, an applicant who seeks to establish that they are protected from unfair dismissal by virtue of being covered by a modern award needs to establish not only that they are within the coverage clause of that modern award (the issue with which I am presently concerned), but also that they are employed in a classification in the award. The latter question is determined by reference to the ‘principal purpose’ test. I would note that, in relation to the Professional Employees Award 2010, care must be taken not to confuse these two questions because the definition of ‘professional engineering duties’ can be satisfied by reference to ‘any portion’ of the employee’s duties and does not require that the duties falling within the definition are the principal purpose for which the employee was employed.” 9

[13] That comment was not specifically endorsed by the Full Bench in Bateman however,in Baptista 10 a Full Bench of the Commission noted that the coverage clause of the Award operates by reference to both the industry of the employer and the occupation of employees. What the clause requires is consideration of whether an employer has employees performing professional engineering duties as defined by the Award and who are in classifications in Schedule B.11 In the present case it is necessary to determine these matters in relation to Mr Whelan.

Evidence – Award Coverage

[25] BMD called two witnesses to give evidence in support of its jurisdictional objections. Evidence was given by:

Mr Steven Thomas, Human Resources Manager; and

Ms Natasha Roy, Project Manager.

[26] Mr Sariman gave evidence on his own behalf. Mrs Pamela Sariman also attended the hearing and gave evidence largely in relation to the kilometres travelled by her husband and the vehicles used.

[27] On 19 April 2012, an offer of employment was made in writing to Mr Sariman by Mr Thomas on behalf of BMD. The role offered was Senior Project Engineer.

[28] A position description for the relevant period of commencement – that being May 2012 – was attached to Mr Thomas’ statement. The position description is as follows:

POSITION TITLE: SENIOR PROJECT ENGINEER

REPORTING TO: PROJECT MANAGER

LOCATION: QLD

DATE: MAY 2012

BASIC OBJECTIVE:

To assist the Project Manager in all aspects of the construction of various civil engineering projects – as directed. To work in conjunction with the Project Manager, Engineers / General Foreman / Project Foremen to complete projects on or under time whilst ensuring safe sites are maintained and a quality and cost effective product is constructed.

KEY RESPONSIBILTIIES:

Key responsibilities of the Senior Project Engineer are as follows:

Pre-construction activities –

Coordinate preparation and issue of Integrated Project Management Plan

Copies of Insurance and Workers Comp to Superintendent

Prepare works program to issue to Superintendent and Site staff – also monitor on a daily basis

Issue bank guarantees or insurance bonds for security – retention to Superintendent

Identify potential risks and opportunities

Develop construction methodologies in conjunction with project team

Construction Phase –

Check schedule of Quantities – discrepancies to be made clear to Consulting Engineers

Have a thorough knowledge of drawings, specifications and quality requirements for all site related activities

To ensure progress claims are sent out on time

Facilitate timely certifications of claims and forward to administrator for issue of tax invoices

Costs – check weekly with assistance from project engineers/foremen

Valuations – monthly in conjunction with the Project Manager

Arrange subcontractors agreements and monthly statements with Project Engineers / Administrators

Verify subcontractor quotes

All variation pricing to be checked by yourself and agreed before sending

Update site with drawing revisions

Technical matters to be directed to Project Manager

Communicate with client representatives and/or superintendents and council inspectors to ensure their requirements are being met

To ensure the implementation of occupational health and safety requirements as well as Environment requirements along with toll [sic] box safety meetings with documentation records kept once a month with all personnel on site.

ADDITIONAL REQUIREMENTS:

Undertake any other duties to successfully complete the particular project that you are working on. Travel short on long term within the state or interstate as may be required from your home base.

[29] Mr Thomas’ evidence is that the principal duties of Mr Sariman’s role were project management, contract administration, procurement and supervision of subcontractors. Mr Thomas stated:

The duties of the Applicant’s position are performed through experience and usually tertiary qualifications. The tertiary qualifications for the Applicant’s position can be Civil Engineering or Project Management. The Company also has employees who carry out roles consistent with that of the Applicant based on experience and no tertiary qualifications. 12

The Applicant’s role on the Project is Senior Project Engineer. This position can also be described as Contracts Administrator or Assistant Project manager on other projects within the Company. The Applicant was not engaged to provide specific engineering work such as calculations, design or technical advice. 13

[30] Ms Roy was Mr Sariman’s manager from June 2015. Mr Sariman was working on the Tiger Brennan Drive Duplication Project; a duplication of the existing major arterial road.

[31] It is Ms Roy’s evidence that the duties and responsibilities undertaken by Mr Sariman did not require engineering qualifications. Ms Roy’s evidence is that the work performed by Mr Sariman was largely that of contract administration, and the work can be performed with adequate construction procurement experience.

[32] Ms Roy’s evidence is that the principal work performed by Mr Sariman was traffic management, constituting approximately 80% of his working time. The responsibilities of traffic management include ensuring traffic controllers and construction workers are safe, and that traffic control diagrams are implemented.

[33] In addition, he was responsible for the procurement, ordering and supply of landscaping, guardrail, pre-cast concrete and quarry materials.

Design work

[34] In relation to any design work, Ms Roy stated:

Any design work undertaken or variations for design are carried out by a consulting engineer on a subcontract basis. In no circumstances are design or variations of design performed or approved by Mr Sariman. 14

[35] In evidence-in-chief, Ms Roy stated that BMD has an external consultant who looks after all design work. The work is performed by the Snowy Mountain Engineering Company (SMEC). 15

Traffic Control

[36] Mr Sariman contends that the traffic management part of his role required reviewing design proposals proposed by subcontractors to ensure they were in accordance with Austroad design standards and guidelines.

[37] Temporary road safety barriers proposed by subcontractors have to meet the road speed design. Installations are required to be per the design and technical manuals.

[38] Mr Sariman contends:

If a person without an engineering qualification, knowledge and experience had been recruited for this role, ….the work would have to be outsourced to a qualified engineer to give recommendations, technical advice, or prepare the information required. 16

[39] The current Traffic Control Manager on the duplication project engaged by BMD is performed by a gentleman called Mr Reardon, engaged through a subcontractor. Mr Reardon is not an engineer, but has a background in traffic management. The qualifications held by him are ‘WZ1’. Ms Roy attested to these qualifications being the minimum requirement for traffic management in the Northern Territory, where the work was being performed.

Procurement of quarry materials and guard rails

[40] When procuring quarry pavement materials, Mr Sariman contends that ordering materials is a basic administrative requirement. However, there are technical requirements in reviewing and interpreting the test results of the pavement materials supplied by the quarry’s geotechnical engineers and technicians to ensure the test methods are in line with the project specifications.

[41] Where it was identified that the results of the products supplied did not meet the requirements, Mr Sariman would request independent results, or advise the supplier that the material stockpile was not compliant, and reject the material.

[42] It is Mr Sariman’s evidence that due to his engineering qualifications, he made the recommendation for stockpile lot sizes to be 5,000 tonnes, and for a minimum of three sets of tests to be done. Mr Sariman stated:

Anyone without an engineering qualification and experience would not have been able to make these recommendations and conduct continuous reviews of these test results with confidence. 17

[43] Mr Sariman prepared the tender documents for the guardrail works, together with recommending and managing the contractor. Mr Sariman contends that ensuring that the technical drawing and information provided to the tenderers complied with the design intent required technical and engineering knowledge. Mr Sariman contends that because there are various types of guardrail systems to select from, there is a high potential of selecting and installing the incorrect product.

[44] In evidence-in-chief, Ms Roy rejected Mr Sariman’s evidence that his engineering qualification is used in the procurement of quarry materials and guard rails. Ms Roy stated that interpretation of geotechnical testing does not require an engineering degree; it is simply comparing a set of rules with a set of results. Ms Roy stated, ‘You definitely don’t need to be an engineer to do that.’ 18

[45] With respect to guard rails, it is Ms Roy’s evidence that the role requires collating a number of design drawings, sending the information out to subcontractors, then coordination and administration of contracts for the installation of the guard rail.

[46] Following the termination of Mr Sariman, and Mr Reardon performing the role of Traffic Control Manager, the remainder of Mr Sariman’s role is being performed by various individuals. Mr Scott Williamson is performing the landscaping duties. Mr Williamson is an engineer.

[47] The quarry materials procurement and administration is being performed by one of BMD’s foremen, Mr Col Water and another employee, Mr Marco Giovino. Mr Giovino is an engineer. Mr Water is not. Another employee, Mr Michael Levy is employed as a quality coordinator. He is not an engineer, and performs a role similar to the work performed by Mr Sariman with the quarry procurement duties.

Cross-over

[48] A temporary cross-over road for use by the public was designed and was to be constructed by a subcontractor. Mr Sariman contends that because he was responsible for traffic management, and with his engineering qualifications, it was his responsibility to undertake a review of the proposed design. Mr Sariman checked the design requirements and identified that the proposed road design was deficient. He determined that a specific guardrail system would meet the design and safety requirements.

[49] In cross-examination of Ms Roy, Mr Sariman suggested that the review that he conducted on the temporary cross-over design required engineering qualifications. Ms Roy stated that a review as to constructability was considered by BMD, but there would not be any design calculations and requirements of design done by BMD; that is done by the consulting engineers.

[50] Mr Sariman asked Ms Roy if she agreed that he had reviewed the cross-over and recommended changes to ensure the safety of traffic through the area. Ms Roy agreed that Mr Sariman had made the recommendations, but other managers could make the same recommendations; it does not require an engineering degree to review and make the changes recommended by Mr Sariman.

Use of ‘Engineering’ in the job title

[51] In cross-examination, Mr Sariman questioned Ms Roy as to why his job title was Senior Project Engineer if he was largely performing the work of a traffic management officer. Ms Roy responded that no, you do not need to be a senior project engineer to be a traffic manager or do procurement or contract administration. Ms Roy stated, ‘We could have called you one of – a myriad of things I guess.’ 19

[52] Mr Thomas’ evidence-in-chief is that Mr Sariman was largely performing project management work, and many people can perform this work without formal qualifications. Mr Thomas stated that BMD has employed people in similar roles to Mr Sariman with backgrounds including labouring, business, finance and site administrators.

[53] Mr Thomas named seven BMD employees who are employed as engineers, project managers or contract administrators who do not hold an engineering degree.

[54] BMD recently employed a Senior Project Engineer whose highest qualification is a Diploma of Surveying. 20

[55] Mr Thomas’ evidence is that the procurement of quarry materials, guardrails, concrete products and traffic barriers does not require an engineering degree. 21

[56] In cross-examination, Mr Sariman asked Mr Thomas how similar is the role of a Senior Project Engineer to that of a Project Manager. Mr Thomas answered that a Project Engineer, Senior Project Engineer and Project Manager can all perform the same or similar duties on a project. He said:

Obviously the higher you go up the chain the greater your level of responsibility becomes. But the fundamental undertakings of the role, looking to the specifics, they’re all the same. 22

[57] Mr Sariman’s evidence is that in his role as a Senior Project Engineer, he reported to the Engineering Manager who reported to the Project Manager. In distinguishing his circumstances from that of Mr Whelan, Mr Sariman contends that his duties were very different to the duties performed by Mr Whelan. Mr Sariman submits that his case should be distinguished to Mr Whelan’s case on the basis of the duties performed by him.

[58] Mr Sariman contends:

In Mr Whelan’s position, he was overseeing projects so would have project engineers, site engineers and other staff reporting to him that would carry out the duties which I performed in my role. 23

[59] Further, Mr Sariman submits:

My position of Senior Project Engineer had no managerial functions or attributes such as financial delegation, direct reports, or the authority to hire and fire employees. Mr Whelan’s position had most of these functions. 24

[60] Mr Sariman contends that in relation to the Tiger Brennan Drive Duplication Project, he was instrumental in obtaining the approval from the client and designers to deviate the construction of a side entry pit. Mr Sariman stated:

The task involved obtaining design specifications from the supplier, analysing and comparing against existing project design drawings and specifications, compiling all technical information and drawings, and preparing a detailed submission to justify that the design change met the project design intent and submitting to the designers. My submission was subsequently approved by the designers and the client. 25

Tiger Brennan Drive Duplication Project – updated position description

[61] During the hearing, Mr Sariman gave evidence that he had come across a position description for the role of Senior Project Engineer on the Tiger Brennan Drive Duplication Project.

[62] Mr Sariman did not provide a copy of this material to the Commission or to BMD prior to the hearing, and said that he had taken photos of the position description on his phone just prior to being dismissed. 26

[63] The copy of the position description, having been taken as a photograph on Mr Sariman’s phone was not entirely clear. A short adjournment was taken during the hearing to make copies of the job description. The quality of the photographs on some pages is poor.

[64] The position description is nine pages long and includes Mr Sariman’s name on the document. The position is titled Senior Project Engineer. The role description states:

To develop and administer a project from start to finish with the use of any relevant documentation and whilst observing all Project policies and procedure and government legislation pertaining to ensuring the project’s effective and timely completion. To manage the Engineering Team to ensure the coordination and administration of contracts with subcontractors for the on-site construction engineering activities as carried out effectively to achieve project time and budget objectives.

[65] The qualifications stated are Bachelor Degree in Engineering. The minimum experience stated is 5 years construction experience.

[66] The role objectives are stated as:

Oversee Engineering team for the management of Subcontractors and specific trades to achieve positive project outcomes

Liaise with Client representatives to ensure good working relationship is maintained and that all contractual requirements are being met

Overall monitoring of project financial systems including continual review and assessment of project costs against the project budget.

Assist in the development of report monthly

Assist in the development and review of monthly progress claim submission and management of the monthly contract valuation process.

Review and monitor program of works for Area 2 and assist in the overall management of project construction program to ensure timely delivery of the project

Manage technicians, site supervisors and subcontractors and assist with reviews for accuracy and adherence to required standards

Review Subcontractor SWMS/CMS and risk assessments and assist in development if required

Work collaboratively with Subcontractors to achieve adherence to overall project program.

Coordinate and administer contracts for engineering activities to ensure the project is implemented in accordance with plans, designs and specifications

Work collaboratively with Subcontractors to interpret designs for implementation

Recommend changes to design details to increase ease of construction and contribute to improvements of existing designs

Manage interfaces between subcontractors to ensure potential delays are minimised.

[67] The position description contains the following:

Competencies/ Experience:

Ability to produce a critical path network with up to 1000 activities on ‘Primavers ASTA’

Ability to prepare, monitor and update short-term programs

Knowledge of Quality Assurance project Quality Management Plan and legal and moral duty of care

Working knowledge of safety and environmental legislation, Project Safety Management Plan, EMP, Australian Standards and industry codes

Ability to produce and review SWMS/CMS and ITP’s for all trades

Ability to formulate/prepare and assess contractual claims and variations

Detailed knowledge of head and subcontract agreement pertaining to project

Ability to develop, implement and maintain a budget and forecasts.

[68] The following question was put by me and answered by Mr Sariman during the hearing:

….. Now, giving consideration to the Whelan decision of Asbury DP, just a short while ago, can you point out to me where you say, in your position description here, that you’re doing professional engineering duties?

Well, it sort of highlights in the details (indistinct) the copy I had in the computer. It states clearly on the first page here, which is my name, Chris Sariman, or Christopher Sariman, and the position, Senior Project Engineer and then it goes down to reporting
- instead of me reading through all that, I'll just point out the (indistinct) which is a portion of my total or whole responsibilities which, specifically on page 2, it says: 27

Managing technicians and other engineers and site supervisors, subcontractors and undertaking (indistinct) accuracy and adherence to the required Australian and design standards. Working collaborately with subcontractors to interpret the designs for implementation, coordinating and administering contracts for engineering activities, to ensure the project is implemented in accordance with the plans and designs and also the specifications and recommending changes to design details to increase the ease of construction and constructability and contributing to the improvements in the existing design. 28

Going further on to that it stipulates the qualifications and experience as in you've got to have a Bachelors Degree in Engineering and a minimum experience of five years in construction. 29

Mr Sariman, having regard to the Whelan decision, her Honour determined that there is a principal purpose test and also that Mr Whelan did not undertake engineering design work, at paragraph 57 of that decision. Talk me through how it is you are principally employed as an engineer and did you perform engineering design work?---Okay, there's a few that I - (indistinct) Commissioner, thanks, for that opportunity. As I put forward in my outline of submission, on 26 April 2016, I've listed that as part of the first item is procurement, which is the supply of quarry (indistinct) materials. The specific engineering and technical knowledge comes into play when you're actually assessing the test methods, in line with the project specification and the Australian standards and you've got to have at least some portion of engineering knowledge when you're checking on the calculation of those results for compliance with the standards and specifications. 30

So in my particular situation, where I was looking after the (indistinct), because the project in particular did not have any stockpile sizes and testing lot details and all that, I made the recommendation, from my experience as an engineer, and recommended that the stockpile lot sizes had to be 5000 tonnes and that three sets of testing had to be undertaken for each stockpile to ensure that the compliance of that (indistinct) were adhered to and then to (indistinct) testing and all that, which includes the California Bearing Ration, which is a particular test effort which the soil is tested to check the load carrying capacity of that particular soil. 31

The other subsoil test is the particle size distribution test, which obviously you put the soil through a few sieves and all that to come up with what sort of size is in each sieve and then you determine what sort of grading of that material is and where it's relevant to use, whether in a top pavement course of the material or down in the lower layers, and other few tests as well, like the (indistinct) test and the optimum moisture content. 32

The next item, which obviously relates in that sense, where design and technical knowledge, which I had to use during my employment, was the roadside cabin site entry lintels. In the specification (indistinct) there was a mention to use the Northern Territory standard of cabin channel but due to the weather in the Northern Territory and looking at constructability issues, there was discussion with the client and the designers which I proposed that we should look at the options of using precast instead of cast in situ material on site. When I say "cast in situ" what I (indistinct) items poured on site as to being poured in a factory and getting them delivered to site. So I mean that task that I was assigned to, I had to obtain the design information from the supplier and review that with what sort of design and specifications that the project design asked for and had to also discuss with designers and propose a plan of how we're going to alter this roadside (indistinct) units from the (indistinct) to getting them prefabricated. That was the plan that I put forward to the designers and it got approved and the construction of those items were made and were constructed at the DMR (indistinct) Humpty Doo in Darwin. 33

Look, thank you?---The other one - - - 34

Sorry, yes, continue?---The other one that we sort of discussed earlier and previously about the cross over road that was designed by the subcontractors, which obviously had to come through to me where I had to review that propose design, in accordance to the Australian Roads Design Standards and the Guidelines, which is a specific design standard that is called up and referred to by all design engineers around Australia and you have to ensure that any road design or a side track has to be (indistinct) or designed in accordance with that standard. So in reviewing that design I determined that there was insufficient protection on the steep (indistinct) which was then picked up by the designers and we went ahead and we installed the protection. So in saying just a few, Commissioner. There's another two but I'll just sort of summarise it here, because this is all in my submissions. In carrying out duties that I just listed a person without an engineering qualification, knowledge and experience would have to be recruited in the position a senior project engineer to undertake those duties that I just listed about. 35

[69] In oral evidence, Mr Sariman largely repeated the evidence given in his witness statement.

[70] During cross-examination, Mr Sariman was asked if he had ever signed the position description relevant to the Tiger Brennan Drive Duplication Project. Mr Sariman stated that he did, but he did not have a copy of it.

[71] Mr Sariman was asked if he was aware that the job descriptions are created by BMD to be included in the project management plan because of the client’s desires. Mr Sariman answered that he did not know why the position description was created.

[72] Mr Thomas was recalled to give evidence with respect to Mr Sariman’s position description on the Tiger Brennan Drive Duplication Project. Mr Thomas’ evidence is that the position description put by Mr Sariman in evidence during the hearing is a document created for the business to demonstrate to clients the capability within BMD.

[73] Mr Thomas stated that the document is a project-specific document. It ‘sits’ on the BMD business management system and Mr Thomas assumes that it was created and included as part of the plan that is submitted to the client.

[74] Mr Thomas stated that some clients specifically request relevant positions are held by individuals with an engineering degree. For example, Main Roads requests that Project Managers hold engineering qualifications. It’s not a requirement that the employee be a Registered Professional Engineer, and they’re not required to sign off on design. However, Main Roads may stipulate that particular requirement within the contract with BMD.

[75] It is Mr Thomas’ evidence that when BMD recruits for engineers:

…it’s an internal wish list that we have. We target civil engineers, but it’s not, as I’ve sort of suggested before, it’s not a requirement that that has to be the case. If there was someone else that came to us that had the experience, but didn’t have the qualifications, that wouldn’t exclude them from being able to fulfil the role in our business. 36

Employees performing work without an engineering degree

[76] In cross-examination, Mr Sariman was asked by Mr Power if the testing of quarry materials, guard rails and concrete products was required to be carried out to a relevant Australian Standard. Mr Sariman agreed that the products needed to be tested against Australian Standards, together with the design standard of the construction.

[77] It is Mr Sariman’s evidence in cross-examination that the work performed in procuring the products and testing them against Australian standards and design standards could not be done by a person without an engineering degree. 37 Mr Sariman also stated this in written submissions:

You would have to have an engineering qualification and experience with road pavement material specifications in order to undertake these tasks and interpret the test results. 38

[78] Mr Sariman was asked if he had worked with a BMD employee, Mr Michael Peterson. Mr Sariman stated that he had briefly met Mr Peterson, but did not know of his qualifications and experience. Mr Power put to Mr Sariman that Mr Peterson is one of the individuals referred to by Mr Thomas as performing project management work without holding an engineering degree. Mr Sariman repeated that he did not know of Mr Peterson’s qualifications. 39

[79] With regard to design work, in cross-examination, it was put to Mr Sariman that all design, amendment and approval of construction work is carried out by the contractor, SMEC. Mr Sariman agreed that signing off on the work was, but he repeated that he had been involved in recommendations.

[80] Mr Sariman was asked if foremen, supervisors, superintendents and project managers would have input into a review of the constructability of a design. Mr Sariman answered:

Well, the first thing is that as the engineer you have to collect the correct information and review the design and put that to those other persons and hence that information gets passed to a consultant engineer, as in what sort of options you are proposing. But not specifically going ahead and asking those blokes “How do you want to do it?” Because it will come back on your head that you basically made that call if an accident happens and that’s where the engineer’s input is far more greater. 40

[81] Mr Sariman asserted that the review could only be done by somebody who is an engineer. 41

[82] During the hearing I asked Mr Sariman how much time he spent performing the cross-over design review work. It is Mr Sariman’s evidence that over a period of two months he spent between eight to fifteen hours performing this work. 42 Mr Sariman stated that he was supplied with the design by the subcontractor. He then had to obtain information, review it, put it in an email, and the subcontractor would then communicate with the consultant engineer.

[83] In cross-examination, Mr Sariman disagreed that traffic management was the principal part of his role. He estimated that he spent approximately 50%-60% of his time performing this function.

Closing submissions on award coverage

[84] The parties were directed to file written closing submission as to whether Mr Sariman was employed pursuant to the Award.

[85] It is Mr Sariman’s contention that classifications 2 and 3 of the Award should not be exclusively applied to engineers who carry out full-time design, calculations and sign-off.

[86] Mr Sariman submitted that the argument put by BMD that it would be necessary for him to be designing, calculating and signing-off design on a full-time basis is incorrect.

[87] It is Mr Sariman’s contention that he was directly involved in duties producing end results for BMD, and not mere administrative roles. Mr Sariman put the following:

Contract Administration

Administrative portion – verifying and submitting claims, cost control

Engineering portion – administering contracts specifically for engineering activities to ensure they were in accordance with plans, designs and specifications. This involved the Applicant’s qualifications and experience to determine and recommend which contracts would suit the project design and would serve the correct purpose.

Procurement

Administrative portion – Placing, checking and verifying delivery orders. Check signs and traffic management set ups.

Engineering Portion –
a. For Quarry materials – the tasks included undertaking Quarry audits and arranging various geotechnical engineering tests required to assess and verify if material is suitable to be used after its properties are determined and evaluated with design standards. Some of these results had to be calculated by the Applicant from raw data that was provided by the geotechnical engineers. The various types of testing were taught as part the coursework of the Engineering Degree and furthermore, in this position as an engineer you would be able to clearly understand how the test are conducted and whether they have been performed accurately.

b. For Traffic Management – The tasks include using my qualification and experience to look for opportunities to ensure no delays and timely delivery of project and, review and make recommendations through a submission to the design engineers. Reviewing of traffic management designs such as cross-overs and proposals for traffic switch locations and layout to ensure that consideration of the design requirements are allowed for and if there is deficiency in the submission, it would be reviewed by the Applicant and sent back to the contractor with his recommendations. Ensuring that the items procured fit the design criteria and the governing standards by identifying what is available, reviewing it to ensure compatibility at all points of construction or installation and making recommendations fit for purpose.

Supervision of subcontractors

Administrative portion – was basically to be a contact point for the subcontractors

Engineering portion – interpreting designs for implementation and working with them to improve existing design where needed. If a subcontractor raised an issue, the applicant would have to assess the issues, review it in line with the design criteria and intent and make recommendation for design change sign off. Working with subcontractors and other project employees to carry out reviews to ensure accuracy and adherence to standards. 43

[88] It is Mr Sariman’s submission that it would be unfair to rely on any earlier position descriptions issued to him, and reliance should be given to the project-specific job description.

[89] Mr Sariman submits that it is misleading if only the administrative portion of the duties performed by him is taken into consideration. Mr Sariman contends that the role was not merely procurement and administration. To do so would downplay the engineering duties performed by him.

[90] Mr Sariman submitted that he spent approximately 60% of his time on traffic management duties. He put the following for consideration:

Non-technical experience component - Inspection of traffic controllers and traffic management set ups; and

Engineering and Technical experience component- Reviewing of traffic management designs such as cross-overs and proposals for traffic switch locations and layouts. This requires the Applicant to consult the Australian Roads Design Manual to ensure that consideration of the design requirements are allowed for and if there is deficiency in the submission, it would be reviewed by the Applicant and sent back to the contractors with his recommendations. 44

[91] BMD’s closing submissions put Mr Sariman’s argument, at its highest as follows:

The majority of Mr Sariman’s work (60%) was on traffic management;

The balance of Mr Sariman’s duties related to procurement of quarry materials, guard rails and concrete products involving the matching of materials supplied to Australian standards; and

The procurement of products assessed against Australian Standards is work that requires engineering qualifications to perform.

[92] BMD’s evidence is that the requirement to hold an engineering degree is not required to perform the work that was being performed by Mr Sariman. The evidence of Ms Roy and Mr Thomas is that there is a variety of different qualifications and experience held by employees in similar roles within BMD to that of Mr Sariman.

[93] In relation to the cross-over review undertaken by Mr Sariman, at its highest, Mr Sariman was collating information, reviewing it, putting it in an email and allowing consultation between the subcontractor and the consultant engineer. BMD submits that there is no reference to professional engineering specific duties such as design, calculations or technical advice as part of this review process.

[94] BMD submits that having regard to the decision in Whelan and the principal duties test, Mr Sariman’s principal duties were traffic management, procurement and contract administration. The traffic management responsibilities are now being undertaken by a person who does not hold engineering qualifications. The evidence of BMD witnesses is that the work performed by Mr Sariman has been and is being performed by employees who are not qualified engineers.

[95] Engineering is only one entry qualification to a career in project management or contract administration; there are other tertiary qualifications or experience that can lead one to this career or role.

Consideration of the award coverage issue

[96] In the decision in Whelan, Asbury DP set out the relevant consideration that is required to determine if an employee who holds an engineering degree is employed pursuant to the Award. The Deputy President determined:

“[50] It necessary to consider whether Mr Whelan was an employee “performing professional engineering...duties” and whether Mr Whelan was covered by the classification structure in Schedule B of the Award. It is not sufficient that Mr Whelan was within the coverage set out in clause 4.1 of the Award. It is also necessary to establish that Mr Whelan was employed in a classification set out in Schedule B in the Award, by applying the principal purpose test. 45 In applying the principal purpose test, the Commission must assess the nature of the work and ascertain the principal purpose for which the employee was employed. This is more than a mere quantitative assessment of the time spent performing certain duties.46

[51] To fall within the definition of “professional engineering duties” as defined in clause 3.2 of the Award and for the purposes of clause 4.1 of the Award, the duties must be “duties..., the adequate discharge of any portion of which...requires qualifications of the employee as (or at least equal to those of) a graduate member of Engineers Australia”. BMD did not tender a position description that had been signed by Mr Whelan or that he had otherwise indicated agreement with. If I accept that the position description tendered by Mr Whelan describes the duties he undertook in his role as Project Manager with BMD, then I am not satisfied that he was performing professional engineering duties as defined in clause 3.2 of the Award.”

[97] There is contention as to whether I should accept the original position description that was issued to Mr Sariman in the offer of employment, or the later project-specific position description which Mr Sariman seeks to rely upon.

[98] It is BMD’s contention that the site-specific job description is used for client satisfaction purposes only. I take it to mean that BMD seeks to be relieved of some of the descriptions used within the document. It is a very curious submission to make; that the document is used to show competency to a client, but should not otherwise be completely relied upon.

[99] Mr Sariman’s submission that because the job description has a requirement that an engineering degree is essential is a persuasive argument. However, BMD’s evidence is that other people performing similar functions, albeit with various titles, do not hold engineering degrees adequately counters that position.

[100] It is not helpful to BMD’s argument that Mr Sariman’s title is a Senior Project Engineer. If, in fact, he is largely a [junior] Project Manager, or a Contract Administrator, he should so be titled.

[101] If it is accepted that the Tiger Brennan Drive Duplication Project position description should be held to be the valid position description, at the most, the following terms have reference to engineering duties:

Coordinate and administer contracts for engineering activities to ensure the project is implemented in accordance with plans, designs and specifications

Work collaboratively with Subcontractors to interpret designs for implementation

Recommend changes to design details to increase ease of construction and contribute to improvements of existing designs

[102] Even at their highest, these duties do not require an engineering degree to have the duties adequately performed. The duties require coordination, administration, collaboration with subcontractors to interpret designs, and recommendations of changes to design details. They do not require engineering duties of design, calculations or technical advice.

[103] If any design, calculations or technical advice has been given by Mr Sariman in his performance of the duties, I consider it to be of minute contribution to the work performed by him. On Mr Sariman’s evidence, his recommendations have been simply that; recommendations. He does not hold any authority with respect to design, calculations or technical advice. This authority is held with the consultant engineers, and it would appear that the consultant engineers could have no regard for Mr Sariman’s recommendations if they so wished.

[104] Mr Sariman’s submission that he was two levels below Mr Whelan’s position (Project Manager) on the organisation chart certainly requires consideration. It does not necessarily correlate that because Mr Sariman’s role included Engineer in its title and he is two levels below that of a Project Manager he must be an award-covered employee.

[105] I have had regard to all of the evidence and submissions put by the parties. In my view, the adequate discharge of duties by a person in the role performed by Mr Sariman (by any title) or any portion of the duties as set out in the position description tendered by Mr Sariman does not require qualifications as a graduate member of Engineers Australia (or equivalent).

[106] Mr Sariman’s duties were largely contractual and administrative. Where Mr Sariman applied intellectual or educational thought to the role (when reviewing the cross-over), it was simply in the form of a recommendation to be considered by qualified and dedicated consultant engineers.

[107] The principal purpose for Mr Sariman’s employment was to perform traffic management functions, together with procurement of various materials to be used in construction. Whilst it is desirable to have a person in the role with engineering qualifications, or without qualifications, experience, it is not essential. The evidence is clear that the work is adequately performed by others without engineering qualifications. At [47], Mr Water and Mr Levy are satisfactorily performing quarry procurement despite not being engineers. Mr Sariman’s evidence is that only engineers can interpret the tests undertaken on the materials. Clearly, this is not the case.

[108] Similarly, Mr Reardon is performing the traffic management duties that Mr Sariman had earlier done, despite not being an engineer.

[109] In Whelan, Asbury DP found:

[53] That the position description requires a thorough knowledge of drawings, specifications, quality, workplace health and safety and environmental requirements for all sites, does not constitute a portion of the duties for the position which require an engineering degree or qualifications for equivalent of a graduate member of Engineers Australia. Understanding plans or technical drawings is not the exclusive province of engineers. Similarly, knowledge of quality, workplace health and safety and environmental issues does not require an engineering qualification.

[110] Mr Sariman submits that during his coursework in undertaking his engineering degree, he was taught various types of testing. He then undertook such testing when procuring material during his employment at BMD. He submits that as an engineer he would be able to clearly understand how the tests are conducted and whether they have been performed accurately. This is, respectfully, not the sole domain of engineers. These duties can and are being performed satisfactorily at BMD by employees who are not engineers.

[111] I expect that Mr Sariman’s experience and knowledge was of assistance in performing the role for the period of his employment with BMD. On the evidence before me, however, I am unable to accept the proposition that Mr Sariman has put that only those individuals who have an engineering degree can perform the duties that he performed at BMD.

[112] I turn now to Mr Sariman’s evidence about his duties and whether those duties were covered by Level 2 – Experienced Professional, or Level 3 - Professional in Appendix B of the Award. On the basis of the evidence before me, I am not satisfied that the principal purpose for which Mr Sariman was employed was to perform the duties in Schedule B for a Level 2 or Level 3. While Mr Sariman may have performed some of those duties comprising a small or incidental part of a work day or work week, the performance of those duties was not the principal purpose for which he was engaged.

[113] I accept that Mr Sariman’s work was valued while he was employed at BMD, and he considered the work to be of sufficient professional fulfilment. I do not, however, accept in the performance of his duties he was undertaking professional engineering duties as defined in the Award or that he was employed to perform work within the classification definitions of the Award in Schedule B.

Conclusion in relation to the award coverage issue

[114] For the above reasons I find that Mr Sariman was not covered by the Award.

[115] It was not contended by the parties that there is another modern award that could cover Mr Sariman’s employment and I am satisfied that there is no modern award that was capable of covering Mr Sariman at the time of his dismissal.

[116] Having so found, it is then necessary to determine if Mr Sariman, as an award-free employee, had annual earnings less than the high income threshold of $136,700.

High income threshold

[117] Section 382(b)(iii) of the Act provides that a person is only protected from unfair dismissal where:

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.

[118] ‘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.

[119] In Francesco Zappia v Universal Music Australia Pty. Ltd. T/A Universal Music Australia 47 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]

[120] The high income threshold at the time of the dismissal was $136,700. It is not contested that Mr Sariman’s base salary for the relevant period of time was $135,000 per annum.

[121] In addition, Mr Sariman was paid a $12,000 per annum car allowance, together with use of a fuel card.

[122] The initial offer of employment made by BMD to Mr Sariman included the following:

a base salary of $130,000 per annum;

a motor vehicle and fuel card (valued at $21,142 per annum);

a mobile phone and laptop; and

$500.00 per week Living Away From Home Allowance.

[123] Mr Sariman requested that instead of receipt of a company motor vehicle and fuel card, he be paid a car allowance. This was implemented in October 2012.

[124] At the time of Mr Sariman’s dismissal, he was in receipt of a base salary of $135,000 and a car allowance of $12,000. He was no longer in receipt of the Living Away From Home Allowance.

Fuel card

[125] Only one day prior to the hearing, BMD provided evidence to the Commission that Mr Sariman was also in receipt of a company fuel card. During the hearing, Mr Sariman stated that he had not seen this document. A short adjournment was allowed to ensure Mr Sariman had an opportunity to review the document.

[126] In order for Mr Sariman to meet or exceed the high income threshold of $136,700 and his application for unfair dismissal to be dismissed, it would be necessary to find that, at a minimum, $1,700 from the $12,000 car allowance and $8,474.36 fuel card could be considered to be ‘earnings’.

[127] Mr Thomas’ evidence during the hearing was that the purchases on the fuel card made by Mr Sariman in the period 1 January 2015 to 4 December 2015 amounted to $15,329.00. 48 In written closing submissions, the amount was calculated to be $8,474.36. It is not clear how the amount reduced dramatically, however I suspect it is because of duplicate calculations in the earlier amount. I accept that Mr Sariman’s expenditure on the fuel card was $8,474.36 for the relevant period.

[128] Mr Sariman’s written closing submissions state that the fuel card evidence should not be accepted as it was flawed with discrepancies, was fabricated and cannot be relied upon as accurate. Mr Sariman contended that he would not have been able to adequately carry out his duties had he not been provided with a vehicle and fuel card.

[129] Mr Sariman contends that he did not have clarification on the parameters of usage of the fuel card. Mr Sariman stated:

It was made known to the Applicant that full personal use was included. There was no advice to keep record of business/personal kilometres and fuel usage. The Applicant should have been advised to use a form of record such as a log book or log form and also advised of parameters to adhere to. 49

[130] Further, Mr Sariman submits:

The Applicant commenced using his own vehicle in lieu the company provided vehicle and as such the allowance was a reimbursement for running costs. The Respondent did not retract the fuel card when the Applicant began to use his own vehicle and did not advise of any changes to the original arrangement with the fuel card.

The Applicant is aware that other employees also have full personal usage of the company provided fuel card. The Respondent has brought the usage of the fuel card into contention to benefit their Jurisdictional Objection. It is prejudicial for the Respondent to give an employee full personal usage and later hold them liable for the Respondent’s own convenience. 50

[131] Mr Sariman’s contention is misplaced. Mr Sariman had the benefit of a company fuel card which he used for all purposes. He used the fuel card extensively throughout the Northern Territory and Queensland for the period January 2015 – December 2015. Mr Sariman was resident in Darwin during the relevant period of employment.

[132] The fuel card records admitted into evidence demonstrate, as an example, a fuel purchase of $215.96 made on 1 January 2015 at Deeragun, near Townsville. On 5 January 2015, a purchase of $199.69 was made in Mackay.

[133] On 6 January 2015, the fuel card was used to purchase $140.03 of fuel at Carmila, south of Mackay. On 7 January 2015, the card was again used to purchase $171.22 of fuel at Rasmussen, near Townsville.

[134] The extensive use of the fuel card in places such as Mackay, Townsville and Cairns demonstrates that Mr Sariman used the fuel card for personal use. Mrs Sariman’s evidence was less than forthright. Mrs Sariman first gave evidence that when the family travelled for personal use, her own car was used 90%-95% of the time due to her having a child restraint in the car.

[135] When Mrs Sariman was asked whose car had been used to travel to Townsville in January 2015, she answered that she thought it might have been her husband’s car. She was then unsure whose vehicle was used to travel Edmonton, near Townsville in May 2015. At first she answered that she thought it might have been her own vehicle, but when asked whose car was filled up with fuel on this occasion, she answered, ‘No, I’m not really sure on that.’

[136] Mrs Sariman was asked if she had ever used the BMD fuel card in her own car. She answered that she had not. BMD did not submit that Mrs Sariman had used the BMD fuel card in her own car.

Consideration on the fuel card constituting earnings

[137] Mr Sariman’s use of the fuel card must certainly be used to calculate the earnings of Mr Sariman in the relevant period. The evidence is clear that Mr Sariman had full use of the fuel card without any sanctions. He was entitled to, and did use it at will.

[138] It is true that if Mr Sariman only had use of the fuel card, and was not paid a car allowance, it would be necessary to deduct some of the fuel card expenditure for relevant business use. The full total of Mr Sariman’s expenditure on the card would not count as earnings. All business travel once Mr Sariman was at work until he finished for work at his workplace would necessarily be deducted.

[139] However, Mr Sariman was also in receipt of a $12,000 car allowance, so it is necessary to deduct relevant business travel from either the fuel card expenditure or the car allowance.

Car allowance

[140] Mr Sariman’s submissions and evidence was extensive in relation to the kilometres he claimed that he travelled for work purposes. In written submissions, Mr Sariman made the following statement:

My traffic management duties and procurement duties required me to be out of the office. I carried out inspections of the Traffic Installations and I visited Government Offices and suppliers for work purposes.

The inspection of the site is not a straight forward drive through of 18km. You would need to use side streets to safely complete the full inspection and safely access work sites. Traffic installations are also located well outside the construction zone. I have compiled and provided a detail list of trips undertaken for work/business purposes using my personal vehicle and summarised the total kilometres in Annexure CS-2.

These business trips are all documented, recorded and are on file with the Respondent by way of daily traffic inspection records, records of meeting minutes, reports, email correspondence, photographs and video footages.

I have utilised the calculation method provided by the Respondent using the case of Zappia v Universal Music Australia Pty Ltd T/A Universal Music Australia [2012] FWA 3208 and present as follows:

Total kilometres I travelled for work purposes annually = 37963.20 kilometres.
The cost per kilometre for these vehicles in accordance with the RACQ private vehicle average running costs is 0.836 cents per kilometre.
37963.20 kilometres x .836 cents = $31,737.24 per annum motor vehicle component utilised for work purposes.
I was provided $12,000 per annum car allowance by the Respondent. The figure of the motor vehicle component used for work purposes ($21,737.24) is more than the reimbursement given.
This yields that there was no private value benefit to me. 51

[141] Mr Sariman’s submission on this method of calculation is, regrettably, incorrect. The test utilised in Zappia is a formula adopted by a Full Bench in H.W. Fewings v Kunbarllanjnja Community Government Council. 52

[142] In Fewings, it was the personal value of the provision of a motor vehicle that was being examined. [my emphasis] The Full Bench in that case set forward the following formula:

1. Determine the annual distance travelled by the vehicle in question.
2. Determine the percentage of the annual distance travelled which was for the applicant's private purposes.
3. Multiply the figures from 1. and 2. This provides the annual distance travelled for private purposes.
4. Estimate the cost per kilometre for a vehicle of the type used. This information can be obtained from the RACV, NRMA will like motoring organisations.
5. Multiply the annual distance travelled for private purposes by the estimated cost per kilometre. The result is the value of the motor vehicle component of the applicant's remuneration.

[143] Mr Sariman has sought to argue that in relation to the kilometres he says that he travelled for business use, he was not paid an appropriate kilometre rate, and therefore there has been no personal benefit to him of the payment of $12,000 as a car allowance.

[144] The examination in Fewings was that of the provision of a company provided motor vehicle. In Mr Sariman’s case, he was provided with a car allowance. They are very different considerations.

[145] In any event, Mr Sariman has not used the formula in Fewings correctly. The formula requires an examination of the private component, not the business component. If Mr Sariman sought to rely on the formula in Fewings, it would be necessary to determine how many kilometres he used his vehicle for private purposes and attach a sum to that amount. For example, it is well established that the cost of travelling from an employee’s home to their place of work is a personal expense (together with the return trip home).

[146] Mr Sariman submitted that if I should find that there is any personal use I should limit it to 10% of the car allowance paid. That would be a sum of $1,200.

[147] As I have said above, the test is not the same for a car allowance as opposed to the provision of a motor vehicle.

[148] The relevant test to apportion earnings when an employee is provided with a car allowance is this:

a. Calculate how many kilometres the vehicle travelled in the relevant period, that being 12 months prior to dismissal;
b. Calculate how many kilometres were for personal use;
c. Calculate how many kilometres were for business use;
d. Determine, as a percentage how much personal use there was against the total kilometres travelled.
e. Apply the percentage against the annual car allowance to determine the value of the earnings.

[149] The examination of personal use as opposed to business use is an appropriate way to determine the value of a car allowance. 53

[150] As an example, if Mr Sariman travelled approximately 32,000 kilometres in the year, and 20,000 kilometres could be attributed to business use, the value to Mr Sariman of the car allowance would be:

12,000 kilometres private use / 32,000 kilometres total use = 37.5%

37.5% of $12,000 = $4,500.

[151] Mr Sariman’s earliest submissions in relation to the $12,000 car allowance included the following:

I use my private vehicle for business use twelve hours or more per day, six days a week and use my wife’s car to do personal runs when I am not at work…..Therefore, the car allowance is a reimbursement cost associated with the use of my private vehicle for business purposes and should not be included in my earnings. 54

[152] Prior to the hearing I required Mr Sariman to inform the Commission of his residential address between 5 December 2014 and 4 December 2015. Mr Sariman provided the information requested.

[153] I also requested that Mr Sariman inform the Commission of the distance from his home to work, together with any additional personal kilometres travelled by him in the vehicle.

[154] Mr Sariman provided the following calculations:

Total annual kilometres travelled to and from home and work during this period: 5,544km

Total estimated additional personal use kilometres for this period = 6,048 km

Total estimated kilometres for business use for the period = 28,408 kilometres

Total estimated kilometres travelled over the one year period = 40,000 kilometres

[155] On Mr Sariman’s evidence prior to hearing, the personal kilometres he travelled was 11,592 kilometres. As a percentage of 40,000 kilometres, this represents nearly 29% of the kilometres travelled by him during the relevant period. As a percentage of $12,000 this represents an amount of $3,477.60.

[156] In Mr Sariman’s latest submissions, he calculated the kilometres travelled by him for business purposes at 37,963.20 kilometres. I do not accept on the evidence before me that he did travel that many kilometres for work purposes. However, for the purposes of the exercise, if I did accept Mr Sariman’s contention, it would then be necessary for me to determine the relevant percentage of Mr Sariman’s private usage.

[157] On Mr Sariman’s latest submissions, the calculation would necessarily be:

Private usage: 11,592 kilometres

Business usage: 37,963.20 kilometres

Total kilometres: 49,555.20 kilometres

11,592 kilometres / 49,555.20 kilometres = 23.39%

23.39% x $12,000 car allowance = $2,807.05

[158] Even on Mr Sariman’s purported increased kilometres for business purposes, the private usage percentage attributes a value of $2,807.50. This amount, in addition to the $135,000 salary would have Mr Sariman’s earnings in excess of the high income threshold.

[159] In addition, if the business use has been considered in the car allowance, it would be necessary to then attribute all of the fuel card usage to Mr Sariman’s earnings. His earnings are already in excess of the high income threshold without the additional amount expended on the fuel card.

Conclusion

[160] For the above reasons, I find that Mr Sariman’s earnings in excess of $136,700.

[161] I find that Mr Sariman is not a person protected from unfair dismissal by virtue of s.382(b)(i), (b)(ii) and (b)(iii) of the Act. I have found that Mr Sariman is not covered by an award or enterprise agreement and that he earned over the high income threshold at the time of his dismissal.

[162] Accordingly, I must dismiss the application for want of jurisdiction. An order dismissing the application will issue with this decision.

COMMISSIONER

1 Layton v North Goonyella Coal Mines Pty Ltd (2007) 166 IR 394; [2007] AIRCFB 713 at [25].

2 The Clothing Trades Award (1950) 68 CAR 597; cited in City of Wanneroo v Holmes [1989] FCA 369 [43].

3 Pickard v John Heine & Son Ltd (1924) 35 CLR 1, 9; cited in City of Wanneroo v Holmes [1989] FCA 369 [43].

4 Transport Workers’ Union of Australia v Coles Supermarkets Pty Ltd [2014] FCAFC 148 at [22].

5 [2010] FWA 6503.

6 Ibid at [5] to [6].

7 Ibid at [23].

8 [2014] FWCFB 8768.

9 [2010] FWA 6503.

10 [2013] FWCFB 10126.

11 Ibid at [41].

12 Exhibit ST1 at [8].

13 Ibid at [9].

14 Exhibit MR2 at [4].

15 PN67.

16 Exhibit CS2 at [10.4](e).

17 Ibid at [10.4](a).

18 PN65.

19 PN204.

20 PN446.

21 PN447.

22 PN598.

23 Exhibit CS2 at [10.1].

24 Ibid.

25 Ibid at [10.4](b).

26 PN740.

27 PN755

28 PN756

29 PN757

30 PN758

31 PN759

32 PN760

33 PN761

34 PN762

35 PN763

36 PN886.

37 PN844.

38 Exhibit CS1.

39 PN852.

40 PN862.

41 PN863.

42 PN871.

43 Exhibit CS1.

44 Ibid.

45 Halasagi v George Weston Food Limited [2010] FWA 6503 at [24]; Brand v APIR Systems Ltd [2003] AIRC 1161 at [10] to [11].

46 Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387 [9]; cited in McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting (2012) 223 IR 125 [11].

47 [2012] FWAFB 6108.

48 PN565.

49 Mr Sariman closing submissions at [30].

50 Ibid [31] and [32].

51 Exhibit CS1.

52 H.W. Fewings v Kunbarllanjnja Community Government Council 7, Q0675 May 1998.

53 Hird v SilkRoad Inc[2014] FWC 5035 at [8].

54 Letter to Drake SDP dated 15 January 2016 to.

Printed by authority of the Commonwealth Government Printer

Christopher Sariman v BMD Constructions Pty Ltd

[2016] FWC 5419

25 AUGUST 2016

DECISION