Gilbreth Brown v Pentana Solutions Pty Ltd

[2016] FWC 1669

[2016] FWC 1669

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Gilbreth Brown
v
Pentana Solutions Pty Ltd
(U2015/14272)

COMMISSIONER BISSETT MELBOURNE, 17 MARCH 2016

Application for relief from unfair dismissal - High income threshold - application dismissed.

[1] Mr Gilbreth Brown has made an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking relief from unfair dismissal. Mr Brown was employed by Pentana Solutions Pty Ltd (Pentana) in its Thai office.

[2] Pentana raised a number of jurisdictional objections to the Commission dealing with the application. These objections are:

(i) that the application was made outside the 21 day period specified in the Act;

(ii) that Mr Brown was not an employee of Pentana. Pentana says it entered into a contract with Mexican Foods Pty Ltd to provide services and Mr Brown was a principal of Mexican Foods;

(iii) that Mr Brown is not eligible to make the application because he did not work in Australia, was not eligible to work in Australia and reported to the General Manager –Asia who is based in Thailand;

(iv) that Mr Brown earns above the high income threshold and is not covered by an award or enterprise agreement and hence is not protected from unfair dismissal.

[3] If any of these jurisdictional objections is upheld Mr Brown’s application of unfair dismissal must fail. Should he fail on any one of these grounds it is not necessary that I consider the remaining grounds.

[4] I have decided, in the first instance, to consider if Mr Brown earned above the high income threshold. In considering this I have referred to Mr Brown as an ‘employee’ of Pentana although I accept that this is a separate matter to be considered.

[5] The high income threshold at the time Mr Brown’s employment was terminated was $136,700.00.

Legislation

[6] The Act states:

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.

[7] It is common ground between the parties that Mr Brown’s employment is not covered by a modern award or an enterprise agreement. It is therefore necessary to consider Mr Brown’s annual rate of earnings at the time of his dismissal.

[8] 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

(c) 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.

[9] It is also common ground that Mr Brown was paid $US100,000.00 per annum, paid monthly, that he was also entitled to commission payments based on his sales and that he was provided with a mobile phone and laptop by Pentana.

Consideration

[10] Mr Brown was paid in US dollars. There has been some conjecture between the parties as to at what point in time I should apply the relevant exchange rate to Mr Brown’s earnings.

[11] Mr Brown has suggested I should apply the exchange rate as it existed at each date he was paid over the 12 month period prior to the termination of his employment and simply add these amounts together to get his annual rate of earnings.

[12] Pentana has suggested I should apply the exchange rate at the date of termination of Mr Brown’s employment to the total amount paid to Mr Brown including wages, commission payments and expenses reimbursed.

[13] In Francesco Zappia v Universal Music Australia Pty. Ltd. T/A Universal Music Australia 1 the Full Bench considered at which point in time or over what period of time an employee’s earnings should be considered for the purpose of determining if the earnings exceeded the high income threshold. 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]

[14] It is apparent from the decision in Zappia that the determination of earnings is as they are at the time of dismissal and not over the 12 months prior to dismissal. The logical extension from this is that I should also apply the exchange rate as it existed at the time of dismissal – that is 31 October 2015.

[15] For this reason I reject the submission of Mr Brown that I should consider his earnings over the 12 months prior to his dismissal and apply the exchange rate that applied each time he was paid.

[16] The Reserve Bank of Australia (RBA) provides historical exchange rate data. 2 That indicates that the exchange rate on 30 October 2015 (31 October 2015 being a Saturday no exchange rate appears to be published by the RBA) was A$1=US$0.7099. On the basis of this exchange rate Mr Brown’s earnings of US$100,000 at 30 October 2015 equates to A$140,864.91.3

[17] On this basis Mr Brown earned more than the high income threshold (of $136,700.00) at the time his employment was terminated by Pentana.

[18] For completeness I would also indicate that I reject Pentana’s submission that I should include in the calculation of Mr Brown’s earnings his commission payments and reimbursement of expenses.

[19] Mr Brown was on a commission scheme that was dependent of the sales he made. His commission payments were not something that could be determined in advance. Further, Pentana agreed that the commission payments could not be known in advance. For this reason such payments are encapsulated by s.332(2)(a) of the Act and should not be included in the determination of earnings.

[20] Mr Brown was reimbursed for any expenses he properly incurred in the process of going about his work. Mr Brown submitted claims for expenses and these were then paid by Pentana. Pentana attached to its Form F3 some of these expense claims. It is clear that the payment of expenses is a reimbursement for costs incurred. Such payments fall within s.332(2)(b) of the Act and are excluded from the determination of earnings.

Conclusion

[21] For the reasons given above I am satisfied that, at the time his employment was terminated, Mr Brown was earning in excess of the high income threshold. He was earning $140,864.91 and the high income threshold was $136,700.00. He was therefore not protected from unfair dismissal at the time his employment was terminated and his application must be dismissed. An order to this effect will be issued with this decision.

[22] Because I have found that Mr Brown is not protected from unfair dismissal due to his earnings it is not necessary that I consider the other jurisdictional objections to his application. Even if I found in favour of Mr Brown on the other objections he would still remain outside the jurisdiction of the Commission because of his earnings. For this reason I make no findings as to the other objections.

COMMISSIONER

Appearances:

G Brown the applicant.

S Grammenos and T Kokkinos for Pentana Solutions Pty Ltd.

Hearing details:

2016.

Melbourne:

11 March

 1   [2012] FWAFB 6108.

 2     The XE website indicates an exchange rate on 31 October 2015 at A$1=US$0.713575 which equates Mr Brown’s US$100,000 to A$140,139.43. See by authority of the Commonwealth Government Printer

<Price code C, PR578067>