John Parker v Publican Group Australia Pty Ltd ATF Publican Group Australia Unit Trust T/A Publican Group Australia

[2014] FWC 627

[2014] FWC 627

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

John Parker
v
Publican Group Australia Pty Ltd ATF Publican Group Australia Unit Trust T/A Publican Group Australia
(U2013/12955)

COMMISSIONER WILLIAMS PERTH, 29 JANUARY 2014

Termination of employment - jurisdiction - high income threshold.

Introduction

[1] This matter involves an application made by Mr John Parker (Mr Parker or the applicant) under section 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. The respondent is Publican Group Australia Pty Ltd ATF Publican Group Australia Unit Trust T/A Publican Group Australia(the respondent).

[2] The matter was the subject of a conciliation conference before a Fair Work Commission conciliator however the matter was not resolved and has been referred to me for determination.

[3] The respondent in this matter has raised two jurisdictional objections to Mr Parker’s unfair dismissal application. The first is that the applicant is not protected from unfair dismissal and so is unable to make the application and the second is that in any event if he is able to make this application his dismissal was a case of genuine redundancy and so cannot be an unfair dismissal.

[4] This decision deals with the first objection as to whether Mr Parker is a person who was protected from unfair dismissal at the time of his dismissal.

[5] Whom is protected from unfair dismissal is prescribed in section 382 of the Act as set out below:

“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.

Note: High income threshold indexed to $129,300 from 1 July 2013”

[6] In this case the respondent asserts that Mr Parker was not covered by a modern award and there was no enterprise agreement applying to his employment and that his annual rate of earnings was above the high income threshold.

[7] Mr Parker does not challenge the submissions of the respondent in regards to the absence of modern award coverage or an applicable enterprise agreement and having considered those submissions and the evidence I am satisfied that neither section 382(b) (i) or (ii) applied to the applicant.

[8] What Mr Parker does contest, however, is that his annual rate of earnings was above the high income threshold.

Consideration

[9] The respondent operates and manages a number of hospitality venues throughout Australia and Mr Parker was employed from March 2012 until 4 August 2013 as the Western Australia Operations Manager.

[10] It is not in dispute that the parties had entered into a written contract of employment in January 2012.

[11] Clause 2−Remuneration of that contract states as follows:

“2.1 Amount

The Publican Group Australia will pay you a base salary of $120 000 per annum. In addition you will also be provided with the following:

Bonus structure to be confirmed with National Operations Manager to the maximum value of $36 000

Phone allowance - $100 a month on PGA business phone or input towards phone bill

Laptop (property of Publican Group Australia)

1 City parking spot

Relocation assistance to a maximum of $3000. PGA is happy to assist with sourcing relocation contacts.”

[12] Mr Parker accepts that his base salary was $120 000 per annum.

[13] What is in dispute between the parties is what consideration the Commission should have for the bonus structure in determining whether Mr Parker’s annual rate of earnings was above the high income threshold of $129 300.

[14] I accept there have been a number of bonus structures over the period of Mr Parker’s employment.

[15] Relevantly the evidence is that in late December 2012 following discussions between Mr Parker and the National Operations Manager, Mr Dan Viney, a new bonus structure was agreed.

[16] It is not disputed that on 28 December 2012 Mr Viney wrote an e-mail to the applicant 1 which relevantly reads as follows;

“Hey mate,

As per discussion on the phone new deal will be

TOTAL AVAILABLE $10,000

With the following breakdown

25% leadership

50% operations

25% finance

25% leadership will be paid in full each quarter ($2,500)

Operations -

will be based on mystery shops score in each venue...”

[17] I find that that the leadership element of the bonus was paid to Mr Parker for the third quarter of financial year 2012/2013 on 5 June 2013, and was paid for the fourth quarter of the financial year 2012/2013 on 15 August 2013 and for each of these quarters the amount was $2 500.

[18] For both of these quarters the applicant was paid a variable amount for the operations element of the bonus but was not paid anything for the financial performance element of the bonus for either quarter.

[19] An email from Ms Dawson, the respondent’s HR and Training Manager, to Mr Parker on 12 August 2013 at 2.22 p.m. details an “Amended breakdown of payout” of his final payout. This expressly states that his termination payments would include an amount of;

“ Q1 Bonus 13/14 $2500”

[20] The evidence of Ms Dawson and Mr Parker was that they had a number of phone conversations regarding his termination payments on 12 and 14 December 2013.

[21] Ms Dawson’s evidence is that on 12 August 2013 during one of those conversations Mr Parker, who was working at one of the respondent’s venues, argued that because the bonus structure agreed at the end of December 2013 had not been replaced with a new structure at the end of June 2012, the bonus structure referred to in Mr Viney’s email of 28 December 2012 was therefore still in place and he should be paid the guaranteed bonus of $2 500 for the first quarter of 2013/2014. 2

[22] Mr Parker denies that this was what he said to Ms Dawson at any stage although his evidence is unclear as to what he believes was said on which of the two days in August. 3

[23] Mrs Parker listened to some of the phone conversations between Mr Parker and Ms Dawson. Her evidence is that she did not overhear any conversation where Mr Parker said he should be paid the guaranteed bonus of $2 500 for the first quarter of 2013/2014. However Mrs Parker’s evidence was that she could only hear one side of the conversations between her husband and Ms Dawson. Importantly on 12 August 2013 Mrs Parker says Mr Parker was at work for half of the day and so she only was present for some of the conversations. Her evidence consequently does not deal with all of the conversations where the bonus issue might have been discussed on 12 August 2013 which was the day Ms Dawson says Mr Parker raised it with her. 4

[24] The first email that Ms Dawson had sent to Mr Parker on Monday, 12 August 2013 with the “Breakdown of payout” was at 2.12 p.m., ten minutes before the second email she sent with the “Amended breakdown of payout”. The first email with the original payout calculations did not include any bonus for the first quarter of 2013/2014.

[25] It is not obvious why the respondent would have included an additional $2 500 bonus for Q1 2013/2014 in the amended payout sent to Mr Parker other than for the reason Ms Dawson has explained; that Mr Parker told her on the phone on 12 August 2013 that the December 2012 bonus structure had not been renegotiated and replaced and so he continued to be entitled to its benefits.

[26] Ms Dawson’s evidence was the only conversation on 14 August 2013 involved Mr Parker seeking additional payments on top of what he had been offered.

[27] Considering all this evidence I prefer the evidence of Ms Dawson over that of Mr Parker and find that he did tell her over the phone that he believed he was entitled to the $2,500 leadership bonus for the first quarter of 2013/2014 because the bonus structure agreed in December 2012 had not been replaced and continued to apply.

[28] I accept the evidence of Ms Dawson that with Mr Viney, they decided that even though Mr Parker’s dismissal had occurred partway through the quarter and they were contractually obliged to pay him only a pro-rata amount of the leadership bonus for the first quarter of financial year 2013/2014, they chose to pay him the full amount of $2 500.

[29] It may be questionable whether the conclusion Ms Dawson and Mr Viney reached was correct given that Mr Parker was being dismissed prior to the end of the quarter and the bonus structure that had been operating since December 2012 does not mention anything about payments for partly completed quarters. That, however, is not significant for the question the Commission is required to determine in this matter. What is significant is that Ms Dawson and Mr Viney accepted Mr Parker’s view was correct that the bonus structure put in place in December 2012 continued to have application beyond 30 June 2013 into the 2013/2014 financial year.

[30] I accept the evidence is that the respondent at times was tardy in paying any bonus amounts to Mr Parker however the fact that an employer does not pay what an employee is contractually entitled to, does not alter the legal fact that these amounts are indeed an entitlement of that employee.

[31] My conclusion regarding the bonus structure is that the leadership element of the bonus the parties agreed to at the end of December 2012 of $2 500 per quarter was a guaranteed amount that Mr Parker was entitled to be paid. The amount was neither variable nor discretionary. The amount of the leadership bonus could be determined in advance. The leadership bonus was not contingent and did not depend on Mr Parker’s performance. Because it was part of Mr Parker’s remuneration under Clause 2 of his contract, once it was confirmed with the National Operations Manager, Mr Viney, the respondent did not have the right to unilaterally modify or discontinue it. 5

[32] The 28 December 2012 email from Mr Viney detailing the bonus structure did not specify any end date for the bonus and notwithstanding the fact the parties had discussed their intention to develop a replacement bonus structure to operate from July 2013 this did not occur. Consequently I find that the bonus structure the parties agreed upon in December 2012 and specifically the $2 500 leadership bonus per quarter continued to be an entitlement of Mr Parker through to the time he was dismissed.

[33] The leadership element of the bonus structure was $2 500 payable for each quarter and so was an annual amount of $10 000.

[34] I agree with the respondent’s submission that the Act requires the Commission to consider what an employee’s annual rate of earnings was at the time of their dismissal and not what the employee’s earnings had been in the 12 months before their dismissal.

[35] In this case then Mr Parker’s annual rate of earnings for the purposes of section 382(b) (iii) was made up of $120 000 base salary and a leadership bonus of $10 000 making a total of $130 000 a year. This amount exceeds the high income threshold.

[36] In addition the Fair Work Regulations 2009 provides direction to the Commission to work out the value of any non-monetary benefits an employee may be entitled to when assessing whether their remuneration exceeds the high income threshold.

[37] The relevant regulations set out below:

“Part 3-2—Unfair dismissal

Division 2—Protection from unfair dismissal

3.05 When a person is protected from unfair dismissal—high income threshold

(1) For subparagraph 382(b)(iii) of the Act, this regulation explains how to work out amounts for the purpose of assessing whether the high income threshold applies in relation to the dismissal of a person at a particular time.

...

Benefits other than payment of money

(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.”

[38] Clause 2−Remuneration of the applicant’s contract of employment in addition to the base salary and bonus structure includes a number of benefits including a phone allowance, laptop, city parking spot and relocation assistance.

[39] I am satisfied in the circumstances of this case that the Commission should consider these benefits set out above which are terms of the applicant’s contract of employment as amounts for the purposes of sub section 382(b) (iii) of the Act.

[40] Unfortunately neither the applicant nor the respondent dealt with these non-monetary benefits in their evidence or submissions.

[41] However given my conclusion in this matter it is not necessary for me to estimate the real or notional money value of each of these benefits however in my view these benefits will inevitably take the applicants annual rate of earnings further above the high income threshold.

Conclusion

[42] At the time of Mr Parker’s dismissal he was neither covered by a modern award nor was there an enterprise agreement that applied to his employment. I have found that the sum of Mr Parker’s annual rate of earnings and other amounts were not less than the high income threshold.

[43] Consequently by virtue of section 382 of the Act Mr Parker is not protected from unfair dismissal and so is not able to pursue this application further. I uphold the respondent’s jurisdictional objection and will dismiss this application.

[44] An order to that effect will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

J Parker on his own behalf

D Viney for the respondent

Hearing details:

2014.

Perth and Melbourne (video hearing):

January 16.

 1   Exhibit R1, Attachment PGA1

 2   Transcript at PN44 to PN51

 3  Ibid., at PN109 to PN116

 4   Ibid., at PN135

 5   [2011] FWAFB 9137 at [19]

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