Leneod Lyon v Charles Hull Contracting Co. Pty Ltd
[2023] FWC 577
•8 MARCH 2023
| [2023] FWC 577 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Leneod Lyon
v
Charles Hull Contracting Co. Pty Ltd
(U2022/6674)
| COMMISSIONER SCHNEIDER | PERTH, 8 MARCH 2023 |
Application for an unfair dismissal remedy
Mr Leneod Lyon (Mr Lyon or the Applicant) has made an application in the Fair Work Commission (the Commission) under section 394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy in relation to the termination of his employment with Charles Hull Contracting Co. Pty Ltd (the Respondent).
The Respondent objects to the application on the grounds that the Applicant is not protected from unfair dismissal as he earns more than the high-income threshold.
The Applicant contends that he was employed under the terms and conditions of a Modern Award, or, in the alternative, his earnings were under the high-income threshold at the time of his dismissal.
Background
The Applicant commenced employment with the Respondent in November 2013.
The Applicant was engaged as a Safety Advisor in January 2021.
The Applicant was later promoted to the position of Supervisor, this being the position he held at the time of his termination.
It is not disputed that the Applicant was not employed under the terms and conditions of any Enterprise Agreement.
The Applicant’s salary at the time of his termination was $150,000 per annum (excluding superannuation).
The Applicant’s employment was terminated on 7 June 2022.
The Applicant asserts that his employment was subject to either the Building and Construction General On-Site Award 2020 or the Miscellaneous Award 2020.[1]
In the alternative, the Applicant submits that his earnings did not surpass the high-income threshold.
The Respondent does not agree that the Applicant’s employment was subject to any Award.
The Respondent also submits that benefits, supplementary to the Applicant’s salary package, raise his earnings above the high-income threshold.
A hearing on the objection was held on 13 October 2022.
This decision deals only with the objection that the Applicant’s earnings are greater than the high-income threshold.
Relevant Legislation
“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.”
“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.”
The threshold is calculated in accordance with regulation 2.13 of the Fair Work Regulations 2009 (Cth), the threshold is updated yearly. At the time of the Applicant’s dismissal, the high-income threshold was $158,500.
Award Coverage
Respondent
Building and Construction General On-Site Award 2020
The Respondent submits that the Applicant was not covered by any Modern Award.
The Respondent submits that the Applicant was engaged in an “Award free” position.
The Respondent submits that supervisory positions in the civil construction sector are expressly not to be covered under any classification of the Building and Construction General On-Site Award 2020 (B&C Award).
The Respondent submits that the scope of work the business was engaged to complete, at Boddington Gold Mine, where the Applicant undertook his duties, was in the Residue Disposal Area (RDA). It was agreed between the parties that the scope of work was consistent with civil construction.
The Respondent submits that the B&C Award, as it relates to the civil construction sector, does not contain any classification for employees such as the Applicant who are engaged in a supervisory role.
Mr Ashley Wyborn (Mr Wyborn), HR Recruitment Coordinator of the Respondent, outlined the key duties of the Applicant as follows:
· Prepare daily crew planning as per scope of works;
· Conduct pre-start meetings;
· Provide on-site supervision and operational support in the field for up to 46 mobile plant operators day to day;
· Ensure jobs are prioritised and milestones are met in a safe and timely manner to job specifications;
· Liaise between upper management and operations staff;
· Attend and participate in planning meetings with upper management; and
· Attend weekly progress meetings.
The Respondent provided a copy of the Applicant’s position description, signed by the Applicant on 7 January 2021. The position description outlines the key responsibilities of the role as follows:
· Set performance goals and project deadlines that align with company requirements;
· Delegate work to employees, track progress and provide constructive feedback throughout projects;
· Address problems with work quality, issues between employees, and other concerns in an effective timely manner;
· Ensure employees adhere to company polices and legal regulations;
· Serve as a link between subordinates and upper management;
· Conduct performance reviews, motivate team members, and create strategies to boost productivity;
· Actively participate in all company endorsed training;
· Ensure relevant documentation is completed as per required time frames; and
· Promote and support all company continuous improvement philosophies.
The Respondent submits that the omission of supervisory classifications within the civil construction sector from the B&C Award was deliberate and intentional. The Respondent highlighted that the Decision of Deputy President Bull in McCullagh, Mark v Acciona Infrastructure Australia Pty Ltd (McCullagh) supports this submission.[2]
Miscellaneous Award 2020
The Respondent submits that the Applicant was not covered by the Miscellaneous Award 2020 (Misc. Award), by operation of section 143(7)(a) of the Act, as supervisory positions such as the Applicants have not traditionally been covered by an Award. The relevant subsection of the Act reads:
“(7) A modern award must not be expressed to cover classes of employees:
(a) who, because of the nature or seniority of their role, have traditionally not been covered by Awards.”
The Respondent relied on the comments of the Full Bench of the Commission in Variation of awards on the initiative of the Commission (AM2020/12).[3] The Full Bench noted, in varying the Misc. Award to broaden its scope to cover employees who fell through Award coverage, that employees excluded from Awards under section 143(7) of the Act would not, by virtue of the variation, be covered by the Misc. Award.[4]
The Respondent submits that, as supervisory roles have not traditionally been contained the B&C award for the civil construction sector, the Applicant’s position of supervisor is therefore excluded from Award coverage.
Applicant
Building and Construction General On-Site Award 2020
The Applicant submits that he was covered by the B&C Award.
The Applicant submits that, whilst he was employed under the title of Supervisor, the tasks and duties that he completed on a regular basis were consistent with those of a “Construction Worker Level 2” (CW2) under the B&C Award.
The Applicant submits that, as there is no “supervisor” category in the B&C Award, it is important to consider the duties and tasks undertaken by the Applicant to assess the relevant classification.
The Applicant submits that he was not only a supervisor, but that he also completed tasks and duties consistent with a CW2.
The Applicant’s evidence was that, whilst he indeed undertook supervisory duties, he completed the below duties which were consistent with a CW2 classification:
· General Labouring as required;
· Dogman/Rigging – pipe/tower movement/install;
· Checking of crib room water tanks;
· Sweep/wipe down crib rooms between cleaner visits;
· Deploy sandbags; and
· Setup/install temporary and permanent traffic control signage.
The Applicant’s statement also confirmed two key points in relation to the duties and requirements of his position:
· “Anticipates and plans for constant changes to the work environment; that was a significant part, if not the main part, of the job.”
· “Performs basic quality checks on the work of others; again this was a significant part of the job.”
The Applicant notes that clause 43 of the B&C Award provides for forepersons and supervisors in the metal and engineering construction sector to be covered by the B&C Award.
The Applicant also submits that, just because clause 43 of the B&C Award does not apply to the Applicant in the civil construction sector, the exclusion of his sector does not remove any possibility for him to fall under the Award coverage. Specifically, the Applicant submits that even if excluded from clause 43 this does not exclude the possibility for him to be covered by the B&C Award elsewhere, particularly as a CW2.
Miscellaneous Award 2020
The Applicant asserted that, in the alternative, if the B&C Award is found to not apply, the Misc. Award applied to his employment.
The Applicant asserts that the Respondent’s submission that the Applicant was excluded from the Award, pursuant to section 143(7)(a) or 143(7)(b) of the Act, cannot be accepted.
The Applicant submits that, more than likely, supervisory positions in the civil construction sector have “fallen through the gaps” of Award coverage and therefore it is a reasonable conclusion that the Applicant would be covered by the Misc. Award.
The Applicant submits that it is not uncommon for supervisory level employees to be covered by Awards and provided the following examples:
· Building and Construction Industry General On-Site Award 2020 – clause 43;
· Manufacturing and Associated Industries and Occupations Award – clause 32(1)(f);
· Clerks – Private Sector Award 2020 – Level 4; and
· Aged Care Award – Level 7.
The Applicant submits that section 143(7)(b) of the Act prohibits coverage of the class of employee on the basis that they perform work that is not of a similar nature to work that has been traditionally covered by an Award and that if this applied to “supervisors” then, as a class of employees, no supervisor could be covered by a Modern Award.
Private Motor Vehicle Usage
Respondent
The Respondent submits that the Applicant had use of the below vehicles:
· Toyota Landcruiser 200 Series (used from30 November 2021 until his termination);
· Toyota Prado (used between 17 May and 24 May 2022, whilst the Landcruiser was being serviced); and
· Toyota Hilux 4x4 Dual Cab (prior to 30 November 2021).
The Respondent provided the below data reflecting the Applicant’s use of the vehicles:
· 23,879km travelled in the Toyota Landcruiser (Between 30 November 2021 and 7 June 2022); and
· 402.87km travelled in the Toyota Prado (Between 17 May 2022 and 24 May 2022 – 402).
The Respondent submits that, over the period of 30 November 2021 up until his termination, the Applicant travelled 23,879km in the vehicles.
The Respondent reasons that, when extrapolated out over twelve months, the Applicant’s annual distance travelled would have been 46,115.53km.
The Respondent submits that it keeps detailed records of motor vehicle trips on a rolling two-month time period. The Respondent provided the below data from those records:
· Between 7 April 2022 and 7 June 2022, the Applicant travelled a total of 7,522.87km. This includes 7120kms in the Landcruiser and 402.87km in the Prado.
· The Applicant’s private use of the vehicles during this period was 3669.24km, consisting of 3266.37kms in the Landcruiser and 402.87kms in the Prado.
The Respondent submits that the Applicant's private motor vehicle usage, in the period between 7 April and 7 June 2022 , made up 49% of the vehicle’s total usage.
The Respondent submits that, to predict the annual usage of the vehicle, a split of 49% private to 51% work related should be relied on.
Therefore, using the data provided from the odometer readings between November 2021 and June 2022, as well as the GPS readings from 7 April 2022 to 7 June 2022, the Respondent formulated the predicted usage for a twelve-month period and the associated earnings.
The Respondent submits that, consistent with previous decisions of the Commission, the Fewings method, established in Kunbarllanjnja Community Government Council v H. W. Fewings,[5] should be utilised to determine the earnings allocated to the vehicle usage.
The Respondent submits that, consistent with previous decisions of the Commission,[6] an appropriate formula to confirm the cost per kilometre would be to use the data from an accredited motor vehicle organisation such as the RACV, NRMA, or RAC.
The Respondent submits that, based on the relevant running costs data from RAC and RACV data, the appropriate cost per kilometre is $1.64.
The Respondent submits the below table to demonstrate that the benefit to the Applicant was in the region of $36,000 per annum. Therefore, the Respondent submits, the Applicant’s earnings would be in excess of $158,500.
| Data Source | Distance over period | Total distance (12 months) | % Private use | Private distance (annual) | Cost per km | Personal value |
| Odometer readings (Nov ‘21-June ‘22) | 23,879kms | 46,115.53kms | 49% | 22,492.61 kms | $1.64/km | $36,887.87 |
| GPS readings (Apr ‘22-June ‘22) | 7,522.87kms | 45,137.22kms | 49% | 22,015.44 kms | $1.64/km | $36,105.32 |
Applicant
The Applicant submits there is no way to accurately determine the value of the private motor vehicle use.
The Applicant submits that there was no agreed value for the private use of a company motor vehicle and no logbook kept.
The Applicant raised concerns over the data supplied by the Respondent. Specifically, the Applicant took issue with the data for 18 May 2022, where the vehicle did not move but managed to travel 6.39km in 22 minutes. The Respondent confirmed at the hearing that this occurred when the vehicle was being serviced and this distance should not be included in any calculation.
The Applicant submits that the travel between his place of residence to the work site and then back home, which he would undertake every eight days, should not be included for calculation purposes.
The Applicant submits that he needed to bring work tools with him every 14 days when he started his next eight-day swing cycle. The Applicant reasons that, relying on ATO information and guidance, the travel to and from work should be regarded as “business travel” as opposed to “private motor vehicle use”.
The Applicant submits that the correct calculation of private motor vehicle use was 85.29kms for the Prado and 1,883.67km for the Landcruiser.
The Applicant submits that he had contributed around $500 between November 2021 and June 2022 in fuel for private vehicle usage.
The Applicant submits that, as the Respondent’s data only contained information covering two months, it is impossible for the Commission to calculate or create a formula to accurately ascertain the earnings associated with the Applicant’s private motor vehicle usage, especially in reliance on the data.
Consideration
Award Coverage – Principal Purpose Test – Exclusion under s 143(7)
Building and Construction General On-Site Award 2020
Where there is contention over whether an employee’s role falls under Award coverage, the principal purpose test, as established in Carpenter v Corona Manufacturing Pty Ltd,[7] should be utilised in making an assessment.
The Applicant was engaged in the position of Supervisor. On assessment of the position description provided and the supporting evidence provided concerning the Applicant’s duties, it is evident the principal purpose for which the Applicant was engaged was to provide front line supervisory assistance for the Respondent’s scope of work on the contract in question.
In his evidence, the Applicant confirmed two of his primary responsibilities were anticipating and planning for changes in the work environment and performing quality checks on the work completed by the operators. These duties are clearly supervisory in nature and do not fall within the scope of a CW2.
The Applicant took on additional duties and tasks that were outside his primary function as a supervisor, such as cleaning duties of the crib facilities, breath testing of employees, and general labouring tasks.
It is clear that the Applicant is a diligent worker who exhibited a high level of initiative and would at times go beyond the confines of his position description.
I do not question that at times the Applicant would complete tasks outside the scope of most civil construction supervisors and agree those tasks would have been consistent with roles falling under CW2.
However, on assessment of the materials before me, it is clear these additional tasks were not the primary or central duties of his role and that completing these tasks, although clearly commendable, was not principal purpose of his engagement with the Respondent.
I am not satisfied that the Applicant was covered by the B&C Award under CW2 or other classification. The Applicant, by his own admission, preformed duties outside of his position description at his own will, this does not circumvent the fact that the principal purpose of his engagement, and the bulk of his work, was to complete supervisory tasks and that is not consistent with the classifications.
I also conclude that, consistent with Deputy President Bull’s decision in McCullagh,[8] the Applicant’s position as a supervisor working within in the civil construction stream, is clearly excluded from coverage under the B&C Award. In McCullagh, the Deputy President expends great effort perusing the history of the Awards to contextualise and interpret their content. I refer the reader to the Deputy President’s discussion at [18] – [55] of McCullagh.[9]
Miscellaneous Award 2020
Again, I wish to draw attention to the comments of the Full Bench in Variation of awards on the initiative of the Commission (AM2020/12):
“Clause 4.3 of the Miscellaneous Award in its current form excludes from the coverage of the award employees who are employed in an industry covered by a modern award who are not within a classification in that modern award or who are in a class exempted by a modern award from its operation. In the 12 February 2020 decision, the Full Bench found that the effect of this exclusion was that lower-paid employees in some occupations such as cleaners and security guards who are employed in industries other than contract cleaning or security respectively will not be covered by any modern award, and that there was no intelligible industrial rationale for this outcome. The variation to the coverage of the Miscellaneous Award will be to remove the current clause 4.3, and the effect of this will be that there will be no federal system employees at the advanced trade level or below who will not be covered by a modern award, unless they are excluded from award coverage by s 143(7) of the Act. As the Full Bench in that case observed, no party was able to identify any category of employees in that class who are so excluded.”
In relation to section 143(7)(a), I am satisfied that the Applicant was engaged in the senior position of Supervisor, in the civil construction industry, and that this position has not traditionally been covered in classifications of the B&C Award.
Accordingly, in consideration of the materials submitted and the Full Bench’s comments above, I am satisfied that the Applicant is not covered by the Misc. Award as he is an employee excluded under section 143(7) of the Act.
I do not accept the Applicant’s assertion that his position of Supervisor had “fallen through the gaps” of the B&C Award coverage. Rather, I am satisfied the Applicant was engaged in a supervisory position which has excluded from coverage under the B&C Award. The Applicant’s role of Supervisor is not consistent with roles of “employees at the advanced trade level or below” and I am satisfied the Supervisor role has not mistakenly fallen through Award coverage. There is “intelligible industrial rationale” for excluding some supervisory and management roles from Awards and I am satisfied this is accurate for the role of the Applicant.
Private Motor Vehicle Usage
I conclude that the Applicant’s use of the private motor vehicle was of significant value and that it does form part of the Applicant’s earnings for the purposes of determining the objection.
I am satisfied that the Applicant’s travel between his home and place of employment has been correctly categorised by the Respondent as private motor vehicle use. This is consistent with the findings of the Commission in Francesco Zappia v Universal Music Australia Pty Limited T/A Universal Music Australia:
“that the motor vehicle was used primarily for private purposes and that its provision constituted a significant part of the appellant’s remuneration. Accordingly its provision constituted a non-monetary benefit.”
“that an employee’s travel between home and normal place of employment is personal rather than work related travel and in his satisfaction that he should consider the benefit for assessing whether the high income threshold applied.”[10]
I note that the Respondent’s calculations are based on the Fewings method, and I accept that these calculations are correct and agree that the Fewings method is the appropriate method of calculation.
I note, however, that the Applicant is of the position that, as the records are not complete, the Commission should not accept the figures as submits by the Respondent.
I have considered the Applicant’s position regarding the Commission’s ability to reasonable predict the value to the Applicant of the private motor vehicle usage and have adopted a modest approach in the calculation of the vehicle usage. I note that the Commission is not bound by the rules of evidence and, in the absence of further material demonstrating the unreliability of the data provided by the Respondent, I am satisfied that the data can be relied upon with appropriate precaution.
Calculation
The distance between the Applicant’s home residence and the Applicant’s place of work with the Respondent is approximately 148km each way, totalling 296km each round trip.
The Applicant was engaged on an eight days on/six days off roster. On this roster, the Applicant would complete one round trip each fourteen days. Over the course of twelve months the Applicant could complete this trip a maximum of twenty-six times.
A reasonable prediction would be that the Applicant would complete this trip twenty-two times per year, this assumes that the Applicant missed four whole swing cycles for periods of leave.
This would amount to 6,512kms (22 x 296kms) each year in private motor vehicle usage between the Applicant’s place of resident and his place of work with the Respondent. Using the RAC cost rate provided, of $1.64 per km, this would total $10,679.68 ($1.64 x 6,512kms) of private motor vehicle usage benefit to the Applicant.
This would mean that, even if the Applicant did not use the vehicle at all during his six days off work, his earnings would total over $160,679.58 ($150,000 base salary plus $10,679.68 in private motor vehicle use).
I note that the Applicant submits he had spent around $500 on fuel in the period between November 2021 and June 2022. The Applicant did not provide documentary evidence to support this claim or figure, but I am willing to entertain this submission to demonstrate that, even if this figure is increased to $1,000 for the twelve-month period, the Applicant’s earnings would still surpass the high-income threshold.
It is not disputed that the Applicant had used the motor vehicle for personal use on his days off. This usage would further inflate the Applicant’s already over-threshold earnings discussed above.
Accordingly, I am satisfied there is no plausible scenario whereby the Applicant’s private motor vehicle usage was so minimal that it did not cause his annual earnings to exceed the high-income threshold of $158,500 per annum.
Conclusion
I have found that the Applicant is not covered by any Modern Award. The Applicant’s role is not consistent with the classifications under the B&C Award. The principal purpose of the Applicant’s engagement is not consistent with the CW2 classification or other classifications under that Award. The Applicant’s role is consistent with one excluded from the Award under section 143(7)(a) of the Act. It follows that the Applicant is therefore excluded from coverage under the Misc. Award.
I am satisfied that the Applicant earned more than the high-income threshold, being $158,500 at the time of his dismissal, as a result of the vehicle use.
The Applicant’s earnings exceeded the high-income threshold, and he is therefore not a person protected from unfair dismissal.
The Applicant’s application is therefore dismissed, an Order to that effect has been issued.[11]
COMMISSIONER
[1] [MA000020] and [MA000104].
[2] [2018] FWC 2997, [18]-[55].
[3] [2020] FWCFB 1837.
[4] [2020] FWCFB 1837 at [130].
[5] Print Q0675 (AIRCFB Ross VP, Watson SPD and Bacon C] 7 May 1998).
[6] [2022] FWC 338; [2012] FWAFB 6108.
[7] PR925731 (AIRCFB, Williams SDP, Lacy SDP, Tolley C, 17 December 2002) [(2002) 122 IR 387].
[8] [2018] FWC 2997, [18]-[55].
[9] [2018] FWC 2997, [18]-[55].
[10] [2021] FWAFB 6108, [11].
[11] [PR760160].
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