Manchee v BTIG Australia Limited

Case [2022] FedCFamC2G 813

Federal Circuit and Family Court of Australia

(DIVISION 2)

Manchee v BTIG Australia Limited [2022] FedCFamC2G 813

File number(s): SYG 2318 of 2021
Judgment of: JUDGE CAMERON
Date of judgment: 6 October 2022
Catchwords:

INDUSTRIAL LAW – set-off – whether payments for specific purposes can be treated as satisfying award obligations

INDUSTRIAL LAW – Fair Work Act 2009 (Cth) – compensation for loss under s.545 of the Fair Work Act

Legislation: Fair Work Act 2009 (Cth) ss. 44, 45, 87, 90, 545
Cases cited:

WorkPac Pty Ltd v Rossato (2020) 296 IR 38

ANZ Banking Group Ltd v Finance Sector Union of Australia (2001) 111 IR 227

James Turner Roofing v Peters (2003) 132 IR 122

Poletti v Ecob (No 2) (1989) 31 IR 321

Moree Plains Shire Council v Goater (2016) 14 ABC(NS) 255

Ray v Radano [1967] AR (NSW) 471

Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400

Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate (2015) 252 IR 69

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508

Bell v Gillen Motors Pty Limited (1989) 24 FCR 77

Dafallah v Fair Work Commission (2014) 225 FCR 559

Leggett v Hawkesbury Race Club Limited (No 4) [2022] FCA 622

Division: Fair Work Division
Number of paragraphs: 65
Dates of hearing: 24, 25 August 2022
Place: Sydney
Counsel for the Applicant: Mr R. Millar
Solicitors for the Applicant: Opus Legal
Counsel for the Respondent: Mr M. Seck
Solicitors for the Respondent: McArdle Legal

ORDERS

SYG 2318 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

ANDREW MANCHEE

Applicant
AND:

BTIG AUSTRALIA LIMITED ACN 128 554 601

Respondent

order made by:

JUDGE CAMERON

DATE OF ORDER:

6 October 2022

THE COURT ORDERS THAT:

1.The application be dismissed to the extent that it sought compensation under s.545 of the Fair Work Act 2009 (Cth).

2.The application stand over for further directions to the extent that it sought pecuniary penalties under s.546 of the Fair Work Act 2009 (Cth).

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE CAMERON

Introduction

  1. The applicant, Mr Manchee, was employed as a “sales trader” by the respondent, BTIG Australia (“BTIG”) from 3 December 2012 until 13 April 2021.  He alleged that BTIG had breached the Banking, Finance and Insurance Award 2010 (“2010 Award”) and the Fair Work Act 2009 (Cth) (“FW Act”) by failing to provide him with paid annual leave, annual leave loading and minimum wages because,…

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AGLC
Manchee v BTIG Australia Limited [2022] FedCFamC2G 813
Case
[2022] FedCFamC2G 813
Decision Date

CaseChat Overview and Summary

In the case of Manchee v BTIG Australia Limited, the primary issue was whether the applicant, Mr Manchee, was entitled to compensation for alleged contraventions of the Fair Work Act 2009 (Cth) and associated awards by his employer, BTIG. Mr Manchee argued that he was underpaid annual leave loading during two periods of employment with BTIG, and sought compensation under section 545(2)(b) of the Fair Work Act. BTIG contended that any payments made to Mr Manchee were in satisfaction of contractual obligations, not entitlements under the relevant awards, and therefore no loss attributable to contravention of the awards occurred.

The court was required to determine whether Mr Manchee had suffered a loss that warranted compensation under the Fair Work Act. This involved assessing whether the payments made to Mr Manchee in accordance with his contracts of employment were in satisfaction of his award entitlements, or whether they merely represented contractual obligations that did not align with award provisions. The court also had to consider whether the employer's discretion to pay more than the minimum award entitlements precluded the applicant's entitlement to compensation.

The court found that Mr Manchee's payments were made in accordance with his contracts of employment and not in reference to award entitlements. As such, the employer's payment of amounts exceeding award entitlements meant that Mr Manchee did not suffer a loss for which compensation could be awarded under section 545(2)(b) of the Fair Work Act. The court held that the employer's discretion to pay more than the minimum award entitlements precluded the applicant's entitlement to compensation. The court also found that BTIG had contravened the awards and the Fair Work Act in various respects but, as Mr Manchee did not suffer a loss, no compensation was payable.

The court dismissed Mr Manchee's claim for compensation, finding that he had not demonstrated a loss for which compensation was available under the Fair Work Act. The matter was to be listed for further directions to set a timetable for a penalty hearing, acknowledging the contraventions of the awards and the Fair Work Act by BTIG.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

First cl.23.3 and then cl.24.3 of the 2010 Award and cl.22.3 of the 2020 Award both provided for annual leave loading of 17.5%.APPLICANT’S EVIDENCE Mr Manchee In his affidavit affirmed on 14 June 2022, Mr Manchee deposed that on 27 November 2012 he accepted BTIG’s offer of employment by signing an offer letter (“Letter”) which stated, amongst other things:2.Your remuneration for this position is based on commissions. You will receive an annual draw of A$110,000 per annum against commissions. (a) Commission will be calculated according to the standard BTIG institutional payout model as outlined in Table 1 attached to this letter. (b) Commissions will be paid monthly, on a 30 day trailing basis.3.It is a condition of your employment that you participate in an approved Superannuation Fund. Your remuneration rate outlined above is exclusive of the employer superannuation contributions (up to the statutory maximum amount) made on your behalf by BTIG in accordance with the obligations imposed under the Superannuation Guarantee (Administration) Act and will be based on the annual draw.4.You will be entitled to four weeks' annual leave for every 12 months of completed service which will be paid at your annual draw rate. Annual leave will accrue from year to year …5.Long service leave will be provided in accordance with relevant legislation in the State in which you reside. ... Long service leave will be paid based on your annual draw. Mr Manchee deposed that from 3 December 2012 to 1 August 2020 his remuneration was based on the commissions he earned. He described the method of its calculation in the following terms:I would do trades with my clients, generating commission for BTIG. BTIG would then take their split (60% initially and then 63% after a few years) - leaving the balance of 40% (then 37% after a few years) ‘attributable’ to myself, less other expenses they deemed fit.Mr Manchee deposed that he was paid a fixed monthly draw of $9,167 and no additional payments or offsets were ever made in respect of salary, annual leave or carer’s leave. If, at the end of a month, his “attributable” commission earnings were below the $9,167 draw, he would receive his fixed monthly draw nonetheless but BTIG would carry the deficiency forward to the following month when it would be deducted from any attributable commission earned in that month. He deposed that when he was on leave, he would still be paid the standard monthly draw but, because he was not working, it often resulted in a deficit that carried over to future months. He deposed that in effect during his leave he received a loan against future commission which then had to be paid back in the months that followed. Annexed to Mr Manchee’s affidavit of 14 June 2022 were documents entitled “Commission Worksheet for Andrew Manchee” which recorded payments made to him by BTIG over three months during the term of the 2012 Agreement. They made clear that payments made to him were unrelated to the number of hours or days he worked and were calculated solely by reference to the commission he earned, less associated expenses. They showed that if the commission he had generated for himself did not exceed his minimum monthly draw, he was nevertheless paid the draw, but the shortfall was carried forward to the next month when it was deducted from the commission he earned in that month. He would receive a payment in addition to the minimum monthly draw if, after clearing any carried forward deficit, his commission after associated expenses for the month exceeded the minimum draw payment for that month.

Decision

Reasons for decision

In this case, it is clear that if during the 2012 Agreement BTIG had had regard to its obligations under the Award, Mr Manchee would not have been paid more than in fact he was, whether in respect of salary or annual leave entitlements with loading. I have made a similar finding in relation to annual leave loading during the 2020 Agreement. It has therefore not been demonstrated that Mr Manchee suffered the sort of loss for which s.545(2)(b) of the FW Act may provide compensation. That aspect of his claim will be dismissed.CONCLUSION Although Mr Manchee has been unsuccessful in demonstrating an entitlement to compensation, he has demonstrated that BTIG contravened the Award and the FW Act in a number of respects. Consequently, the matter will be listed for further directions at which time a timetable will be set for a penalty hearing.

Ratio Decidendi

Legal Principle Established

Finally, BTIG argued that, in any event, the Court’s discretion to order compensation in this case was not engaged because Mr Manchee had not suffered a loss caused by a contravention of the FW Act as the payments he had received were more than he had been entitled to under the Award.Consideration I do not doubt that the witnesses’ evidence was the truth as they saw it. To the extent that there were differences between them, those differences have not been relevant to the outcome of this dispute except in relation to the payment of annual leave loading in 2021 which will be addressed later in these reasons. As recorded earlier, the basis on which Mr Manchee was employed by BTIG in 2012 was set out in the Letter. His contract provided that his remuneration was based on commission although he would receive a monthly draw regardless of how little commission he earned. How long Mr Manchee would have been allowed to remain if he had not earned reasonable brokerage income for BTIG might be speculated upon, but that appears not to have been an issue for him. That his earnings were in fact paid in satisfaction of his contractual entitlement to his share of the brokerage commission he earned for BTIG is recorded in his monthly commission worksheets, which were not calculated by reference to the number of hours he worked or to hourly or weekly pay rates but by reference to commissions earned and expenses incurred. They recorded two sorts of payment to Mr Manchee, a “Draw Deduction” of $9,166.67 that was paid every month and a “Grand Total Due Sales Person” which, I conclude, was only paid when commissions earned exceeded the total of the “Draw Deduction” and any debit balance carried forward from the previous month. But regardless of those matters, the only material evidence as to the agreement struck between Mr Manchee and BTIG in 2012 is what is found in the Letter, and its terms admit of no understanding other than that it was agreed that Mr Manchee was to be paid a share of the brokerage commission he earned for BTIG. The Letter makes no reference to the Award and it was not suggested that the Award had been discussed by the parties before Mr Manchee’s recruitment. The 2020 Agreement provided more conventionally for a salary with related entitlements. As the figures quoted earlier disclose, the wage that Mr Manchee was entitled to under the Award were significantly less than the payments he in fact received. The question is therefore whether, notwithstanding that the payments to Mr Manchee were paid in satisfaction of BTIG’s contractual obligations under the 2012 Agreement based on the brokerage commission he earned for it, and under the 2020 Agreement in payment of his contracted salary, and were not expressed to be referable to Award entitlements, they might nevertheless be set off against BTIG’s payment obligations under the Award. Set-off If an employer, in satisfaction of the undifferentiated entirety of its obligations under a contract to make monetary payment for hours worked, makes a wage payment that equals or exceeds the totality of its statutory obligations to pay for time worked (e.g. ordinary time, overtime penalty rates), that payment may be applied to the satisfaction of those various obligations: ANZ v FSU at 239 [51]; James Turner Roofing v Peters (2003) 132 IR 122 at 132-133 [43]-[45]; 134 [52]; 136 [68]. However, if such an undifferentiated payment does not equal or exceed the totality of the employer’s statutory obligations, the employee is free to appropriate it to the discharge of whichever obligation or obligations he or she wishes: Poletti v Ecob (No 2) (1989) 31 IR 321 at 333; Moree Plains Shire Council v Goater (2016) 14 ABC(NS) 255 at 269 [59]. Implicitly, in that case one or more particular liabilities is not discharged fully or at all.