Maturu v Leica Geosystems Pty Ltd
[2014] FWCFB 6735
•29 SEPTEMBER 2014
| [2014] FWCFB 6735 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Leica Geosystems Pty Ltd
(C2014/4626)
VICE PRESIDENT CATANZARITI | SYDNEY, 29 SEPTEMBER 2014 |
Appeal against decision in transcript of Commissioner Booth at Brisbane on 8 May 2014 in matter number U2013/14485.
[1] This is an appeal by Mr Sasidhar Maturu (the Appellant) against a decision made in transcript by Commissioner Booth at Brisbane on 8 May 2014 and an order 1 (Order) issued by the Commissioner on the same day. The Commissioner dismissed the Appellant’s unfair dismissal application on the basis that the Fair Work Commission (the Commission) does not have jurisdiction to hear the matter.
[2] At the hearing of the appeal, the Appellant was not represented. Leica Geosystems Pty Ltd (the Respondent) sought permission to be represented by Mr L Thorburn of Bennett & Philp Lawyers. Permission was granted on the basis that, although the matter was not significantly complex, we were satisfied that the matter would be dealt with more efficiently if permission to be represented was granted.
Background
[3] The primary issue of dispute at first instance was whether the Appellant was protected from unfair dismissal for the purposes of s.382 of the Fair Work Act 2009 (the Act). The Respondent contended that the Appellant’s annual rate of earnings and other relevant amounts were higher than the high income threshold. The Appellant contended that he was protected from unfair dismissal as his income did not exceed the high income threshold.
[4] The relevant high income threshold applicable in this matter is $129,300. It was not contested on appeal that the Appellant’s base annual rate of earnings was $129,000 at the time of dismissal. The sole issue on appeal was whether the Commissioner was correct in her conclusion that the Appellant had the benefit of access to mobile broadband, and whether certain mobile broadband usage should count towards the calculation for the purposes of s.382 of the Act.
[5] The Commissioner considered this issue in some detail and it is worth reproducing the Commissioner’s reasoning on this issue in its entirety:
“The issue of access to the laptop and mobile phone were the subject of significant evidence in this matter. The respondent submits that the applicant had private use of his own laptop and mobile. Ms Blair's evidence, in particular her second witness statement, attaches various details of phone and data access from the applicant. She deposes as follows, ‘The applicant also had the benefit of a laptop computer with unlimited broadband via a USB data dongle. The applicant had sole use of the laptop and the applicant would use the laptop at home out of business hours. I recall telephoning the applicant during the period of unpaid leave to question a very large usage bill which we had received from internet usage. The applicant apologised and said words to the effect, “My daughter might have been playing around with it."’
I note this particular bill issue date is 15 July and there was a similar bill for August 2013. I turn now to Mr Maturu's evidence on this point. The applicant says he points to his contract which says, ‘The laptop will be supplied to you for work purposes.’ There is an asterisk which states as follows, ‘It is to be noted that this equipment remains the property of Leica Geosystems and is only to be used while in the employ of Leica Geosystems.’ The contract also states, ‘Broadband internet access costs will be paid by Leica.’ Additionally with regard to the mobile phone contract it states as follows, ‘A Blackberry mobile phone will apply to the engagement of Leica,’ this clause is also asterisked. Mr Maturu's evidence was that he also had a personal laptop and phone and used his own equipment while he was on sick leave and in fact he should have been charging that employer. Mr Maturu said that both his laptop and phone were left on his desk at work. He wondered if a Sim card had been swapped.
Mr Maturu denies that he was responsible for the $500 a month and asserts that perhaps it was somebody else's use. I now turn to discussion of the evidence on the data laptop and mobile phone usage. On the question of the Sim card Ms Blair's evidence was clear. Should the device be swapped the same Sim card and data dongle assigned to the applicant would remain. Mr Maturu could not remember the conversation with Ms Blair where she inquired about the high data use. This seemed surprising. It is especially surprising if the applicant was of the view he was not allowed to use his personal laptop or mobile in accordance with the contract. In those circumstances an inquiry from an employer of a large data use would seem to me to be something that was important.
On these points I prefer the evidence of Ms Blair. Not only could Mr Maturu not remember what I considered to be an important conversation, there are other inconsistencies in his evidence at the time indicating some personal usage was allowed, at other times insisting he only used his personal phone. I turn now to the assessment then of the appropriate amount for access to laptop, phones and data use. The employer suggested a pro rata amount of $1,000 and $500 for the laptop and mobile respectively, that being $737.10 for laptop access for the period until dismissal and $369.90 for the mobile access. The applicant says if these amounts were to be accepted they are in fact too high and that the equipment itself would have been written off given it was quite old. The applicant did accept he had an offer of a new iPhone but because of his sick leave did not in fact access this equipment. I consider that both these amounts are too high and few details assist me to break down the personal and private use of the phone and laptop.
I do note, however, that the data use was when the applicant was on leave, which is the subject of the telephone inquiry I referred to earlier is clear. Even if that is discounted, as the applicant suggests some work was done while on unpaid sick leave, the amount of data use for the laptop for the period when the applicant was on sick leave is over $1,000. I therefore calculate that an amount of 80 per cent or $800 of the data use is private and should be added to the calculation. While this means that the applicant in addition to his salary earnings is over the high income threshold, being now $129,800, I would add for the sake of completeness I would also have included an amount for professional memberships in similar terms to that suggested by the employer.” 2
Legislation
[6] Section 382 of the Act sets out the circumstances in which a person will be protected from unfair dismissal as follows:
“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] The term “earnings” is defined in s.332 of the Act as follows:
“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) ...”
[8] Regulation 3.05(6) of the Fair Work Regulations 2009 (the Regulations) provides as follows:
“(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.”
[9] The Commissioner found that the Appellant utilised his mobile broadband service while on leave and that the value of this use was $800. It is not clear from the Commissioner’s decision the precise process by which this amount was to contribute towards the overall calculation of the Appellant’s earnings for the purposes of s.382(b)(iii) of the Act. As there is no evidence of any agreed monetary value in relation to the mobile broadband usage, it appears that such usage could not meet the definition of “non-monetary benefit” as found in s.332(3) of the Act. It would appear, therefore, that the Commissioner utilised the Commission’s power under reg 3.05(6)(c) of the Regulations to estimate the real or notional money value of this “benefit.”
[10] A Full Bench of the Australian Industrial Relations Commission considered the issue of non-monetary benefits in the context of motor vehicles in Rofin Australia Pty Ltd v Newtown (1997) 78 IR 78 as follows:
“These principles appear to reflect a distinction that has been made, in our view quite properly, between the provision of a motor vehicle as part of a salary package and the provision of a motor vehicle as a piece of equipment supplied by the employer to enable the employee to perform the job.
Where a motor vehicle is provided to an employee in lieu of salary that might otherwise have been paid, it is appropriate that the private benefit derived by the employee from the provision of the motor vehicle be counted as part of the employee’s remuneration. Where, however, the vehicle is provided for business purposes and the employee’s entitlement to private use is purely incidental, the provision of the motor vehicle should be treated no differently to the provision by the employer of any other tool or piece of equipment essential to the performance of the job.”
(References omitted)
[11] These principles apply, by analogy, to mobile broadband access. In this matter, the applicant’s use of the mobile broadband was governed by his employment contract which provided as follows:
“Additional Benefits
In addition to your salary, the following benefits will apply to your engagement with Leica:
...
• A Laptop will be supplied to you for work purposes **
• Broadband internet access costs will be paid by Leica
• A Blackberry / Mobile Phone will apply to your engagement with Leica **
** It is to be noted that this equipment remains the property of Leica Geosystems and is only to be used whilst under the employ of Leica Geosystems”
[12] It is clear, in this context, that the mobile broadband service was provided to the Appellant as a piece of equipment that was essential to the performance of his job. The Commissioner found that the mobile broadband had been utilised while the Appellant was on sick leave, and calculated that 80% of this usage had been for private purposes. While this finding was open to the Commissioner on the basis of the evidence before her, we are not satisfied that, in all of the circumstances of the case, the private usage of the mobile broadband service is sufficient to enliven the Commission’s powers under reg 3.05(6).
[13] In order for the Commission to make an estimate of the real or notional money value of a benefit pursuant to reg 3.05 and to have that estimate contribute to the calculation for the purposes of s.382(b)(iii) of the Act, each part of the cumulative test in reg 3.05(6) must be satisfied. Regulation 3.05(6)(a) requires that “the person is entitled to receive, or has received, a benefit in accordance with an agreement between the person and the person’s employer” (emphasis added).
[14] While the contract of employment does not explicitly limit the use of mobile broadband to work purposes, the context in which it appears in the contract does not give rise to any implication of an agreement between the Appellant and the Respondent that the mobile broadband service may be used for private purposes. Additionally, the evidence of Ms Megan Elizabeth Blair (Ms Blair) at first instance further negates any implication as to an agreement that the mobile broadband service could be utilised for private purposes:
“Did Leica monitor the internet use of employees' laptops?---We have a standard where if it goes above say 150 then that flags it as high usage.
That's $150 is it?---Yes, per month, yes.
Did that ever happen in the case of the applicant?---Yes, it did while he was on unpaid leave.
Did you question the applicant on that?---Yes, we did.
Was that you, did you contact the applicant?---Yes, I believe I asked him why it was so high because for two months in a row it was $500 and he was on unpaid leave, so I questioned why it was over that amount.
Do you remember what the applicant said to you?---He said something to the effect that he thinks that possibly his daughter was playing around with it.” 3
[15] While the Appellant gave evidence at first instance that he did not recall this conversation, the Commissioner found that she preferred the evidence of Ms Blair. This finding was reasonably open to her. This conversation militates against any inference that there was an agreement between the parties as to the private usage of the mobile broadband service. The existence of an agreement between the parties that the Appellant had the benefit of private usage of the mobile broadband service is not consistent of the Respondent’s actions in contacting him while he was on unpaid leave to inquire as to why the usage was so high. Finally, the Respondent expressed the view in its written submissions that “[the employment] contract is quite clear that the laptop and the internet access were only to be used for work purposes,” which further suggests that no such agreement was in place.
[16] We are not satisfied that there was any agreement between the parties in relation to the private use of the mobile broadband service. In these circumstances, the Appellant’s usage of the mobile broadband service while on unpaid leave may even have resulted in disciplinary action being taken by the Respondent, were it so inclined. Such a state of affairs could hardly be considered a “benefit” in the ordinary meaning of the term. In any event, where a person has received a benefit that was not in accordance with an agreement between that person and his or her employer, the Commission’s power under reg 3.05(6) will not be enlivened.
Public Interest
[17] In order to grant the Appellant permission to appeal, the Full Bench must be satisfied that it is in the public interest to do so. 4 In GlaxoSmithKline Australia Pty Ltd v Colin Makin5 a Full Bench summarised the concept of public interest in the following terms:
“Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...”
[18] We are satisfied that this matter raises issues of importance and general application. The proper approach to the application of reg 3.05(6) is an issue that is currently the subject of few authorities. We believe that a Full Bench decision on this issue will provide some guidance in relation to this issue. We are of the view that this guidance is particularly warranted given that the application of this provision will go to issues of the Commission’s jurisdiction.
Conclusion
[19] We are of the view that the Commissioner has made an error of law with respect to her application of reg 3.05(6), and that no additional sum should be added to the calculation for the purposes of s.382(b)(iii) of the Act in relation to the mobile broadband service.
[20] We note that the Commissioner made some additional observations in her decision without making a final ruling:
“While this means that the applicant in addition to his salary earnings is over the high income threshold, being now $129,800, I would add for the sake of completeness I would also have included an amount for professional memberships in similar terms to that suggested by the employer.
The reason I say this is that in some employment situations some payments may be made by the employer but in this case there was no evidence that it was part of a contract and therefore in my view payment of such amounts could be included in the applicant's annual rate of earnings, but as I indicated it is not necessary for further details to go into in that matter.”
[21] Having found that no additional sum should be calculated in relation to the mobile broadband service, it is not necessary for us to consider the issue of professional memberships. The Respondent has submitted that the value of the Appellant’s professional memberships was $207.27. Even were this calculation accepted at face value, it would not bring the total amount of the calculation for the purposes of s.382(b)(iii) beyond the high income threshold.
[22] We find that permission to appeal should be granted and the appeal upheld. The Order and decision that are the subject of this appeal are quashed. We find that the Respondent’s jurisdictional objection should be dismissed. We remit the Appellant’s unfair dismissal application to Commissioner Spencer who will make arrangements directly with the parties for the matter to be conciliated.
VICE PRESIDENT
Appearances:
S Maturu appeared on his own behalf.
L Thorburn of Bennett & Philp Lawyers for Leica Geosystems Pty Ltd.
Hearing details:
2014.
Brisbane:
September 4.
1 Mr Sasidhar Maturu v Leica Geosystems Pty Ltd [PR550422].
2 Transcript, 8 May 2014, Brisbane, PN379–PN383.
3 Transcript, 8 May 2014, Brisbane, PN96-PN101.
4 Fair Work Act 2009, s.400(1).
5 [2010] FWAFB 5343 at [27].
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