Mr Damien McGeoghegan v CSC Healthcare Australia - [2013] FWC 9926

[2013] FWC 9926

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Damien McGeoghegan
v
CSC Healthcare Australia
(U2013/12478)

COMMISSIONER WILSON

MELBOURNE, 17 DECEMBER 2013

Application for relief from unfair dismissal; high income threshold

[1] Mr Damien McGeoghegan was employed by CSC Australia Pty Limited, trading as CSC Healthcare Australia, on 30 August 2010. His application for unfair dismissal asserts that he was subjected to a constructive dismissal, being notified of such on 15 July 2013 with the termination of employment taking effect from 2 August 2013. Mr McGeoghegan’s application for unfair dismissal remedy is dated 13 August 2013.

[2] The former employer, CSC Healthcare Australia, asserts in its Employer’s Response to Application for Unfair Dismissal Remedy that Mr McGeoghegan is not a person protected from unfair dismissal for several reasons as follows;

“a. The Applicant was not dismissed. The Applicant resigned and continued to perform work after the date of resignation.

b. The Applicant was earning an annual base salary of $131,526 at the time of resignation which is more than the high income threshold (currently $129,300).

c. The Applicant was not covered by an award.

d. The Applicant was not covered by an enterprise agreement.” 1

[3] The assertion that Mr McGeoghegan’s earnings were greater than the high income threshold requires initial determination. The parties have been invited to provide written submissions in order that this question can be determined on the papers. No party indicated to the Commission that they were unprepared for the matter to be dealt with in this way.

Legislation

[4] Section 382 of the Fair Work Act provides 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.

[5] As referred to above, CSC Healthcare Australia submits that Mr McGeoghegan’s employment was not subject to an enterprise agreement (and he did not contest that it was) and that his employment was not subject to a modern award.

[6] Mr McGeoghegan’s position description is set out in some detail in a copy of his employment agreement which was provided with the Employer’s Response Form. His position is described as that of “Principal Consultant” 2. His duties are described in the position description as follows;

“Main activities

Designing and developing high quality business solutions and other projects.

Evaluating customers' business needs, thus contributing to strategic planning of information systems facilities and software directions.

Being accountable for defined work assignments often involving immediate action or short term planning of human and other resources.

Planning and coordinating resources necessary to complete product implementation and assisting in preparation of major sales proposals.

Liaising with major customers during preliminary installation and testing of developed solutions or products.

Managing a team of consultants (largely dependent on the size and scope of client project).

Key skills

Specialist knowledge of many industries or segments, coupled with strong analytical skills.

Recognised as leading expert in specialty area.

Can adapt and apply existing techniques and methodologies to new uses.” 3

[7] After consideration of these main activities and key skills, I am satisfied that Mr McGeoghegan’s employment is not subject to a modern award.

[8] For the purposes of s.382(b)(iii) of the Act the high income threshold was indexed to $129,300 from 1 July 2013 pursuant to Regulation 2.13 of the Fair Work Regulations 2009. 4

[9] In turn section 332 of the Act is relevant to the question of determining a person’s “annual rate of earnings”. The section provides;

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

(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;

(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 292-175 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.

[10] As a result of these provisions, assessment of the high income threshold requires application of two considerations.

[11] Firstly, consideration needs to be given to the person’s annual rate of earnings, which requires an examination of several factors, including those set out in s.332, and, because of a reference in that section, potentially factors included in the regulations. Secondly, and separately, consideration may need to be made about whether there are any amounts to be added to the person’s annual rate of earnings because of factors included in the regulations 5. Should there be any elements within the second category, the sum of the two considerations is what is compared against the high income threshold.

[12] On the basis of the material before me, I am satisfied that there are no amounts in the second category which are required to be taken into account in assessing Mr McGeoghegan’s annual rate of earnings. That is I am satisfied only the elements in the first category require being taken account of in this decision.

[13] The submissions of CSC Healthcare Australia indicate that at the time of his termination of employment, Mr McGeoghegan was earning an annual base salary $132,526 with superannuation payments of $11,927.34 giving a total remuneration package of $144,453.34 per year 6. Upon clarification, following a question from me, CSC Healthcare Australia provided evidence that Mr McGeoghegan’s total “base salary” earnings in the 12 months prior to his termination of employment were $132,539.30. The information provided by CSC Healthcare Australia reveals there were other payments made including for superannuation.

[14] The material provided by CSC Healthcare Australia and Mr McGeoghegan shows he was paid monthly, with payslips showing the payments were made at the midpoint of each month, with the actual pay period being from the first to last day of the month. 7 The amount referred to above is the total of the pay transactions for the 12 pay periods before his employment ended - that is, for the period 1 August 2012 to 30 July 2013. Since Mr McGeoghegan’s employment ended on 2 August 2013, I am satisfied that the total referred to above represents his annual rate of earnings.

[15] As a result of this analysis, I find that Mr McGeoghegan’s annual rate of earnings in the 12 months prior to his termination of employment was $132,539.30 and that this amount exceeds the high income threshold.

[16] I therefore find that Mr McGeoghegan is not a person protected from unfair dismissal at the time of his termination of employment for the reason that his annual rate of earnings exceeded the high income threshold.

[17] As a result I must dismiss his application for unfair dismissal remedy, and an Order to this effect is issued at the same time as this decision.

COMMISSIONER

1 Employer's Response to Application for Unfair Dismissal Remedy, Form F3, item 4 (1)

2 Employer Response Form F3, attached Employment Agreement, page 2

3 Ibid, attached Position Description

4 Refer See Fair Work Regulations, R3.05

6 email Nerys Jefferson, 4 November 2013

7 Applicant’s email dated 10 December 2013

Printed by authority of the Commonwealth Government Printer