Mr Dewayne O'Bryan v Giovenco Industries (Aust) Pty Ltd
[2015] FWC 4831
•23 JULY 2015
[2015] FWC 4831
The attached document replaces the document previously issued with the above code on 23 July 2015.
This version corrects an error in the paragraph numbering.
Shomaice Zowghi
Associate to Vice President Catanzariti
Dated 24 July 2015
| [2015] FWC 4831 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Dewayne O'Bryan
v
Giovenco Industries (Aust) Pty Ltd
(U2014/14768)
VICE PRESIDENT CATANZARITI | SYDNEY, 23 JULY 2015 |
Application for relief from unfair dismissal.
[1] Mr Dewayne O’Bryan (the Applicant) applied under s.394 of the Fair Work Act2009 (the Act) for an unfair dismissal remedy in relation to his former employment with Giovenco Industries Pty Ltd (the Respondent). The matter was listed for jurisdictional hearing in Brisbane on 29 May 2015 on the basis of a jurisdictional objection brought by the Respondent.
[2] The Applicant was employed as a site manager for the Respondent at the Caltex Refinery in Lytton. The Applicant commenced employment with the Respondent on 13 February 2012. He suffered a psychological illness which made him unfit to attend work from 22 January 2014 until his employment with the Respondent was terminated on 14 October 2014. It was agreed that the Applicant completed a period of employment of at least the minimum employment period pursuant to s. 382 of the Act. It was also agreed that no modern award or enterprise agreement covered the Applicant in relation to his employment with the Respondent.
[3] The Respondent raised 2 jurisdictional objections to the application, namely, that the application should be dismissed on the basis that:
1. the Applicant was not “dismissed” pursuant to the definition of dismissed under s. 386 of the Act; and
2. the Applicant was not a person protected from unfair dismissal because his annual rate of earnings at the time of the conclusion of his employment exceeded the high income threshold pursuant to s. 382 of the Act. The high income threshold at the time of the hearing was $133,000.00.
[4] The matter before me was in relation to the second jurisdictional objection only as the first objection, regarding whether a person has been dismissed, is on one view not a jurisdictional issue and requires a proper evidentiary case.
[5] At the hearing, Mr Seck of Counsel sought permission to appear for the Respondent and Mr Hardie sought permission to appear for the Applicant. Having regard to s.596 of the Act permission was granted to the Respondent to be represented.
Legislation
[6] Section 396(b) of the Act requires that the question of whether a person is protected from unfair dismissal is to be decided before the merits of the person’s application is considered. Section 382 of the Act provides for when a person is 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] As earlier noted, the high income threshold for the purpose of s.382(b)(iii) was $133,000.00 in the period relevant to this application.
[8] 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) 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.
[9] Regulation 3.05(6) of the Fair Work Regulations 2009 states:
“(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;
(b) The benefit is not an entitlement to a payment of money and is not a non-monetary benefit within the meaning of section 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 purposes of assessing whether the high income threshold applies to a person at the time of 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 the real or notional money value of the benefits;
The real or notional money value of the benefit estimated by the FWC is an amount for subparagraph 382 (b)(ii) of the Act.”
Questions to be determined
[10] The primary question to be determined is whether the Applicant’s annual rate of earnings exceeded the high income threshold. The annual rate of earnings is to be assessed as at the time of dismissal. It is not an assessment of the actual earnings in the 12 months immediately prior to dismissal. 1
Submissions
[11] The basis of the Respondent’s jurisdictional objection and its position as to why the Applicant earned more than the high income threshold was as follows:
1. The Applicant’s salary at the conclusion of his employment was $129,746.00;
2. The Applicant was in possession of a motor vehicle provided by the Respondent pursuant to the Applicant’s contract of employment at the commencement of his employment until on or about 31 March 2014;
3. According to the formulas set down by relevant authorities 2 articulated in the Applicant’s submissions3 in particular Fewings, and taking into account Regulation 3.05 of the Fair Work Regulations 2009 (Regulations) the Commission should consider the benefit of the Applicant’s personal use of the Respondent provided motor vehicle for the purposes of assessing whether the high income threshold applies in the per annum amount of $8,856.90 - $9,827.92 (Scenario 1);
4. If the Commission does not accept the above figures and calculations, the Applicant has made alternative calculations 4 which determine the per annum value as $2,450.81 - $2,719.50 (Scenario 2);
5. A mobile phone was provided as part of the Applicant’s package which the Respondent has calculated at the amount of $575.00 for the purposes of calculating the Applicants earnings 5;
6. The Applicant was supplied with a laptop as part of the Applicant’s package which the Respondent has calculated at the amount of $516.59 for the purposes of calculating the Applicant’s earnings 6; and
7. The Applicant incurred tolls as part of his motor vehicle use which have been calculated by the Respondent at the amount of $2,193.60 for the purposes of calculating the Applicant’s earnings 7.
[12] In total, the Respondent submitted that the following items should be counted as earnings for the purposes of assessing whether or not the Applicant meets the high income threshold for an unfair dismissal remedy:
Item | Amount |
Salary | $129,746.00 |
Private Motor Vehicle Use (Scenario 1) | $8,856.90 to $9,827.92 |
Mobile Phone | $575.00 |
Laptop | $516.59 |
Tolls | $2,193.60 |
Total | $141,888.09 - $142,859.11 |
[13] In the alternative, the Respondent submitted that using the Scenario 2 calculations for the private motor vehicle use, the total amount of earnings would be $135,482.00 - $135,750.69.
[14] The Respondent filed additional written submissions following the hearing going to the determination of whether the above mentioned non-monetary items should be included for the purposes of the high income threshold under regulation 3.05(6) of the FW Regulations. 8 In these submissions there were 10 different alternate threshold calculations that do not warrant reproducing here.9 The variable in these calculations was the amount assigned to the motor vehicle, mobile phone and toll payment. In all 10 variations of the calculations, the Applicant fell above the high income threshold.10
[15] The Applicant disputed the jurisdictional objection raised by the Respondent on the basis that the sum of his annual rate of earnings at the time of termination was less than the high income threshold. The Applicant’s position was as follows:
1. He agreed that he was paid an annual salary of $129,749.00 at the time of his termination;
2. The Applicant did not agree that taking into account Regulation 3.05(6), the Commission should include in the Applicant’s earnings the real or notional value of benefits for the personal use of the motor vehicle, mobile phone, laptop and the value of motorway tolls, specifically:
a. The Commission should prefer direct evidence of the Applicant that the provision of the company vehicle was for work purposes and akin to a tool for trade and therefore should not be taken into account for purposes of the high income threshold 11;
b. The Commission should find that the laptop was a tool of trade and the Applicant did not receive a personal benefit from being supplied with it 12;
c. The Commission is unable to estimate the real or notional money value of the benefit of the toll payments in accordance with regulations 3.05(6)(c)(iii) 13;
d. The Commission is unable to estimate the real or notional money value of the benefit of the mobile phone in accordance with Regulation 3.05(6)(c)(iii) and the evidence of the Applicant should be preferred to find that the mobile phone as also a tool of trade with any private usage being incidental. 14
3. To extent that the Respondent has attempted to calculate the real or notional value to the Applicant of any personal use of those items the Applicant submitted that those calculation were misleading 15;
4. Even if the Commission was of the view that it was appropriate or able to estimate a value for the motor vehicle, the Applicant submitted that it is only appropriate to look at the at the period that the Applicant actually used the vehicle which was approximately 15 weeks and in this case, the Applicant’s earnings would still not exceed the high income threshold. 16
[16] Additional detail was provided in further written submissions by the Applicant after the hearing specifically in relation to the application of s.382(b)(iii) to the circumstances of the employment and further detail in relation to the incurring tolls, the use of the mobile phone, motor vehicle and submissions in relation to the estimate of a real or notional value of a benefit. 17 In these final submissions the Applicant included the following calculations, excluding the mobile phone as the Applicant submitted that there was no cost to the Respondent regarding the phone:
Annual rate of earnings | $129,746.00 |
Motor vehicle | $1,426.70 |
Tolls | $429.58 |
Total | $131,602.28 |
Relevant High Income Threshold | $133,000.00 |
Difference | $1,397.72 |
Consideration
[17] I have considered the initial submissions of the parties and the subsequent submissions filed after the hearing as well as all other evidence and material before the Commission. I note that both the Applicant and Respondent filed voluminous submissions which can only be characterised as excessive for the purposes of a relatively innocuous jurisdictional objection. In essence, the matter rises and falls on whether for the purposes of calculating the applicant’s earnings, the provision of a company car and accompanying tolls should be included. If I find that it is to be included, then the Applicant will be found to be over the high income threshold and there is no utility in findings regarding other matters such as the laptop and mobile phone.
[18] The questions to be determined in accordance with 3.05(6) of the FW regulations are first, whether the Applicant is entitled to receive, or has received, a benefit in accordance with an agreement between the parties; and second, whether the Commission is properly satisfied having regard to the circumstances that it should “consider” the benefit for the purposes of the high income threshold and the Commission can estimate a “real or notional money value” of the benefit.
[19] I accept the submissions of the Respondent. In my view the Applicant had both the entitlement to receive the benefits and received the benefits in accordance with the Applicant’s Contract and Conditions of Employment and the applicable policies and procedures. It is apparent from these documents that the Applicant had an entitlement to private use of the motor vehicle. It is plain that the Respondent’s policies and procedures providing for private use of motor vehicles were incorporated into the Contract in numerous ways including by express reference in the contract 18, by signature19 and by the obligation placed on the Applicant to comply with the applicable policies and procedures contained in the Policy Manual as required in clause 2.7 of the Conditions of Employment20.
[20] In relation to the motor vehicle, I accept the Respondent’s submissions. On the evidence before me it is objectively clear that the Applicant received considerable personal benefit from the private use of the company motor vehicle to and from work and it is appropriate for it to be taken into account for the purposes of determining whether the Applicant’s annual rate of earnings exceeds the high income threshold. Likewise in relation to the tolls, the evidence indicates that the Applicant received considerable personal benefit from the payment of tolls to and from work and it is appropriate for it to be taken into account for the purposes of determining his annual rate of earnings.
[21] In relation to the estimate of the notional money value of the entitlement to the benefit, I accept the Respondent’s submissions. The Applicant contends that at the time of the termination of employment, he had no entitlement to a motor vehicle under the Contract because he was sick for 9 months and was required to leave the vehicle on site. However, what must be ascertained and valued is the “entitlement to the benefit” provided in accordance with an agreement, as required under Regulation 3.05(6)(a), and not the Applicant’s entitlement to the benefit in particular circumstances at a particular time. The value of the entitlement is fixed at the time of making the agreement and is not ambulatory in nature depending on the circumstances of the case. I accept the methodology of the Respondent in calculating the value of the entitlement to the motor vehicle and tolls. I note that there were a number of alternate calculations in the Respondent’s written submissions. 21 It is not necessary for me to comment on each individual scenario I accept the initial threshold calculations of the Respondent22 and in any event, all alternate scenarios fall above the high income threshold regardless of the approach taken.
[22] I find that the Applicant is above the high income threshold. The entitlement to and use of the company car to and from work and the payment of the tolls put him above the high income threshold.
Conclusion
[23] I find that the Applicant is not a person protected from unfair dismissal in accordance with s. 382 of the Act on the basis that he does not earn below the high income threshold.
[24] As a result of this finding, the Fair Work Commission has no jurisdiction to hear the application for an unfair dismissal remedy. The matter is dismissed.
VICE PRESIDENT
Appearances:
C Hardie for the Applicant.
M Seck of Counsel instructed by M Waring for the Respondent.
Hearing details:
29 May
Brisbane
2015
Final written submissions:
Respondent submissions dated 6 February 2015.
Applicant submissions in reply dated 26 February 2015.
Respondent submissions filed 16 June 2015.
Applicant submissions filed 23 June 2015.
Respondent submissions in reply filed 30 June 2015.
1 Zappia v Universal Music Australia Pty Limited t/a Universal Music Australia [2012] FWAFB 6108 at [9].
2 Rofin Australia Pty Ltd v Newtown (1997) 78 IR 78; Kunbarllanjnja Community Government Council v Fewings (unreported AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998) (Print Q0675); Chang v Ntscorp Ltd[2010] FWA 1952 (unreported, Hamberger SDP, 9 March 2012); Mcllwraith v Toowng Mitsubishi Pty Ltd[2012] FWA 3614 (unreported, Cribb C, 30 April 2012).
3 Paragraphs 34 - 67 of the Respondent’s submissions dated 6 February 2015
4 Paragraphs 69-74 of the Respondent’s submissions dated 6 February 2015.
5 Ibid at paragraphs 75-81.
6 Ibid at paragraphs 82-87
7 Ibid at paragraphs 89-94.
8 Respondent Closing Submissions dated 16 June 2015.
9 Ibid paragraph 60.
10 Ibid.
11 Paragraphs 10-21 of the Applicant’s Answer to Respondent’s Submissions in Reply for Jurisdictional Objection dated 26 February 2015.
12 Ibid at paragraphs 22-25.
13 Ibid at paragraphs 25.
14 Ibid at paragraphs 26-27.
15 Ibid at paragraphs 28-38.
16 Ibid at paragraphs 39.
17 Closing Submissions of Applicant dated 23 June 2015.
18 See Exhibit A; and Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 at [76].
19 Exhibit B, 1 and 4; Toll (FCGT) v Alphapharm Pty Ltd (2004) 219 CLR at [57].
20 Exhibit A.
21 Respondent submissions in reply dated 6 February 2015 paragraphs 32 – 94 and 96-97.
22 Respondent Submissions in reply dated 6 February 2015, paragraphs 96-96 read in conjunction with Respondent Closing Submissions dated 16 June 2015 at paragraph 69.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR569479>
0
4
0