Mr Jeff Hardman v Statewide Communications Australia Pty Ltd T/A Alarming Solutions Statewide Health Integration - [2013] FWC 3118

[2013] FWC 3118

FAIR WORK COMMISSION

DECISION

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

Mr Jeff Hardman
v
Statewide Communications Australia Pty Ltd T/A Alarming Solutions Statewide Health Integration
(U2012/15105)

SENIOR DEPUTY PRESIDENT DRAKE

SYDNEY, 27 MAY 2013

Termination of employment.

[1] Mr Hardman's application pursuant to section 394 of the Fair Work Act 2009 (the Act) was lodged on 13 November 2012.

[2] The respondent to Mr Hardman's application, Statewide Communications Australia Proprietary Limited, trading as Alarming Solutions Statewide Health Integration (Statewide), objected to Mr Hardman’s application on the basis that he was, at the date of the termination of his employment, earning above the high income threshold of $123,300.

[3] At the conclusion of the first hearing date of 15 February 2013 I allowed the parties to adjourn to give them an opportunity to research their positions. I referred the parties, particularly Statewide, to a decision of Senior Deputy President Watson in J McDonnell v Qube Ports & Bulk Pty Ltd trading as Qube Ports 1, which contains a detailed analysis of how to calculate the quantum of personal use of a vehicle.I resumed the hearing on 24 April 2013, on which date Mr Curtin, the new Financial Controller of Statewide, appeared with Miss Santos.

[4] Statewide submitted that Mr Hardman was paid a gross annual salary of $128,000, which included a car allowance of $18,000, as State Manager responsible for New South Wales.

[5] Statewide relied on the statement of Mr Milton Russell dated 16 January 2013 2 which had various attachments, one of which was a statement of Mrs Raj, a payroll officer.

[6] Attachment A to Mr Russell’s statement was Mr Hardman's Contract of Employment which states at clause 5 that his base salary per annum was to be $110,000. At page 16 of the same document, under the heading Allowances, there is the following clause regarding a motor vehicle allowance.

“Motor Vehicle Allowance: $18,000 per Annum

The Motor Vehicle allowance is paid to the employee to supply and maintain their own vehicle including any repayments, servicing of vehicle and running expenses including Petrol, Insurances etc. The company is not responsible for any liability of the employee’s motor vehicle and if any time the contract is terminated the Motor Vehicle remains the property of the person here within deemed as the ‘employee’”.

[7] The superannuation contribution paid by Statewide on behalf of Mr Hardman was paid on the basis of a total salary package of $128,000. Income tax was also deducted on the basis of a total salary package of $128,000. Statewide contends that if Mr Hardman's submissions are accepted then it has paid Mr Hardman's superannuation contribution and deducted income tax on an incorrect basis.

[8] Mr Hardman acknowledged that he received a car allowance. His submission was as follows:

“1. Statewide Communications at the time of my employment supplied its employees with either a car allowance or fully serviced car if their duties required so.

2. My employment required me to travel extensive distances in carrying out my duties.

3. As stated in my employment agreement (Attached) and the respondents outline of submission paragraph 4 section 1, I received a motor vehicle allowance of $18,000 pa.

4. The motor vehicle allowance was in leui(sic) of a fully serviced vehicle.

5. That 100% of the Vehicle allowance (plus) was used for business purposes and not personal.

6. That 92% of the actual car usage can be attributed for business use (As shown on the attached extract from my Tax return submission for the 2011/2012 financial year).

7. A car allowance isn’t mentioned in the documentation on the FWA website at the following link as something that is taken into account under the Threshod.(sic)

IN CONCLUSION

I ask that as the vehicle allowance being used for business purposes isn’t viewed as taxable income by the ATO, that FWA view the vehicle allowance in a similar light and not be viewed as earnings but an allowance to cover an expense.”

[9] In Mr Hardman's Taxation Return for the financial year 2011/2012, he claimed 92% business usage and 8% personal usage of his vehicle. Eight percent of the value of the motor vehicle allowance paid by Statewide is $1,440. If Mr Hardman's estimate of the personal use of his vehicle is accurate, and the amount is included in his base salary, his earnings would be below the high income threshold.

[10] On the first hearing date Ms Santos for Statewide asked Mr Hardman if he was aware that Statewide had been deducting tax from his income on the basis of a total income of $128,000. Mr Hardman's reply was that he had lodged a Tax Withholding Form and that he was not taxed on his car allowance.

[11] Mr Curtin submitted that Statewide had also paid a proportion of Mr Hardman’s parking fees and that these should be considered as part of his gross salary. Mr Hardman responded that those paid by Statewide were those charged on the credit card. Those paid for in cash by him amounted to $415.

[12] I am satisfied that Statewide deducted income tax and paid superannuation contributions on an inaccurate understanding of Mr Hardman’s gross salary. Statewide’s mistake of fact concerning Mr Hardman's salary package cannot convert a payment that would otherwise not be part of an amount calculated as earnings for the high income threshold into a payment which is part of that figure.

[13] I am satisfied that only 8% of the motor vehicle allowance paid by Statewide was part of Mr Hardman’s remuneration for the purpose of calculating whether or not he received an income above the high income threshold. I am satisfied that Mr Hardman was not paid in excess of the high income threshold.

[14] Statewide's jurisdictional rejection is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr J Hardman on his own behalf.

Ms M Santos for Statewide Communications Australia Pty Ltd T/A Alarming Solutions Statewide Health Integration

Hearing details:

2013

Sydney

April 24

1 [PR533670] 6 February 2013

2 Exhibit Statewide 1

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