Mr Shane Bond v Oz Minerals Carrapateena Pty Ltd
[2024] FWC 1470
•6 JUNE 2024
| [2024] FWC 1470 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Shane Bond
v
OZ Minerals Carrapateena Pty Ltd
(U2024/3371)
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 6 JUNE 2024 |
Application for an unfair dismissal remedy – jurisdiction – mining industry – senior emergency services officer – whether protected from unfair dismissal – whether covered by a modern award – not award covered – earnings above high income threshold – no jurisdiction – application dismissed
On 24 March 2024 Shane Bond (Mr Bond or the applicant) applied to the Commission under s 394 of the Fair Work Act 2009 (Cth) (FW Act) for an unfair dismissal remedy concerning a dismissal on 21 March 2024. The respondent is Oz Minerals Carrapateena Pty Ltd (Oz Minerals or the respondent).
The application is opposed by Oz Minerals which raises a preliminary objection. It says that Mr Bond is not protected from unfair dismissal because his earnings exceeded the high income threshold.
In response Mr Bond submits (at a late stage in proceedings) that his employment was covered by a modern award and consequently it matters not if his earnings exceeded the high income threshold. Alternatively, Mr Bond submits that his earnings did not exceed the high income threshold.
Mr Bond’s application was not conciliated as the respondent first sought determination of the jurisdictional issue.
I issued directions on 26 April 2024.
Materials were filed by Mr Bond and Oz Minerals (including final written submissions).
I heard the matter by video conference on 23 May 2024. Both parties were self-represented.
I heard evidence from two persons:
Mr Shand Bond (applicant); and
Ms Jacquie Dealtry, Principal Employee Relations (BHP).
Both Mr Bond and Ms Dealtry were conscientious witnesses. Facts relevant to the jurisdictional issue are generally agreed.
Facts
Oz Minerals operates globally in the mining industry, including the mining of copper concentrate at Carrapateena in northern South Australia.
In April 2023 Oz Minerals was purchased by BHP.
Mr Bond, a resident of Adelaide, had been employed by Oz Minerals and its subsidiaries since April 2010. From 1 January 2020 he had worked at the Carrapateena mine.
Mr Bond was Senior Emergency Services Officer and Paramedic for the Carrapateena mine. It was a full time position.
Mr Bond’s employment at Carrapateena was established by a new contract entered with Oz Minerals on 24 December 2019 (employment contract).[1]
The contract was a standard form contract used by Oz Minerals with relevant schedules (Schedule 1 ‘Employment Details’ and Schedule 2 ‘Remuneration Statement’) tailored to the engagement of Mr Bond.
The contract provided total fixed remuneration comprising an annual base salary and superannuation contributions (at the statutory level).
The base annual salary was paid monthly.
The contract also provided a site allowance and for eligibility for the company’s short term incentive plan (also referred to as a bonus) and, separately, a performance rights plan.
The contract (Schedule1) provided for an 8-day on and 6-day off roster (12 hours per day) and reimbursement of travel expenses.
The contract designated Mr Bond as a ‘job grade 10’ and ‘job band B’ which were internal Oz Minerals designations of seniority and pay levels.
Being a standard form contract, it stated that “if your employment’ is covered by the Clerks Private Sector Award or the Mining Industry Award or the Professional Employees Award then “your annual base salary is in satisfaction of the provisions of that award”.[2]
Neither Schedule 1 nor Schedule 2 made specific reference to Mr Bond being covered by an award or enterprise agreement.
Oz Minerals conducted annual remuneration reviews. These were whole of company and advised to employees (including Mr Bond) in or about February of each year.
Upon commencing in 2020 as Senior Emergency Services Officer and Paramedic for the Carrapateena mine Mr Bond’s remuneration was:
Total fixed remuneration ($145,000) comprising:
§Base salary $132,420;
§Superannuation $12,580 (9.5%);
Plus site allowance $10,000 per year;
Plus short term incentive plan 15,950 per year (up to 10.5%);
Plus performance rights plan $14,500 per year (10%).
At the time of the following year’s remuneration review (January 2021) Oz Minerals decided to simplify its remuneration framework. It decided to discontinue the annual short term incentive plan (bonus) and incorporate the value of the short term incentive plan (bonus) and the site allowance into total fixed remuneration, and pay this monthly.[3] For Mr Bond, this meant that his total fixed remuneration increased to a new annual base salary and superannuation (paid monthly) and that he no longer received a separate payment of site allowance or an annual short term incentive bonus. The only additional payment beyond the new total fixed remuneration was the performance rights plan.
Subsequent remuneration reviews in 2022 and 2023 retained this revised structure and again increased Mr Bond’s total fixed remuneration. A small further increase (in addition to the superannuation increase) occurred to base salary in July 2023 consequent on the superannuation guarantee increasing to 11%.[4]
Following the 2023 remuneration review and at the time of dismissal, Mr Bond received:
Total fixed remuneration ($187,796) comprising:
§Annual base salary $169,186;
§Superannuation $18,610 (11%); and
Performance rights plan.
No separate payment was made for a site allowance or the discontinued short term incentive payment.
Mr Bond was dismissed for cause on 21 March 2024.
Mr Bond filed these proceedings on 24 March 2024.
Submissions
Oz Minerals
Oz Minerals submit that Mr Bond is not protected from unfair dismissal because his earnings exceeded the high income threshold.
Oz Minerals submit that Mr Bond’s employment was not covered by a modern award or enterprise agreement.
Oz Minerals submit that Mr Bond is therefore not protected from unfair dismissal under s 382 of the FW Act and ineligible to make this claim.
Mr Bond
Mr Bond submits that his employment was covered by a modern award and consequently it matters not if his earnings exceeded the high income threshold.
This submission was first advanced by Mr Bond two days prior to the hearing. It was raised once Oz Minerals provided details of the evidentiary basis on which it contended that Mr Bond’s earnings exceed the high income threshold. The submission was advanced once Mr Bond received legal advice. Albeit raised at a late juncture, it was fully canvassed at the hearing with allowance made for final written submissions on the award coverage question.
Mr Bond first submitted that he was covered by the Mining Industry Award 2020[5]. Shortly prior to the hearing and upon receiving the respondent’s submissions on the Mining Award, he submitted that he was employed by either the Firefighting Industry Award 2020, the Health Professionals and Support Services Award or the Ambulance and Patient Transport Industry Award 2020. In his final written submission Mr Bond contended that he “was most appropriately covered” by the Firefighting Industry Award.
I deal with these submissions by Mr Bond below.
Alternatively, Mr Bond submits that his earnings did not exceed the high income threshold. He does so for two reasons:
the value of the site allowance should not be included in “earnings” for the purpose of the threshold; and
the historic value of the short term incentive payment should not be included in “earnings” for the purpose of the threshold.
I deal with these issues below.
Consideration
The Commission only has jurisdiction to hear and determine an unfair dismissal application if the employee is a person “protected from unfair dismissal”. Section 382(b) of the FW Act provides:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissalat 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.”
Was Mr Bond covered by an award?
It is not contended by Mr Bond that an enterprise agreement applied. Rather, he contends that he was covered by one of either:
the Mining Industry Award 2020;
the Firefighting Industry Award 2020;
the Health Professionals and Support Services Award 2020; or
the Ambulance and Patient Transport Industry Award 2020.
During the course of his employment, Mr Bond did not hold the view that he was covered by an award and that neither Oz Minerals (nor its successor BHP) held out that he was so covered.
Be that as it may, that neither an employer nor employee operated on the basis that the employment relationship, whilst it existed, was not award covered does not make it so. Whether a person is or was award covered is a question of fact based on the application of the coverage provisions of a relevant award to employment that exists or existed. It matters not in answering this question that such a contention is not made or assessed until after the employment has ceased.
A person is covered by an award if the principal or primary purpose of their employment is to perform work within the stated coverage of the award and if in fact they perform that work.[6]
It is necessary to make some further findings about the work for which Mr Bond was employed and undertook.
Mr Bond was Senior Emergency Services Officer and Paramedic at the Carrapateena mine. He was the senior mine officer responsible for all matters associated with emergency services. This included co-ordinating emergency training and readiness, emergency drills, emergency events (including evacuations) and liaising with and assessing the nature and level of external emergency and support services needed to support an emergency event, including rescue and government agencies. Mr Bond was responsible for performing these duties consistent with Oz Minerals (now BHP) emergency policies and protocols and providing inputs into the application of those policies based on his experience at the mine site.
Although Mr Bond’s duties were extensive, no single position description could be located by Mr Bond or Oz Minerals. A position description produced by Oz Minerals for the position of ‘Senior Emergency Services Officer’ at a related mine (Prominent Hill) is in evidence but as it did not specifically relate to Mr Bond’s position at Carrapateena, I refer to it as guidance only in assessing Mr Bond’s direct evidence, which I prefer.
Mr Bond reported to BHP’s Senior Adviser – Health, Emergency and Registered Nurse.
I now turn to consider whether Mr Bond was covered by a modern award. Mr Bond presents one of four award options.
Mining Award: Mr Bond submitted that he was covered by the Mining Award but at the hearing did not press this submission. Oz Minerals submit that Mr Bond was not covered by the Mining Award.
Clause 4 of the Mining Award provides:
“This industry award covers employers throughout Australia in the mining industry and their employees in the classifications listed in clause 15 – Minimum rates and classifications to the exclusion of any other modern award.”
There is no doubt that Oz Minerals operated in the mining industry as defined by the award. However, I do not find that Mr Bond was employed in one of the classification groups set out in Schedule A to the award. There are five classification groups. The one relied upon by Mr Bond is “Mining Industry Service Employees”. This classification is defined in Schedule A2.1 as:
“Mining Industry Services Employees
A Mining Industry Services Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to:
· labouring;
· assisting work crews and tradespersons;
· operation of plant and equipment (including mobile plant);
· maintenance work on plant, equipment or buildings;
· performance of general plant, stores, workshop, warehouse, packaging, and marine interface tasks, resource assessment (including prospecting, drilling and exploration);
· preparing and cleaning equipment and materials; and
· on site catering cleaning and security.
This classification group also encompasses work performed by Laboratory Assistants, who do not hold tertiary qualifications.”
The emergency services work, the paramedic work and the qualifications of Mr Bond do not fall within any of these descriptors, nor were one or other of those descriptors the principal purpose of his employment, nor designated by Oz Minerals as such.
I do not find that Mr Bond was covered by the Mining Award 2020.
Firefighting Industry Award 2020: Mr Bond submits that he was covered by the Firefighting Industry Award 2020 “due to the wide variety of work performed by the Senior Emergency Services Officer / Paramedic” and “due to my wide range of work taskings”.[7]
Clause 4.1 of the award provides:
“This industry award covers employers throughout Australia in the firefighting industry and their employees in the classifications listed in clause 10—Classificationsto the exclusion of any other modern award.”
The “firefighting industry” is defined in cl 4.2 as:
(a) the suppressing and extinguishing of fires.
(b) the provision of rescue services (other than by police, ambulance, a State Emergency Service, or the military) at the scene of accidents, explosions, or other emergencies.
(c) the handling of spillages of toxic or hazardous materials in emergency situations (other than in a marine environment or by an employer in relation to its own property, premises, or products); and
(d) the prevention of fires and the sale, supply, installation, maintenance, repair and/or inspection of fire protection equipment other than fixed or semi-fixed fire protection systems by an employer otherwise in the firefighting industry by virtue of clause 4.2(a).”
It is clear that the Firefighting Industry Award 2020 is an industry award, not an occupational award. Clause 4.1 states as much.
Whether an employer is ‘in’ a particular industry for modern award purposes is a question of fact to be determined by the ‘substantial character’ of the employer.[8]
Oz Minerals does not have the substantial character of being a business in the firefighting industry. Its substantial character is as a mining company operating in the mining industry. The character of Oz Minerals is not altered simply because a small number of employees (such as Mr Bond) may not perform mining work.[9]
Mr Bond relies on cl 4.4 of the Firefighting Industry Award which provides “where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.” This provision is of no assistance to Mr Bond. It only operates if Oz Minerals was covered by the Firefighting Industry Award 2020, which it was not.
I do not find that Mr Bond was covered by the Firefighting Industry Award 2020.
Ambulance and Patient Transport Industry Award 2020: Mr Bond submits that he may have been covered by the Ambulance and Patient Transport Industry Award 2020.
Clause 4.1 of the award provides:
“This industry award covers any employers throughout Australia in theambulance and patient transport industry and their employees in the classifications listed in Schedule A- Classification Definitionsto the exclusion of any other modern award.”
The “ambulance and patient transport industry” is defined in cl 4.2 to mean “the provision of ambulance and patient transport services and ambulance and patient transport education and training”.
It is clear that the Ambulance and Patient Transport Industry Award 2020 is also an industry award.
As noted, Oz Minerals operates in the mining industry. Its principal character is not in the industry of ambulance and patient transport.
As the Ambulance and Patient Transport Industry Award 2020 does not apply, Mr Bond was not covered by that award.
Health Professionals and Support Services Award 2020: Mr Bond submits that he may have been covered by the Health Professionals and Support Services Award 2020.
This award is both an industry and occupational award. Clause 4.1 provides:
“This industry and occupational award covers:
(a) employers throughout Australia in the health industry and their employees in the classifications listed in Schedule A - Classification Definitions to the exclusion of any other modern award; and
(b) employers engaging a health professional employee in the classifications listed in Schedule A - Classification Definitions.”
Clause 4.2 provides that the “health industry” means employers “whose business and/or activity is in the delivery of health care, medical services and dental services.”
The principal character of Oz Minerals is mining natural resources, not as a health industry employer. The industry test is not met.
Was Mr Bond “a health professional employee” within the meaning of cl 4.1(b)?
The classifications in Schedule A to the award refer to gradings of “health professionals”. Schedule B provides an indicative list of health professionals for the purposes of the award. No mention is made in those descriptors to an emergency services officer or a paramedic. The principal purpose of Mr Bond’s employment was the co-ordination of site emergency and paramedic services. Mr Bond’s principal purpose of employment was not as a “health professional” as defined by the award.
Mr Bond was not covered by the Health Professionals and Support Services Award 2020.
For each of the foregoing reasons, I do not find that Mr Bond was covered by a modern award.
Were Mr Bond’s earnings above the high income threshold?
As Mr Bond’s employment was not covered by an award or enterprise agreement, he is eligible to make an unfair dismissal claim only if his annual rate of earnings was below the high income threshold at the date of dismissal.
Was the sum of Mr Bond’s annual rate of earnings less than the applicable high income threshold provided by s 333 of the FW Act and regulations made under the Act?
The applicable statutory rate at the time of dismissal was $167,500.
Following the 2021 remuneration review by Oz Minerals, Mr Bond was paid a set annual gross amount of total fixed remuneration in the sum of $174,575 per year.[10] Of this 9.5% was required to be paid into superannuation. The balance ($159,479) was paid monthly in twelve equal instalments. Prior to this, Mr Bond had received a total fixed remuneration (comprising base rate plus superannuation) plus a site allowance and a short term incentive payment. From 2021, these elements were rolled into the one lump sum of total fixed remuneration.
In 2022, and again in 2023, the total fixed remuneration payable to Mr Bond was increased in annual remuneration reviews (and in July 2023 by the offset increase). The statutory rate of superannuation also increased.
As a consequence, I find that as at the date of dismissal the total fixed remuneration payable to Mr Bond was $187,796 per year. This sum was comprised of a base salary of $169,186 plus 11% superannuation ($18,610). No separate allowance was made for a site allowance or the short term incentive payment.
Mr Bond does not dispute that the sum of $169,186 was received in monthly instalments at the time of dismissal.
Was this sum Mr Bond’s annual rate of “earnings” at the time of dismissal within the meaning of s 382(b)(iii)?
Section 332 of the FW Act relevantly provides:
“332 Earnings
(1)An employee's earningsinclude:
(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 earningsdo 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).”
Under s 332(2), earnings do not include payments that cannot be determined in advance.[11]
For two reasons I find that both the incorporated value of the site allowance and the value of the short term incentive payment were “earnings” and required to be included for the purpose of assessing whether Mr Bond’s earnings exceeded the high income threshold at the time of dismissal.
Firstly, these two elements were no longer being disaggregated and paid individually. Following the 2021 remuneration review Oz Minerals implemented a singular lump sum remuneration scheme that incorporated the then value of both the site allowance and the value of the short term incentive payment into an annual total fixed remuneration. This continued throughout 2022, 2023 and into 2024. At the time of dismissal this combined sum was being paid to Mr Bond monthly. That sum was $169,186 per year. It was “wages” within the meaning of s 333(1)(a) and thus “earnings”.
Secondly, even if the incorporated values of these items were to be isolated from the annual earnings (which I do not consider appropriate, given the changed remuneration arrangements after 2021), both the site allowance and the short term incentive payment were not “unable to be determined in advance” within the meaning of s 333(2)(a).
In relation to the site allowance, Mr Bond submits that its value ($10,000) should be deducted from the amount of $169,186. I do not agree. It is “earnings” and cannot be deducted. The uncontroverted evidence was that for so long as Mr Bond was engaged to work at the Carrapateena site, which had been the entirety of his employment since 2020, he was required to be paid and receive the site allowance specified in his contract. The contract stated:[12]
“Whilst you are based at Carrapateena and work the roster pattern specified above, you will be paid a “Site Allowance” on a monthly basis. The annual Site Allowance is specified in Schedule 2 and is paid in addition to your TFR. The allowance is inclusive of superannuation and is taxable at the applicable rate. Oz Minerals retains discretion to alter/remove the site Allowance if your work location changes.”
I find that Oz Minerals had no discretion to not pay the site allowance for so long as Mr Bond worked at the site. A discretion only existed if Mr Bond’s work location changed, which it did not.
Further, the value of the site allowance was known in advance. The contract stated that it was $10,000 per year.[13]
This sum was paid to Mr Bond. It was, from 2021, paid inside the annual remuneration and paid monthly. At the date of termination, $10,000 of the annual remuneration of $169,186 (after deducting superannuation) represented the value of the site allowance.
In relation to the short term incentive payment, until 2021 Oz Minerals operated two incentive systems as part of remuneration packages: a short term incentive plan (up to 10.5%), and a performance rights plan (up to 10%). The short term incentive plan was also referred to as a “bonus”.
The contract provided that Mr Bond was “eligible” for the short term incentive plan but that it did:[14]
“not form a part of your employment contract. Oz Minerals may vary, discontinue or replace the STI Plan at any time in its absolute discretion.”
However, the evidence, again uncontested, was that the short term incentive plan was not varied, that Mr Bond remained eligible whilst the scheme existed, that the incentive payment was made each month from the time his employment commenced, and that, from 2021, its value became incorporated in his total fixed remuneration and the scheme was discontinued.
To the extent that the short term incentive was initially a discretionary payment (in the sense that it was able to be withdrawn by the employer), it was no longer a discretionary payment after 2021 once built into the total remuneration package. From the time of that arrangement and by virtue of the subsequent conduct of the parties, Mr Bond’s contract was, in effect, varied to render the value of the discontinued short term incentive as a non-discretionary payment to which he was entitled as a matter of course in his monthly wage.
As such, at the time of dismissal I find that the short term incentive payment was not a discretionary sum but an entitlement as part of “wages” within the meaning of s 333(1)(a).
Should it be necessary, I also find that the value of this sum was able to be determined in advance. Immediately prior to it being built into the wage, the value of the incentive paid to Mr Bond was $15,950 (10.5% of his then total fixed remuneration).[15]
To the extent relevant, this remained its notional value at the time of dismissal.
This finding is in contrast to the position of the performance rights plan. The performance rights plan was a discretionary payment under the contract[16] which, whilst valued at up to 10%, was not built into total fixed remuneration. Rather, the evidence was that it remined payable as a separate sum following the 2021 remuneration review.[17] Vesting arrangements for the performance rights plan were then varied in 2023 upon the acquisition of Oz Minerals by BHP.[18]
Conclusion on high income threshold
I find that Mr Bond’s “earnings”, within the meaning of s 333 of the FW Act, at the date of dismissal was remuneration in the sum of $169,186 per year. This was a non-discretionary sum paid monthly the value of which was known.
I conclude that it matters not that this sum incorporated the historical payment of a site allowance and a discretionary short term incentive payment. The disaggregation of those payments ceased in 2021 and thereafter were incorporated into Mr Bond’s wages.
Given that the statutory high income threshold at the time of dismissal was $167,500 and Mr Bond’s earnings (absent superannuation) were $169,186, I find that Mr Bond’s earnings exceeded the high income threshold.
Conclusion
I have found that Mr Bond was not covered by a modern award or enterprise agreement at the time of dismissal.
I have found that Mr Bond’s earnings at the time of dismissal exceeded the high income threshold.
Accordingly, Mr Bond was not a person protected from unfair dismissal within the meaning of s 382 of the FW Act.
As Mr Bond was not eligible to make the claim, the application is beyond jurisdiction. It must be dismissed. An order giving effect to this decision accompanies its publication.[19]
DEPUTY PRESIDENT
Appearances:
S. Bond, on his own behalf.
J. Dealtry, of and on behalf of Oz Minerals Carrapateena Pty Ltd with S. Stacey assisting.
Hearing details:
2024.
Adelaide (by video)
23 May.
Final written submissions:
Shane Bond: 2 June 2024
Oz Minerals Carrapateena Pty Ltd: 28 May 2024
[1] A2; R1 JD5
[2] Clause 3(e)
[3] R1 JD1 pages 75 to 78 court book
[4] R1 JD4
[5] Mr Bond referred to the Mining Industry Award 2010. At the date of dismissal, the 2010 award had been superseded by the 2020 award
[6] Carpenter v Corona Manufacturing Pty Ltd [2002] 122 IR 387, 388 to 389
[7] Mr Bond Final Written Submission 2 June 2024
[8] Re G.JE Pty Ltd[2013] FWCFB 1705, [18] – [20]
[9] CFMEU v Dyno Nobel Asia Pacific Ltd[2005] AIRC 622, [59]
[10] R1 JD1
[11] See also Foster v CBI Constructors Pty Ltd[2014] FWCFB 1976
[12] A2 Schedule 1
[13] A2 Schedule 2
[14] A2 clause 4
[15] A2 Schedule 2
[16] A2 clause 5
[17] R1 JD2
[18] R1 JD3
[19] PR775723
Printed by authority of the Commonwealth Government Printer
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