Mr Stephen Steimetz v Delemere Holdings Pty Ltd ATF DTMT Unit Trust T/A D.T.M.T Construction Company

[2015] FWC 5

[2015] FWC 5

FAIR WORK COMMISSION

DECISION

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

Mr Stephen Steimetz
v
Delemere Holdings Pty Ltd ATF DTMT Unit Trust T/A D.T.M.T. Construction Company
(U2014/12973)

COMMISSIONER CLOGHAN PERTH, 5 JANUARY 2015

Application for relief from unfair dismissal - jurisdictional objection - high income threshold - enterprise agreement does not apply - modern award does not cover.

[1] On 2 October 2014, Mr Stephen Steimetz (Mr Steimetz or Applicant) made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from his former employer, Delemere Holdings Pty Ltd ATF DTMT Unit Trust T/A D.T.M.T. Construction Company (Employer).

[2] The application was made pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[3] In response to the application, the Employer asserts that the Applicant is not protected from unfair dismissal provisions of the FW Act because:

• his annual rate of earnings is more than the high income threshold of $133,000;



• an enterprise agreement does not apply to Mr Steimetz’s employment; and



• a modern award does not cover Mr Steimetz’s employment.

[4] The Applicant concedes that an enterprise agreement does not apply to his employment and a modern award does not cover his employment. Consequently, one jurisdictional question has to be determined by the Commission and that is:

• was the sum of the Applicant’s annual rate of earnings, and such other amounts (if any) less than the high income threshold of $133 000?

[5] This is my decision and reasons for decision relating to the question for determination.

RELEVANT LEGISLATIVE FRAMEWORK

[6] Mr Steimetz is protected from unfair dismissal if he meets the provisions of s.382 of the FW Act 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.” (my emphasis)

[7] Section 332 of the FW Act defines earnings 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) ...”

RELEVANT BACKGROUND

[8] Mr Steimetz commenced employment with the Employer on 22 November 2011. At the time of his termination of employment, Mr Steimetz was employed as a HSE Advisor.

[9] On 6 February 2014, the Applicant received and signed a contract of employment which reads as follows:

“18.0 Annual Leave

18.1 Annual leave shall be in accordance with the NES and may be taken at times agreed between an employee and the company.

18.2 Full time employees shall accrue four (4) weeks paid leave each 12 months of service.

18.3 ...

18.4 Unless otherwise agreed, annual leave will be payable at the Base Rate prescribed in the employee’s Special Conditions Schedule.

19.0 Christmas Shutdown

19.1 The company may, at its discretion, shut down all operations through the Christmas holiday period. The duration of the shut down shall be at the Company’s discretion depending on operational requirements. During this period employees will be paid annual leave provided they have accrued an amount of annual leave sufficient to cover the shut down period.

19.2 ...
19.3 ...”

[10] At the time of Mr Steimetz’s dismissal, his remuneration was as follows:

“Base Salary $100 910
Base Superannuation $9 426
Site Uplift $35 668
Site Superannuation $3 299

Total site base package $150 303”

[11] The Applicant concedes that his annual rate of earnings, exclusive of superannuation, was $137 578. However, he has provided copies of 26 fortnightly pay slips from 21 September 2013 to 6 September 2014 which indicate that he earned during this period, exclusive of superannuation, $131 230.

[12] Mr Steimetz’s ordinary fortnightly earnings are $5 291.57. On an annual basis 26 x $5 291.57 = $137 580 (rounded).

[13] Mr Steimetz’s gross pay for each fortnightly pay period was as follows:

• 08 September 2013 to 21 September 2013 = $5 291.47



• 22 September 2013 to 05 October 2013 = $5 291.47



• 06 October 2013 to 19 October 2013 = $5 291.47



• 20 October 2013 to 02 November 2013 = $5 291.46



• 03 November 2013 to 16 November 2013 = $5 291.47



• 17 November 2013 to 30 November 2013 = $5 085.69



• 01 December 2013 to 14 December 2013 = $5 291.47



• 15 December 2013 to 28 December 2013 = $4 331.55



• 29 December 2013 to 11 January 2014 = $3 939.44



• 12 January 2014 to 25 January 2014 = $5 291.47



• 26 January 2014 to 08 February 2014 = $5 291.66



• 09 February 2014 to 22 February 2014 = $5 291.47



• 23 February 2014 to 08 March 2014 = $4 762.58



• 09 March 2014 to 22 March 2014 = $5 683.47



• 23 March 2014 to 05 April 2014 = $5 291.66



• 06 April 2014 to 19 April 2014 = $5 291.47



• 20 April 2014 to 03 May 2014 = $5 291.55



• 04 May 2014 to 17 May 2014 = $5 291.66



• 18 May 2014 to 31 May 2014 = $5 291.47



• 01 June 2014 to 14 June 2014 = $5 291.66



• 15 June 2014 to 28 June 2014 = $5 291.51



• 29 June 2014 to 12 July 2014 = $3 939.55



• 13 July 2014 to 26 July 2014 = $3 920.00



• 27 July 2014 to 09 August 2014 = $3 919.89



• 10 August 2014 to 23 August 2014 = $5 703.05



• 24 August 2014 to 06 September 2014 = $5 291.57

[14] Mr Steimetz’s contract of employment provides for four (4) weeks annual leave. In addition, the Employer, at its discretion, may shut down all operations during the “Christmas holiday period”. During this period, employees are deemed, if rostered, on annual leave and paid accordingly.

[15] The relevance of annual leave and the Christmas shut down period is important as it is the period in which the Applicant describes as being paid the “Perth rate instead of normal rate (FIFO)”.

[16] The difference between Perth rates and FIFO rates is best illustrated in the pay period ending 26 July 2014. During this period, Mr Steimetz took two (2) weeks annual leave and his gross rate of pay was $3 920 as he did not receive what is described as the regular fortnightly “Site Uplift Allowance” of $1 371.85.

[17] For the period between 21 September 2013 and 6 September 2014, Mr Steimetz took 32 days (8 hours) annual leave and an additional 12 hours annual leave in the pay period ending 30 November 2013. Consequently, Mr Steimetz’s documentary evidence demonstrates that for that period he has selected, he took almost double the amount of annual leave provided for in his contract of employment. In addition, the validity of the comparative period is further distorted by three (3) days of what is described as “Other Unpaid Leave” which, as its name suggests, attracts no payment of wages or “Site Uplift Allowance”.

[18] I consider that the appropriate sum of Mr Steimetz’s annual rate of earnings to be as follows:

• 24 fortnights of base salary ($3 919.62) plus 24 fortnights of his Site Uplift Allowance ($1 371.85) = $126 995.10; and



• 2 fortnights of base salary ($3 919.62) only during annual leave = $7 839.23



• Total = $134 834.33

[19] In my view, the Parliament intended the sum of a person’s annual rate of earnings to be what an employee would normally be expected to earn had they not been dismissed. The “annual rate of earnings” is intended to be “neutral” and not affected by the “swings and roundabouts” of individual employment circumstances.

[20] The condition of neutrality, unaffected by the vagaries of employment circumstances, is best illustrated by the provision that “earnings” in s.332(2) of the FW Act, does not include the unpredictable nature of overtime (except where guaranteed), commissions, bonuses or other types of incentive/irregular payments.

[21] Annual rates of earnings is the identification of what could normally be expected by an employee and not a self identified period inclusive of the randomness of individual circumstances such as abnormal annual leave, leave without pay or other such circumstances which may distort annual earnings.

[22] I consider my finding as to the appropriateness of the above methodology, supported by Mr Steimetz’s gross payment of $139 984 for the 2013-14 financial year as recorded in his PAYG Payment Summary. In making this statement, I should note that I have not been supplied with any details of the summary amounts.

CONCLUSION

[23] For the above reasons, I find that Mr Steimetz has not met the provisions of s.382(b) of the FW Act to be protected from unfair dismissal. Accordingly, the Commission has no jurisdiction to deal with the application. An order to this effect is made and issued jointly with this Decision.

COMMISSIONER

Final written submissions:

Applicant: 2 December 2014.

Employer: 16 December 2014.

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<Price code C, PR559619>