Paul Davis v Pt Western Plains Pty Limited T/A Western Plains Automotive

[2016] FWC 492

[2016] FWC 492 [Note: An appeal pursuant to s.604 (C2016/2597) was lodged against this decision.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Paul Davis
v
PT Western Plains Pty Limited T/A Western Plains Automotive
(U2015/11495)

COMMISSIONER JOHNS MELBOURNE, 22 JANUARY 2016

Application for Relief of Unfair Dismissal – high income threshold – value of motor vehicles provided to the applicant and his wife.

Introduction

[1] On 1 September 2015 Paul Davis (applicant) made an application pursuant to section 394 of the Fair Work Act 2009 (FW Act) for a remedy in respect of his dismissal by PT Western Plains Pty Ltd (trading as Western Plains Automotive) (Employer/respondent).
[2] On 15 September 2015 the Employer filed a response to the unfair dismissal application in which it objected to the Fair Work Commission (Commission) exercising jurisdiction in relation to the matter on the basis that, the respondent asserted, the applicant earned more than the high income threshold (currently $136,700).
[3] The high income threshold operates as a limit to an employee’s eligibility to be protected from unfair dismissal under the terms of the FW Act. If an employee is not covered by modern award, or if an enterprise agreement does not apply they must have an annual rate of earnings of less than the high income threshold.
[4] Consequently the matter was listed for a jurisdictional hearing to determine if the applicant earned more than the high income threshold.
[5] The jurisdictional hearing was conducted on 4 December 2015. At the jurisdictional hearing:

a) the applicant:

i. was, with permission pursuant to section 596(2(a) of the FW Act, represented by Mr C Kingston, a solicitor from Kingston Swift; and
ii. gave evidence on his own behalf.

b) the respondent:

i. was, with permission pursuant to section 596(2(a) of the FW Act, represented by Mr C Nicholls, a solicitor with McIntosh McPhillamy & Co; and
ii. called evidence from its principle, Mr Greg Brimble.

c) both the applicant and Mr Brimble were cross-examined.

[6] Following the jurisdictional hearing the parties were provided with an opportunity to file Closing Submissions. The respondent did so on 14 December 2015. The applicant did so on 21 December 2015.
[7] In coming to this decision, the Commission, as presently constituted, has had regard to all of the evidence received and all of the submissions made on behalf of the parties.

Background

[8] The following matters were either agreed or not otherwise contested in the matter:

a) The applicant commenced employment with the respondent on 21 November 2006.

b) The applicant was employed on a full-time basis as the Administration Manager-Accountant (Financial Controller).

c) The applicant’s employment was terminated on 11 August 2015. The reason advanced by the respondent to justify the termination of the applicant’s employment is not relevant for present purposes.

d) At the time of the dismissal the applicant’s salary package comprised the following:

Component	Amount
i. Salary	$115,000
ii. Annual fuel allowance	$3,000
iii. Annual contribution to mobile phone	$1,200
iv. Two fully maintained motor vehicles		Estimated 2 x $20,000

e) The applicant does not dispute that his annual rate of earnings was at least $119,200.

f) No log book was kept in relation to the use of the vehicles.

[9] The applicant submits he was unfairly dismissed and seeks an Order that he be compensated.

Protection from Unfair Dismissal

[10] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.
[11] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“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.

[12] There is no dispute, and I am satisfied, the applicant has completed the minimum employment period.
[13] Further, there is no dispute, and I am satisfied, that the applicant is not covered by a modern award or enterprise agreement.
[14] The issue to be determined is the sum of the applicant’s annual rate of earnings and whether it is less than the high income threshold.
[15] As stated above the applicant does not dispute that his annual rate of earnings was at least $119,200.
[16] The dispute can be reduced to a consideration of the value of the motor vehicles that were provided to the applicant. If the value of the cars is $17,500 or more, then the applicant earned more than the high income threshold.
[17] Where an employer provides an employee with a fully maintained vehicle the value of the private use of the vehicle can be included in the annual rate of earnings. 1 Use for business purposes is excluded and only the proportion of private usage can be counted as remuneration. Where there is no agreed monetary value of the benefit of the private use of a motor vehicle, the Commission will generally apply a formula first established in Kunbarllanjnja Community Government Council v Fewings.2

The applicant submitted that:

a) “the vehicle I used (which was a company demonstrator) was returned to the vehicle pool each day during working hours for use by other staff performing company business. The vehicle carried the company logo;
b) the vehicle used by my wife (which was also a company demonstrator) was returned to the company when it had travelled about 2000 km and another vehicle was provided to me;
c) the vehicles are not generally available for holiday use outside Dubbo or for we can travel outside Dubbo.” 3

[18] The applicant assessed the private use of the vehicles at $8,749 4; thus bringing his annual remuneration to $127,9495 (i.e. less than the high income threshold).

The applicant’s calculations were included in Annexure “1” to Exhibit “A1” (Annexure 1 to this decision).

The respondent submitted that the vehicles provided to the applicant and his wife were for “full private use”.

[19] In response to the claims made by the applicant, Mr Brimble replied as follows:

a) “Mr Davis did not always return is vehicle to the vehicle pool each day during working hours for use by other staff performing company business. He used to park his vehicle on the street and not on the yard. However, on occasions, I am aware that other staff used Mr Davis’ vehicle during the day whilst he was at work. The vehicle supplied to Mr Davis did carry the business logo.”
b) “I deny the vehicles supplied to Mr Davis and his wife, were not generally available for holiday use outside Dubbo or we can travel outside Dubbo. No restrictions or limitations were placed on the private use of the vehicles by the respondent, and Mr Davis and his wife had both vehicles for the extensive use after hours, on weekends and we Mr Davis had holidays. Mr Davis and his wife did not own their own vehicle.” 6

[20] Mr Brimble rejected the estimates of value given by Mr Davis in Annexure 1 and submitted an alternate calculation totalling $20,645.04 7 (Annexure 2 to this decision); thus bringing his annual remuneration to $139,845.04 (i.e. more than the high income threshold).

Both the applicant and Mr Brimble gave evidence about a cross-examined in respect of the amount of private use to be attributed to the vehicle provided to the applicant and his wife.

[21] Mr Brimble presented as an honest witness who was willing to make appropriate concessions that were adverse to the respondent’s case. For example, he conceded that he used the applicant’s vehicle from time to time and that other staff did so during business hours. 8
[22] Mr Brimble gave evidence that, while the applicant had the use of a new demonstrator vehicle on occasions “he would ask for a different type of vehicle if he was going away on holiday somewhere or if he specifically require particular accessories bull bar or a towbar on the vehicle if he was going camping with the family and that type of thing.” 9

The applicant was also cross-examined about his private use of the vehicle provided to him and his wife. The applicant conceded that neither he nor his wife owned a vehicle 10 and that any vehicle they used from time to time was provided by the respondent.11 The applicant also conceded an answer to a question from me, that when he travelled outside of Dubbo, although he returned the demonstrator vehicle that had been provided to him, he was then provided with another car by his employer.12

Having regard to the evidence in the proceeding I make the following findings of fact:

a) at all times throughout the period of the applicant’s employment he was provided with two motor vehicles, one for himself one his wife;
b) the motor vehicles formed part of his salary package;
c) the motor vehicles were fully maintained;
d) the motor vehicles were always current model demonstrators and were all late-model second-hand vehicles;
e) the motor vehicles were available and used by the applicant’s wife with private use and no limitations placed on the private use of the applicant (safe that he was not allowed to take demonstrators out of Dubbo and, therefore, when he left Dubbo he was provided with a replacement vehicle); and
f) because neither the applicant nor his wife owned a vehicle, at all times during the of employment, any vehicle use in that period was provided by the respondent.

[23] Noting that the applicant did not keep a log book the use of either the car provided to him, or his wife, or the cars provided to them as replacement cars when they were going outside Dubbo, the task for the Commission in assessing the value of the full private use of all of the vehicles used by the applicant and his wife during the period of employment is rendered more difficult.
[24] However, for present purposes, because of the concessions made by the applicant, his calculation must be rejected. It takes no account of the fact that he and his wife were provided with replacement cars when they needed to drive outside Dubbo. The value of those replacement cars are properly to be considered a part of the applicant’s remuneration.
[25] Having regard to the evidence I am satisfied that in applying the National Remuneration Centre formula the correct usage factor to be applied to the vehicles provided to the applicant and his wife (and any replacement vehicles provided to them when they travelled outside Dubbo) is Level 1: Full Private Use.
[26] Consequently, I prefer, and adopt the calculations provide by the respondent (Annexure 2). I find as a matter of fact that the applicant’s annual remuneration was $139,845.04 (i.e. more than the high income threshold).
[27] Consequently, I am not satisfied the applicant was protected from unfair dismissal.
[28] In the circumstances where I have found that the applicant was not protected from unfair dismissal because of the value of the vehicles it is unnecessary for me to make any further findings about the factual dispute between the parties about whether a $5000 cash bonus was paid to the applicant.

Conclusion

[29] I am not satisfied that the applicant was protected from unfair dismissal. Consequently, his application for an unfair dismissal remedy is dismissed.
[30] An order will be issued with this decision.

COMMISSIONER

Appearances:

Mr C Kingston for the applicant.

Mr C Nicholls for the respondent.

Hearing Details:

Sydney,

4 December 2015.

Final Submissions:

Respondent, 14 December 2015.
Applicant, 21 December 2015.

Annexure 1

Annexure 2

 1   Rofin Australia Pty Ltd v Newton (1997) 78 IR 78, 82; citing Condon v G James Extusion Company (1997) 74 IR 283, 288.

 2   Unreported, AIRCFB, Ross VP (as he then was), Watson SDP, Bacon C, 7 May 1998.

 3   Exhibit “A1”, para 6.

 4   Exhibit “A1”, para 18.

 5   Exhibit “A1”, para 23.

 6   Exhibit “R1”, paras 11 and 12.

 7   Exhibit “R1”, para 21.

 8   Transcript PN70.

 9   Transcript PN71.

 10   Transcript PN190.

 11   Transcript PN191-192 and PN211-215.

 12   Transcript PN218-220.

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