Peter Tuffs v Nestle Australia Ltd
[2012] FWA 9387
•1 NOVEMBER 2012
[2012] FWA 9387 |
|
DECISION |
Workplace Relations Act 1996
s.643 - Application for relief re (Unlawful and Harsh, Unjust or Unreasonable) termination of employment
Peter Tuffs
v
Nestle Australia Ltd
(U2012/14159)
COMMISSIONER RYAN | MELBOURNE, 1 NOVEMBER 2012 |
Application for relief re termination under the Workplace Relations Act 1996 - excluded employee.
[1] On 9 October 2012 Mr Tuffs sent to Fair Work Australia an email which comprised a letter and a large amount of supporting documentation. The letter was not in the form of any specific Form contained either in the Fair Work Act 2009 (the FW Act) or the predecessor Workplace Relations Act 1996 (the WR Act). However the letter clearly sought that Fair Work Australia act in relation to the matters raised by Mr Tuffs.
[2] Fair Work Australia Help line staff responded by email to Mr Tuffs on 12 October 2012 indicating to him that if he was intending to lodge a claim he would need to do so using Form R27 under the Workplace Relations Act. The email also noted that if Mr Tuffs did make an application to Fair Work Australia “it would appear to need a substantial extension of time”. Mr Tuffs was advised to seek legal advice in relation to any application.
[3] On 13 October 2012 Mr Tuffs emailed a completed Form R27 to the FWA Help line.
Background
[4] Mr Tuffs was employed by Nestle Australia Ltd from 1 March 2001 until 10 June 2008. Mr Tuffs transferred to Australia after having worked for Nestle in the UK since 1 September 1980. In July 2007 Mr Tuffs was diagnosed with Coronary Artery Disease and was unfit to work as from that time. Mr Tuffs was employed in a senior management role as Head of Procurement within Nestle Australia Ltd. Mr Tuffs returned to the UK in June 2008 as a result of his illness. Nestle Australia Ltd terminated Mr Tuff’s employment by letter dated 30 May 2008 which included in part the following:
“You have advised on a number of occasions that you will shortly be relocating to the UK on a permanent basis to be closer to your family support network, commencing with your departure from Sydney on 11 June 2008. You have also provided a number of reports from your treating doctor indicating that your medical condition will prevent you from ever returning to your normal duties with NAL.
Your medical condition and decision to relocate to the UK make it impossible for you to fulfil the duties required by your contract of employment with NAL. It is clear that you cannot, and do not intend to, return to NAL to perform the work required by your employment contract. These circumstances entitle Nestle to treat your employment as being at an end. Accordingly, we confirm that your employment with NAL will come to an end effective on 10 June 2008 (which we understand is the date immediately prior to your departure from Sydney).”
[5] Much of the material filed by Mr Tuffs in support of his application concerns claims by Mr Tuffs that he was not provided with entitlements on termination that he believed he should have received. Mr Tuffs has been in dispute with Nestle Australia Ltd since his termination over his claim for these entitlements.
Notice of Motion to Dismiss the Application for want of Jurisdiction
[6] On 26 October 2012 Nestle Australia Ltd pursuant to s.645 of the WR Act filed a Notice of Motion to Dismiss the Application for want of Jurisdiction. The relevant parts of that Notice are as follows:
“The employer moves for the dismissal of the employee’s application on the following jurisdictional ground(s):
1. The applicant was an excluded employee within the meaning of s638(1)(f) of the Workplace Relations Act.
2. An order dismissing the application should therefore be made pursuant to s645(5).
3. No hearing is required to make such an order: s645(7) and there is sufficient evidence included in the material filed with the application to make such an order.
4. The application should otherwise be dismissed on the ground that there was no termination of employment at the initiative of the Company. Instead, the applicant’s conduct amounted to repudiation which was accepted by the company.
Excluded Employee
1. The applicant is an excluded employee within the meaning of s638(1)(f) of the Workplace Relations Act:
(i) The applicant was not employed under award derived conditions. His conditions of employment were derived entirely from a written employment contract dated 1 May 2004 (see attachment to application marked “Appendix 4”).
(ii) In an email dated 9 October 2012 to FWA Inquiries (attached to the application), the applicant describes himself as “Senior Executive”
(iii) The remuneration cap at the time of the termination was $101,300.
(iv) At the time of the applicant’s employment termination, he was in receipt of remuneration consisting of:
- A Base Salary equal to $194,500
- A Motor Vehicle Allowance equal to $26,970
- Amounting to a total cash remuneration of $221,470. This remuneration value is acknowledged in a letter written by the applicant to the Company dated 29 May 2012 (which is attached to the application)
2. The applicant’s most recent written employment contract dated 1 May 2004 is attached to the application (marked “Appendix 4”). Clause 4 of that contract sets out the applicant’s Total Remuneration Package as at 1 May 2004. The base salary set out in that contract ($167,300) would alone be sufficient to render the applicant an excluded employee.
3. An excluded employee is excluded from making an application under s643(1)(a) and/or s661: s638(1).
Particular cost that would be caused to the business of the employer in attending a hearing
Specify the cost to the business of the employer in attending a hearing on this motion to dismiss the employee’s application on the above stated grounds:
- Attendance is not necessary to determine the motion as there is sufficient evidence provided by the applicant in his application to dismiss the application.
Objection to conciliation occurring before this motion is dealt with
Does the employer object to conciliation before this motion is dealt with by the Commission?
[ ] Yes [ ] No [ ] Not applicable (see section 649)”
[7] On 29 October 2012 I wrote to Mr Tuffs directing him to file his response to the Notice of Motion to Dismiss the Application for want of Jurisdiction by 12 November 2012. Mr Tuffs filed a Response on 31 October 2012. Whilst that response addressed a number of the issues raised by Nestle Australia Ltd I intend to deal with only one part of the Response which was in the following terms:
“Point 5 (VI): I have no knowledge or expertise of the Act or Australian Employment Law and thus am unaware if I am an “excluded employee”. If that is indeed the case (the remuneration figures quoted are correct), then it is difficult to understand why Nestle Australia Ltd have bothered to list all their other reasons why my application should be rejected. I would also ask the question as to what rights do Senior Executives have surrounding termination of employment if they are indeed excluded from Fairwork (sic) Australia and/or the Workplace Relations Act?”
[8] Mr Tuff’s concession that the figures quoted by Nestle Australia Ltd in their Notice of Motion to Dismiss the Application for want of Jurisdiction are correct is significant.
[9] The determination of this application must be made under the WR Act given the operation of Item 11(1) Part 3 of Schedule 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
[10] The provisions of “Division 4 - Termination of Employment” in “Part 12 - Minimum entitlements of employees” of the WR Act are relevant.
[11] Mr Tuffs was an employee and Nestle Australia Ltd was an employer for the purposes of s.636 of the WR Act.
[12] The relevant sections of the WR Act are set out below.
“638 Exclusions
(1) The following kinds of employee are excluded from the operation of Subdivisions B, D and E and sections 660 and 661:
...
(f) an employee:
(i) who is not employed under award-derived conditions (see subsection 642(6)); and
(ii) to whom subsection (6) or (7) applies;
...
(2) Despite the exclusion of an employee from the operation of Subdivisions B and E because of subsection (1):
(a) the employee may make an application under section 643 for relief in respect of the termination of his or her employment on the ground of an alleged contravention of section 659; and
(b) if the employee does so, those Subdivisions have effect, in so far as they relate to that application, as if the employee had not been excluded from their operation.
...
(6) For the purposes of subparagraph (1)(f)(ii), this subsection applies to an employee if:
(a) the employee’s remuneration immediately before the termination of employment was not wholly or partly determined on the basis of commission or piece rates; and
(b) the rate of remuneration applicable to the employee immediately before the termination exceeds a rate specified, or worked out in a manner specified, in the regulations (the specified rate).
...
642 Definitions
...
(6) For the purposes of this Division, an employee is taken to be employed under award-derived conditions if the employer is bound:
(a) in relation to the employee’s wages and conditions of employment—by an award or a workplace agreement; or
(b) in relation to:
(i) the employee’s wages—by an APCS; and
(ii) in relation to the employee’s conditions of employment—by an award or a workplace agreement.
Subdivision B—Application to Commission for relief in respect of termination of employment
643 Application to Commission to deal with termination under this Subdivision
(1) Subject to subsections (5), (6), (8) and (10), an employee whose employment has been terminated by the employer may apply to the Commission for relief in respect of the termination of that employment:
(a) on the ground that the termination was harsh, unjust or unreasonable; or
(b) on the ground of an alleged contravention of section 659, 660 or 661; or
(c) on any combination of grounds in paragraph (b) or on a ground or grounds in paragraph (b) and the ground in paragraph (a).
...
645 Motions for dismissal of application for want of jurisdiction
(1) A respondent may move for the dismissal of an application under section 643 on the ground that the application is outside the jurisdiction of the Commission at any time, including a time before the Commission has begun dealing with the application.
(2) If:
(a) the respondent moves for the dismissal of an application on such a ground and has not previously so moved; and
(b) the respondent so moves before the matter is referred for conciliation by the Commission;
the Commission must deal with the motion before taking any action, or any further action, on that application, unless the respondent indicates that the matter may be dealt with at a later time.
(3) If the respondent moves for the dismissal of an application on such a ground, having already so moved on a previous occasion, the Commission must deal with the motion but may do so at any time it considers appropriate.
(4) If a respondent has moved for the dismissal of an application made, or purported to have been made, under subsection 643(1):
(a) on the ground referred to in paragraph 643(1)(a); or
(b) on grounds that include that ground;
Subsection (5) applies to the application.
(5) If the Commission is satisfied that an application to which this subsection applies cannot be made under subsection 643(1) on the ground referred to in paragraph 643(1)(a):
(a) because the employee is excluded from the operation of Subdivision B by section 638; or
(b) because of the operation of subsection 643(6) (which relates to qualifying periods); or
(c) because of the operation of subsection 643(10) (which relates to employers of 100 employees or fewer);
the Commission must:
(d) if paragraph (4)(a) applies—make an order dismissing the application; or
(e) if paragraph (4)(b) applies—make an order dismissing the application to the extent that it is made on the ground referred to in paragraph 643(1)(a).
(6) If:
(a) a respondent has moved for the dismissal of an application to which subsection (5) applies; and
(b) the Commission is not satisfied as mentioned in paragraph (5)(a), (b) or (c) in relation to the application;
the Commission must make an order refusing the motion for dismissal.
(7) The Commission is not required to hold a hearing in relation to the making of an order under subsection (5) or (6).
...
648 Matters that do not require a hearing
(1) The Commission must, in deciding whether or not to hold a hearing for the purposes of deciding:
(a) whether to make an order under subsection 645(5) or (6) or 646(1) or (2); or
(b) whether to grant an extension of time application within the meaning of section 647;
take into account the cost that would be caused to the business of the employer concerned by requiring the employer to attend a hearing.
(2) If the Commission decides not to hold a hearing, the Commission must, before making a decision:
(a) invite the employee and the employer concerned to provide further information that relates to whether the order should be made or the extension of time granted; and
(b) take account of any such information.
(3) If, as a result of information provided as mentioned in subsection (2), the Commission considers that it would be desirable to hold a hearing, the Commission may do so.
(4) An invitation under paragraph (2)(a) must:
(a) be given by notice in writing to the employee and the employer concerned; and
(b) specify the time by which the information referred to in the invitation is to be provided.”
[13] The reference in s.638(6) to “the specified rate” is a reference to Regulation 12.3 of the Workplace Relations Regulations 1996:
“12.3 Specified rate
For paragraphs 638(6)(b) and (7)(b) of the Act, the specified rate is:
(a) $94,900 per year; or
(b) the rate worked out by indexing that amount in accordance with regulation 12.6.”
[14] Without setting out the provisions of Reg. 12.6 it is sufficient to identify that the specified rate of $94,900 was to be increased on 1 July of each year on the basis of a formula contained in reg.12.6 which had regard to movements in the CPI. The relevant specified rate as at 1 July 2007 was $101,300.
[15] Section 645(7) of the WR Act gives a discretion to Fair Work Australia to decide a Notice of Motion to Dismiss for want of Jurisdiction without holding a hearing. The only constraint on the exercise of that discretion is found in s.648 of the WR Act.
[16] My letter to Mr Tuffs of 26 October meets the requirements of s.648(2)(a) and (4) of the WR Act. Mr Tuffs has provided information which I have taken into account. I have also taken into account the information supplied by Nestle Australia Ltd.
[17] I am also required by s.648(1) to “take into account the cost that would be caused to the business of the employer concerned by requiring the employer to attend a hearing”. Nestle Australia Ltd contended that:
“The Company will seek to obtain legal advice and representation if the matter is listed for hearing. Such costs have been avoided to date.
There will be attendance costs which will be significant, particularly if the matter is listed in a location other than Sydney.
There are likely to costs (sic) and inconvenience associated with time zone differences given the location of the applicant (the UK).”
[18] The requirement in s.648(1) is only to take into account the cost which results from “requiring the employer to attend the hearing”. I note that although Nestle Australia Ltd has indicated an intention to engage counsel should the matter proceed to a hearing the issue of representation is a matter for the Tribunal to decide in accordance with s.100 of the WR Act. Therefore the cost to Nestle Australia Ltd of being legally represented is not relevant. If a hearing was conducted it would be done by way of video conferencing between Melbourne, Sydney and the UK. The cost to Nestle Australia Ltd in attending Fair Work Australia in Sydney would appear not to be significant.
[19] I am satisfied that the Notice of Motion to Dismiss the Application for want of Jurisdiction should be decided without the need to hold a hearing.
[20] The critical jurisdictional challenge raised by Nestle Australia Ltd is that Mr Tuffs was an employee who was excluded from making an application to Fair Work Australia on the basis that Mr Tuffs earnt more than the specified rate of $101,300. Mr Tuffs concession that the basic salary and total remuneration figures cited by Nestle Australia Ltd were correct means that I must find that Mr Tuffs is an excluded person for the purposes of s.638(1)(f) of the WR Act. Having made that finding then I am required by s.645(5) to dismiss the application made by Mr Tuffs.
[21] I note that the second jurisdictional challenge raised by Nestle Australia Ltd was that there was no termination of employment at the initiative of the employer because “the applicant’s conduct amounted to repudiation which was accepted by the Company”. I do not need to decide this issue but I make the observation that the letter of termination of employment and all of the material put to me by both Mr tuffs and Nestle Australia does not support an assertion that there was a repudiation of the contract by Mr Tuffs. Rather all of the material supports a contention that there was frustration of the contract due to the inability of Mr Tuffs to work.
[22] The application by Mr Tuffs is dismissed.
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