Roland Pierre Marchetti v K&S Freighters Pty Ltd
[2022] FWC 1177
•19 MAY 2022
| [2022] FWC 1177 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Roland Pierre Marchetti
v
K&S Freighters Pty Ltd
(U2022/438)
| COMMISSIONER CIRKOVIC | MELBOURNE, 19 MAY 2022 |
Application for an unfair dismissal remedy – jurisdictional objection - Applicant not covered by a modern award and enterprise agreement did not apply – high income threshold – annual rate of earnings above the high income threshold of $158,500 – jurisdictional objection upheld – application dismissed.
Background
On 6 January 2022 Mr Roland Pierre Marchetti (the Applicant) applied to the Fair Work Commission (FWC) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy, having been dismissed from his employment with K&S Freighters Pty Ltd (the Respondent) on 20 December 2021.
On 21 January 2022, a Form F3 – Employer response to unfair dismissal application (Form F3) was filed in which the Respondent raised the jurisdictional objection that the Applicant’s annual rate of earnings was more than the high income threshold of $158,500 and therefore is not a person protected from unfair dismissal, as required by s.382 of the Act. The Applicant disputed the assertion.
Following the issuing of directions in the matter, the Applicant, also raised the argument that he was covered by a modern award. Further directions were issued to enable the parties to address this issue. There is no dispute that no enterprise agreement applied to the Applicant at the time of his dismissal.
Following the filing of material, I conducted a Hearing on 12 May 2022 in relation to the jurisdictional objection. The Applicant appeared on his own behalf. Pursuant to s 596(2)(a) of the Fair Work Act 2009, I considered that granting permission to the Respondent would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. Accordingly, I exercised my discretion to grant permission to the Respondent to be represented.
Ms Erin Compitiello (National Employee Relations Manager) gave evidence on behalf of the Respondent and provided two witness statements. The Applicant relied upon two written submissions and oral evidence given at the hearing.
I note that the Applicant confirmed at the hearing the essence of his submission that he was (a) covered by a modern award and (b) that his income did not exceed the high income threshold at the time of his dismissal.
Section 382 of the Act prescribes in what circumstances a person is 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.”
Did the Applicant complete the minimum employment period? (s.382(a))
It is not in dispute that the Applicant commenced employment with K&S Freighters in May 2007 and that the termination of his employment took effect on 20 December 2021. I am satisfied that the requirements of s.382(a) are met.
Was the Applicant covered by a modern award or an enterprise agreement? (s.382(b)(i) and (ii))?
The Applicant contends that at the time of the dismissal he was covered by the Commercial Sales Award 2020 (CS Award) and that he meets the definition of a “Commercial Traveller” under that Award.[1] There is no dispute that the Applicant was not covered by an enterprise agreement at the time of his dismissal.
I note that pursuant to s.48 of the Act, a modern award covers an employee if the award is expressed to cover the employee.
To determine whether an employee is covered by a particular modern award it is necessary to examine the scope and coverage of the particular modern award and the position and duties required of the position occupied by the relevant employee. The relevant employee is covered by the modern award, if having regard to the scope and coverage of the particular modern award, the position and duties required of the employee’s position is covered by the modern award.
There is no dispute that the Applicant commenced employment with the Respondent as a Business Development Manager in May 2007, the terms of which were set out in an employment contract dated 15 May 2007 (the 2007 Contract). There is also no contest that following the variation to the contract of employment in 2016 (the 2016 contract variation), the Applicant’s title was “National Business Development & Key Client Manager”. There is no dispute the Applicant was not provided with a job description.
In his written submissions, the Applicant contends that:[2]
·His role involved a “significantly high amount of time on the road/travelling canvasing/researching potential new sales.”
·He conducted sales research and cold called/knocked on doors.
·He engaged in “surveillance” of competitors for the purposes of gathering information which could assist with sales.
·He would “set up and on-board” sales and would attempt to “grow and maintain” the relationship with the customer” post-sale.
·“On a regular basis, as required, [his] sales pipeline was provided to [his] manager depicting the potential sales & requirements, approximant [sic] spend of the sales.”
·The Respondent did not keep a CRM system that recorded sales visits.
·The time to make a sale could vary, some taking up to “36 months.”
·He was involved in “monthly or quarterly KPI presentations.”
·The company-provided laptops did not allow external printing so the Applicant would be required to attend a local office of the company to print documents for printing needs.
·“In normal weeks [he] would be working 50+ hours and 60-70 hours per week when travelling intrastate or interstate.”
·He serviced over 100 “sales customers” and the “monthly revenue” from his sales was “circa $55m+.”
During the course of the hearing, the Applicant confirmed the contents of correspondence sent by his solicitors to the Respondent detailing his tasks. When asked whether he agreed that this aspect of the correspondence accurately represented his role, the Applicant confirmed that it did. Reproduced below is an extract from that correspondence:
·“Cold calling for new business on a national basis, RFP’S – RFR – Tenders, and ad-hoc work;
·Regular interstate and intrastate travel to meet with current customers and new customer prospects;
·Assisting senior K&S management with the preparation of RFP – RFR – Tenders;
·Annual customer rate reviews;
·Key account management. Overseeing performance of K&S operations in line with the contract/agreement, preparing & presenting KPI reports for monthly and or quarterly review meetings with the customer, taking of minutes/actions and distributing to key stakeholders, instigating continuous improvement with key stakeholders;”
·Preparing and providing commercial letters of offer for non-contracted – ad hoc transport and warehouse services;
·Arranging commercial trading agreements with new customers;
·Assisting the K&S sales admin team in setting up new customer rates – fuel levy surcharges in K&S operating system Panorama;
·Assisting the operations department at request: i.e. liaising with customers on freight requirements, liaising with customers when delays and/or not able to provide resources to cover their freight. Coordinating loads – suppliers. Liaising with customers around late deliveries, damaged freight, redeliveries requirements, etc;
·Other duties as requested by senior management: i.e. travel to Adelaide to manage BP-Castrol project; travel to Adelaide to establish and complete report on Team Polys operational fleet requirements for potential acquisition; assisting other branches such as Ballarat and Kyabram; assisting Melbourne operational team.”[3]
The Respondent disputes the Applicant’s assertion that the primary focus of his role was to work “substantially away from the employer’s place of business”. In support of its submission the Respondent relies on the position description contained in the job advertisement for the Applicant’s former position, reproduced below:
·“Developing and sustaining solid relationships with company stakeholders and customers;
·Analysing customer feedback data to determine whether customers are satisfied with company services;
·Providing insight into our service development and competitive positioning;
·Analysing financial data and developing effective strategies to reduce business costs and increase company profits;
·Conduct market research to identify new business opportunities;
·Identify and make recommendations regarding marketing initiatives;
·Collaborating with company executives to determine the most viable and cost-effective approach to pursue new business opportunities;
·Identify opportunities that can create exceptional results;
·Develop and implement strategic business growth plans;
·Continuously build company knowledge across several divisions;
·Strong commitment to driving Continuous Improvements.”[4]
I note for completeness that the Applicant states that the position description reproduced above does not have “significance”[5] to the work he was “undertaking” as a “National Business Development & Key Client Manager”.
The Respondent contends that the Applicant’s primary role was “not travelling to sell goods, rather he was managing existing relationships”[6] and posits that the Applicant’s main duty involved managing the Respondent’s relationship with its two largest clients.
Further, the Respondent contends that 80% of the Applicant’s day-to-day work involved “participating in operational meetings, account issue resolution, review and KPI meetings”[7] and that the meetings were scheduled in advance and were usually conducted via Microsoft Teams. In addition, the Respondent submits that the fact that the Applicant was offered the option of moving to the Queensland offices of the company where “he could work just as easily work from the Coopers Plain Branch in Queensland”[8] is indicative that the Applicant’s work was not required to be conducted “substantially away” from the business premises of the Respondent.
At the hearing, the Respondent stated that the sales component of the Applicant’s role was “very limited” and new sales would constitute 10% at most of his duties.
On the material before me, I am satisfied that the evidence establishes the following:
(a) The Respondent conducted the business of providing freight services to clients.
(b) The Applicant reported to a Mr Simon Hine, the Executive General Manager of the Respondent, who in turn reported to the Managing director.
(c) The Applicant had no direct reports.
(d) Sales employees of the Respondent reported to other divisional heads.
(e) The Applicant was employed in a role that necessarily combined maintaining the Respondent’s existing customers and relationships and identifying and securing new business opportunities.
(f) The Applicant’s work location was at 591 Boundary Road Truganina, Victoria 3029.
(g) At that location, the Applicant was allocated an office located within the executive team office area with a door and desk. I note for completeness that at the hearing, the Applicant states that as of December 2019 he was allocated a “cubicle”. The Respondent states that upon the introduction of COVID-19 restrictions and given the Applicant’s working from home arrangement, his office was temporarily assigned to another staff member who was able to attend the office in person.
(h) The Applicant’s activities involve him attending the workplace to prepare for his daily meetings including meetings with customers or prospective customers, away from the Respondents’ offices.
The CS Award is an occupational award that covers:
“…employers throughout Australia with respect to Commercial Travellers, Merchandisers and Advertising Sales Representatives and those employees unless any other modern award contains classifications that apply to such persons, in which case the other modern award prevails.”[9]
There is no dispute that the Applicant was not employed by the Respondent as a “Merchandiser” or as an “Advertising Sales Representative” within the meaning of the CS Award. Clause 2 of the CS Award defines a “Commercial Traveller” as follows:
“Commercial Traveller means a person employed, substantially away from the employer’s place of business, for the purposes of soliciting orders for, or selling articles, goods, wares or merchandise or material for wholesale sale, for resale, or for use in or in connection with the production and/or preparation and/or distribution of commodities for sale by the customer.”[10]
There are three elements to this definition. First, the person must be employed “substantially away from the employer’s place of business”. Secondly, that employment must be for “the purpose of soliciting orders for, or selling articles, goods, wares or merchandise or material.” Thirdly, the solicitation of orders for, or selling of articles etc must be “for wholesale sale, for resale, or for use in or in connection with the production and/or preparation and/or distribution of commodities for sale by the customer”.
Clause 2 requires that the person be “employed substantially away” from the employer’s place of business. It is not in dispute that, for present purposes, the Respondent’s place of business is 591 Boundary Road Truganina, Victoria 3029. In order to be within the definition, a person must, as a term of the employment, be employed substantially away from the employer’s place of business. There is little doubt that the Applicant travelled to meet with existing clients and prospective clients of the Respondent. However, in my view, he was employed to be located in the Truganina office, assigned a desk (at least prior to December 2019, when the Applicant asserted he was assigned a “cubicle”) and attended regular meetings at that office, noting that since the introduction of COVID-19 restrictions in Victoria, a substantial portion of this work was performed via Microsoft Teams from his home residence. He was employed at the Respondent’s place of business. He was not employed substantially away from that location. That was his location; the 2007 contract provides that the location is the Truganina office and whilst the 2016 variation does not refer to the location of the employment specifically it does provide that “all other terms and conditions of your employment remain the same” and further that in the event that the Applicant chose to relocate to Queensland, his “role” would be “based from our Coopers Plains branch”. That in carrying out some of his duties he met with actual and prospective clients away from the Truganina office, does not have the result that the Applicant was “employed, substantially away” from the Respondent’s place of business.
In my view, the Applicant does not meet the first limb of the definition of “Commercial Traveller”. That said, I observe that the evidence does not appear to support a conclusion that the second limb or third limb of the definition are satisfied. In light of the uncontested evidence that the Respondent is in the business of providing freight services to national customers, it is not apparent to me that the Applicant engaged in “soliciting orders for, or selling articles, goods, wares or merchandise or material for wholesale sale, for resale, or for use in or in connection with the production and/or preparation and/or distribution of commodities for sale by the customer.” In the context of clause 2, the words “articles, goods, wares or merchandise or material” carry their ordinary meaning and do not on their face include the duties performed by the Applicant.
In the circumstances, I am satisfied that the CS Award did not cover the Applicant at the time he was dismissed from his employment.
Were the Applicant’s annual earnings over the $158,500 high income threshold? (s.382(b)(iii))
I note at this juncture, the Respondent submitted detailed information as to the Applicant’s annual earnings including his usage of his motor vehicle and toll pass. Despite issuing directions for the filling of material, the Applicant provided limited material as to this aspect of his case. During cross examination of Ms Compitiello, the Applicant did not seriously take issue with her evidence as to his annual earnings. Ms Compitiello gave cogent evidence and provided thorough material as to the Applicant’s earnings and I have relied on that material in coming to my decision in this matter. I also observe that, where possible, Ms Compitiello, provided estimates favourable to the Applicant in calculating the personal and business usage of the motor vehicle allowance and further, that she chose not to include in the assessment the portion of personal usage attributable to the Applicant’s use of the laptop and mobile phone as she was “unable to reliably determine the percentage of personal use.”[11]
I have concluded at paragraph 26 above that the Applicant is not covered by a modern award. There is no dispute that he is not covered by an enterprise agreement. If an employee is neither covered by a modern award nor an enterprise agreement, and their annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is more than the high income threshold, then they are not a person protected from unfair dismissal and are not eligible to make an application for an unfair dismissal remedy.
Section 333 of the Act provides that the high income threshold is the amount prescribed by, or worked out in the manner prescribed in the regulations. Regulation 2.13 of the Fair Work Regulations 2009 provides that as of 1 July 2021 the figure was $158,500. This figure applied at the time of the Applicant’s termination on 20 December 2021.
Section 332 of the Act defines ‘earnings’ as follows:
“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) This subsection applies to contributions that the employer makes to a superannuation fund to the extent that one or more of the following applies:
(a) the employer would have been liable to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the person if the amounts had not been so contributed;
(b) the employer is required to contribute to the fund for the employee's benefit in relation to a defined benefit interest (within the meaning of section 291-175 of the Income Tax Assessment Act 1997) of the employee;
(c) the employer is required to contribute to the fund for the employee's benefit under a law of the Commonwealth, a State or a Territory.”
Regulation 3.05 explains how to work out amounts for the purposes of assessing whether the high income threshold applies in relation to a dismissal, and includes Reg 3.05(6) that provides for circumstances where a non-monetary benefit that has not been for an agreed amount may be included for the purposes of the unfair dismissal jurisdiction.
Regulation 3.05(6) reads as follows:
“REGULATION 3.05 When a person is protected from unfair dismissal--high income threshold
…..
Benefits other than payment of money
(6) If:
(a) the person is entitled to receive, or has received, a benefit in accordance with an agreement between the person and the person's employer; and
(b) the benefit is not an entitlement to a payment of money and is not a non-monetary benefit within the meaning of subsection 332(3) of the Act; and
(c) the FWC is satisfied, having regard to the circumstances, that:
(i) it should consider the benefit for the purpose of assessing whether the high income threshold applies to a person at the time of the dismissal; and
(ii) a reasonable money value of the benefit has not been agreed by the person and the employer; and
(iii) the FWC can estimate a real or notional money value of the benefit;
the real or notional money value of the benefit estimated by the FWC is an amount for subparagraph 382(b)(iii) of the Act.”
The parties agree that the Applicant’s employment was subject to an employment contract dated 15 May 2007[12], and the 2016 contract variation. The parties agree and I am satisfied that the Applicant’s base salary as at the date of termination was $156,999.25. This is also confirmed in the CHRIS21 Payroll System Download extract provided by the Respondent.[13] This amount is to be included in Mr Marchetti’s earnings in accordance with s.332(1)(a) of the Act.
The Respondent submitted that the Applicant’s total earnings, monetary and non-monetary benefits consist of
·“The Applicant’s base annual salary;
·Portion of his annual car allowance for which the Applicant received a private benefit;
·Portion of the fuel card which K&S paid on behalf of the Applicant for which the Applicant received a private benefit; and
·Portion of the toll charges which K&S paid on behalf of the Applicant for which the Applicant received a private benefit.”[14]
I note the following clauses of the 2007 contract which are relevant to my determination of the Applicant’s total earnings noting that the 2016 contract variation did not alter these terms:
“Motor Vehicle Allowance
Within your contract you are provided with a motor vehicle allowance to the value of $15,000 in accordance with the K&S Group Company Policy.”
“Fuel Card
As a component of your contract you will be provided with a fuel card that is authorised for unleaded fuel charges only and is not authorised to accept premium charges, in accordance with the K&S Group Company Policy.”
I note that the 2007 contract does not refer to toll charges. In the Respondent’s material it is submitted that the Respondent paid for the Applicant’s E-tag for all tolls notwithstanding that a portion of the tolls were used for private use. As stated at paragraph 27 above, the Respondent does not include the provision of a work mobile phone and laptop as additional earnings for the calculation of the high income threshold as the Respondent could not accurately ascertain what portion of their usage was work related or private.
Consideration
Base income
It is not in dispute and so I find that the Applicant’s base annual income was $156,999.25.
Car allowance
In the Full Bench decision Sam Technology Engineers Pty Ltd v Bernado[15], Deputy Presidents Gostencnik and Clancy and Commissioner Saunders (as he was then) helpfully provided a formula for the calculation of the additional benefit provided by a car allowance. The formula is as follows:
(a) “If a car allowance is paid to an employee in circumstances in which there is no requirement or expectation that the employee will have to use his or her car for work purposes, then the whole of the car allowance is, in reality, part of the employee’s wages and is therefore included in their “earnings”; or
(b) If a car allowance is paid to an employee at the time of their dismissal in circumstances in which there is a requirement or expectation that the employee will have to use his or her car for work purposes, then it will be necessary to determine and calculate the private benefit, if any, derived by the employee from the car allowance. To that end, we suggest the following methodology, which is based on the approach taken in Fewings:
1. Determine the annual distance travelled by the car in question. The amount of the annual distance will be as follows:
a. if the car allowance has been paid for at least 12 months prior to the dismissal - the distance travelled by the car over the 12 months immediately prior to the dismissal; or
b. if the car allowance has been paid for a period of less than 12 months prior to the dismissal, determine the distance travelled by the car in the period during which the car allowance has been paid and then extrapolate that distance over a period of 12 months to calculate an annual distance. For example, if an employee moved into a new position with his or her employer 6 months prior to his or her dismissal, received a car allowance during that 6 month period, and drove his or her car for 10,000 km in that 6 month period, the assumed annual distance travelled by the car for the purpose of calculating the employee’s “annual rate of earnings” would be 20,000 km.
2. Determine the percentage of the annual distance travelled which was for business use, which would not include travel between the employee’s home and usual place of work. If the car allowance has been paid for a period of less than 12 months prior to the dismissal, determine the business use percentage of the distance travelled in the period during which the car allowance was paid.
3. Multiply the annual distance calculated in accordance with paragraph 1 above by the business use percentage calculated in accordance with paragraph 2 above. This provides the annual distance travelled for business purposes.
4. Estimate the cost per kilometre for a car of the type used. This information can be obtained from the RACV, NRMA or like motoring organisations.
5. Multiply the annual distance travelled for business purposes by the estimated cost per kilometre. The result is the annual cost of using the car for work purposes. Compare that annual cost with the amount of the annual car allowance. The amount of the annual car allowance will be as follows:
a. if the car allowance was paid for at least 12 months prior to the dismissal - the amount of the car allowance paid to the employee in the 12 months immediately prior to the dismissal; or
b. if the car allowance has been paid for a period of less than 12 months prior to the dismissal, determine the amount of the car allowance paid in that period and then extrapolate that payment over a period of 12 months to calculate an annual amount of the car allowance. For example, if an employee in a business other than a small business was employed in that business for a period of 9 months prior to his or her dismissal, and received a car allowance of $2,000 each month in that 9 month period, the assumed annual car allowance for the purpose of calculating the employee’s “annual rate of earnings” would be $24,000 ($2,000/month x 12 months = $24,000).
6. If the amount of the annual car allowance exceeds the annual cost of using the car for work purposes, the difference is the private benefit to the employee of the car allowance, which forms part of their "annual rate of earnings.”
For the calculation above, I note that the Applicant has received the car allowance for longer than 12 months.
An extract from the Respondent’s payroll system confirms the annual amount of car allowance received by the Applicant in the year immediately preceding the termination of the Applicant’s employment is $15,000.
The first step as laid out in Bernardo, is determining the total kilometres travelled by the Applicant in the year before he was terminated. The Respondent has provided a fuel card report which indicates that the Applicant travelled a total distance of 17,095 kilometres between 20 December 2020 and 28 September 2021. Data from 28 September 2021 to 20 December 2021 was not available to the Respondent due to a system change, however if the above figure is annualised, the estimated rate of travel per year equates to 22,048 kilometres (17,095÷283 days = 60.4064 travelled per day. 60.4064 x 365 days = 22,048 estimated kilometres).
The second step involves a determination of the percentage of the 22,048 kilometres that can be attributed personal use and the amount travelled for business purposes. The Respondent submits that 50% should be attributed to business use and 50% to private use. The Respondent submitted the following evidence in coming to this amount:
“Based on my inquiries as to the Applicant’s work commitments during that period, and the distance to and from his home, I would assess the percentage of annual distance travelled which was for business purposes to be less than 50%. This assessment is made on the basis that:
Based on the total annual kilometres, the Applicant was travelling an average of 424 kilometres per week.
Attached as EC6 is a copy of a Google maps screenshot which shows that the total distance from the Applicant’s home to work is 55.7 kilometres.
Attached as EC7 is the Applicant’s Outlook calendar from December 2020 to December 2021 which shows that the vast majority of the meetings the Applicant had scheduled during that period were by videoconference or teleconference and therefore did not require him to travel.
Attached as EC8 is a spreadsheet which has extracted all the data of etag payments which K&S have made on the Applicant’s behalf for tolls he incurred while driving. I have summarised the data in the first tab, and it shows that approximately 45% of those payments were for trips taken outside of work in the Applicant’s personal time, either while the Applicant was on leave, on weekends, public holidays or after hours. Of the remaining 55% that occurred during weekdays, K&S would expect that a reasonable proportion of these were personal too, although this is more difficult to estimate.
For a great proportion of the period from December 2020 to December 2021 Victoria was operating under stage 3 or stage 4 restrictions which required the Applicant to work from home. The Applicant worked from home during this period and his office was reallocated to another staff member who was still required to attend the office. It is estimated that during these periods the Applicant’s use of his vehicle for business purposes would have been negligible.
I note that the Applicant claimed in his FBT business declaration attached as EC9 on 6 April 2021 that the business portion of the total kilometres travelled during the period 1 April 2020 to 31 March 2021 to be 85%. However, for the reasons outlined above, I believe this is incorrect and significantly overstates the business portion of the Applicant’s vehicle use.”[16]
I have accepted the above estimation of the apportionment of personal and business travel as posited by the Respondent.
Therefore, I calculate the total amount travelled in the past year for business use is 11,024 kilometres, being 50% of 22,048 Kilometres.
The fourth step involves establishing the cost per kilometre of operating the Applicant’s car. The Respondent submitted that the Applicant drives a Jeep Grand Cherokee.[17] The RACV Vehicle Running Guide 2021 does not contain information relating to a Jeep Grand Cherokee however I have accepted the Respondent’s method of using a Toyota Kluger GX as comparable vehicle. I note that like the Jeep, the Toyota Kluger GX is a large Sports Utility Vehicle (SUV) of a comparable specification.
The RACV guide states that the cost for running a Toyota Kluger GX per year is as follows:
·Loan repayments: $13,011.84
·Registration/insurance/membership: $2,340.24
·Fuel: $1972.08
·Servicing: $735.00 (based on 15,000 km driven per year). This equates to $0.049 per kilometre).
·Tyres: $243.96 (based on 15,000 km driven per year). This equates to $0.016264 per kilometre).
I note for the purpose of the calculation that the Applicant had a separately provided company fuel card and as such this input is not relevant for the car allowance calculation above.
I therefore calculate the annual cost of travel is as follows:
·Loan repayments: $6,505.92 (50% of $13,011.84)
·Registration/insurance/membership: $1,170.12 (50% of $2,340.24)
·Servicing: $540.18 ($0.049 x 11,024 kilometres)
·Tyres: $179.30 ($0.016 x 11,024 kilometres).
The total annual cost attributable to business purposes is therefore $8,395.52. I therefore determine that the private benefit, to form part of the Applicant’s yearly earnings, attributable to the car allowance, is $6,604.48 ($15,000 - $8,395.52).
Fuel card
The Respondent’s evidence as to the Fuel Card indicates that between 20 December 2020 to 28 September 2021 the Applicant charged $2996.53 to the company-provided fuel card.[18] This equates to approximately $10.59 per day ($2996.53÷283) that when annualised equates to $3,864.78. I have found that the Applicant had private beneficial use of his motor vehicle for 50% of total kilometres travelled. As such, I find that 50% of the annual charge to the Applicant’s fuel card should contribute to his annual earnings. As the annual charge in 2021 was $3,864.78, I find that $1,932.39 (50% of $3,864.78) should form part of the Applicant’s annual earnings.
Toll charges
With respect to the treatment of toll charges, a Full Bench of the Fair Work Commission in Zappia v Universal Music Australia[19] stated that:
“Finally, his Honour was correct in taking into account the value of the tolls paid by the respondent in respect of the private portion of the appellant’s travel. It matters not that this was by way of reimbursement, rather than by direct payment. The payment of the tolls was a benefit other than payment of money for the purposes of regulation 3.05(6). In the event that it was not, applying a purposive approach to the interpretation of the word “reimbursements” in section 332(2)(b) of the Act, the word does not contemplate reimbursements of outlays incurred for private, as approved by business, purposes. The payment by an employer for an employee’s private outgoings, whether directly or by way of reimbursement, clearly constitutes part of that employee’s remuneration.”[20]
The Respondent provided a breakdown of when the Applicant used his company provided E-tag in the year December 2020 - December 2021 and I have reproduced this table below:
I accept the Respondent’s submission that 113 out of 253 trips fell outside of weekday work hours travel and should be considered a private benefit in line with the decision in Zappia. As these trips constitute $468.17 of the total use of the E-tag for the period December 2020 to December 2021, and the total charge on the E-tag for that period was $1.158.79, I find that $468.17 of tolls was charged for private benefit and should form part of the Applicant’s annual earnings for the purposes of s.382 of the Act.
Conclusion
For the reasons above, I consider that the Applicant’s annual rate of earnings at the date of his termination is to be calculated by totalling the following:
· Annual Base Salary $156,999.25 (see paragraph [37] above);
· Car allowance $6,604.48 (see paragraph [49] above);
· Fuel card charges for private benefit $1,932.39 (see paragraph [50] above); and
· Toll charges for private benefit $468.17 (see paragraph [53] above).
I therefore find that the Applicant’s total annual earnings in the year preceding his dismissal is calculated at $166,004.29.
I have found that the CS Award did not cover the Applicant at the time he was dismissed from his employment and that the Applicant’s annual rate of earnings was more than the high income threshold of $158,500. On that basis, the Respondent’s jurisdictional objection is upheld. As the Applicant is not a person protected from unfair dismissal withing the meaning of s.382 of the Act, his application is dismissed.
COMMISSIONER
Appearances:
Mr R Marchetti on his own behalf.
Ms S Rayner for K&S Freighters Pty Ltd.
Hearing details:
12 May 2022, Melbourne (via Microsoft Teams).
[1] Applicant’s submissions, 7 April 2022.
[2] Respondent’s outline of submissions (Award), 3 May 2022, [6] – [9].
[3] Form F2 Annexure E: Response to Show Cause Letter, Roland Marchetti, 9 December 2021.
[4] Witness Statement of Erin Compitiello,26 April 2022, [15].
[5] Applicant’s outline of submissions, 3 May 2022, [3].
[6] Ibid [19].
[7] Ibid [16].
[8] Respondent’s outline of submissions (Award), 26 April 2022, [13].
[9] Commercial Sales Award 2020, clause 4.1.
[10] Commercial Sales Award 2020, clause 2.
[11] Witness Statement of Ms Erin Compitiello, 31 March 2022, [8].
[12] Annexure EC1, Witness Statement of Erin Compitiello.
[13] Annexure EC3, Witness Statement of Erin Compitiello
[14] Respondent’s outline of Submissions, 31 March 2022, [7].
[15] [2018] FWCFB 1767.
[16] Witness Statement of Ms Erin Compitiello, 31 March 2022, [11].
[17] Ibid [12].
[18] Annexure EC5, Witness Statement of Erin Compitiello.
[19] [2012] FWAFB 6108.
[20] Ibid [13].
Printed by authority of the Commonwealth Government Printer
<PR741637>
0
1
0