Scott Priddis v Komatsu Australia Pty Ltd

[2015] FWC 2406

[2015] FWC 2406

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Scott Priddis
v
Komatsu Australia Pty Ltd
(U2015/2973)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 8 APRIL 2015

Application for relief from unfair dismissal.

[1] Mr Scott Priddis was employed by Komatsu Australia Pty Ltd (Komatsu) until his employment was terminated on 6 February 2015. He lodged an unfair dismissal application and Komatsu objected to the application because it said Mr Priddis earned more than the high income threshold.

[2] It was not submitted that either a modern award or an enterprise agreement applied to Mr Priddis’ employment. Nor was it disputed that Mr Priddis’ remuneration package consisted of:

$120,000 base salary

$30,000 zone allowance.

[3] In addition, Mr Priddis’ contract provided for the provision of accommodation, a completion bonus and private use of a motor vehicle.

[4] The first issue to be determined is whether the zone allowance should be included as part of Mr Priddis’ earnings.

[5] Earnings are defined in section 332 of the Fair Work Act 2009 (the Act) as follows:

(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.

[6] Mr Priddis was employed as the Branch Manager at Port Hedland.

[7] The zone allowance was included for the purpose of calculating the amount paid to Mr Priddis for annual leave, personal leave and notice of termination. In addition, the zone allowance was included as part of his ordinary time earnings for the purpose of calculating his superannuation contribution.

[8] Mr Priddis submitted that the site allowance should not be included in his earnings because it is not expressed to be part of his base salary and is only paid because of the location of the position. He submitted that he would not get paid this allowance if he did not work in the Pilbara Region.

[9] This submission misses the point. Mr Priddis was employed to work at Port Hedland. The allowance is not discretionary. His contract expressly provides for a zone allowance. There is no capacity for the allowance to be removed whilst Mr Priddis is employed in that position at that location.

[10] While a site allowance may be paid to compensate the employee for the disabilities associated with working away from home, it is not a living away from home allowance 1. Nor is it a discretionary bonus.2

[11] Deputy President Smith in Venning v McConnell Dowell Constructors (Aust) Pty Ltd 3found that a site allowance was not included in the annual earnings. In that case, the site allowance was not payable if “there is no longer a requirement for the Employee to work at the site or where he or she is no longer subject to the conditions that warrant the payment of the Site Allowance.”4 The site allowance was not payable when the employee was on annual leave or long service leave.5 Superannuation was not paid on the site allowance.6

[12] In that case, the employer had greater discretion to remove the site allowance and it was not part of the employee’s ordinary time earnings for superannuation purposes, nor was it payable on annual leave. That is not the case here.

[13] In Ferguson v Macmahon Contractors Pty Ltd, 7 I determined that the site allowance paid to Mr Ferguson was included as part of Mr Ferguson’s earnings. It was payable on Mr Ferguson’s annual leave, personal leave and superannuation. It was not paid on long service leave.

[14] In Suleski v Rio Tinto Iron Ore Dampier, 8 I found that the site allowance was included in Mr Suleski’s earnings. In that matter, the site allowance was paid on annual leave, personal leave and long service leave.

[15] I therefore find that the zone allowance is a part of Mr Priddis’ wages and is included in his earnings. Given this decision, I do not have to decide if the other amounts relied upon by Komatsu should be included. Mr Priddis earned more than the high income threshold and therefore is not protected from unfair dismissal. His application for an unfair dismissal remedy is therefore dismissed.

DEPUTY PRESIDENT

Appearances:

S Priddis on his own behalf.

C Cannavo for the Respondent.

Hearing details:

2015.

Melbourne, Sydney and Perth via video link:

7 April.

 1   Mr Lee C v CLS Pty Ltd [2009] FWA 779.

 2   Jenny Craig Weight Loss Centres Pty Ltd v I Margolina [2011] FWAFB 9137.

 3   [2013] FWC 7838.

 4 Ibid [7].

 5   Ibid.

 6   Ibid [6]-[7].

 7   [2015] FWC 1294.

 8   [2015] FWC 1663.

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