Tamara Trezise v Universal Music Australia Pty Limited T/A Universal Music Australia

[2011] FWA 5960

[2011] FWA 5960

FAIR WORK AUSTRALIA

DECISION

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

Tamara Trezise
v
Universal Music Australia Pty Limited T/A Universal Music Australia
(U2011/5554)

COMMISSIONER HARRISON SYDNEY, 2 SEPTEMBER 2011

Termination of employment - jurisdiction.

[1] This decision relates to a jurisdictional objection raised by Universal Music Australia Pty Limited T/A Universal Music Australia (Universal) to an application for an unfair dismissal remedy lodged by Mrs Tamara Trezise (the Applicant). The basis for the objection is that the unfair dismissal provisions of the Fair Work Act 2009 (the Act) do not apply to the Applicant because her annual rate of earnings is above the high income threshold.

[2] Section 382(b)(iii) of the Act provides that an employee is protected from unfair dismissal if at the time of dismissal 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.

[3] The meaning of high income threshold is set out in s.333 of the Act which provides:

“333 High income threshold

(1) Subject to this section, the high income threshold is the amount prescribed by, or worked out in the manner prescribed by, the regulations.

(2) A regulation made for the purposes of subsection (1) has no effect to the extent that it would have the effect of reducing the amount of the high income threshold.

(3) If:

(a) in prescribing a manner in which the high income threshold is worked out, regulations made for the purposes of subsection (1) specify a particular matter or state of affairs; and

(b) as a result of a change in the matter or state of affairs, the amount of the high income threshold worked out in that manner would, but for this subsection, be less than it was on the last occasion on which this subsection did not apply;

the high income threshold is the amount that it would be if the change had not occurred.”

[4] At the time of the Applicant’s termination the high income threshold was $113,800.

[5] It is not contested that the Applicant’s annual rate of earnings (excluding superannuation) at the time of her dismissal was $125,000 in accordance with her contract of employment dated 26 February 2010.

[6] Counsel for the Applicant, however, argued that the annual rate of earnings were below the high income threshold because the Applicant was on unpaid parental leave for a period of approximately 5 months.

[7] It was submitted it would be impracticable and unfair not to take into account unpaid leave when determining the rate of earnings.

[8] Whilst counsel for the Applicant conceded that the Act and the regulations are silent on whether unpaid parental leave has an impact on the determination of a person’s rate of earnings, he submitted that regulation 3.05(4) provides a formula that discounts days on leave without full pay.

[9] Regulation 3.05 states:

“3.05 When a person is protected from unfair dismissal — high income threshold

(1) For subparagraph 382 (b) (iii) of the Act, this regulation explains how to work out amounts for the purpose of assessing whether the high income threshold applies in relation to the dismissal of a person at a particular time.

Note   Under section 382 of the Act, a person is protected from unfair dismissal if specified circumstances apply. One of the circumstances is that 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.

Piece rates

(2) Subregulations (3), (4) and (5) apply if part or all of the person’s income at the time of the dismissal is paid as piece rates that are:

(a) set by reference to a quantifiable output or task; and

(b) not paid as a rate set by reference to a period of time worked.

(3) If the person was continuously employed by the employer and was not on leave without full pay at any time during the period of 12 months immediately before the dismissal, the total amount of piece rates paid or payable to the person in respect of the period of 12 months ending immediately before the dismissal is an amount for subparagraph 382(b)(iii) of the Act.

(4) If the person was continuously employed by the employer and was on leave without full pay at any time during the period of 12 months immediately before the dismissal, the total of:

(a) for the days during that period that the employee was not on leave without full pay — the actual piece rates received by the employee; and

(b) for the days that the employee was on leave without full pay — an amount worked out using the formula:

is an amount for subparagraph 382(b)(iii) of the Act. ...”

[10] It can be noted from the above that regulation 3.05(4) provides for persons who are paid piece rates and whilst the formula deducts unpaid leave, it is in the context of where there is no annual rate of earnings. That is not the situation in this matter and any reliance on a regulation related to piece work is irrelevant misconceived.

[11] The consistent use of the word “earnings” in ss332 and 382(b)(iii) as distinct from the term “payment” is no mere coincidence. Counsel for Universal submitted that if a period of unpaid leave such as parental leave was to be considered for the purpose of determining the annual rate of earnings, referred to in s.382, parliament would have said so plainly and expressly. I agree.

[12] In my view a period of unpaid leave does not affect the annual rate of earnings as referred to in s.328.

[13] I find that the applicant’s annual rate of earnings exceeded the high income threshold and accordingly Fair Work Australia has no jurisdiction to deal with the substantive application.

[14] I uphold Universal’s jurisdictional objection and the application for relief is hereby dismissed.

COMMISSIONER

Appearances:

A Gotting, counsel, on behalf of Universal Music Australia Pty Limited.

P Lott, counsel, on behalf of Mrs Tamara Trezise.

Hearing details:

2011.
Sydney:
August 4.

Printed by authority of the Commonwealth Government Printer

<Price code B, PR514126>