Toby Koenig v Ultra Thoroughbred Racing Pty Ltd
[2018] FWC 4880
•10 OCTOBER 2018
| [2018] FWC 4880 [Note: An appeal pursuant to s.604 (C2018/6119) was lodged against this decision.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Toby Koenig
v
Ultra Thoroughbred Racing Pty Ltd
(U2018/4613)
| Deputy President Colman | MELBOURNE, 10 OCTOBER 2018 |
Unfair dismissal application – jurisdictional objection – applicant not covered by an award – earnings exceed high income threshold – jurisdictional objection upheld
This decision concerns a jurisdictional objection raised by Ultra Thoroughbred Racing Pty Ltd (Ultra Thoroughbred) to an unfair dismissal application brought by Mr Toby Koenig under s 394 of the Fair Work Act 2009 (Act).
Mr Koenig was employed by Ultra Thoroughbred as general manager and equine veterinarian. He submits that he was dismissed from his employment on 24 April 2018, and that his dismissal was unfair.
The company contends that Mr Koenig was not a person protected from unfair dismissal because he earned more than the high income threshold and his employment was not covered by an award or enterprise agreement. It further contends that Mr Koenig resigned from his employment, and that there was no dismissal on the employer’s initiative for the purposes of s 386(1) of the Act.
Mr Koenig contests the company’s jurisdictional objection. He contends that his remuneration did not exceed the high income threshold, and that his employment at Ultra Thoroughbred was covered by the Animal Care and Veterinary Services Award 2010 (Award). Mr Koenig also submits that he was constructively dismissed by the company when it suspended him without pay in breach of his contract of employment.
Ultra Thoroughbred’s jurisdictional objection was listed before me on 27 July 2018. I conducted the proceeding by way of determinative conference. Mr Koenig appeared for himself and gave evidence on his own behalf. Mr Watts of counsel appeared, with permission, for Ultra Thoroughbred. The proceedings on 27 July 2018 were adjourned to allow the company an opportunity to file further evidence about Mr Koenig’s duties, and to enable the parties to participate in a member-assisted conciliation.
A member-assisted conciliation subsequently took place by telephone, however the matter did not resolve. The proceedings were relisted for 27 August 2018. Mr Koenig gave further evidence and was cross-examined by the company’s counsel. Ms Robyn Bull gave evidence for the company. Ultra Thoroughbred did not ultimately file further evidence about Mr Koenig’s duties, and was content to rely on Mr Koenig’s own evidence, and his cross-examination by the company’s counsel.
Background
Ultra Thoroughbred is a business that buys, breeds, sells and races horses.[1] Mr Koenig commenced employment with the company on 25 February 2013, as resident veterinary surgeon.[2] He signed a contract of employment setting out his duties and conditions of employment. It was common ground that on or about July 2015, Mr Koenig was appointed to the position of ‘general manager’. The appointment was made orally by Mr Buckley, the company’s executive chairman. It was not recorded in writing, nor was a new contract of employment prepared for Mr Koenig’s revised role. It was common ground that Mr Koenig continued to perform veterinary work after his appointment as general manager. Documents tendered in the proceedings show that from the time of his appointment, Mr Koenig’s emails and various other company documents referred to his position as ‘general manager and equine veterinarian’.
Mr Koenig and the company disagreed about the nature of his role following his appointment as general manager. Mr Koenig contended that he remained first and foremost a veterinary surgeon, and that his activities as general manager were effectively an extension or manifestation of his role as an equine veterinarian. The company contended that Mr Koenig’s role as general manager was fundamentally commercial, and that his veterinary duties were an adjunct to this role.
On 24 April 2018, the company’s in-house lawyer advised Mr Koenig that he was suspended without pay, effective immediately, for failing to carry out certain instructions, and that a meeting would be arranged to discuss the matter. In reply, Mr Koenig denied that he had refused to carry out the relevant instructions, and contested the company’s right to suspend him without pay. On 27 April 2018, Mr Koenig wrote to the company, stating that he considered his suspension on 24 April to be unlawful and that it amounted to constructive dismissal.[3] There followed further correspondence between the parties, culminating in Mr Koenig advising the company on 2 May 2018 that unless he received a satisfactory response to his concerns by the following day, he would bring unfair dismissal proceedings against the company. Mr Koenig did not receive a response. He filed an unfair dismissal application on 3 May 2018.
On 4 May 2018, Mr Koenig sent an email to Mr Chong, advising the company that he was no longer an employee by reason of constructive dismissal. On 7 May, Mr Chong replied that the company considered Mr Koenig to have resigned from his employment.
Was Mr Koenig a person protected from unfair dismissal?
Ultra Thoroughbred contended that Mr Koenig was not a person protected from unfair dismissal at the time of the alleged dismissal. Section 382 of the Act provides that a person is protected from unfair dismissal if he or she has completed the minimum employment period (there is no dispute about that matter in this case) and 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.”
Was Mr Koenig covered by the Award?
No enterprise agreement applied to Mr Koenig in relation to his employment with Ultra Thoroughbred. Mr Koenig however contended that at the time of his dismissal, he was covered by the Award. He said that the company was covered by the Award, and that his role fell within the Award classification of Level 4 senior veterinary surgeon.
The company submitted that it was not covered by the Award and that in any event Mr Koenig did not fall within the Level 4 senior veterinary surgeon classification.
Section 48 of the Act provides that an award covers an employee, employer or organisation if the award is expressed to cover them.
Clause 4.1 of the Award states that it applies to employers throughout Australia ‘in the veterinary surgery and the animal care industry and their employees in the classifications listed in Schedule B’. The expression ‘veterinary surgery industry’ is defined in clause 3.1 of the Award to mean ‘private veterinary surgery practices.’
Ultra Thoroughbred submitted that it is not an employer in the veterinary surgery or animal care industry, and that the Award therefore does not apply to it. The company is clearly not in the ‘animal care’ industry. Ultra Thoroughbred contended that it was not in the ‘veterinary surgery industry’ because it did not fall within the Award’s definition of this expression: it is not a ‘private veterinary surgery practice’; rather, it is a business that buys, breeds, sells and races horses.
Mr Koenig submitted that Ultra Thoroughbred does fall within the definition of a private veterinary surgery practice. He contended that, although the company is engaged in broader commercial activities, it runs a private veterinary surgery, and that, prior to his dismissal, he was the person who operated it. Mr Koenig said that he was employed as a veterinarian, that he attended to most of the hundred or so horses owned by the company in Victoria, and that his veterinary role continued after his appointment as general manager. He submitted that the company had an in-house, ‘ambulatory’ veterinary practice,[4] and that he would go from place to place attending to horses. In relation to the care of the company’s horses interstate, he would liaise with external vets who attended to their care. Mr Koenig said that in the veterinary industry, it was common for a veterinary practice to have a vet travel from site to site with relevant equipment in the back of a van and provide care to animals, and that he performed this function, in-house, for Ultra Thoroughbred.[5]
Mr Koenig explained that he also undertook equine veterinary work for another company established by Ultra Thoroughbred, Advanced Racing Therapeutics Pty Ltd (ART), and that it was the vehicle for Ultra Thoroughbred to charge external clients for his veterinary services.[6] However, Mr Koenig said that most of this work involved horses owned by Ultra Thoroughbred.[7] He also confirmed that his employer was Ultra Thoroughbred, not ART.
‘Private veterinary surgery practices’ is not defined in the Award. As a preliminary matter, it is quite clear from the reference to ‘practices’ in the plural that the expression is referring to businesses. A reference to practice in the singular would have pointed to the carrying out or exercise of the profession, but the plural cannot be read in this way. Veterinary surgery practices are veterinary businesses. The distinction between the practice of veterinary surgery and the business of a veterinary practice is further underscored in the Award by the presence of a separate definition in clause 3.1 of veterinary surgeon, meaning a qualified vet who satisfies the relevant statutory and professional requirements to practice as a vet in the relevant jurisdiction.
Mr Koenig urged the Commission to adopt a broad meaning of ‘private veterinary surgery practice’, namely that private practice encompasses an in-house veterinary function in a private company. Ultra Thoroughbred is certainly a private company. However in my view, as a matter of ordinary English usage, a ‘private veterinary surgery practice’ connotes a private veterinary business that offers services to clients.
This interpretation is compatible with a contextual reading of clause 4.1 and the Award as a whole. The classifications that are defined in Schedule B of the Award relevantly include practice managers, veterinary nurses and receptionists, all of whom one would expect to encounter at a veterinary surgery offering services to clients. In particular, the Level 5 practice manager is defined as a person who has overall responsibility of managing the day-to-day operations of a veterinary practice, including oversight of human resources, stock control, clinical administration, bookkeeping and customer management (clause B.2.6). None of this has meaningful application to an in-house veterinary function.
Ultra Thoroughbred is not a ‘private veterinary surgery practice’. It is a business that buys, sells, breeds and races horses.
Mr Koenig suggested that ART was a ‘private veterinary surgery practice’. The veterinary work carried out by Mr Koenig for this company was for private clients. Ultra Thoroughbred itself could be considered a client of ART. I accept that Mr Koenig performed work for ART as part of his role as an employee of Ultra Thoroughbred. But even if ART is a private veterinary surgery practice owned by Ultra Thoroughbred, and Mr Koenig performed veterinary work for this entity, it does not follow that Ultra Thoroughbred is a private veterinary surgery practice.
I conclude that Ultra Thoroughbred is not an employer ‘in the veterinary surgery industry’, and that Mr Koenig was therefore not covered by the Award. It is not necessary for me to consider whether Mr Koenig’s employment as ‘general manager and equine veterinarian’ fell within the classification structure in the Award.
The significance of this conclusion is that Mr Koenig will not be protected from unfair dismissal unless his remuneration was less than the high income threshold.
Was Mr Koenig’s remuneration less than the high income threshold?
Throughout the proceedings before me, Mr Koenig did not dispute that his income exceeded the high income threshold. He acknowledged that his annual salary was $150,000.[8] However, following the conclusion of the proceedings on 27 August 2018, Mr Koenig forwarded to my chambers a group certificate that he had received from the company at his home address that evening. It indicated that for the 2017/18 financial year Mr Koenig’s total earnings were $125,192. Mr Koenig contended that the certificate proved he had earned less than the high income threshold, and that he was a person protected from unfair dismissal.
Mr Koenig’s submission concerning the significance of the group certificate is misconceived. Section 382 provides that a person is protected from unfair dismissal if, relevantly, ‘the sum of the person’s annual rate of earnings … is less than the high income threshold.’ What is relevant is the annual rate of earnings, not the earnings for the last financial year.
The high income threshold that applied at the time of Mr Koenig’s dismissal was $142,000. In her witness statement, Ms Bull said that Mr Koenig’s annual salary at the time of his dismissal was $150,000 per annum,[9] and that in addition he received $14,250 superannuation per annum. She appended to her witness statement a payslip for the period 2 April 2018 to 15 April 2018, which showed that for this period Mr Koenig was paid $5,769.24 gross, from which PAYG tax was deducted. The payslip also showed that Mr Koenig’s annual salary was $150,000.24.
In further emails sent to my chambers after the conclusion of the proceedings, Mr Koenig submitted an additional or alternative argument as to why he earned less than the high income threshold. He said that he was constructively dismissed on 19 April 2018 (based on his witness statement and unfair dismissal application, he appears to have in mind 24 April 2018, the date of his suspension), but that if his employment had been terminated in accordance with law, he would have received four weeks’ notice, such that his employment would have ended on 19 May (I take this to mean 24 May). He appears to contend that, over the 12 month period ending on 19 May, he would have earned $138,043.59, reflecting roughly 11 months’ pay only, because he was not actually afforded the four weeks’ notice and was not paid during this period.
This argument too is misconceived. It is based on a hypothetical and false premise, namely that his employment ended on 19 (or 24) May 2018.
Mr Koenig’s employment ended, at the latest, on 7 May 2018, when the company advised Mr Koenig that it would consider him to have resigned. Mr Koenig was suspended without pay from 24 April 2018; however, he contends that this suspension was unlawful, and that he was entitled to be paid during the period he was suspended. If he is right, the payment for these two weeks is to be included in his annual rate of remuneration. If he is wrong, I accept that there would be a basis to reduce the annual rate of remuneration by two weeks, but this would see his remuneration drop by $5,769 to $144,231. Although it was not the subject of any detailed argument, I agree with Mr Koenig that there appears to have been no basis for the company to suspend him without pay. His contract does not contain a provision which would allow for this to occur. Accordingly, he would be entitled to payment for the period of his suspension, and his annual rate of remuneration remains at $150,000.
I am satisfied that Mr Koenig’s remuneration exceeded the high income threshold. A modern award did not cover him, and an enterprise agreement did not apply to him in relation to his employment. Mr Koenig was not a person protected from unfair dismissal. Accordingly, the Commission has no jurisdiction to order an unfair dismissal remedy (s 390).
It is not necessary for me to consider the company’s second jurisdictional objection.
Mr Koenig’s application for an unfair dismissal remedy is dismissed.
DEPUTY PRESIDENT
Appearances:
T. Koenig for himself
L. Watts of counsel for Ultra Thoroughbred Racing Pty Ltd
Hearing details:
Melbourne
2018
27 July, 27 August
<PR610297>
[1] Transcript dated 27 August 2018 at PN1013
[2] Annexure 2, Statement of Robyn Bull
[3] Form F2 application, Section 3 at [4] – [5]
[4] Transcript dated 27 July 2018 at PN97, PN160
[5] Transcript dated 27 July 2018 at PN419 – PN420
[6] Transcript dated 27 August 2018 at PN1273
[7] Transcript dated 27 August 2018 at PN1281
[8] Applicant’s outline of submissions at Question 7(c)
[9] Statement of Robyn Bull at [7]
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