Trevor Wilkinson v BIS Industries Limited T/A BIS Industries

[2015] FWC 2385

[2015] FWC 2385

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Trevor Wilkinson
v
BIS Industries Limited T/A BIS Industries
(U2014/16163)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 7 APRIL 2015

Application for relief from unfair dismissal.

[1] Mr Trevor Wilkinson was employed by BIS Industries (BIS) until his employment was terminated on 8 December 2014. Mr Wilkinson lodged an unfair dismissal application. BIS objected to his application because it said he earned more than the high income threshold.

[2] It was not contested that neither a modern award nor an enterprise agreement applied to Mr Wilkinson’s employment. Nor was it disputed that his remuneration package consisted of:

$118,500 base salary

$15,000 site allowance

10% superannuation

Other payments are not relevant to the matters before the Fair Work Commission.

[3] The issue to be determined is whether the site allowance should be included as part of Mr Wilkinson’s earnings.

[4] 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.

[5] Mr Wilkinson’s contract of employment provided for a site allowance as follows:

“As the location in which the Employee will normally be working is considered, due to remoteness/climate to impose a degree of inconvenience/hardship additional to that experienced by the majority of supervisory/management employees, a “site allowance” at the rate of $15,000 gross per annum will be paid in addition to the annual base salary noted above. This allowance will be subject to the normal tax provisions governing such allowances. This allowance is subject to regular review but will not be adjusted between annual reviews unless the conditions governing its payment vary significantly. Should the Employee transfer to another location, a site allowance may or may not be provided, as determined by the Company in its sole and absolute discretion.”

[6] The contract provided that the employee must work at the location specified in Schedule 1 or at such other places as the Company may reasonably require from time to time.

[7] The contract further provided that “the Employee’s place of work shall initially be Leinster Mine Site, WA. The Company may however, require the Employee to perform their duties at other locations. In such circumstances, the Employee agrees that they will perform their duties from any location required by the Company.”

[8] It was not disputed that the site allowance was included in the monies paid to Mr Wilkinson when he took annual leave and personal leave. Further, his superannuation was paid on his base salary and site allowance. It was further not disputed that the site allowance was not included for the purpose of calculating annual leave on termination or long service leave or redundancy pay. However, the site allowance was included for the purpose of calculating Mr Wilkinson’s pay in lieu of notice.

[9] It was submitted that because BIS could relocate Mr Wilkinson at its sole discretion to a site where Mr Wilkinson was not entitled to a site allowance, the amount should not be included in the calculation of the high income threshold.

[10] It was further submitted that because BIS at its sole discretion could adjust the allowance if the conditions governing its payment vary significantly, it would not be counted as part of Mr Wilkinson’s base salary.

[11] I agree that the site allowance is not part of Mr Wilkinson’s base salary. However, that is not the question that needs to be determined. What needs to be determined is whether it is part of Mr Wilkinson’s earnings.

[12] 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

[13] I accept that Mr Wilkinson may not have been entitled to the allowance if he were transferred to a site which did not require him to fly in and fly out, however, that does not mean the amount should not be included in his earnings.

[14] 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

[15] 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.

[16] 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. In that case, like here, the allowance was not paid if Mr Ferguson transferred to a site where the allowance was not payable. It was payable on Mr Ferguson’s annual leave, personal leave and superannuation. It was not paid on long service leave.

[17] 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. In that case, I found that Rio Tinto could change the site allowance from time to time, but there was no basis for concluding that Rio Tinto could unilaterally change Mr Suleski’s package.9

[18] It is not necessary for me to determine if Mr Wilkinson could be moved to a site which did not attract a site allowance. If he did, then his earnings would fall below the high income threshold.

[19] There are many circumstances where an amount which is included in an employee’s wages will cease being paid because of changed circumstances. For example, an employee who receives a night shift penalty will have that amount included in his or her wages but that penalty will not be paid if the employee ceases to work night shift.

[20] The site allowance is not discretionary in the sense that BIS could unilaterally reduce the site allowance at the fly in fly out sites where it currently applies.

[21] I am concerned with Mr Wilkinson’s earnings at the date of the termination of his employment. I consider that the site allowance paid to him at that time was part of his wages and as such it is included in Mr Wilkinson’s annual earnings. As such, he earned more than the high income threshold and therefore is not protected from unfair dismissal. Mr Wilkinson’s application for an unfair dismissal remedy is therefore dismissed.

DEPUTY PRESIDENT

Appearances:

S Gold of Counsel for the Applicant.

R Harding for the Respondent.

Hearing details:

2015.

Melbourne, Sydney and Perth, by video link.

1 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.

 9 Ibid at [23].

Printed by authority of the Commonwealth Government Printer

<Price code A, PR562830>