[2010] FWA 8124

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Craig Ablett
v
Gemco Rail Pty Ltd
(U2010/1173)

COMMISSIONER WILLIAMS

PERTH, 22 OCTOBER 2010

s.394 - application for unfair dismissal remedy

[1] This matter involves an application for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (the Act) made by Mr Craig Ablett (the Applicant). The respondent to the application is Gemco Rail Pty Ltd (the Respondent).

[2] A conciliation conference was conducted by a Fair Work Australia conciliator however the matter was not resolved and so it was referred for arbitration.

[3] The Respondent objects to the application for an unfair dismissal remedy on the ground that the Applicant was not protected from unfair dismissal because his annual rate of earnings was above the high income threshold and his employment was not covered by a modern award or enterprise agreement and separately, on the ground that the application was made out of time, after the 14 day statutory period allowed.

[4] Consequently I wrote to both parties and requested information from them with respect to the above objections. The Applicant was first invited to provide information in response to the Respondent's objections and the Respondent was then invited to provide any further information in reply.

[5] Accordingly the Applicant has provided a response which was also e-mailed to the Respondent. The Respondent has not provided any further information in reply to the Applicant's submissions.

The legislation

[6] Section 394 set out below provides that a person who has been dismissed may apply to Fair Work Australia for an order granting a remedy. Further section 394 (2) requires that the application be made within 14 days after the dismissal took effect however Fair Work Australia is empowered, if satisfied that there were exceptional circumstances, to allow a further period for the application to be made.

[7] However section 390 below provides that Fair Work Australia may only order a person's reinstatement or the payment of compensation to a person if Fair Work Australia is satisfied that the person was protected from unfair dismissal.

[8] Section 382 set out below then defines when a person is protected from unfair dismissal. A person who has completed the minimum employment period is protected from unfair dismissal if either they were covered by a modern award or an enterprise agreement applied to them or the sum of their annual rate of earnings and other amounts worked out in relation to the person in accordance with the regulations is less than the high income threshold. As of 1 July 2010 the high income threshold is $113,800.00.

Background

[9] The Applicant was dismissed by the respondent on 2 July 2010.

[10] From the information provided by the Applicant it seems shortly thereafter he received from the respondents a PAYG payment summary for the year ending 30 June 2010 which was dated 30 June 2010 ( the first PAYG payment summary).

[11] Following this the Applicant received a letter from the Respondent dated 22 July 2010 which says that an audit has revealed that the first PAYG payment summary sent out on 5 July 2010 was incorrect. Attached was an amended PAYG payment summary dated 21 July 2010 ( the second PAYG payment summary).

[12] The first PAYG payment summary specifies the gross payments as $101,923 and the reportable fringe benefit's amount as $18,150.

[13] The second PAYG payment summary specifies the same gross payments as $101,923 but specifies the reportable fringe benefits amount as the lesser amount of $11,942.

Was the Applicant protected from unfair dismissal?

The Respondent’s submission

[14] The Respondent's submissions are limited to those set out their Form F4 Objection to Application for Unfair Dismissal Remedy. This objection includes a statement that the Applicant's annual rate of earnings was $120,581. This form was signed by the Respondent’s Human Resources Co-ordinator on 19 August 2010.

[15] I note that earlier, in the Respondent’s Form F3 Employer's Response to Application for Unfair Dismissal Remedy which was signed and dated by the Respondent’s Human Resources Co-ordinator on 12 August 2010, it was asserted that the Applicant's annual rate of earnings amounted to $123,192.04.

[16] The Respondent calculated this amount as follows:

[17] It is not clear why these two figures for the Applicant’s annual rate of earnings provided by the respondent are different however as will be seen below this discrepancy is not material to this decision.

The Applicant’s submission

[18] The Applicant has explained that whilst both PAYG payment summaries show the gross payments he received to have been $101,923 this includes an amount of $1923 which was a bonus payment which was not guaranteed. So the Applicant submits this bonus should be excluded from the calculation by virtue of section 332 (2) (a).

[19] The Applicant says his annual rate of earnings was as follows:

[20] The Applicant submits that the Respondent in their calculations has wrongly included the superannuation amount of $9,000 which is excluded by virtue of section 332 (2) (c).

[21] Further the Applicant submits that the amount of $2,850 which the Respondent included in their first calculation on the Form F3 was a reimbursement for training and so is excluded by virtue of section 332 (2) (b).

[22] Therefore, the Applicant submits his annual rate of earnings was below the high income threshold of $113,800 at the time he was dismissed.

[23] The Applicant concedes that he was not covered by a modern award nor did an enterprise agreement apply to his employment.

[24] Accordingly the Applicant submits that at the time he was dismissed he was protected from unfair dismissal by virtue of s. 382(b)(iii).

Consideration of the Applicant's earnings

[25] Both parties in this case have relied on the earnings of the Applicant for the financial year 2009 - 2010 as being the amount of his annual rate of earnings. I note that the Applicant was dismissed on 2 July 2010 two days after the end of financial year and so the parties’ approach in this regard is unsurprising.

[26] The Respondent appears to accept that the Applicant's annual salary was $100,000 per annum and I accept the submissions of the Applicant that the additional mount of $1,923 included in the gross payments to him for the previous financial year was for a bonus amount that was not guaranteed and so is not to be included in the calculation of his annual rate of earnings.

[27] Both parties in their calculations have included an amount for a motor vehicle. The Respondent proposes an amount of $11,342.04 whilst the Applicant has included the amount set out in both PAYG payment summaries as the reportable fringe benefit amount being $11,942. It is possible that the amount the Respondent has attributed to a motor vehicle has been reduced by $600 in error.

[28] In the circumstances I will accept the amount submitted by the Applicant as being attributable to his use of a motor vehicle that amount being $11,942, an amount greater than that which the Respondent submits should be included.

[29] I note that the Applicant’s submissions, which addressed the exclusion of the superannuation amount and the amount for educational expenses or training, was provided to the Respondent but they have not replied to this.

[30] Section 332 of the Act below defines what is included and what is not included in the calculation of a person's earnings.

[31] Compulsory superannuation contributions made by an employer as required by the Superannuation Guarantee Charge Act 1992 are expressly excluded from the calculation of an employee's earnings by virtue of s.332(2)(c). I note that the amount in question here is $9,000 which of course is 9% of the Applicant's annual salary of $100,000. This percentage is consistent with an employer's obligation under the Superannuation Guarantee Charge Act 1992.

[32] I agree with the submissions of the Applicant that the amount of $9,000 paid to him as superannuation is not to be included in the calculation of his annual rate of earnings.

[33] Section 332(2)(b) of the Act expressly excludes reimbursements to an employee from the calculation of an employee's earnings. The Applicant argues that the amount of $2,850 that the Respondent says should be included was a reimbursement amount for training. I note that the Respondent in their original response referred to this amount is being for educational expenses. This statement is consistent with the Applicant's view that the amount was a reimbursement for expenses he incurred. Consequently, I am satisfied that the amount of $2,850 was an amount that is not to be included in the calculation of the Applicant's earnings.

[34] In conclusion I find that the Applicant’s annual rate of earnings was:

[35] Therefore I am satisfied that the sum of the Applicant's annual rate of earnings being $111,942 at the time of his dismissal was less than the high income threshold of $113,800. Consequently I find that the Applicant was a person protected from unfair dismissal at the time he was dismissed by the Respondent.

Extension of time to make the application

[36] The Applicant acknowledges the application was made out of time and applies for Fair Work Australia to grant him an extension of that 14 day statutory time limit to the date on which the application was lodged.

[37] The Applicant submits that the reason the application was lodged outside the 14 day time limit was because he believed his annual rate of earnings was above the high income threshold. This erroneous belief was because of the error included by the Respondent in the first PAYG payment summary he received.

[38] The first PAYG payment summary was sent to the Applicant on 5 July 2010 and this stated that the reportable fringe benefit amount was $18,150. Added to the Applicant's annual salary of $100,000 this led the Applicant to believe that his annual rate of earnings was $118,150 which exceeded the high income threshold of $113,800 and so the Applicant believed he was unable to apply for an unfair dismissal remedy.

[39] On 22 July 2010 which was 20 days after the date of dismissal the Respondent advised the Applicant that the figures included in the first PAYG payment summary were incorrect and that the reportable fringe benefit amount was the lower amount of $11,942. The Applicant then understood his annual rate of earnings to have been $111,942, an amount below the high income threshold such that he was not, as he had originally believed, excluded from making application for an unfair dismissal remedy.

[40] The Applicant immediately lodge this application on 23 July 2010. The Applicant submits that had the first PAYG payment summary being correct he would have lodged this application within the 14 day period.

[41] The Respondent has not provided any submissions in response to the information the Applicant has provided in support of his application to extend time for lodging this application.

Consideration of the application to extend time for lodgement

[42] I am satisfied that the incorrect information provided by the Respondent in the first PAYG payment summary led the Applicant to believe he was unable to make an application such as this. I am further satisfied that this was the reason for all of the delay in making this application and that the reason for the delay in this instance is an acceptable explanation for the delay in making this application.

[43] The Applicant did not take any other action to dispute his dismissal which was unsurprising in the context of him believing he was excluded from making an application such as this.

[44] There is no suggestion that extending time for the Applicant to make the application in this instance word create prejudice for the Respondent.

[45] The merits of the application had not been canvassed by the parties in their submissions so I am unable to form a view on this factor. Similarly there is no information to suggest that there are any other persons in a similar position such that fairness between those persons and the Applicant is a matter for the Tribunal to consider.

[46] Taking into account all of the above factors I agree that there are exceptional circumstances in this case such that it is appropriate for the Tribunal to allow an extension of time for the applicant to lodge this application. An appropriate order will issue in conjunction with this decision.

[47] This matter will be listed for arbitration on the substantive application and the parties will be contacted in due course to this end.

COMMISSIONER



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