Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [2016] FWC 1335 of Commissioner Cribb at Melbourne on 4 March 2016 in matter number U2015/12896.

[1] Savannah Nickel Mines Pty Ltd (the appellant) has sought to appeal a decision of Cribb C dated 4 March 2016 (the decision). 1 The decision concerned whether Mr Crowley (the respondent), who had made an application seeking an unfair dismissal remedy, earned more than the high income threshold. (He was not covered by an award or enterprise agreement.) Employees who not covered by a modern award or enterprise agreement are only protected from unfair dismissal if they earn less than the high income threshold.

[2] The appeal was heard on 14 April 2016. Both parties had previously filed written submissions. The appellant was represented by Mr A Cameron. Mr I Colgrave of counsel was granted permission to represent the respondent.

The relevant legislation

[3] The relevant provisions of the Fair Work Act 2009 are ss.382(b) and 332.

[4] Section 382 provides as follows:

‘382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) 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.

Note: High income threshold indexed to $136,700 from 1 July 2015.’

[5] Section 332 provides as follows:

‘332 Earnings

(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.

Note: Some examples of payments covered by paragraph (a) are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).

(3) Non-monetary benefits are benefits other than an entitlement to a payment of money:

(a) to which the employee is entitled in return for the performance of work; and

(b) for which a reasonable money value has been agreed by the employee and the employer;

but does not include a benefit prescribed by the regulations.

(4) This subsection applies to contributions that the employer makes to a superannuation fund to the extent that one or more of the following applies:

(a) the employer would have been liable to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the person if the amounts had not been so contributed;

(b) the employer is required to contribute to the fund for the employee’s benefit in relation to a defined benefit interest (within the meaning of section 291-175 of the Income Tax Assessment Act 1997) of the employee;

(c) the employer is required to contribute to the fund for the employee’s benefit under a law of the Commonwealth, a State or a Territory.’

The decision

[6] At the date of dismissal, the respondent’s annual gross salary was $133,475. In addition, the respondent was also the beneficiary of a life insurance policy, which was paid for by the appellant. The matter in dispute before Cribb C was whether the cost of the premium for this insurance should be included in calculating whether the respondent earned more than the high income threshold. Specifically, it was whether or not the annual premium was an amount applied or dealt with in any way on the employee’s behalf as referred to in s.332 (1)(b). If it were included, his earnings would be above the high income threshold and he would therefore not be eligible to seek an unfair dismissal remedy.

[7] The Commissioner concluded that the relevant insurance premium was not an amount applied or dealt with in any way on the respondent’s behalf, and therefore should not be included in calculating whether he earned more than the high income threshold. She did so because while the respondent was the beneficiary of the policy, the policy was in the name of the employer:

‘For the premium to be an amount applied or dealt with on the employee’s behalf, it would flow that the policy would be in Mr Crowley’s name. Mr Crowley is a beneficiary of the policy but the policy is the in the name of the company. It is the company’s policy. The premium paid by the company was paid for the company’s insurance plan so, therefore, may not fairly be described as an amount applied or dealt with on the employee’s behalf. The premium was paid on the company’s behalf for its insurance cover. Mr Crowley is the named beneficiary, but the company is identified as the owner of the plan.’ 2

Consideration

[8] We have decided to grant permission to appeal, for two reasons: the appeal raises an issue concerning the jurisdiction of the Commission, and it concerns an issue that has not previously been the subject of a Full Bench decision.

[9] We are satisfied that the Commissioner was in error in finding that the life insurance premium was not an amount applied or dealt with on the employee’s behalf. As the Commissioner noted, the beneficiary of the policy was the respondent (or presumably the respondent’s estate in the event of his death). The fact that the policy was in the name of the employer is an irrelevant consideration. As the appellant noted during its oral submissions:

‘The only practical effect of the policy being in the name of (the) company, rather than being in the name of Mr Crowley, is that the bills go directly to the company.’ 3

[10] The respondent paid the premium for the life insurance policy for the benefit of the respondent. This was ‘an amount applied or dealt with’ on behalf of the respondent. The cost of the premium should be taken into account in calculating whether the respondent earned more than the high income threshold.

Conclusion

[11] The appeal is upheld and the Commissioner’s decision quashed. We are satisfied that Mr Crowley is not protected from unfair dismissal, as he is not covered by a modern award or an enterprise agreement, and his earnings were above the high income threshold. His application for an unfair dismissal remedy is accordingly dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr A Cameron appeared in Perth for the Appellant.

Mr I Colgrave of counsel appeared in Adelaide for the Respondent.

Hearing details:

Sydney.

2016.

April 14.

 1   Bryan Crowley v Savannah Nickel Mines Pty Ltd [2016] FWC 1335.

 2   Ibid [52].

 3   PN74.

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