1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Heath Morrison
v
Mabey Hire
(U2021/1143)
DEPUTY PRESIDENT CLANCY MELBOURNE, 13 APRIL 2021
Application for an unfair dismissal remedy – jurisdictional objection – high income threshold
– annual rate of earnings below the high income threshold of $153,600 – jurisdictional
objection dismissed.
Background
[1] On 12 February 2021 Mr Heath Morrison applied to the Fair Work Commission under
s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy, having been
dismissed from his employment with Mabey Hire on 22 January 2021.
[2] On 19 February 2021, a Form F4 – Objection to application for unfair dismissal
remedy (Form F4) was filed in response. In it, Mabey Hire raised the jurisdictional objection
that Mr Morrison’s annual rate of earnings was more than the high income threshold of
$153,600 and therefore he is not a person protected from unfair dismissal, as required by
s.382 of the Act. On 23 February 2021 Mabey Hire filed a Form F3 – Employer Response to
application for an Unfair Dismissal Remedy (Form F3) in which it repeated its jurisdictional
objection.
[3] Following the filing of material, I conducted a Determinative Conference on 12 April
2021 in relation the jurisdictional objection. Mr Morrison appeared on his own behalf and Mr
Gary Pepper (Human Resources Manager) appeared on behalf of Mabey Hire.
[4] Section 382 of the Act prescribes in what circumstances a person is protected from
unfair dismissal:
“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:
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DECISION
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(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.”
Did Mr Morrison complete the minimum employment period? (s.382(a))
[5] It is not in dispute that Mr Morrison commenced employment with Mabey Hire on 20
October 2016 and that the termination of his employment took effect on 22 January 2021. I
am satisfied that the requirements of s.382(a) are met.
Was Mr Morrison covered by a modern award or an enterprise agreement? (s.382(b)(i)
and (ii))?
[6] Neither Mr Morrison nor Mabey Hire contend that Mr Morrison was covered by a
modern award or an enterprise agreement at the time of dismissal and I am satisfied this was
the case.
Were Mr Morrison’s annual earnings over the $153,600 high income threshold?
(s.382(b)(iii))
[7] If an employee is neither covered by a modern award nor an enterprise agreement (as
is the case with Mr Morrison) but their annual rate of earnings, and such other amounts (if
any) worked out in relation to the person in accordance with the regulations, is more than the
high income threshold, then they are not a person protected from unfair dismissal and are not
eligible to make an application for an unfair dismissal remedy.
[8] Section 333 of the Act provides that the high income threshold is the amount
prescribed by, or worked out in the manner prescribed in the regulations. Regulation 2.13 of
the Fair Work Regulations 2009 provides that as of 1 July 2020 the figure was $153,600.
[9] Section 332 of the Act defines ‘earnings’ as follows:
“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.
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(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.”
[10] Regulation 3.05 explains how to work out amounts for the purposes of assessing
whether the high income threshold applies in relation to a dismissal, and includes Reg 3.05(6)
that provides for circumstances where a non-monetary benefit that has not been for an agreed
amount may be included for the purposes of the unfair dismissal jurisdiction.
[11] Regulation 3.05(6) reads as follows:
“REGULATION 3.05 When a person is protected from unfair dismissal--high
income threshold
…..
[2021] FWC 2009
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Benefits other than payment of money
(6) If:
(a) the person is entitled to receive, or has received, a benefit in accordance
with an agreement between the person and the person's employer; and
(b) the benefit is not an entitlement to a payment of money and is not a non-
monetary benefit within the meaning of subsection 332(3) of the Act; and
(c) the FWC is satisfied, having regard to the circumstances, that:
(i) it should consider the benefit for the purpose of assessing whether the
high income threshold applies to a person at the time of the dismissal;
and
(ii) a reasonable money value of the benefit has not been agreed by the
person and the employer; and
(iii) the FWC can estimate a real or notional money value of the benefit;
the real or notional money value of the benefit estimated by the FWC is an amount for
subparagraph 382(b)(iii) of the Act.”
[12] The parties agree that Mr Morrison’s employment was subject to an employment
contract dated 16 October 2016.1 The parties agree and I am satisfied that Mr Morrison’s base
salary as at the date of termination was $125,000. This amount is to be included in Mr
Morrison’s earnings in accordance with s.332(1)(a) of the Act.
[13] Clause 10 of Mr Morrison’s employment contract states:
“10. Tools of trade – Motor Vehicle
10.1 You will be provided with a fully maintained job-related vehicle in accordance
with the relevant Company Policy. You are required to read the Tool of Trade Vehicle
Policy and Fuel Card Policy prior to being issued with a vehicle.
10.2 Excessive personal use will not be condoned, and the Company may seek
reimbursement from you (via deductions from your wages) for excessive personal fuel
costs.
10.3 During periods of leave (paid or unpaid), the vehicle may be required to remain
on site for use by other personnel conducting company business”.
[14] Having regard to the matters in Clause 10 of the employment contract:
It outlines that Mr Morrison would be provided with a tool of trade and ‘fully
maintained job-related’ vehicle;
1 Exhibit R1, DCB at p.97.
[2021] FWC 2009
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Neither the Tool of Trade Vehicle or Fuel Card policies referred to were put before
me; and
It was not submitted that Mr Morrison’s personal use was so excessive that Mabey
Hire had sought reimbursement from him for excessive personal fuel costs.
[15] In Rofin Australia Pty Ltd v Newton2 the Full Bench of the Australian Industrial
Relations Commission stated:
“Where a motor vehicle is provided to an employee in lieu of salary that might
otherwise have been paid, it is appropriate that the private benefit derived by the
employee from the provision of the motor vehicle be counted as part of the employee's
remuneration. Where, however, the vehicle is provided for business purposes and the
employee's entitlement to private use is purely incidental, the provision of the motor
vehicle should be treated no differently to the provision by the employer of any other
tool or piece of equipment essential to the performance of the job.”3
[16] In the circumstances of this case, even if Mabey Hire had not sought reimbursement
from Mr Morrison for excessive personal fuel costs, it appears his private use was more than
incidental. I will therefore have regard to the value of Mr Morrison’s private use of the motor
vehicle provided to him by Mabey Hire.
[17] In H.W. Fewings v Kunbarllanjnja Community Government Council4 the Full Bench
of the Australian Industrial Relations Commission held that the most appropriate method of
calculating the monetary value of the benefit of the private use of a motor vehicle was to
apply the following formula:
1. Determine the annual distance travelled by the vehicle in question.
2. Determine the percentage of that distance that was for private use.
3. Multiply the above two figures to obtain the annual distance travelled for private
purposes.
4. Estimate the cost per kilometre for a vehicle of that type (may be obtained from
RACV, NRMA or other similar motoring association).
5. Multiply the annual distance travelled for private purpose (obtained at step 3) by
the estimated cost per kilometre.
[18] Both parties put material before me regarding the private use by Mr Morrison during
the period 1 July 2020-31 December 2020.
[19] Prior to hearing Mabey Hire submitted that virtually all of Mr Morrison’s travel in the
vehicle provided to him was personal. It submitted that from the date the vehicle was
provided (1 September 2018) until the date of termination (22 January 2021) the vehicle’s
odometer indicated that 96,941.67 km had been travelled. Mabey Hire divided these by the
period of time Mr Morrison had use of the vehicle (27.71 months) to produce a monthly rate
of travel of 3,498.43km. It then said this equated to annual travel of 41,981.24 km, of which
just 74 km was business related in 2020. Mabey Hire submits that by multiplying the balance
2 (1997) 78 IR 78.
3 Ibid at pp 82-83.
4 Print Q0675 (AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998).
[2021] FWC 2009
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(41,907.24) by the RACV weekly running cost for a “large SUV” ($0.89c per km),5 the
benefit to Mr Morrison of the private use of the vehicle it provided to him was $37,297.44.
The Mabey Hire position is that 99.82% of the total usage was private use by Mr Morrison.
[20] At hearing, Mr Pepper said a review of the GPS system for the vehicle for the period 1
July 2020 – 31 December 2020 indicates 4,055 km of travel after 5pm on Mondays-Fridays
and 3,619 km of travel on weekends, producing a total of 7,674 km of private use during that
period.
[21] Mr Morrison submitted that during the period 1 July 2020 – 31 December 2020, his
private use totalled 7,733.4 km. He said this figure was derived from:
1) 111 working days, travel from Craigieburn to Bundoora (return trip) = 53.4 km round
trip x 111 trips = 5,927.4 km;
2) 10 working days, travel from Clonbinane to Bundoora (return trip) = 125.6 km round
trip x 10 trips = 1,256 km;
3) 2 public holidays = 50 km per day (estimated) = 100 km; and
4) 9 days annual leave = 50 km per day (estimated) = 450 km.
[22] There was no dispute that Mr Morrison had been provided with a new vehicle
(Registration: 1NU 6CD) on or about 1 September 2018 or that 96,941.67 km had been
recorded as having been driven from that time the date of his termination on 22 January 2021.
Nor were the following odometer readings for the vehicle in dispute:
On 8 May 2020 – 74,332km;6 and
On 9 October 2020 – 87,813km.7
[23] If the reading on 8 May 2020 (74,332 km) is subtracted from the 96,941.67 km
reading on the date of Mr Morrison’s termination on 22 January 2021, it is evident that a total
of 22,609.67 km was travelled in that 37-week period. This equates to an average of 611.072
km per week and I consider this to be the most accurate and fair basis for calculating Mr
Morrison’s private use of the vehicle. Converting this 611.072 km per week into an annual
figure produces the total of 31,775.75 km (611.072 x 52 weeks).
[24] In order to assess the private use, I have analysed figures for annual private use from
two methods of calculation.
[25] Dealing firstly with the figures for private use submitted by the parties for the period 1
July 2020 – 31 December 2020 yields the following:
Mabey Hire: 7,674km x $0.89 x 2 = $13,659.72
Mr Morrison: 7733.4km x $0.89 x 2 = $13,765.45
[26] I consider neither total is an entirely accurate reflection of the private usage because
Mabey Hire’s GPS figures would not appear to pick up any travel from Mr Morrison’s home
to his place of work each day, while Mr Morrison’s figures do not include any weekend
5 See - https://www.racv.com.au/on-the-road/buying-a-car/car-running-costs.html#carculator (SUV Large – Toyota Kluger).
6 Exhibit A2, DCB at p.267.
7 Exhibit A1, DCB at p.263.
https://www.racv.com.au/on-the-road/buying-a-car/car-running-costs.html#carculator
[2021] FWC 2009
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travel. However, even if the two totals were added together, the total annual sum for private
usage would be $27,425.17. Mabey Hire also claimed there would have been additional
personal usage by Mr Morrison on holidays but produced no GPS data at the hearing to
support this assertion.
[27] The second method of calculation, and the one I will apply, is to accept Mabey Hire’s
case at its highest and assume that virtually all of Mr Morrison’s use of the vehicle was
private usage. Multiplying the 31,775.75 km for annual usage calculated in [23] above by the
Mabey Hire position that 99.82% of the total usage was private use by Mr Morrison, produces
the annual distance of 31,718.56 km travelled for private purposes. Multiplying this total by
the RACV weekly running cost for a “large SUV” ($0.89c per km) produces the sum of
$28,229.52.
[28] Clause 9 of Mr Morrison’s employment contract states:
“9. Tools of Trade / Mobile Phone
9.1 In this position you will be provided with the use of a mobile telephone. This tool
of trade is to be utilised for business purposes unless written permission is obtained
from the Company beforehand. Please ensure that you familiarise yourself with the
relevant policies and conditions of use prior to your appointment.
9.2 Excessive personal use will not be condoned, and the Company may seek
reimbursement from you (via deductions from your wages) for excessive personal
voice and/or data costs”.
[29] Mabey Hire submitted material that indicates that during the period 2 July 2020 – 1
January 2021, Mr Morrison had the benefit of $91.26 in personal calls on the company
supplied mobile phone.8 Mabey Hire calculated this sum by calculating what percentage
personal calls comprised of total calls each month and then multiplying that percentage by the
monthly charge for the mobile phone provided to Mr Morrison. These figures were not
challenged by Mr Morrison. Although Mabey Hire also provided a figure for January 2021, I
do not consider it reasonable to include this as part of the calculation because I observe from
payslips provided to the Commission that Mr Morrison was on annual leave for almost all of
this period and his contract of employment contemplated personal use that was not excessive.
Calculating the personal usage as an annual figure ($91.26 x 2) produces the sum of $182.52.
[30] The parties agree that in the period 1 July 2020 – 31 December 2020, Mr Morrison
had the benefit of $20.76 in road toll charges.9 Calculating this as an annual figure ($20.76 x
2) produces the sum of $41.52.
[31] Putting Mabey Hire’s Case at its highest, I consider that Mr Morrison’s annual rate of
earnings at the date of his termination is to be calculated by totalling the following:
Annual Base Salary - $125,000 (see [12] above);
Private usage of company provided vehicle - $28,229.52 (see [27] above);
8 Exhibit R2, DCB at p.47.
9 Exhibit R2, DCB at p.46.
[2021] FWC 2009
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Personal usage of company provided mobile telephone - $182.52 (see [29] above);
and
Out of hours road tolls - $41.52 (see [30] above).
[32] The total calculated is $153,453.56 and since this is below the high income threshold
of $153,600 and Mr Morrison completed a period of employment of at least the minimum
employment period immediately before his summary dismissal on 22 January 2021, Mr
Morrison is a person protected from unfair dismissal within the meaning of s.382 of the Act.
Conclusion
[33] Mabey Hire’s jurisdictional objection that Mr Morrison’s annual rate of earnings was
more than the high income threshold of $153,600 is dismissed and an Order to that effect will
be issued with this Decision.
[34] Issued concurrently with this Decision are Directions for the filing and service of
further material to address the question of the merits of Mr Morrison’s unfair dismissal
application. I also encourage the parties to engage in discussions to see whether a settlement
agreement might be reached and thereby negating the necessity for any further hearing, which
will require further time, effort and expense on the part of the parties. I note in this regard that
the matter has yet to have been conciliated and will facilitate making available a Member of
the Commission to assist the parties if the parties so request. Such arrangements can be made
by contacting my Chambers.
DEPUTY PRESIDENT
Appearances:
Mr H Morrison on his own behalf.
Mr G Pepper for Mabey Hire Pty Ltd.
Hearing details:
2021.
Melbourne (via Microsoft Teams):
April 12.
Printed by authority of the Commonwealth Government Printer
PR728583
NO R HE FAI NOISSIN THE SEA
