1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Rebecca Johnson
v
Benex Civil Pty Ltd
(U2021/3143)
COMMISSIONER SPENCER BRISBANE, 18 FEBRUARY 2022
Application for an unfair dismissal remedy – jurisdictional objection – high income threshold
– vehicle usage – jurisdictional objection upheld – application dismissed.
INTRODUCTION
[1] Ms Rebecca Johnson (the Applicant) lodged an application to the Fair Work
Commission for an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009
(the Act) alleging that the termination of her employment by Benex Civil Pty Ltd (the
Respondent) was harsh, unjust or unreasonable. The Applicant’s employment was terminated
on 14 April 2021, for alleged serious misconduct.
[2] The Respondent raised a jurisdictional objection to the application, on the grounds that
the Applicant’s annual rate of earnings was in excess of the high income threshold of $153,600,
as at the time of termination, and therefore, the Applicant was not protected under the unfair
dismissal provisions prescribed in s.382(b)(iii) of the Act.
[3] There were contested facts in relation to the matters applicable to the Applicant’s
earnings against the high income threshold. A determinative conference (by consent) was held
in accordance with s.397 of the Act, and Keira Fletcher v Little Darlings Early Development
Centre.1 The conference was conducted, via telephone. The Respondent was later granted
permission for a solicitor to represent the Respondent, pursuant to s.596(2)(a) of the Act. One
of the primary reasons of consideration for the granting of legal representation was that the
cross-examination between the parties was raised as being problematic by the Respondent’s
solicitors, as an Apprehended Domestic Violence Order (ADVO) was in place. Further, there
was some complexity on the facts. A related decision, ([2022] FWC 339) deals with the
Respondent’s application for a suppression order in relation to some of the material filed.
BACKGROUND
1 Keira Fletcher v Little Darlings Early Development Centre [2015] FWC 7556.
[2022] FWC 338
DECISION
AUSTRALIA FairWork Commission
[2022] FWC 338
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[4] The following context to the application was set out in the parties’ submissions. In
December 2007, the Applicant commenced a relationship with Mr Benjamin Johnson, who is
the sole Director of the Respondent business (Benex Civil Pty Ltd). The Applicant and Mr
Johnson then married on 20 December 2012 and have one child. These matters are mentioned
as they are referred to, in providing the context of the vehicle usage and matters relevant to the
jurisdictional objection.
[5] The Applicant commenced employment with the Respondent on 9 October 2017 when
she was engaged as an Office Manager (later renamed to be Commercial Manager). The
Applicant was responsible for overseeing and supervising the Respondent’s commercial
activities and employees, including to ensure that the Respondent met its financial goals, to
assess overall company performance, perform human resource activities and other duties.2
[6] On 1 February 2021, the Respondent replaced the Applicant’s Rav4 with a Toyota
Landcruiser Prado (Prado) which was intended to be driven by the Applicant and was insured
with the Respondent’s insurance company. The Prado was provided to the Applicant for use on
5 March 2021.
[7] In late March or early April 2021, the Applicant and Mr Johnson separated on a final
basis. It is Mr Johnson’s evidence that the separation occurred on 20 March 2021, whereas it is
the Applicant’s evidence that the separation occurred on 6 April 2021, when she had informed
Mr Johnson, that she had sought legal advice and that all of their joint assets, liabilities and
finances are to be considered frozen.
[8] On 6 April 2021, Mr Johnson emailed the Applicant advising that the inappropriate
accessing of the Respondent’s email, Telstra and iCloud accounts will be under a full security
check and upgrade. In the same email, Mr Johnson requested that the Applicant update their
current management password register and return it to Mr Johnson by close of business, 7 April.
[9] The Applicant responded shortly after, advising “no”, that she will fight to retain this
business and will not offer her passwords. Mr Johnson replied to the Applicant’s email advising
that he is issuing a direct order, which the Applicant must comply with. There was no response
made by the Applicant, in the email chain provided.
[10] At 12:06pm on 13 April 2021, Mr Johnson sent another email to the Applicant advising
the following:3
“Afternoon Becky
Your lack of engagement and complaints regarding to the state issues above, are very
concerning. The negative impacts on Benex’s ability to function and fulfil its
responsibilities are at risk .
I take mater very seriously.
2 See Witness Statement of Benjamin Paul Johnson, BJ-4 for Job Description of Business Manager.
3 See Witness Statement of Benjamin Paul Johnson, BJ
[2022] FWC 338
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You are advised I require a formal reply as to why your employment should be
continued by 12pm tomorrow 14/4/21.
Thanks
Ben Johnson
Director”
[11] At 1:35pm on 13 April 2021, the Applicant received notification from the
Commonwealth Bank, of the request to remove the Applicant, as an account operating authority
for the Respondent’s account had been completed.
[12] The Applicant was summarily dismissed at 8:16am on 14 April 2021 for alleged serious
misconduct.4 The letter of termination dated 14 April 2021, outlined the reason for the
Applicant’s termination of employment and the alleged direct breaches of the Respondent’s
People Policies. The letter, from Mr Ben Johnson, stated as follows:
“Dear Rebecca,
Termination of your Employment – Serious Misconduct
I am writing to inform you that your employment with Benex Civil has been terminated
effective immediately, Wednesday 14th April 2021, due to Serious Misconduct.
You have been terminated for the following reasons:
Inappropriately accessing Benex Civil email, Telstra and iCloud accounts. This
action was deliberate behaviour by you that is inconsistent with Benex Civil
People Policies and your role.
You have refused to carry out a lawful and reasonable instruction that was
consistent with the requirements of your role. I refer to my email dated 6th April
2021 where you were requested to update and provide a copy of the
‘Management Password Register’. To date you have not updated or provided
a copy of the register and have in fact deleted the document. In these
circumstances your continued employment during a notice period would be
unreasonable.
Benex Civil considers that your actions constitute serious misconduct warranting
summary dismissal.
You will be paid any outstanding pay up to and including your last day of employment
including superannuation.
4 See Witness Statement of Rebecca Johnson, “V. Email re Termination Letter”.
[2022] FWC 338
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You may seek information about minimum terms and conditions of employment from
the Fair Work Ombudsman. If you wish to contact them, you can call 13 13 94 or visit
their website at www.fairwork.gov.au.”
[13] The Applicant filed an application for an unfair dismissal remedy on the same day at
11:27am on 14 April 2021.
[14] The Applicant also considered it relevant to arranging the hearing in this matter, that an
Apprehended Domestic Violence Order had been made against Mr Johnson. Both parties
referred to this document and this matter became relevant to the granting of legal representation
for the Respondent.
[15] The Respondent submitted that the Applicant is precluded from the unfair dismissal
protections under the Act, on the grounds that the Applicant’s income was above the high
income threshold. The Respondent submitted that the Applicant’s total annual earnings are
estimated to be $172,000. This decision considers these matters. The related decision ([2022]
FWC 339) dealing with the Respondent’s application for the suppression of a range of
documents, also deals with the granting of permission for the Respondent to be legally
represented.
RELEVANT LEGISLATION
[16] Section 382 of the Act relevant sets out when 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:
(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.”
[17] As outlined above, the high income threshold is currently $158,500 per year (having
increased to this level on 1 July 2021). However, as the Applicant was dismissed prior to this
date, on 14 April 2021, the relevant high-income threshold for the period 1 July 2020 to 30 June
2021 was $153,600. Accordingly, this threshold amount is applicable to the jurisdictional
objection.
http://www.fairwork.gov.au/
[2022] FWC 338
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[18] Section 333 of the Act defines high-income threshold as:
“333 High income threshold
(1) Subject to this section, the high income threshold is the amount prescribed by,
or worked out in the matter prescribed by, the regulations.
(2) A regulation made for the purposes of subsection (1) has no effect to the extent
that it would have the effect of reducing the amount of the high income threshold.
(3) If:
(a) in prescribing a manner in which the high income threshold is worked
out, regulations made for the purposes of subsection (1) specify a particular
matter or state of affairs; and
(b) as a result of a change in the matter or state of affairs, the amount of the
high income threshold worked out in that manner would, but for this subsection,
be less than it was on the last occasion on which this subsection did not apply;
the high income threshold is the amount that it would be if the change had not
occurred.”
[19] The term “earnings” is defined under s.332 of the Act to mean:
“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;
[2022] FWC 338
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(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.”
[20] The Respondent submitted that the Applicant was provided a company supplied vehicle.
Shortly before the marital separation, a Toyota Prado (with a market value of $82,367) was
leased in lieu of the Rav4 vehicle, that the Applicant had used for some time. In the absence of
any agreed monetary value between the parties, for the private use of the vehicle, r 3.05(6) of
the Fair Work Regulations 2009 (the Regulation) provides the Commission, with the discretion
to estimate the real or notional money value of the benefit. Regulation 3.05 relevantly provides:
“FAIR WORK REGULATIONS 2009 – REG 3.05
When a person is protected from unfair dismissal—high income threshold
(1) For subparagraph 382(b)(iii) of the Act, this regulation explains how to work
out amounts for the purpose of assessing whether the high income threshold applies in
relation to the dismissal of a person at a particular time.
…
[2022] FWC 338
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(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.”
[21] The parties provided submissions on the value of matters relevant to the Applicant’s
earnings and in relation to the high income threshold.
SUMMARY OF RESPONDENT’S MATERIALS
[22] The Respondent submitted that its jurisdictional objection should be upheld, and the
Application should be dismissed pursuant to s.382(b)(iii). In particular, the Respondent
objected on the basis that the Applicant’s earnings exceeded the high-income.
[23] The Respondent advised that the Applicant’s annual salary at the time of dismissal was
$125,000 plus superannuation. Superannuation is not included in the calculation of earnings.5
In addition to this, the Respondent provided a number of additional benefits as follows:
The Respondent initially relied on the Applicant’s expenditure on a company credit
card, but when legally represented this was not pursued. The expenditure (as agreed
by the Respondent) was in the main for the family’s domestic needs. Mr Johnson
later resiled from relying on this.
Payment for private health insurance which the Respondent submitted is a benefit to
the Applicant and is to be included in the Applicant’s earnings. The amount for the
2020 Financial Year was $3,864.41. The Respondent confirmed that this was health
insurance for coverage of the family. The health insurance cover was for Mr Johnson,
the Applicant and their child. However, this policy was not severable, and therefore
the full amount was attributable to the Applicant.
5 s.332(2)(c) of the Fair Work Act 2009; discussed in Ablett v Gemco Rail Pty Ltd [2010] FWA 8124 (Williams C, 22
October 2010) at paras 31‒32.
[2022] FWC 338
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Mobile phone and data payments of up to $2,319.48 for the 2020 Financial Year.
Vehicle costs for the Toyota RAV 4 vehicle. The total associated costs for the 2021
Financial Year were approximately $4,251.76. This cost is made up of:
Car wash costs;
Motor Vehicle service and maintenance;
Motor Vehicle Registration;
Tolls; and
Motor Vehicle Insurance.
The Company supplied vehicle, a new Prado, was provided to the Applicant on 5
March 2021. The Respondent submitted that the attributable value of the Prado is
$36,593.92, this item is dealt with further in the decision.
[24] The Respondent advised that the Applicant was provided with a laptop, however noted
that it was used only for work purposes. As such, the Respondent made no allowance for it in
the calculations.
[25] The Respondent submitted that between 5 March 2021 and 14 April 2021 (40 days), the
Applicant completed 4,000km in the Prado that was categorised as private use. The Respondent
submitted that the Applicant’s private use portion of the Prado is to be annualised in order to
determine the annual rate of earnings, and therefore calculated the attributable value of the
vehicle as further outlined.
[26] The Respondent submitted that the annual rate of earnings needs to be determined, as at
the date of the Applicant’s dismissal and not an enquiry as to what the Applicant earned in the
12 months immediately preceding her dismissal.
[27] In light of the above case law, in relation to the value of the Prado vehicle, the
Respondent applied the approach as set out in Kunbarllanjnja Community Government Council
v H.W. Fewings (Fewings),6 which is as follows:
(a) Determine the annual distance travelled by the vehicle in question
(b) Determine the percentage of that distance that was for private use
(c) Multiply the above two figures to obtain the annual distance travelled for private
purposes
(d) Estimated cost per kilometre for a vehicle of that type (obtained from RACV)
(e) Multiply the annual distance travelled for private purpose by the estimated cost per
kilometre
6 Print Q0675 [1998] AIRC 268.
[2022] FWC 338
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[28] In applying the Fewings formula, the Respondent submitted that the calculation for the
attributable value of the Prado is as follows:
The annual distance assessed to be travelled by the vehicle in question is 35,200km.
Given that the Applicant only commenced using the vehicle in the month prior to the
termination. This figure is calculated by the Respondent by dividing 4,000km by 40
days, (in which the Applicant drove the vehicle) which is 100km per day. This is
then multiplied by 352 days, which resulted in the below figure.
The percentage of that distance that was for private use was 100%.
By multiplying the two figures above, the annual distance travelled for private
purpose is 35,200km
The estimated cost per kilometre for the Prado, as obtained from RACV, is $1.0396
per km. The Applicant used an RACQ figure of $1.28 per kilometre.
By multiplying the annual distance travelled for private purpose with the estimated
cost per kilometre, the value of the vehicle to the Applicant is $36,593.92 (based on
the $1.0396 RACQ figure)
Witness Statement of Mr Johnson
[29] Mr Johnson confirmed that he is the sole Director of the Respondent. He holds the
responsibility to run the Respondent’s business and to ensure it operates in accordance with the
rules and policies of the Respondent.
[30] Mr Johnson advised that the Applicant was an employee of the Respondent and also is
his ex-wife, having separated on or around 20 March 2021. Prior to their formal separation, Mr
Johnson is of the understanding that the Applicant had left Queensland and moved to their New
South Wales residence.
[31] On 28 June 2021, the Applicant filed an ADVO against the Respondent. The matter was
resolved without admissions and by agreement on 19 July 2021 for a period of two years. The
ADVO prevents the Respondent from having any contact with the Applicant unless it is through
legal representation. The exception to this is in relation to the family law proceedings. However,
all communication remains through a lawyer. This matter was referred to, in relation to the
application for legal representation.
Background of the Respondent
[32] Mr Johnson advised that the Respondent is a specialised business in civil works within
the construction industry, throughout Southeast Queensland, operating since April 2008. At the
time the Applicant was dismissed, the Respondent had 18 employees.
[33] The Respondent currently does not employ dedicated Human Resources personnel. The
Applicant stated that she developed and undertook a range of this work during her employment.
[2022] FWC 338
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Applicant’s Employment
[34] At the time of the Applicant’s dismissal, her annual salary was $125,000 plus
superannuation. In addition to the Applicant’s base salary, she received the following benefits
as part of her employment with the Respondent:
Bupa Private Health Insurance paid by the Respondent in the amount of $3,864.41
(family cover);
Payment for an iPhone and iPad in the amount of $2,319.48;
Payment for costs associated with the Applicant’s personal car (Toyota RAV4) and
maintenance prior to the Applicant being provided with a company vehicle in the
amount of $4,251.76;
Laptop purchase amount approximately $7,000;
On 5 March 2021, the Applicant’s employment was varied, and she was provided
with a leased company vehicle, a Prado, by the Respondent, which had a value of
$82,367.13. The Respondent also paid for the maintenance and running of the
company vehicle; and
The Respondent also paid for the Applicant’s fuel, tolls, motor vehicle service,
vehicle registration and insurance costs for both the company vehicle and the
Applicant’s personal vehicle, which the Applicant used before the company vehicle.
[35] Mr Johnson advised that the Respondent’s annual costs for the Applicant, including her
base salary and benefits, totalled approximately up to $172,000 per year. The Applicant
contested this.
[36] In April 2021, Mr Johnson advised that he noticed that the Applicant did not have an
employment contract. He noted that the Applicant generally prepares the contract and had asked
that the Applicant prepare one for herself and update her position description accordingly. On
7 April 2021, the Applicant responded advising that an employment agreement was not required
as she was managing the business and did not need to sign an employment contract.
[37] Given that the Applicant’s responsibility includes to “ensure that the company is on
track to meet its financial goals”, Mr Johnson advised that he trusted the Applicant to manage
the finance side of the Respondent’s business. This meant the Applicant had access to all
sensitive and confidential information of the Respondent’s business. Mr Johnson advised that
he and the Applicant are the only two persons in the Respondent’s business who had access to
the business accounts and any sensitive or confidential information.
[38] Mr Johnson advised that he understood that the Applicant was not residing in
Queensland from around 30 March 2021. From this time forward, most of his communication
with the Applicant was via telephone or email. It was referred to that the parties had previously
[2022] FWC 338
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purchased another property in NSW and reference was made to the Applicant commuting to
this property after the separation.
SUMMARY OF THE APPLICANT’S MATERIALS
[39] The Applicant submitted that her annual salary at the time of termination was $125,000
plus superannuation. This was agreed by the Respondent. However, the Applicant disputed the
calculation submitted by the Respondent in ascertaining her annual earnings with consideration
of all other benefits. The Applicant stated that any additional expenses to her annual salary were
authorised financial benefits of being a co-owner to the Respondent and wife to Mr Johnson
and was not incorporated into her employment. The expenditure on the company credit card
was later not relied upon by the Respondent.
[40] The Applicant submitted that the private health insurance should not be included in the
calculation of the annual earnings, as it was previously authorised by the Respondent. However,
should it be found to be an earning, the Applicant then submitted that the private health
insurance was not a benefit solely for herself. The health insurance covered the Applicant, Mr
Johnson and their child. The Applicant is of the view that the most appropriate figure to be
included to her earnings is by dividing the figure by three family members, resulting in an
amount of $1,288.14.
[41] The Applicant further submitted that the payment for the mobile phone should not be
included in the Applicant’s earnings, as this was also previously authorised by the Respondent.
[42] The Applicant disputed the inclusion of the payments to the Applicant’s personal
vehicle (RAV4) in the earnings, as this vehicle was previously utilised by the Respondent’s
employees during the period December 2018 to April 2021. The Applicant did not receive any
financial compensation for the utilisation of her personal vehicle. Should it be found that the
payment to the RAV4, is to be included in the Applicant’s annual earnings, then she disputes
the inclusion of the cost to service and cost to replace the tyres. The Applicant submitted that
without the other employees’ usage of this vehicle, the costs would not be required. These costs
should also be calculated to exclude GST as the Respondent had claimed the GST component
back via the BAS process.
[43] The Applicant noted the costs related to the Prado from 5 March 2021 to 14 April 2021
based on a personal usage of 4000km. However, she argued the rate utilised by the
Respondent’s representative is incorrect as the vehicle is only a 2.8L Diesel. The Applicant
further submitted that the costs of the RAV4 for this period and the Prado costs annualised
should not both be incorporated into earnings as this would be a duplication of expenses.
[44] The parties’ marital home and the business were located at the same address, and
therefore personal usage of the RAV4 had been at a minimal level; for taking the child to day
care and grocery shopping.
[45] The Applicant advised that there are two options shown in the salary calculations
(Vehicle Option A and Vehicle Option B) which can be determined by the Commission. The
Applicant does not agree with the kilometre calculations provided by the Respondent’s
Representative as the initial kilometres utilised were outside of normal distance travelled, due
[2022] FWC 338
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to travelling back and forth from the property at Brooms Head, New South Wales after the
separation. The standard kilometres were estimated to be 20,800km per annum (equating to
400km per week) which is reflective of the 20,000kms per annum noted in the insurance policy
and the 125,000km per 60 months noted on the Prado order form with FleetPlus.
[46] In light of the above, the Applicant submitted that the total earnings amounted to:
For Vehicle Option A, $133,647.16
For Vehicle Option B, $148,395.62
[47] The Applicant stated that in January 2021, the Applicant purchased a holiday property
in Brooms Head NSW and commenced occasionally working remotely from this residence. The
Applicant advised that this had minimal effect, as the office staff were familiar with the
Applicant working remotely, as this occurred regularly even when she resided in Brisbane due
to parental responsibilities. It was stated that the Applicant and Mr Johnson’s marriage, around
this time, was declining dramatically.
[48] The Applicant advised that the marriage between herself and Mr Johnson further
dramatically declined between 29 March 2021 and 6 April 2021, when the Applicant officially
ended the marriage. The Applicant stated that the Applicant and the Respondent planned to visit
Brooms Head NSW for the Easter break on 31 March 2021. However, due to a COVID
lockdown being declared in Brisbane on 29 March 2021, the Applicant decided to leave this
day and return to the office on 8 April 2021. Mr Johnson, however, did not visit Brooms Head
NSW.
[49] The Applicant continued to work remotely during this period, however also had parental
responsibilities.
[50] On 6 April 2021, when the marriage ended, the Applicant advised the Respondent that
she had sought legal advice and that all their joint assets, liabilities and finances, including the
businesses, are to be considered frozen until they decide further.
[51] The Applicant filed a large number of documents accompanying her submissions.
[52] The Applicant later filed additional submissions in respect to the mileage evidence. In
her submissions, the Applicant advised that the Prado was offered to be transferred to the
Applicant from the Respondent. The Applicant was sharing the responsibility of the day care
drop off and collection of her child, and therefore submitted that 50% of this milage has been
included into her mileage analysis.
[53] The Applicant further provided that the usual mileage undertaken, (prior to relocating
to NSW) as per Google Maps, on Monday and Tuesday for usage for day care delivery was
approximately 8.6km one way from the home and business location (noting that they are at the
same address). On Wednesday, the Applicant advised that for child related extracurricular
activities and a fortnightly shopping trip, the milage was approximately 14km on way. On
Thursday and Friday, the Applicant stated that the mileage usage was approximately 9.3km one
way. The Applicant then identified, using Google Maps, that the distance travelled to the
holiday home in NSW was approximately 292km one way.
[2022] FWC 338
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[54] The Applicant identified that the total annual expense for the RACQ Private Ownership
Costs for the Toyota Prado was approximately $19,889.80. The Applicant submitted that the
Fringe Benefit Tax should not be added to her income, due to the employer choosing to provide
this benefit to her as an employee and was not required to fulfil employment obligations.
[55] In consideration of these figures, the Applicant made the following calculation:
Weekday Mileage – Determined from home and Business Location
Day Usage Trip Mileage
(km)
One way or
Return
Total Trip
(km)
Monday Day Care 8.6 Return 17.2
Tuesday Day Care 8.6 Return 17.2
Wednesday Child Extra
curricular
activity
14 Return 28
Thursday Day Care 9.3 Return 18.6
Friday Day Care 9.3 Return 18.6
Total Weekday Mileage 99.6
Per week (Mon-Fri) Annualised Total Weekday Mileage 5179.2
Weekend Mileage
Day Usage Trip Mileage
(km)
One way or
Return
Total Trip
(km)
Saturday
Sunday
Fortnightly
Shopping Trip
14 Return 28
Total weekend mileage 28
Annualised Total Weekend Mileage 728
Holiday Mileage
Holiday Usage Trip Mileage
(km)
One way or
Return
Total Trip
(km)
Easter Break Holiday Home 292 Return 584
Christmas Break Holiday Home 292 Return 584
Labour Day Holiday Home 292 Return 584
Queens Birthday Holiday Home 292 Return 584
Total Holiday Mileage 2336
[56] Based on the above calculation, the Applicant calculated the total annualised mileage
being 8243.2km. In consideration of the costs based on RACQ being $1.28 per kilometre, the
Applicant submitted that the total costs would be $10,551.30. The Applicant acknowledges her
changed circumstances in terms of living in NSW.
[57] The Applicant provided three options in respect to the calculation of her total annual
earnings. The calculations are as follows:
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Amount Description Comments
$ 125,000.00 Annual Salary Agreed and Pay Slips attached
Vehicle Expense Options (Annualised)
(Vehicle Option A)
$ 1,379.54 Rav4 Expenses Expenses detailed in Appendix
A - Account
Transactions_Rav4
$ 5,120.00 RACQ Cost per
Kilometre Method
$ 1.28 per kilometre based on
4000kms personal usage
OR
(Vehicle Option B)
$ 10,551.30 RACQ Cost per
Kilometre Method
$ 1.28 per kilometre based on
usage of 8243.2 kms per annum
as per Mileage Spreadsheet
OR
(Vehicle Option C)
$ 19,889.80 RACQ Private
Ownership Costs
$ 19,889.90 per annum for
Toyota Prado GX 2.8 T/dsl 6sp
auto
Mobile Phone Expenses
$ 2,139.48 (Number
redacted)
All fees per month excluding
bill error of international calls
in latest bill provided
100% Personal
Private Healthcare Expenses
$ 1,288.14 BUPA Private
Healthcare
Total fees are for a family of
three, therefore amounts have
been split.
Total Income
$ 134,927.16 (Vehicle Option A)
$ 138,978.92 (Vehicle Option B)
$ 148,317.42 (Vehicle Option C)
[58] The Applicant submitted that all of the above options which include various alternatives
to calculate the private usage of the vehicle and deems her annual earnings to be lower than the
high-income threshold. The Applicant advised that the mileage being shown on the Toyota
Prado is not consistent with the personal mileage that would be incurred during her employment
with the Respondent.
[59] The Applicant submitted that her payslips and Notice of Assessments that show only
salary that had been classed as employment related. The Applicant noted that she is unable to
provide a PAYG statement as this was sent to her business email, which she no longer has
access to. She further advised that the business was jointly managed by herself and Mr Johnson.
The Applicant stated that the business is classed as part of the Family property settlement, as in
the separation proceedings of the Applicant and Mr Johnson, and the Applicant argued that the
termination actions should not have been taken.
[2022] FWC 338
15
[60] The Applicant advised that the Prado was only provided as of 5 March 2021, (shortly
before the termination) and had completed 4,000kms for personal usage. Prior to this, the
Applicant’s personal vehicle (being the Rav4) was utilised for business and personal usage with
costs shown under Vehicle Option A. The Applicant submitted that should the expenses be
calculated on an annualised basis for the Prado, this would be for 20,800kms per annum
(400kms per week) which is reflected under Vehicle Option B. The Applicant advised that this
was a family asset and not a business asset, therefore should not form part of her employment.
The Applicant stated that this was due to cash flow of the business and personal finances being
entangled. The Respondent had authorised expenses being paid out of company funds.
[61] Furthermore, the Applicant advised that the private healthcare expenses were an
expense paid by the business due to a directive being given by Mr Johnson. The Applicant
submitted that this expense was not employment related. She noted also that the mobile phone
expenses are also combined in the business and personal expenses. She stated that it can be
demonstrated that the Applicant, her daughter and ex-husband all used the data with the iPad.
Lastly, the Applicant argued that the Fringe Benefits Tax has never been paid for any of the
claimed employment expenses, and it was an issue that only became payable after termination.
CONSIDERATION
Award or Enterprise Agreement coverage
[62] To consider the jurisdictional objection, it must be determined if the Applicant’s
employment was covered by a Modern Award, or alternatively, subject to an Enterprise
Agreement. In these circumstances, in order to be a person protected from unfair dismissal, for
the purposes of s.382 of the Act, the Applicant must earn less than the high income threshold
amount, as per s.382(b)(iii). Both parties confirmed that the Applicant’s employment was not
subject to an Award or Enterprise Agreement.
Motor Vehicle Usage
[63] It has been accepted by the Commission that where an employee is provided with a fully
maintained vehicle for use in the course of their employment, and that vehicle is also used for
private purposes, the value of that private use can be included in the employee’s annualised
earnings.7
[64] In Zappia v Universal Music Australia Pty Ltd,8 the Respondent referred to the
following passage:
“Section 382 of the Act relevantly provides that a person is protected from unfair
dismissal at a time if, at that time, 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. It is clear that the time at which
7 Monteiro v Valco Group Australia Pty Ltd T/A Valco Group Australia [2019] FWC 2410. See also, Rofin Australia Pty Ltd
v Newton Print P6855 (AIRCFB, Williams SDP, Acton DP, Eames C, 21 November 1997), [(1997) 78 IR 78 at p. 82];
citing Condon v G James Extrusion Company Print N9963 (AIRC, Watson DP, 4 April 1997), [(1997) 74 IR 283 at p.
288].
8 [2012] FWAFB 6108.
[2022] FWC 338
16
the annual rate of earnings must be ascertained is at the time of the termination of
the person’s employment. What needs to be ascertained is the annual rate of
earnings at the time, not the annual earnings to that time (the amount earned in the
12 months to that time)” (emphasis added).9
[65] The Full Bench decision in Maturu v Leica Geosystems Pty Ltd,10 set out the reliance of
the Regulation in calculating the monetary value where there is no agreement on the value of
the benefit:
“In order for the Commission to make an estimate of the real or notional money value of
a benefit pursuant to reg 3.05 and to have that estimate contribute to the calculation for
the purposes of s.382(b)(iii) of the Act, each part of the cumulative test in reg 3.05(6)
must be satisfied. Regulation 3.05(6)(a) requires that ‘that the person is entitled to
receive, or has received, a benefit in accordance with an agreement between the person
and the person’s employer’.”11
[66] As referenced by the Respondent, the case of Phillip Hearnden v Danihers Facility
Management Pty Ltd,12 in which McKinnon C stated:
“The proper approach for assessing the value of the benefit of a car provided for private
use where there is no agreed monetary value attributed to that benefit is that set out by a
Full Bench of the Australian Industrial Relations Commission in Kunbarllanjnja
Community Government Council v H.W. Fewings. The approach in Fewings aligns with
the approach adopted by Hearnden, above”.13
[67] The generally accepted formula to determine the value of the use of a company vehicle
derives from Kunbarllanjnja Community Government Council v Fewings (Fewings).14 The
Fewings formula is as follows:
(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
purpose.
(4) Estimate the cost per kilometre for a vehicle of the type used. This information can
be obtained from the RACV, NRMA or like monitoring organisations.
9 Zappia v Universal Music Australia Pty Ltd [2012] FWAFB 6108 at [9].
10 [2014] FWCFB 6735.
11 Maturu v Leica Geosystems Pty Ltd [2014] FWCFB 6735 at [13].
12 [2019] FWC 3570.
13 Phillip Hearnden v Danihers Facility Management Pty Ltd [2019] FWC 3570 at [17].
14 Kunbarllanjnja Community Government Council v Fewings (Fewings) AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May
1998, Print Q0675.
[2022] FWC 338
17
(5) Multiply the annual distance travelled for private purpose by the estimated cost per
kilometre. The result is the value of the motor vehicle component of the
remuneration.
[68] The Full Bench in Sam Technology Engineers Pty Ltd v Bernadou15 (Sam Technology)
observed no issues, with the method of apportionment adopted in Fewings and considered it
entirely appropriate in circumstances where an employee was provided with a fully maintained
vehicle, in which they had derived a benefit, and a reasonable monetary value had not been
agreed for its private use. The Full Bench continued noting that the Fewings method of
apportionment was appropriate to enable the Commission to estimate the real or notional value
of the benefit in accordance with Reg 3.05(6) of the Regulations.
[69] The issues within this matter, however, concerns the provision of the company supplied
vehicle (the Toyota Prado) which was only provided to the Applicant on 5 March 2021. This is
40 days prior to the Applicant’s termination on 14 April 2021. Before this date, the Applicant
was expected to use her personal Rav4 vehicle, which the Respondent submitted it paid vehicle
running costs for.
[70] Whilst an apportionment approach has been considered against the Applicant’s
proposed actual figures of usage, this has fully taken into account that the leased Prado, at the
time of termination, was fully available to the Applicant, for her usage and formed a part of her
employment contract at the time of termination, and therefore has to be considered on that basis.
It is also relevant that at time of termination, the Applicant unilaterally retained the Prado,
against objections of the business entity, for her personal use in NSW.
[71] In a number of cases in which the Fewings formula was applied, the employee in those
matters was provided with a fully maintained vehicle for at least 12 months. In calculating the
figure, the Commission often looked at the available evidence that could assist in ascertaining
the total distance travelled for private use within one year. An example of how this was
calculated can be seen in Heath Morrison v Mabey Hire (Mabey).16
[72] In Mabey, Mr Morrison was employed by the Respondent on 20 October 2016 and was
terminated on 22 January 2021. His annual base salary at the date of termination was at
$125,000. On 1 September 2018, Mr Morrison was issued a fully maintained job-related vehicle
which he had possession of until the date of his termination (over 2 years). The Commission
applied the Fewings formula and considered two approaches in determining the distance
travelled for private use. The approach accepted by Clancy DP and was determined to be the
most accurate and fair, by taking into account the odometer reading on 8 May 2020 (which was
74,332km) and the odometer reading at the date of termination on 22 January 2021 (being
96,941.67). This amounted to 37 weeks. The total kilometres travelled by Mr Morrison was
found to be 22,609.67, which equated to an average of 611.072km per week. This was then
converted into an annual figure of 31,775.75km. Upon calculating the kilometres travelled for
private use, the Commission multiplied the total distance travelled for private purpose by the
RACV weekly running costs.
15 Sam Technology Engineers Pty Ltd v Bernadou [2018] FWCFB 1767.
16 [2021] FWC 2009.
[2022] FWC 338
18
[73] The decision of Mabey demonstrated that there is flexibility in applying the formula set
out in Fewings when ascertaining the notional value of the benefit. However, and perhaps more
relevantly, the Fewings formula could be applied in circumstances where the vehicle was not
in use for 12 consecutive months.
[74] In Welk v SG Mining Pty Ltd (Welk),17 Beaumont DP accepted the Fewings approach
being applied to only 10 months rather than 12 months to counter, Mr Welk’s period of absence.
The relevant facts of Welk, is as follows:
Mr Welk commenced employment on 4 August 2014 and was terminated on 28
January 2020.
At the time of Mr Welk’s termination, his base salary was $148,000.
In addition of the base salary, Mr Welk was provided with a full serviced Hilux SR
2014 (Hilux) as a tool of the trade during work hours and for personal use outside of
work.
The Hilux was provided to MR Welk as a term of his Employment Contract.
There was no agreed value between the parties for Mr Welk’s private use of the
Hilux.
[75] The Full Bench decision of Zappia v Universal Music Australia Pty Limited T/A
Universal Music Australia,18 suggests that the benefit derived from the company supplied
vehicle would need to be considered to ascertain the annual rate of earnings. There is no doubt
in the current matter, that the Applicant had the full personal use of the new Prado, in
commuting to the NSW location.
[76] The approach taken by the Respondent in this matter in determining the monetary value
of benefit for the vehicle closely reflects that in Mabey. In the current matter, the Applicant was
issued with the vehicle for 40 days. However, a flexible approach to the application of the
Fewings formula has been taken in cases to establish a monetary value where there is no
agreement. The Welk case suggests that a flexible approach can be taken to the Fewings formula
to appropriately reflect the benefit the employee obtained from the company supplied vehicle.
[77] In Welk, two months were excluded when ascertaining the annual distance travelled for
the purposes of applying the Fewings formula, to accommodate the employee’s two months of
absence. This is despite that the employee was issued with the vehicle for more than 12 months.
This calculation was accepted by the Commission and the notional value derived from the 10
months, was included in the Commission’s consideration in determining whether the employee
met the high income threshold.
17 [2020] FWC 2513.
18 [2012] FWAFB 6108.
[2022] FWC 338
19
[78] A further example of a flexible approach to relying on the Fewings method, in
Tolmachoff v Trustee for the Wingrain Trust AKA Grain Brokers Australia (Tolmachoff),19 the
Applicant was not in possession of the vehicle from 18 July 2019 to the date of termination on
12 August 2019. Commissioner Hampton found that although the Applicant was not in
possession of the vehicle at the time of termination, the vehicle was a term of the Applicant’s
employment contract. Therefore, Hampton C considered the annual distance travelled from 12
months preceding the time in which the Applicant was no longer in possession of the Vehicle.20
[79] In consideration of the Fewings formula, the similar approach is to be taken in the
current matter as in Welk, in that the annualization formula is to be applied from 5 March 2021.
The Welk approach, requires that the formula only applies to the number of days / months in
which the Applicant was issued the vehicle. The second approach, which would result in the
same resulting figure, is taking into consideration the actual distance travelled in the whole of
12 months prior to her termination date. Given that there is evidence to demonstrate the exact
figure of kilometres travelled once the vehicle was issued, it can be easily ascertained that the
actual distance travelled in the 12 months is based on the 4,000km in the last 40 days, then
apply the formula to this figure only. In Mabey, they determined the weekly average distance
travelled from 37 weeks, then multiplied it to 52 weeks to find the annual distance, due to the
limited evidence available, to ascertain the actual distance travelled in 52 weeks.
[80] The Applicant and Mr Johnson formally separated their marriage, on 20 March 2021.
As a result of this the Applicant stated that following the marital separation, she drove with her
daughter to their other house located in NSW and cared for their daughter and worked from
there. Prior to this, during her employment, the Applicant resided at the family home in
Greenbank, QLD.
[81] The car was leased through the Respondent company. The lease document estimated an
annual kilometre usage of 20,800kms. The Applicant stated that she was involved in the
business accounts and documents, and stated in evidence that an annual estimation of kilometres
for a leased vehicle, would normally be set at an inflated level to ensure, additional costs for
kilometre usage were not incurred, at the penalty rate, if the usage exceeded the annual estimate.
The lease estimate in the current circumstances was conservative, as at the time of setting that
annual figure, it was unknown between the parties that the Applicant would be residing in NSW.
[82] The Fewings formula provides a reflection of the actual benefit the employee had
obtained with the new company vehicle.
[83] This approach is relevant to take account of the changed residential circumstances and
associated personal usage, to assess the monetary value at the time of termination.
[84] In applying the Fewings formula to the current circumstances, it is first necessary to
determine the annual kilometres driven by the Applicant. It was confirmed between the parties
that the Applicant travelled 4000kms in the 40 days that she had possession of the car: providing
a figure of 100kms per day. This figure multiplied by 352 days is 35,200kms. It is then
necessary to determine the percentage of this figure that represented personal use during this
19 [2019] FWC 8027.
20 Tolmachoff v Trustee for the Wingrain Trust AKA Grain Brokers Australia [2019] FWC 8027 at paras [66] to [75].
[2022] FWC 338
20
period. Both parties conceded that the milage accrued during this period was 100% personal.
The next step requires this kilometre figure to be multiplied by the RACQ cost estimate of $1.28
per kilometre. This provides an annualised value of $45,056 for the Prado, attributable to the
Applicant’s earnings.
Motor Vehicle (RAV4)
[85] Section 332(2) of the Act provides that “reimbursement” is not an earning.
[86] The Respondent argued that the total associated maintenance and running costs for the
RAV4 in the 2021 Financial Year were approximately $4,251.76, and that this figure should be
attributable to the Applicant’s annual rate of earnings. It was accepted that these running, and
maintenance costs were paid for by the Respondent.
[87] The Applicant noted in her submissions that the RAV4 was used by others as well for
work related purposes. Neither party has clearly set out the particular kilometres for work
related usage of the RAV4, but the Applicant has set out the private benefit, based on
kilometres, for the RAV4.
[88] Based on Zappia, the RAV4 was not a “benefit” she received at the time of her
termination, as she was provided a significantly different, fully maintained new company
supplied vehicle. The figure of $4,251.76 is therefore not attributable to her earnings, for the
purposes of the high income threshold assessment.
Fringe benefit tax
[89] The Respondent submitted that fringe benefit tax should be applied to the Prado’s use
by the Applicant, and an amount of $16,105.97 should be included in the calculation of her total
earnings. The Respondent’s representative argued that the Respondent was required to pay
fringe benefit tax on the Prado, in the amount of $16,105.97 and that this should be attributed
to the Applicant’s earnings.
[90] It is noted that in accordance with Lynn Chang v Ntscorp Ltd,21a fringe benefit tax may
be an amount dealt with at the employee’s direction, in a genuine salary sacrifice situation when
an employee has forgone wages in return for a benefit. In those circumstances, the fringe benefit
tax would be included in the employee’s earnings. However, in the present matter, there was
no evidence put forward to suggest that the Applicant had forgone wages in return for the use
of the Prado vehicle.
[91] On this basis, the inclusion of the $16,105.97 in the Applicant’s annual rate of earnings
cannot be supported.
Mobile phone and data
[92] The Respondent submitted that the Applicant was provided with a mobile phone, iPad
and data plan by the business, to the value of $2319.48 for the 2020 financial year. The
21 [2010] FWA 1952.
[2022] FWC 338
21
Respondent submitted that the Applicant’s use of the devices was entirely personal, and that
the whole amount should be attributed to her earnings. The Applicant argued that this figure
should not be included in her earnings as the Respondent’s director had previously authorised
the supply of the devices to the Applicant.
[93] Whilst there was disparity in the submissions regarding whether the devices were
wholly for the Applicant’s personal use, it is considered that in accordance with the decision of
Dart v Trade Coast Investments Pty Ltd,22 the whole amount of $2319.48 is attributable to the
Applicant’s annual rate of earnings at the time of her dismissal. However, if this is incorrect,
this amount does not change the overall outcome that the earning are above the high income
threshold.
Superannuation
[94] Any paid superannuation contributions that are at the statutory rate are excluded from
the calculation of earnings for the purposes of the high income threshold.23 Any superannuation
contributions that exceeds the compulsory contributions, as required under the relevant Act,
however, are to be included.
[95] There are no submissions from the Respondent arguing that the superannuation
contributions for the Applicant exceed the compulsory contributions. Further, the Respondent
does not include superannuation in the Applicant’s annual earnings.
Private Health Insurance
[96] In Savannah Nickel Mines Pty Ltd v Crowley,24 the Full Bench held that the life
insurance premium paid by the Respondent was found to be an amount applied or dealt with on
the employee’s behalf. As per section 332(1)(b), the amount paid was included in calculating
the employee’s income. Similarly, in Monteiro v Valco Group Australia Pty Ltd T/A Valco
Group Australia,25 the Full Bench held that:
“[31] In respect of the Commissioner’s determination of the private health insurance
expenses as ‘earnings’ for the purpose of s.332(1) of the Act, we do not find any error.
We consider this to be an appropriate conclusion despite the contract entered into
between the parties labelling it as a ‘reimbursement’. It is not a reimbursement. The
payment by an employer for an employee’s private health insurance is a benefit to an
employee, and is not, unless agreed, an entitlement of employment for which an
employee would need to reimburse an employee.”
[97] The Respondent conceded that the health insurance was applicable to the family and the
Applicant maintained that the costs were severable on that basis across the 3 family members.
There was no evidence that the $3864.41 family cover was able to be divided and apportioned
22 [2015] FWC 4355.
23 Fair Work Act 2009 (Cth) s 332(2)(c). See also, Ablett v Gemco Rail Pty Ltd [2010] FWA 8124.
24 2016] FWCFB 2630.
25 2018] FWCFB 3280.
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb2630.htm
[2022] FWC 338
22
across the family members. Accordingly, that whole figure, as was paid for by the employer,
has been attributed as a benefit, and is included in the Applicant’s total earnings.
Total earnings
[98] The predominate issue between the parties in ascertaining the earnings is that of the
value attributable to the new Prado vehicle, provided prior to the dismissal. The Applicant
emphasised that in a regular employment situation, that did not involve a marital scenario, the
employer would not normally have any detail of the post dismissal car usage. The period of
personal usage prior to the dismissal has been extrapolated.
[99] The earnings, on the case law, are calculated at the time of termination. This case is
however complicated by the changed circumstances between the employer and employee and
the business and employment circumstances of the husband and wife at the time of the
termination.
[100] The earnings are determined to be comprised of:
Wages: $125,000.00
Prado (annualised basis): $45,056
Health cover: $3,864.41
Mobile phone and data: $2,319.48
Total earnings: $176,239.89
[101] In relation to the Prado, if the annualised figure derived from the Fewings formula, taken
at the time of termination is incorrect, the alternative milage (proposed by the Applicant) of
20,800kms, adopted in consideration of the Fewings formula, would still place the Applicant’s
earnings above the high income threshold amount.
[102] In exploring this alternative, if the Applicant’s conceded figure of 20,800kms per annum
(estimated annual usage from the Prado lease document) is applied to the Fewings formula, the
result is still a figure that places the Applicant’s earnings in excess of the high income threshold.
It is noted that this lease estimate is conservative, because it did not take into account the
changed residential circumstances of the Applicant moving to NSW. In any event, this annual
lease estimate, multiplied by the RACQ figure of $1.28 per km, would provide the attributable
figure of $26,624. This figure, in combination with the health cover, mobile phone and the
salary of $125,000 still exceeds the high income threshold.
[103] The Applicant’s proposed actual kilometre usage (set out in [55] and [57]) are rejected,
because they fail to take into account the personal usage of the Prado, in accordance with the
case authorities. The $4,251.76 maintenance and running costs paid by the Respondent have
also not been included. These could not have been considered to be a reimbursement.
[104] Based on the case authorities, a flexible approach has been adopted to the annualization
of the kilometre usage of the Prado. The annualization has been undertaken in accordance with
the Fewings formula, at the time of the termination. As set out above, the alternatives to this
have been considered, on the basis of the estimated kilometre usage from the Prado lease
[2022] FWC 338
23
document, and on either calculation, the Applicant’s income exceeds the relevant high income
threshold.
Suppression orders
[105] The Respondent’s representative raised at the jurisdictional hearing that they sought
suppression orders for approximately 60 documents, provided by the Applicant in her material.
The Respondent also sought for the decision to be subject to a suppression order and not be
published. This was later amended to seek an order to suppress the names of the parties and the
Applicant’s daughter.
[106] The application for the suppression order over documents was first raised during the
determinative conference. The particularised matters had not been raised at any earlier stage of
the proceedings by the Respondent, nor at the time the documents were filed. No explanation
was provided in relation to the delay in raising the suppression matters. The jurisdictional,
determinative conference proceeded as scheduled, and Directions were set for the filing of
submissions in relation to the suppression orders. The suppression order is determined in a
separate decision.
CONCLUSION
[107] For the reasons set out above, the Applicant’s annual rate of earnings at the time of her
dismissal exceeded the high income threshold of $153,600. The jurisdictional objection,
pursuant to s.382(2)(b)(iii) of the Act is therefore upheld, and the s.394 application is dismissed.
[108] I Order accordingly.
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