[2012] FWA 8393

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Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Paul Davidson
Adecco Australia Pty Ltd T/A Adecco



Application for unfair dismissal remedy - jurisdictional objection - high income threshold.

[1] Mr Paul Davidson (the Applicant) has made an application for relief for unfair dismissal under section 394 of the Fair Work Act 2009 (the Act).

[2] The Applicant began his employment with Adecco Australia Pty Ltd (Adecco) on 8 August 2008 as Area Manager, Queensland. He was dismissed from his employment with the Adecco on 15 May 2012.

[3] Adecco objects to the Applicant’s application proceeding on the ground that, at the time of dismissal, he was not protected from unfair dismissal by the Act because the sum of his annual earnings, calculated in accordance with the Fair Work Regulations 2009, exceeded the high income threshold, which at the applicable time was $118,100.

[4] The Applicant submits that he falls within the unfair dismissal provisions of the Act because his earnings do not exceed the threshold.

Relevant legislative framework

[5] Section 394 of the Act allows a person who has been dismissed to apply to Fair Work Australia (the Tribunal) for an order under Division 4 part 3-2 of the Act.

[6] However section 396(b) requires the Tribunal to decide whether the person is protected from unfair dismissal. This jurisdictional question is required to be decided before determining the merits of any application under section 394(1).

[7] Section 382(b) provides that for a person to be protected from unfair dismissal one or more of the following must apply:

[8] Regulation 3.05 “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”. The Tribunal must work out the applicant’s earnings in accordance with that regulation and other statutory provisions. These include the following sections of the Act.

The Relevant Facts

[9] The Applicant entered into a Contract of Employment with Adecco. It states, relevantly, as follows:

[10] The Applicant was paid a salary of $79,000 and was provided with an allowance of $16,000 per annum for costs associated with use of his motor vehicle for Adecco purposes in accordance with Item 8, extracted above, and in accordance with that Item, he was not entitled to claim reimbursement for use of his own motor vehicle.

Applicant’s Submissions

[11] The Applicant submitted that he did not fall within the high income bracket. In his written and oral submissions, and a statutory declaration, he made the following points.

[12] In his written submissions the Applicant calculated the work related use of his motor vehicle on Australian Taxation Office (ATO) standards to be approximately $15,000 per annum. He stated:

[13] In the course of the hearing I enquired about the nature of the Applicant's employment which was not otherwise in evidence. The Applicant advised that he had had two positions during the past 12 months. The majority of the time he was Area Manager which required visiting all three of Adecco’s branches (Wacol, Gold Coast and Hendra). His second position was more sales focused and described as the South East Queensland Regional Sales Manager. He described his work as being on the road a considerable amount of time as it was sales focused and involved daily visits to clients.

[14] Under cross-examination the Applicant confirmed that the travel allowance was paid in advance and taxed as any other income.

Submissions from Adecco

[15] Adecco objected to the application proceeding on the basis of its assertion that the Applicant was above the high income threshold. Mr Trennery (for Adecco) relied on 2 letters which included calculations but limited explanation as to the basis of those calculations.

[16] Adecco was provided with a further opportunity to provide submissions as to the method of calculating the high income threshold, but no further submissions were provided.

[17] At the hearing, Mr Trennery confirmed the calculations provided in correspondence with the Applicant. Adecco’s assertions included:

[18] Central to Adecco’s calculations are the inclusion of the entire $16,000 allowance as salary, and treatment of the salary thus calculated as pro rata to arrive at the full-time equivalent earnings. Under Adecco’s submissions and calculations, the Applicant cannot make a claim for unfair dismissal.

[19] Under cross-examination Mr Trennery was asked about car allowance. He stated:


[20] Adecco, having raised the jurisdictional point, bears the onus of proving that the Applicant is excluded from protection from unfair dismissal under the Act. 1 It falls on Adecco to demonstrate the Applicant was in receipt of a full time equivalent annual earnings above the high income threshold.

[21] The Applicant submits that the car allowance should not be considered as part of the annual earnings when calculating the high income threshold. The $16,000 car allowance was, he argues, compensation for travel expenses related to his need to have a vehicle to perform his duties which covered a significant geographic area including Hendra, Wacol and Gold Coast branches.

Is the travel allowance ‘earnings’?

[22] Adecco submits that the car allowance is an allowance in the nature of salary that should be calculated pro rata to the full-time rate.

[23] The Act defines earnings in section 332.

[24] To be included as part of an employee’s earnings, the car allowance will need to fall within s332(1)(a)-(d).

[25] The Applicant’s remuneration is contained in Schedule 7 and is described as his ‘annual salary’ of $79,000. This is ‘wages’ and falls within s332(1)(a).

[26] The allowance is separate from the annual salary and is described as an “additional benefit’. Such a benefit will only be earnings if it falls under s332.

[27] The allowance is not wages, because it was paid in contemplation of offsetting the employee’s expenses in providing, running and maintaining his own motor vehicle for the purposes of Adecco’s business. The allowance recompensed him for these business related costs, and cannot be fairly categorised as a payment for the applicant’s work or services. 2

[28] An allowance could not be described as a non-monetary benefit for the purposes of s.332(1)(c), as it is a money amount. Further the sum does not fall into the category of an amount prescribed by regulations for s.332(1)(d).

[29] That leaves only whether the allowance ‘earnings’ covered under s.332(1)(b), namely:

[30] The Applicant’s contract provides:

[31] It goes on to state:

[32] The travel allowance is to be used according to Adecco policy. Adecco then prohibits an employee from any entitlements to or reimbursement of work-related travel.

[33] The Applicant asserts that the sum is properly construed as money paid as recompense for his costs in providing, running and maintaining his motor vehicle in order to carry out the work of Adecco.

[34] I conclude that the travel allowance is not an amount dealt with or applied for on an employee's behalf under s.332. It is an allowance paid, and intended to be used only in accordance with Adecco policy. Accordingly the amount is not earnings under s.332.

[35] There was some evidence before the Tribunal about whether the entire travel allowance was spent on work-related travel.

[36] I note from the statutory declaration of the Applicant was that the “car allowance paid by Adecco Propriety Ltd was used for the provision of transport to carry out the role I was employed in”. The statutory declaration also noted the use of the car was business-related with minimal or no personal use.

[37] In H.W. Fewings v Kunbarllanjnja Community Government Council 3 (“Fewings”) a Full Bench of the Australian Industrial Relations Commission comprising Ross VP, Watson SDP and Bacon C considered the proper treatment of a motor vehicle allowance for calculation of salary under the equivalent provision of the repealed Act. Fewings is an authority for calculating a business-use component of a motor vehicle allowance to be excluded from earning. Only the private-use component, if any, is included as ‘earnings’.

[38] The Tribunal has before it the Applicant’s evidence that at least $15,000 of the allowance was, on the ATO basis, business use. At most, on this calculation, $1,000 is able to be included in earnings, if any amount were to be included at all. Adecco did not adduce any evidence to the contrary.

[39] On the basis of the uncontradicted evidence of the applicant, $15,000 is not earnings as defined in s.332. This amount would not, on the authority of Fewings, be included in the Applicant’s salary for the purposes of calculating whether the Applicant is a high income employee.

[40] While this concludes the matter in that the Applicant has established that his income is below the threshold for the purposes of s.394, for the sake of completeness I have also addressed the other matter raised. That is whether the Applicant’s notional hours of work are the equivalent of 38 or 40 hours per week.

Is there a notional 38 or 40 hours per week?

[41] Adecco argues that the relevant full-time hours should be 40 hours per week, not the 38 hours suggested by the Applicant.

[42] Adecco’s proposition that the proper pro-rata calculation should be based on 40 hours is not substantiated by its evidence or the contract of employment. The Applicant asserts a 38 hours basis, and the contract in clause 7 clearly supports that proposition. I find that the intended full-time equivalent hours of the position was 38 hours per week.

[43] The Applicant had provided evidence and submissions that the relevant full-time equivalent hours per week is properly 38 hours; that the car allowance was in the nature of recompense for use of his vehicle for Adecco purposes and therefore not “earnings”; and that in any case, the business related use of the vehicle was the predominant or sole use, and should be calculated at least $15,000 per annum at ATO rates. Adecco bears the burden of proving its assertion that the Applicant’s earnings exceeded the high income threshold. Adecco has not adduced sufficient evidence to the Tribunal to the contrary of any of the Applicant’s points, and has not therefore discharged its evidentiary burden.


[44] Accordingly, the Applicant’s full-time equivalent earnings at the time of his dismissal are to be calculated on the basis of 38/32nds of his salary. I add $1,000 of the car allowance, being the sum the Applicant’s own evidence allocates to private use of the motor vehicle.

[45] Accordingly, the Applicant’s earnings for the purposes of s.329 is a sum of $94,812.50 per annum. This is below the high income threshold.

[46] The Applicant is covered by the Act’s unfair dismissal protections.

[47] The jurisdictional objection of Adecco is dismissed. An order to this effect will issue simultaneously with the decision.

[48] The file shall now be subject to further programming to deal with the application for relief from unfair dismissal.



Mr P Davidson on his own behalf.

Mr D Trenerry for the Adecco.

Hearing details:



September 14.

 1   Section 382

 2   Neither party referred the Tribunal to a definition of “wages. The Macquarie Dictionary defines the term wage as “that which is paid for work or services, as by the day or week”.

 3   Kunbarllanjnja Community Government Council v Fewings [Print no.Q0675] (7 May1998)

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