[2015] FWC 3639
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Peter Cross
v
Bechtel Construction (Australia) Pty Ltd
(U2014/15243)

VICE PRESIDENT CATANZARITI

SYDNEY, 29 JUNE 2015

Application for relief from unfair dismissal.

Introduction

[1] Mr Peter Cross (Applicant) applied under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in relation to his former employment with Bechtel Australia Pty Ltd (Respondent). The matter was listed for jurisdictional hearing in Brisbane on 28 May 2015 on the basis of a jurisdictional objection brought by the Respondent.

[2] The Applicant was employed as a HSE Training Coordinator on Curtis Island at Bechtel’s Queensland Curtis LNG Project. The Applicant commenced employment with the Respondent on 11 March 2012. The Applicant went on unpaid leave on 29 July 2013 due to medical reasons. The Applicant’s employment with the Respondent was terminated on 5 November 2014. It was agreed that the Applicant completed a period of employment of at least the minimum employment period pursuant to s. 382 of the Act. It was also agreed that no modern award or enterprise agreement covered the Applicant in relation to his employment with the Respondent.

[3] The crux of the jurisdictional objection was the Respondent’s contention that the application should be dismissed on the basis that the Applicant was not a person protected from unfair dismissal because his annual rate of earnings exceeded the high income threshold pursuant to s. 382 of the Act. The Applicant contended that he was protected from unfair dismissal as his income did not exceed the high income threshold. The high income threshold at the time of the hearing was $133,000.00.

[4] Prior to the hearing of the appeal, Mr Osborne sought permission to appear for the Respondent. The Applicant was notified of this request and confirmed in an email on 18 May 2015 that he had no objection to the Respondent being represented. Having regard to s.596 of the Act and in light of the Applicant’s lack of objection to the request, permission was granted to the Respondent to be represented.

Legislation

[5] Section 396(b) of the Act requires that the question of whether a person is protected from unfair dismissal is to be decided before the merits of the person’s application is considered. Section 382 of the Act provides for when a person is protected from unfair dismissal as follows:

[6] As earlier noted, the high income threshold for the purpose of s.382(b)(iii) was $133,000.00 in the period relevant to this application.

[7] The term “earnings” is defined in s. 332 of the Act as follows:

Questions to be determined

[8] The primary question to be determined is whether the Applicant’s annual rate of earnings exceeded the high income threshold. The annual rate of earnings is to be assessed as at the time of dismissal. It is not an assessment of the actual earnings in the 12 months immediately prior to dismissal. 1

Submissions

[9] The basis of the Respondent’s jurisdictional objection and its position as to why the Applicant earned more than the high income threshold was as follows:

[10] The Applicant disputed the jurisdictional objection raised by the Respondent on the basis that the sum of his annual rate of earnings at the time of termination was less than the high income threshold. The Applicant’s position was as follows:

[11] In essence, the key contention between the parties in submissions and at the hearing was in relation to the issue of overtime and whether it was guaranteed overtime for the purposes of s. 332 of the Act. The Respondent contended that the Applicant was contractually obliged to work 58 hours a week, comprising of a 40 hour work week and 18 hours overtime. This 18 hours was part of what was called an Extended Work Week (EWW). Therefore it formed part of the calculation of his earnings for the purposes of s. 332 of the Act.

[12] The Applicant was of the view that for the purposes of calculating his earnings pursuant to s. 332 of the Act, the 18 hours overtime was not be to taken into account and the figures he arrived at were based on a 40 hour week only. The 18 hours was not guaranteed overtime according to the Applicant. The Applicant during his cross-examination of Ms Treglown at the hearing sought to use the example of overtime not being available during severe weather conditions in which boats can’t travel, as evidence that the overtime was not guaranteed.

[13] The Applicant also sought to advance a second argument that since he was on unpaid sick leave for over a year at the time that his employment was terminated, he did not need to include the overtime payment in his calculations. He contended that in circumstances where he was on sick leave, there would be no overtime component because the overtime could not have been worked when he was sick regardless of the expectation that he usually worked an EWW.

Consideration

[14] I have considered all the material before me including the evidence and submissions of parties. This case rises and falls on the issue on whether or not there was guaranteed overtime at 18 hours per week as part of the EWW. If the answer to that question is yes, then the Applicant clearly exceeds the high income threshold based on a 58 hour working week and no further considerations are relevant as a finding of no jurisdiction will see the matter dismissed. If the answer to that question is no, then further consideration would need to be given on whether he fell bellowing the threshold.

[15] Prior to being off sick, the Applicant worked 18 hours paid overtime each week. He now contends that he was not entitled to overtime while on unpaid leave. On that analysis it would mean that if a person is on unpaid leave for a year, their earnings for the purposes of s. 332 of the Act would be zero and therefore they would fall under the high income threshold. I am not persuaded that this is the correct construction of the legislation. It is clear on the material before me that but for the sick leave, the Applicant would have been obliged to work 58 hours and would have been paid the regular overtime. The Applicant during his cross-examination of Ms Treglown sought to use the example of overtime not being available in inclement weather conditions as evidence that the overtime was not guaranteed. However, inclement weather conditions or in fact other situations akin to an event of force majeure which are outside the employer’s control, are not indicators of whether overtime is guarantee and the Applicant’s reliance on this evidence is a misapplication of the test and conflates issues. The evidence of an isolated example of overtime not being worked in inclement weather conditions cannot be relied upon to say the overtime is generally not guaranteed. Nor can the argument that the Applicant was on unpaid sick leave be relied upon to form the view that his earnings for the purposes of the legislation did not include overtime.

[16] The correct test for determining the annual rate of earnings for the purposes of s. 332 of the Act, is to determine the rate of earnings at the time of termination of employment, not the actual earnings up to that time. 2 As such, the relevant consideration is whether he would have been expected to work a 58 hour week if he had been otherwise fit, excluding any extraordinary circumstances. The evidence of the Respondent makes it is clear that the Applicant was required to regularly work 58 hours a week, as he had done prior to going on sick leave and he would have been paid for every one of those hours based on the hourly rate equivalent of the base salary.

[17] The question then becomes, whether the overtime can properly be characterised as guaranteed or not. In relation to the issue of guaranteed overtime, the Full Bench of the FWC in Foster v CBI Constructions Pty Ltd 3 relevantly held that for the purposes of s. 332 of the Act, overtime that can be determined in advanced should be included in calculating a person’s annual rate of earnings.4 In the Applicant’s circumstances, the required 58 hour EWW could clearly be determined in advanced and therefore should be used as the basis for calculating the annual rate of earnings. This can be contrasted to overtime work that is not anticipated or agreed to in advanced.

[18] For the reasons above, I find that the overtime was guaranteed. This finding alone is enough to take the Applicant over the high income threshold. However, I also note the 5 per cent project allowance formed part of his income for the purposes of the legislation.

Conclusion

[19] I find that the Applicant is not a person protected from unfair dismissal in accordance with s. 382 of the Act on the basis that he does not earn below the high income threshold.

[20] As a result of this finding, the Fair Work Commission has no jurisdiction to hear the application for an unfair dismissal remedy. The matter is dismissed.

al of the Fair Work Commission with Vice President Catanzariti's signature

VICE PRESIDENT

Appearances:

P Cross in person.

M Osborne for the Respondent.

Hearing details:

28 May

2015

Brisbane.

 1   Zappia v Universal Music Australia Pty Limited t/a Universal Music Australia [2012] FWAFB 6108 at [9].

 2   Zappia v Universal Music Australia Pty Limited t/a Universal Music Australia [2012] FWAFB 6108; Foster v CBI Constructions Pty Ltd[2014] FWCFB 1976; Darling v Bechtel Australia Pty Limited [2015] FWC 1242.

 3   [2014] FWCFB 1976

 4  [2014] FWCFB 1976 at [39]-[42].

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