| FWC 7555|
|FAIR WORK COMMISSION|
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Michael Wigglesworth
Warringah Plastics Pty Ltd
DEPUTY PRESIDENT GOSTENCNIK
MELBOURNE, 19 DECEMBER 2016
Application for an unfair dismissal remedy; jurisdictional objection; applicant not covered by modern award and an enterprise agreement did not apply to him; whether applicant earned less than the high income threshold; jurisdictional objection dismissed.
 Mr Michael Wigglesworth (Applicant) has applied for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (Act). The Applicant was employed in the position of Business Development and Accounts Manager for the states of Victoria and South Australia with Warringah Plastics Pty Ltd (Respondent) and appears to have commenced that position on 1 July 2015. The details of that position and the terms of that employment are set out in a letter of offer of employment dated 17 June 2015.
 The Applicant was advised of the dismissal by letter on 8 July 2016 (Termination Letter). It is not in dispute that the Applicant’s employment was terminated by the Respondent on 8 July 2016 effective immediately. 1 Although the dismissal was effective immediately, the Termination Letter makes clear that the Applicant would receive one months’ pay in lieu of notice.2
 The Termination Letter provides that “our decision is based solely on a commercial basis in that the business you brought across from Kema Plastics is not sufficient to justify a full time Account Manager and with no significant new business generated since your commencement, we have no option other than to server our ties”. 3
 The Respondent maintains that at the time of the Applicant’s dismissal, the Applicant’s employment was not covered by a modern award or enterprise agreement, and the Applicant earned more than the high income threshold and therefore is unable to make an application for an unfair dismissal remedy. That the Applicant was not covered by a modern award or that an enterprise agreement applied to the Applicant at the time of his dismissal is not in dispute.
 Section 382 of the Act outlines 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.”
 Meeting or exceeding the high income threshold assessed under the s.382(b)(iii) of the Act has the effect of excluding an employee not covered by an award and to whom an enterprise agreement does not apply, from making an unfair dismissal remedy application. The high income threshold is worked out in accordance with Regulation 2.13 of the Fair Work Regulations 2009. On and from 1 July 2016, the high income threshold prescribed for the purposes of the Act is $138,900.00.
 It is not in dispute, and I find that the Applicant served the minimum employment period, that he was not covered by a modern award and that an enterprise agreement did not apply to him at the time of his dismissal. The issue that must be determined therefore is whether the Applicant’s annual rate of earnings at the time of his dismissal was less than the high income threshold of $138,900.00.
 “Earnings” are described in a non-exhaustive fashion in s.332 of the Act:
(a) the employee's wages; and
(a) payments the amount of which cannot be determined in advance;
(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:
 The Applicant commenced working for the Respondent on a full time basis on 1 July 2015.
 The Respondent maintains that the Applicant’s earnings at the time of his dismissal were $143,152.25. The Respondent’s calculation is comprised of the following:
● Salary and Motor Vehicle allowance ($123,553 + $15,000) $138,553.00
● Mobile phone/internet $ 1,734.66
● E-tag and road tolls $ 864.59
● Overseas Travel Allowance $2000.00
 During the course of the hearing, Mr Salvador Santana, General Manager of the Respondent, tendered a copy of three emails dated 4 June 2015. The first email contained an attachment titled “Remuneration package for Sales Account Managers”. The content of the email is as follows 4:
As discussed earlier we are looking forward to having you as part of the Warringah Plastics team.
As a point of reference, attached is Warringah Plastics’ current remuneration package for Sales Account Managers.
Please review and apply the commission structure to your anticipated annual sales to see how it stacks up against your expectations.
The vehicle allowance, interstate flights, and mobile phone expenditure can be defined to suit the requirements of operating independently interstate.
After you have reviewed the package, call and we can discuss and define a mutually beneficial package.”
 The attached remuneration package, among other things, outlined the annual base salary for a Sales Account Manager as $60,000.00. 5 The remuneration package also outlined a commission structure, leave and superannuation entitlements. It is not in dispute that the parties negotiated from an initial position through to a final position.6
 The Respondent maintains that the emails of 4 June 2015 and the remuneration package therein sets out and explains how the provision of an e-TAG, the payment of the Applicant’s mobile phone accounts and payment of a motor vehicle allowance arose, 7 and in essence should be referred to in order to establish the Applicant’s remuneration package and thus his earnings.
 In my view, the remuneration package attached to the email was only “a point of reference” for the Applicant. Firstly, the remuneration package is for a Sales Account Manager and not the role the Applicant ultimately accepted. The base salary is substantially lower than the Applicant’s actual base salary and the email encourages the Applicant to review the remuneration package against his expectations. The letter of offer of employment dated 17 June 2015 seems to me to be the final remuneration package agreed and in any event, the letter of offer dated 17 June 2015 superseded the 4 June 2015 letter of offer.
 The terms are set out in the 17 June 2015 letter of offer which was accepted, and formed terms of the contract of employment between the Applicant and the Respondent. Those terms remained applicable at the date of the Applicant’s dismissal.
 Pursuant to the contract of employment, the Applicant’s “remuneration package” was described as follows:
The Salary Package includes:-
1. $120,000 per year.
2. Car allowance of $15,000 per year.
Inclusive of all vehicle expenses
3. Travel allowance of $4,800 per year.
To cover interstate trips (1 per month on average) inclusive of all expenses, food, car hire, and accommodation.”
 The Applicant’s position description and duties are outlined as follows:
“ Business Development & Accounts Manager for the states of Victoria and South Australia.
 At the time the Applicant was dismissed, he was entitled to an annual salary of $120,000.00 as set out in the contract of employment. However, the Applicant’s PAYG payment summary for the financial year ending 30 June 2016 records that the Applicant had been paid an amount of $123,553.00.
 The Applicant was unable to provide a satisfactory explanation for the discrepancy between the two figures but indicated that he might have been paid twice incorrectly and that the overpaid amount was reimbursed to the Respondent. 8 The Applicant later indicated that “there were a couple of issues with the pay people, because, at that stage, Warringah Plastics were changing from one pay company to another”.9 Mr Santana’s evidence was that the Respondent uses an external payroll company to pay employees their monthly salary by multiplying the total number of hours worked per month by the hourly rate and that invariably the amounts differ.10
 On the whole, I found the evidence given by both parties in respect of the discrepancy between the two figures unsatisfactory. Neither party provided a cogent explanation between the contractual entitlement of $120,000.00 and the $123,553.00 amount recorded in the PAYG payment summary.
 As outlined above “earnings” do not include payments, the amount of which cannot be determined in advance. The only amount that can satisfactorily be determined in advance is the Applicant’s salary entitlement set out in the contract of employment.
 I am satisfied that at the time of the Applicant’s dismissal, his guaranteed salary was $120,000.00.
 In any event, even if the amount of $123,553.00 is part of the Applicant’s earnings, for the reasons which follow the Applicant’s annual rate of earnings would nevertheless fall below the high income threshold.
 The contract of employment is silent on mobile phone/internet usage, however, the Applicant’s description and duties as outlined above requires the person who carries out this position to follow up on customer calls while out on the road. by phone and email. 11 This suggests at least a part of the role occupied by the Applicant required him to call customers and reply to emails using either his mobile phone, laptop or other portable device.
 The Applicant’s evidence is that he had discussions with Mr Santana prior to commencement of his employment, that he would require a mobile phone in order to communicate with customers. 12 Mr Santana’s evidence is that all representatives were provided with a mobile phone.13 The Applicant says that the Respondent at the time was in the process of reviewing its mobile phone plans and that as his mobile phone had broken, he required one a lot sooner.14 This evidence is uncontested. It is in not in dispute that by agreement or consent, the Applicant purchased a mobile phone on a $120.00 per month contract15 and the invoices were then forwarded to the Respondent for payment.16 The Respondent paid the amount of each invoice.
 The Respondent provided copies of the front pages of the Telstra bills which were paid over the preceding 12 months. 17 The total sum of which was $1,734.66. The Respondent maintains that the sum of $1,734.66 forms part of the Applicant’s annual earnings and that the 4 June 2015 emails and attachment explained this.18
 The Applicant maintains that his mobile phone was used predominantly to contact and follow up customers, 19 and estimated that his personal usage would be in the vicinity of 30% - 50%.20 The Applicant’s evidence is that he did not claim the mobile phone as a tax deduction.21
 It seems to me on the evidence that instead of providing the Applicant with a mobile phone for use in the performance of his duties, the Respondent and the Applicant agreed that the Applicant would purchase a mobile phone subject to a plan to use in the performance of his duties and provide invoices which would be met by the Respondent. I do not accept that the sums paid by the Respondent formed part of the Applicant’s earnings. The Respondent agreed to take responsibility for payment of the invoices and the Applicant agreed to supply and use his own mobile phone instead of being provided with a mobile phone by the Respondent. The payment of the invoices by the Respondent is akin to reimbursements, and the amounts to be paid cannot be determined in advance, as is evident by the contract value in the preceding 12 months of $1,440.00 and the actual payment made of $1,734.66.
E-TAG and road tolls
 It is not in dispute that during the Applicant’s employment, the Applicant requested that he be provided with an e-TAG as he would be travelling into Melbourne to visit Victorian customers from his home based in South Australia. 22 It is also not in dispute that other account managers had e-TAGs23 provided and that the e-TAG was supplied to the Applicant by the Respondent and the account was held in the Respondent’s name.24
 Attached to the Respondent’s submissions are copies of the e-TAG and road tolls incurred by the Applicant between August 2015 and June 2016. 25 The total sum of travel including the cost of the e-TAG was $864.59 and the Respondent says that this amount should form part of the Applicant’s annual earnings.
 The Applicant says that the amount of expenditure cannot be determined in advance and therefore should not form part of his annual earnings and, in the alternative, only his personal usage should be included. 26 The Applicant estimates that his personal use during the period was approximately 20%.27 The Applicant was not cross-examined about his personal usage. The Respondent says that the e-TAG has not been returned.28
 The expenditure on the e-TAG is not a payment to the Applicant. The e-TAG account is in the name of the Respondent, not the Applicant. The principal purpose for which the e-TAG is provided is to facilitate work related travel. To the extent that the Applicant derives a tangential benefit, that benefit is somewhat similar to a non-monetary benefit, but not as described in s.332 of the Act. This is because the personal benefit derived from the e-TAG use did not involve, on the evidence, an agreement between the Applicant and the Respondent as to the “reasonable money value” of the benefit.
Overseas Travel Allowance
 Pursuant to the terms of the contract of employment, there was provision for travel allowance of $4,800.00 per annum to cover interstate trips inclusive of all expenses, food, car hire and accommodation. It is not in dispute that the Applicant did not receive the $4,800.00 allowance on a weekly, fortnightly or monthly basis. 29 No part of the allowance was paid in advance. This amount was intended to be a reimbursement allowance. In the event that the Applicant needed to be reimbursed for business related expenses, it was the Applicant’s responsibility to make a claim for this.30 In effect, the amount of $4,800.00 was a work related travel expenditure budget amount.
 In September 2016, the Applicant travelled on an overseas business trip to Dusseldorf in Germany. 31 It is not in dispute that the purpose of the trip was to primarily secure Jayco as a customer.32 The flights were organised by the Applicant and paid directly by the Respondent.33
 Attached to the Respondent’s submissions is a remittance advice. 34 On 1 September 2016, an amount of $2,000.00 was paid into the Applicant’s account. The Respondent maintains that this amount should be characterised as earnings.
 The Applicant appeared to have no recollection of how the $2000.00 travel allowance arose. The following passage of the transcript makes good this point: 35
“All right. Now, the 2000 dollar expenditure in relation to the overseas trip, what was that for?---There was some costs which had been incurred while I was over there that I had paid directly.
When you were overseas doing what?---For business, doing review in regards to a caravan expo in Dusseldorf in Europe.
The flights were paid for by whom?---Directly by Mr Santana. They were organised by myself because Mr Santana informed me that if it's easiest to organise myself then do so and have the Flight Centre people send him up an invoice to be paid, and that was how that one transpired.
And the $2000 was paid as a travel allowance?---I'm not sure how that was – that was reimbursement, I understood. It's not on PAYG.
Well, there were amounts claimed – so if you just go to Mr Santana's documents, and we'll go to the fourth attachment to those documents?---The fourth attachment.
It's titled Attachment 4 and it's a remittance advice?---Attachment 4.
Do you have that?---Yes.
So that says amongst other things, payments by EFT, amount paid is $2000, and then it has, "Wigglesworth M, travel allowance Europe $2000". See that?---Yes.
Now the next page is a payment to Flight Centre?---Yes.
Which I presume was for the airfare?---Yes.
Then there's another document which has reimbursements, which is a remittance advice of 23 November 2015, all titled "Travel", with various amounts. What are they for?---I would need to cross-reference them to - that might have been when was it, it was November.
Then the next document is another remittance advice for 20 July 2015, which has various amounts reimbursed to you for travel?---Yes, I believe there was another email that Mr Santana sent through which was an expense sheet and if I was to cross-reference then I would probably - it might be what they're for.
Well, focusing on the $2000, what was that for, I was asking? Did you put in receipts for that or what did you do?---I would think there would have been receipts put in for that.
Do you have a recollection of putting in receipts?---I don't have a recollection, no. I don't know if it's a sum - it's showing as a sum total but I'm not sure if it's broken down into other items. But that - 1 September, September was the period that I was away for in the caravan salon, so I can't - I can't verify or deny any of this date of 1st of the 9th, other than what is written on here.
Mr Santana, would you like to ask - - -?
MR SANTANA: Perhaps on that $2000 travel allowance, I'll clarify where that came about. When Mr Wigglesworth requested that he wanted to travel to Germany to a caravan show, at the time he asked for an amount of $2000 for a travel allowance because supposedly he didn't have any money at the time, and that's how we transferred a sum of $2000 unconditionally to his account. That was one payment which can be proven by a remittance if required. It may even be in - - -
THE DEPUTY PRESIDENT: Right. Well, this is an opportunity, Mr Santana, for you to ask questions. You'll get a chance to give some evidence, but I'll take that as a question. Do you understand the proposition that was put to you, Mr Wigglesworth, that that was an amount that was paid to you at your request because you didn't have any money and that was unconditional. Do you have a recollection of that?---No, I don't. I'm just looking through some - trying to find some of the expense forms which I found on the other matters, but ..”
 Mr Santana gave evidence that the Applicant travelled to Germany and at the time requested an amount of $2000.00 for a travel allowance “because supposedly he didn’t have any money at the time.” Mr Santana’s evidence is that the sum of $2,000.00 was paid in connection with work related travel 36 and the amount was transferred into the Applicant’s account.37
 On the whole, I found the evidence given by both parties in respect of the travel allowance unsatisfactory. The Applicant’s recollection was extremely vague and unclear. Mr Santana’s oral evidence was not supported by any document save for the remittance advice recording the payment.
 On its face, it seems that $2,000.00 was paid to the Applicant to cover his expenses whilst on an overseas business trip. This sum falls within his travel allowance as set out in the contract of employment. Whether the payment was made in advance or made after a claim was made is not clear on the evidence.
 I am not inclined to characterise the $2,000.00 as earnings as in my view this payment was made to fund work related travel. This point is not disputed. Whether it was paid in advance or not, does not change that characteristic. It was payment for expenses incurred or to be incurred in connection with work related travel.
 The Applicant was entitled to be paid a $15,000.00 per annum vehicle allowance. The Applicant’s evidence is that the vehicle allowance was paid to cover the expenses of the car for travelling and visiting current and prospective customers. 38 The vehicle allowance was guaranteed and paid on a monthly basis irrespective of how much the Applicant travelled.39 It is not in dispute that the Applicant would not be reimbursed for any claims in relation to his motor vehicle as he was receiving an allowance. The Applicant did not account for travel; he did not account for expenditure on the motor vehicle such as petrol and servicing costs or account for mileage; nor was he required to do so.
 The amount of total kilometres travelled by the motor vehicle between the period of July 2015 and June 2016, and the amount of kilometres attributed to personal use, is in dispute. Both the Applicant and Respondent led evidence about this issue. I do not find it necessary to assess whether the vehicle allowance in whole or part forms part of the Applicant’s annual rate earnings as its inclusion as a whole will make no difference to the ultimate result.
 The approach to the question of the treatment of a motor vehicle allowance for the purpose of assessing earnings by this tribunal is less than satisfactory.
 In Sinclair v Spotless Management Services Pty Ltds t/a WA Laundries, 40 Commissioner Roe treated a vehicle allowance paid to the employee as in nature of a reimbursement because the employee’s contract provided that:
1. the purpose of the payment was compensation for the employee using his own vehicle for work purposes.
2. the payment was described as an expense allowance.
3. the payment was expressly excluded from the employee’s ordinary pay.
4. the allowance could be withdrawn if the employee’s role changed and he no longer required the vehicle to perform his duties.
 In Davidson v Adecco Australia Pty Ltd t/a Adecco, 41 Commissioner Booth concluded in the circumstances of that case that the travel allowance paid to the employee was not wages because the allowance was paid in contemplation of offsetting the employees’ expenses in providing, running and maintaining his own vehicle for the purposes of performing his duties. According to Commissioner Booth, the allowance recompensed the employee for business related costs and therefore could not be categorised as payment for his work or services.
 In contrast, in Pasznicki v Expo Group Australia Pty Ltd, 42 Deputy President Binet determined that the car allowance unconditionally paid and not linked to the nature of the Applicant’s duties was included as earnings. In that case, there was also a separate company travel policy which provided:
“The company provides certain funds for employees travelling for the purpose of undertaking business on the company’s behalf. The company may approve travel for the purpose of:
- Attending conferences
- Attending seminars, workshops, training or residential courses
- Attended meetings
- Performing normal work activities i.e. consulting with clients
- Inspecting the operations of other organisations.
Expro accepts responsibility to cover reasonable out of pocket expenses of employees travelling on Expro business
From time to time employees may be authorised by Management to use their own private vehicles on Company business in which case a charge per km may be claimed by the employee in accordance with the applicable rate” 43
 Deputy President Clancy in Ni Mhorain v UON Pty Ltd 44 came to the same conclusion as in Pasznicki in similar circumstances.
 For my own part, and without deciding the issue, I am inclined to the view that an entitlement to payment of a vehicle allowance which is paid in conjunction with salary, as is the case here, is earnings. This is so whether it is paid unconditionally or linked to anticipated use of a private vehicle by the employee. The extent to which an employee uses his or her vehicle for work purposes in such circumstances is a matter for tax deduction claims, rather than denying the payment of the allowance its true character.
 When account is taken of the Applicant’s salary of $120,000.00 and the vehicle allowance of $15,000.00 the result is $135,000.00 which is less than the high income threshold. Even if the unexplained additional amount appearing in the PAYG payment summary of $3,553.00 is added, the total remains less than the high income threshold.
 The other amounts sought to be included by the Respondent do not form part of the sum or amount contemplated by s.382(b)(iii) of the Act, for the reasons earlier given.
 Consequently, the Applicant is a person protected from unfair dismissal and the Respondent’s jurisdictional objection is dismissed.
 The file will be returned to the unfair dismissal case management team and the application will be processed in the normal way.
Mr M Wigglesworth appeared in person.
Mr S Santana on behalf of the Respondent.
Final written submissions:
Applicant’s Final Submissions dated 2 November 2016.
Respondent’s Final Submissions dated 2 November 2016.
1 Transcript of 9 September 2016 PN6 - PN7, Exhibit 4.
2 Exhibit 4.
4 Exhibit 2.
6 Transcript of 18 October 2016 PN241.
7 Transcript of 18 October 2016 PN191.
8 Transcript of 18 October 2016, PN112.
9 Transcript PN114.
10 Transcript of 18 October 2016, PN235.
11 Exhibit 2.
12 Transcript of 18 October 2016 PN73.
13 Transcript of 18 October 2016 PN227.
15 Transcript of 18 October 2016 PN41.
16 Transcript of 18 October 2016 PN228- PN229.
17 Respondent’s Submissions dated 26 August 2016 at Attachment 2.
18 Transcript of 18 October 2016 PN191.
19 Transcript of 18 October 2016 PN75.
20 Transcript of 18 October 2016 PN74.
21 Transcript of 18 October 2016 PN76.
22 Transcript of 18 October 2016, PN77, PN221.
23 Transcript of 18 October 2016, PN222.
24 Transcript of 9 September 2016, PN43- PN44.
25 Respondent’s Submissions dated 26 August 2016 at Attachment 3.
26 Applicant’s Final Submissions dated 2 November 2016.
27 Transcript of 18 October 2016, PN88.
28 Respondent’s Submissions dated 26 August 2016 at Attachment 4.
29 Transcript of 18 October 2016, PN214; Transcript of 9 September 2016, PN35- PN37.
30 Transcript of 9 September 2016, PN36.
31 Transcript of 18 October 2016, PN117.
32 Transcript of 18 October 2016, PN136.
33 Transcript of 18 October 2016, PN118.
34 Respondent’s Submissions dated 26 August 2016 at Attachment 4.
35 Transcript of 18 October 2016, PN116 – PN134.
36 Transcript of 18 October 2016, PN220.
37 Transcript of 18 October 2016, PN133.
38 Transcript of 18 October 2016, PN41.
39 Transcript of 18 October 2016, PN56 – PN60.
40  FWC 4228.
41  FWA 8393.
42  FWC 2298.
43 Ibid at .
44  FWC 4427.
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