These days, I hardly go anywhere without my phone and tablet, and they are certainly among the first things I pack when I get ready to head down to the Fair Work Commission. No longer do I need to carry my legislation in dead-tree format, and no longer do I need to remember my calculator to work out how many dollars there are in the settlement represented by the equation:
2 x (week’s pay) – (tax at ETP rate) – (expenses to be repaid) + (unpaid leave loading)
So, at the Fair Work Commission, my phone and tablet are invaluable to me. But how valuable would they be to an employer who was trying to persuade the Fair Work Commission to knock out an unfair dismissal claim? A recent case answers that question.
The question arose in an unfair dismissal claim where the issue was whether the employee’s remuneration exceeded the high income threshold. At the time, the high income threshold was $133,000 per year (on 1 July 2015, it increased to $136,700). The threshold doesn’t apply to employees covered by a modern award, so highly paid employees who want to bring an unfair dismissal claim will first try to identify a modern award which covers them, and if unsuccessful in that argument, then try to argue that their remuneration is less than the high income threshold. In calculating remuneration, it will often be necessary to identify the ‘personal benefit’ of an employee’s use of vehicles or tools provided by an employer, because personal benefit will be part of remuneration, whereas work use will not.
The employee in the case in question first tried to argue that the Miscellaneous Award applied to his employment. My favourite dictionary defines miscellaneous as meaning “of mixed composition or character,” and reviewing the cases, it is fair to say that a pretty mixed composition of characters have attempted, over the years, to rely on the Miscellaneous Award as their ticket to an unfair dismissal claim. The problem in this case was that the Miscellaneous Award expressly excludes managerial employees, which was a bit of a problem for the employee, whose title was property/facilities manager.
Now, it is not every person with ‘manager’ in his or her title who is a managerial employee. The working world is full of people with titles like ‘account manager’ who don’t, in fact, have the authority to manage anything outside the four corners of the cubicle in which they work. (By the same token, calling yourself a ‘burger construction technician’ doesn’t make you a tradie). However, this employee was found to be a true manager, so the question then turned to his remuneration.
There was no dispute about the salary of $121,560, and the Commission determined that the value of the employee’s vehicle was $11,454 – totalling $133,014, or $14 over the limit. That was enough to knock out the claim. But it was what the Commission did with the value of the employee’s phone and iPad which was more interesting.
The phone was on a plan of $163 per month, and the Commission accepted evidence that 65% of the calls made by the employee were to numbers the employer could not identify as work contacts. Accordingly, said the Commission, the personal benefit of the phone was 65% of $163 per month, or $1,222.50 per year. This does seem harsh, given that there was no evidence of the value of the personal calls, and $163 per month is a lot to pay for a personal phone (even my plan doesn’t cost that much, and as a lawyer, I talk almost continuously). If an employer chooses to provide a phone on an expensive plan, it is not necessarily clear that the personal benefit received by the employee can be measured by just adding up the calls, especially if the employee is also using the phone for work emails.
When it came to the iPad, the Commission was not swayed by the employee’s evidence that the iPad was used mostly to check work emails, and instead counted up the number of personal photos and work photos on the iPad as a basis for finding that half the value of the $39 per month iPad plan should be counted as personal. The lesson from that finding might be don’t take happy snaps with your iPad, given that (A) it is pretty hard to do so without looking like a bit of a goose, and (B) it will count against you in the Fair Work Commission
The case illustrates the complexity of the high value threshold and the need for careful consideration by employers in the cases of employees whose remuneration is close to the line. However, there might be one further twist in the case: It emerged that the employee’s company car was actually owned by his boss, which meant that the boss collected the demerit points for the employee’s speeding offences.
The employer did not try to argue that this was a benefit to the employee, although it may have been open to do so. If the employee is thinking about an appeal, he might win on the phone and the iPad, but ultimately, lose on points.