Industrial Relations Commission of New South Wales CITATION: Thomson and VoIP Pty Ltd [2005] NSWIRComm 17 APPLICANT Matthew James Leonard Thomson PARTIES: RESPONDENT VoIP Pty Ltd FILE NUMBER(S): 4499 of 2004 CORAM: Sams DP Jurisdiction - termination of employment - unfair dismissal application - application out of time - reason for, and length of delay - hardship for applicant and employer - sufficient reason - exercise of discretion - option to resign or be dismissed - legal advice sought - exemption from unfair dismissal provisions - whether applicant was covered by an industrial instrument - nature of work performed - whether applicant covered by employment contract and award free - respondent's business records - applicant's evidence - applicant's annual remuneration - whether remuneration exceeded threshold - salary, commission, car allowance, superannuation and non cash benefits - package of benefits - vehicle business usage - requirement of a vehicle to perform work - leased vehicle - leasing and running costs - contract of employment - tax returns - business records - applicant's evidence - whether superannuation part of remuneration - no Full Bench authority - principles considered. CATCHWORDS: Held, exercise of discretion unnecessary - no decision taken to terminate employment on the date alleged - unfair dismissal application filed within 21 days - respondent's evidence incomplete and unclear - no reliable evidence to rebut applicant's claim - work relevantly covered by an industrial instrument - employer cannot contract out of award - no evidence of change in duties - applicant's evidence preferred - respondent's evidentiary case weak - applicant's work covered by the terms of an industrial instrument - applicant not prevented from bringing an unfair dismissal claim - vehicle required for the job - actual costs of running vehicle greater than car allowance - 90% business usage accepted - business usage applied to car allowance - respondent's evidence incomplete - applicant's evidence accepted - no commission - superannuation part of remuneration - reasons developed in addition to comments of Full Bench - applicant's total remuneration below threshold -applicant's unfair dismissal claim competently before the Commission - jurisdictional challenge not sustained - further proceedings listed - parties directed to confer as to settlement. LEGISLATION CITED: Industrial Relations Act 1996 ss83 and 85 Gorrell v Uwatec Pty Ltd (unreported, Sams DP, IRC1700 of 1999, 5 July 1999) Kagan v Primus Telecommunications (Aust) Pty Ltd (No 2) [2000] NSWIRComm 185 McBlane v National Transport Insurance Limited (1997) 77 IR 185 National Wage Case June 1986 301 CAR 611 CASES CITED: AWARDS: Draughtsmen, Planners, Technical Officers, (State) Award 327 IG 1058 Metal, Engineering and Associated Industries (State) Award 325 IG 209 HEARING DATES: 11/26/2004 DATE OF JUDGMENT: 02/11/2005 APPLICANT Ms L Doust, Solicitor Maurice Blackburn Cashman Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr A Powter, Solicitor Turks Legal JUDGMENT: - 31 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 11 February 2005 Matter No IRC04/4499 Matthew James Leonard Thomson and VoIP Pty Ltd Application by Matthew James Leonard Thomson re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2005] NSWIRComm 17 1 This decision will resolve two preliminary jurisdictional issues which arose following the filing of an unfair dismissal application by Matthew James Leonard Thomson ('the applicant') on 2 August 2004. It was claimed that the applicant was dismissed from his employment as an engineer with VoIP Pty Ltd ('the respondent') on 7 July 2004 for various performance related issues. 2 The two preliminary issues to be determined are: 1) Whether the Commission should exercise its discretion pursuant to s85(3) of the Act to accept the applicant's application which it was said, was filed out of time. 2) Whether the applicant was prevented from bringing an unfair dismissal claim pursuant to s83(1)(b) of the Act because it was said that he was a non award employee whose annual remuneration was in excess of the $90,400 threshold. 3 It is obviously unnecessary for the purposes of this decision for the Commission to make findings as to whether the applicant's dismissal was harsh, unreasonable or unjust within the meaning of Pt 6 ch 2 of the Industrial Relations Act 1996 ('the Act'). 4 Notwithstanding the jurisdictional difficulties, the Commission chaired private conferences with the parties on 13 August 2004 in an attempt to secure a settlement of the claim. However, this proved unsuccessful and the matter was listed for jurisdictional hearing with directions issued for the filing of evidence. I intend to deal with each of the two jurisdictional issues seriatim. OUT OF TIME APPLICATION Evidence 5 The applicant's unfair dismissal claim was lodged on 2 August 2004. It was said that the applicant was dismissed on 7 July, thereby making his claim five days late or three working days late. 6 The applicant detailed his meeting with the respondent's officers, Mr Mick Harte, Chief Executive and Mr Robert Sigg, Director on 7 July 2004. At this meeting Mr Harte told the applicant that he had the option to resign, sign a deed of release and receive some monies or be fired and receive nothing. The reasons for the respondent's decision are not materially relevant at this juncture; suffice to observe that the alleged performance issues raised by the respondent were strongly contested by the applicant. 7 Mr Harte presented the applicant with a deed of release which he was reluctant to sign without legal advice. It provided for one month's pay in lieu of notice, unpaid holiday pay, the waiver of a $8,013.14 debt to the respondent and a further four weeks' wages. The applicant said he was also promised a $20,000 bonus. Both Mr Harte and Mr Sigg had indicated to the applicant that he would be re-hired as a contractor when "things settled down". In these circumstances, the applicant felt he had no option but to resign. 8 On 9 July arrangements were made for the applicant and Mr Harte to meet at The Oaks Hotel, Neutral Bay on 13 July. At this meeting the applicant put a list of six issues he wished the respondent to agree to before he would sign the deed of release. Mr Harte agreed to all six points and discussion then turned to a prospective PABX contract for a large Sydney hotel. Mr Harte asked the applicant to make further inquiries about the project. 9 By 19 July the applicant had still not heard from Mr Harte. He called Mr Harte and arranged to meet with him on 22 July at the respondent's offices. The meeting took place and Mr Harte apologised for not arranging the termination cheques as he had promised. He agreed to give him the cheques the next day at a coffee shop located down the road from the office. 10 The next day Mr Harte was late for the meeting. When he arrived he had various documents relating to the hotel PABX project. Mr Harte had one cheque, but not the deed of release. The payslip attached to the cheque disclosed that the amounts (which were lumped together) were not his full outstanding holiday pay, four weeks wages and only $10,000 as a bonus. Mr Harte said that this was the best he could do. 11 The applicant deposed that on 29 July he called the AMWU office at Granville and the ACTU and was directed to call the Redfern Legal Centre. He called the Centre and was informed to commence the processes for filing an unfair dismissal application. He was told to hurry, as the 21 day time limit had passed. The applicant downloaded the 7A application form and spent the next day preparing it, having it signed by a Justice of the Peace and attending the solicitor's office. By the time this had been completed, the Industrial Relations Commission Registry was closed. As it was a Friday, the applicant lodged his claim at the Phillip Street Registry on the next available working day - Monday, 2 August. 12 The applicant maintained that Mr Harte, on three separate occasions, had promised him an amount of $20,000 and had said that this would give him enough money to take a real break from work. Both Mr Harte and Mr Sigg had said that he would be re-employed as a contractor when things had settled down. 13 In oral evidence, the applicant agreed he had been a union delegate in his previous employment, when he had worked at Alcatel. However, he said he had not been aware of the processes for dealing with unfair dismissal claims. For the respondent 14 Mr Harte did not give evidence in the proceedings. Mr Sigg, in his evidence took issue with some aspects of the applicant's version of events - although not the chronology referred to by the applicant. Mr Sigg claimed that on 7 July the applicant was given two options to consider. He was not forced to resign. He could have been terminated and paid one month's notice and statutory entitlements, or resign and receive a debt waiver of $8,013.14 owed to the respondent, one month's pay in lieu of notice, statutory entitlements and $10,000. 15 Mr Sigg deposed that the applicant said he wished to consider these alternatives and obtain legal advice. Mr Sigg had encouraged him to do so. Mr Sigg claimed the applicant had said that he would obtain legal advice within a week. 16 Mr Sigg claimed he had given the applicant a letter of termination. However, the applicant had left it on the table and said he preferred to resign. The applicant strongly denied ever seeing or receiving this letter. 17 Mr Sigg denied that the applicant was promised $20,000. A bonus was offered for the completion of the Health Insurance Commission ('HIC') network implementation. However, the applicant had not met his targets for the project. The respondent had offered a gross amount of $18,884.63 and a waiver of a debt of $8,013.14. The figure included a component of disputed leave because the applicant had not submitted appropriate leave forms. SUBMISSIONS For the applicant 18 Ms Doust submitted that the delay in filing the claim was very brief - being only three working days. Moreover, she said, Mr Sigg could offer no evidence of any prejudice to the respondent if the application was accepted. 19 Ms Doust said that there was no evidence from Mr Harte which contradicted the applicant's version of events and which had disclosed that there had been ongoing discussions after 7 July about an amicable resolution of the matter. These discussions had included assurances of further work and a monetary settlement. 20 Ms Doust put that the applicant had not accepted his termination without demur and the delay in filing his claim was reasonable as he had been encouraged by the respondent to settle the matter. Further, the applicant would suffer hardship if he did not have an opportunity to press his claim of unfair dismissal. For the respondent 21 Mr Powter submitted that the onus was on the applicant to convince the Commission to exercise its discretion to accept the application out of time. He relied on the principles discussed in Gorrell v Uwatec Pty Ltd (unreported, Sams DP, IRC1700 of 1999, 5 July 1999). 22 Mr Powter put that the applicant had indicated to the respondent on 7 July that he was intending to take legal advice. He had an opportunity to get advice and file his claim within time. The applicant had previously been a union delegate and should have known about time limits for filing unfair dismissal claims. CONCLUSIONS 23 Having considered the uncontested evidence on this issue, it must follow that there is no requirement for the Commission to consider exercising its discretion to allow this s84 application to be accepted out of time, pursuant to s85(3) of the Act. This is so, because on any view of the evidence, the applicant was not dismissed on 7 July 2004. 24 It was the applicant's evidence that, at least until the 23 July conversation with Mr Harte in the coffee shop, he had been led to believe that the terms of his resignation would be amicably resolved. He had been offered a financial settlement and future work. 25 More significantly however, it was the respondent's evidence (Mr Sigg) that the applicant was offered two alternatives on 7 July - to resign or be dismissed. Mr Sigg emphatically stated that the applicant was not required to make his decision then and there. Indeed, Mr Sigg said that he had encouraged the applicant to seek legal advice. When the applicant requested a week to do so, this was agreed. In other words, no decision had been made on 7 July to dismiss the applicant or otherwise terminate his employment. 26 Mr Powter conceded as much in the following exchange with the Commission during the proceedings: HIS HONOUR: Does not that plainly infer that what was being considered by the applicant and tacitly supported by the employer was a consideration of the two options that were available - that is to resign or be dismissed - and at that point it could not be said that a dismissal had occurred, even though that is how it turned out? POWTER: That is a way you could look at the circumstances of the case, yes. That is definitely an observation about the circumstances surrounding the separation. HIS HONOUR: That does not help your case. I appreciate your candour. 27 While it is impossible to pinpoint when the applicant was actually dismissed, if it was a week later (14 July - the time period agreed to for the applicant to seek legal advice) or 23 July (the coffee shop conversation), either date placed the application well within the 21 day time limit. 28 Some attention was given to an unsigned letter of dismissal produced in these proceedings and dated 7 July. The applicant vigorously denied ever being given the letter, or even seeing it at any time. I have serious doubts that this letter was in existence at the relevant time. In any event, the letter, of itself, proves nothing. As I have said, the applicant could not have been dismissed on 7 July. Even so, a dismissal cannot be backdated in circumstances where the employer has given an employee time to consider his/her options, notwithstanding that a dismissal might be the eventual result. 29 The Commission concludes therefore, that the applicant's s84 claim was filed within time and in that respect is competently before the Commission. I turn now to the second jurisdictional issue. Was the applicant prevented from lodging an unfair dismissal claim by virtue of s83(1)(b) of the Act? 30 To answer this question two matters arise for determination. Firstly, the applicant claimed that his conditions of employment were governed by an industrial instrument, and secondly, that his salary did not exceed the statutory threshold of $90,400. Thus, on either basis, he was not prevented from lodging an unfair dismissal claim. 31 The relevant provisions of the statute are expressed as follows: 83 Application of Part (1) This Part applies to the dismissal of: (a) ..... (b) any other employee, except an employee for whom conditions of employment are not set by an industrial instrument and his annual remuneration is greater than $62,200 (or such greater amount as is prescribed by the regulations). (The relevant threshold amount was $90,400). Was the applicant covered by an Award? 32 The applicant originally believed that his conditions of employment were covered by the Metal, Engineering and Associated Industries (State) Award 325 IG 209. He described his duties as the installation, maintenance and provision of support to telecommunications PABX equipment. It was the applicant's evidence that when he was employed by Alcatel Australia from 1996 to 1999 he performed the same, or similar duties as those he had performed for the respondent. He said that he and all of the workers employed in the PABX services department at Alcatel were employed under the Award. 33 After receiving Mr Sigg's affidavit, the applicant made further inquiries with the Union. He said that he was advised by the Union that when he had worked at Alcatel, he had in fact been employed under the terms of the Draughtsmen, Planners, Technical Officers, (State) Award 327 IG 1058. He now believed he was employed under that Award whilst employed by the respondent. Reference was made to the definitions covered by the Award, in particular the Electrical/Electronic stream. 1.4.1 (a) "Electrical/electronic stream" includes the design, assembly, manufacture, installation, modification, testing, fault finding, commissioning, maintenance and service of all electrical and electronic devices systems, equipment and controls, eg, electrical wiring, motors, generators, PLC's and other electronic controls, instruments, refrigeration, telecommunications, radio and television, communication and information processing. 34 In cross examination, the applicant was questioned about his resume which included details of the work he had performed for Alcatel. The applicant maintained that he had performed similar work for the respondent. The applicant agreed that he had willingly signed a contract of employment when he commenced work for the respondent. 35 Mr Sigg deposed that the applicant was one of 38 systems engineers employed by the respondent, whose responsibilities were the programming and servicing of computerised information systems. He said these employees were award free and engaged under the terms of employment contracts negotiated, and agreed to in writing, before the commencement of employment. The applicant's contract of employment was annexed to Mr Sigg's affidavit. Mr Sigg observed that there was no reference to award coverage in the employment contract. 36 In a reply affidavit, Mr Sigg deposed that the applicant could not have performed the same duties as he had when he had worked for Alcatel. In any event, Mr Sigg said the applicant's duties changed in January 2004 to that of a pre-sales role. This work involved providing consultancy services to a client base, which included the preparation of tenders, advising on system configurations and general consultancy services. He had not performed any major installation, modification, assembly or repair work. Mr Sigg accepted that some of the duties the applicant had performed at Alcatel may have been similar. However, he had not been required to do any installation work for the respondent, as this work was undertaken by contractors. 37 Mr Sigg also relied on the respondent's business records, from January to June 2004. The records disclosed that the applicant had performed 42 jobs for the respondent. These were mainly performed through a dial-up modem located at the respondent's office. Of the 42 jobs, only one required offsite travel. 38 In cross examination Mr Sigg agreed that the applicant's original and only contract of employment referred to him as an engineer. The contract had not been changed when he switched to a pre-sales employee. He accepted that there was no letter which specified a change of role. Further, Mr Sigg could not depose to the detail of any conversation in which the change to the applicant's role had been discussed. 39 In re examination, Mr Sigg described the applicant's employment contract as a standard agreement which applied to all engineers. However, it did not specify actual duties. The applicant's salary was not reduced when he reverted to a pre-sales role. Mr Sigg accepted that he did not know what work the applicant actually performed at Alcatel. Mr Sigg had based his own assessment on the applicant's job sheets. He had not been in a position to know what the applicant did for the respondent on a day to day basis. SUBMISSIONS 40 Ms Doust highlighted the applicant's evidence in which he referred to the work he had performed at Alcatel under the relevant Award. She put that his evidence was largely unchallenged and that he had performed similar or identical work for the respondent. 41 On the other hand, Ms Doust said that Mr Sigg's evidence was based solely on the respondent's incomplete business records. They did not provide an overall picture of the work the applicant had performed. Further, Mr Sigg had admitted he was not familiar with what the applicant did at Alcatel and had had no day-to-day knowledge of what the applicant's tasks were for the respondent. His lack of knowledge was plainly demonstrated by the large gaps in the business records. 42 Ms Doust submitted that despite the contract of employment, the respondent could not contract out of its Award obligations. 43 For the respondent, Mr Powter relied on Mr Sigg's evidence that the applicant had not performed any work related to cabling, mechanical work, installation, modification, assembly or repair. His primary role was in pre-sales. Mr Powter submitted that this was a very different role to the work the applicant had performed at Alcatel, as Alcatel is a manufacturer of components. 44 Mr Powter said that the applicant's view about award coverage was based solely on a conversation with a Union official, but he did not call that official as a witness. The extent of the evidence was the applicant's observations and Mr Sigg's evidence. 45 Mr Powter put that the applicant freely entered into a contract of employment which made no reference to the Award. He had previously been an experienced Union delegate. There was no evidence that even suggested the applicant's work fell within the scope of the Draughtsmen, Planners, Technical Officers, (State) Award. CONCLUSIONS 46 The Commission has not been persuaded that the respondent has been able to successfully rebut the applicant's contention that the work he performed was covered by an industrial instrument. 47 The respondent relied exclusively on the evidence of Mr Sigg - a director of the company. It called no evidence from any employee who had worked directly with the applicant or from anyone who had directly supervised his work. With all due respect to Mr Sigg, his evidence on this matter was incomplete, unclear, speculative and regrettably, most unhelpful. He relied on company records which, at best, were but a snapshot of some aspects of the applicant's work. For example, the records consisted of 42 short duration jobs over six months. There were huge gaps in the records, where Mr Sigg simply could not say what the applicant was doing. 48 Further extracts of Mr Sigg's evidence do not assist the respondent's case. He conceded in oral evidence, that the applicant had worked on the HIC project, but didn't know exactly where, or what he was doing. This was a large and significant job for the respondent. Mr Sigg conceded that he didn't even know what the applicant was doing for the respondent on a day to day basis. I hasten to add that these observations should imply no criticism of Mr Sigg. However, his evidence was of someone who had little to do with the applicant, or his work. 49 Further, Mr Sigg could not materially challenge the applicant's claims that he had performed similar work as to when he had worked at Alcatel under the relevant Award. Moreover, Mr Sigg properly conceded that he didn't even know what work the applicant had performed at Alcatel. It follows then, that he was in no position to take issue with the applicant's evidence. Even if the work was not exactly the same, I am satisfied from reviewing the terms of the Award, that the work described by the applicant was appropriately reflected in the definitions of the electrical/electronic stream. 50 Mr Sigg deposed that the applicant had freely and willingly signed a contract of employment which made no reference to any award. It followed, Mr Sigg boldly put, that the applicant must be award free. Ms Doust correctly observed that whatever arrangement was entered into, it cannot, as a matter of law, oust the common rule award coverage of the work in question. The existence of a contract of employment doesn't automatically mean the employee is award free. 51 Put another way, the mere existence of a contract of employment (albeit with significantly better wages and conditions than the award), is no answer to the issue of whether the applicant was properly covered by the terms and conditions of the relevant award. Of course, an employer is perfectly entitled to pay higher wages and provide better conditions than the award provides, but it cannot pay less than the award. 52 I wish to say a little more about the contract of employment. It is to be noted that the contract placed primary emphasis on provisions to protect the respondent; namely, in respect to confidential information, intellectual property rights and restraints on the employee. I would go so far as to say that the contract had more to do with protecting the respondent's interests, than with a mutual set of responsibilities and obligations for both parties. In particular, I note that nowhere is it spelt out what the engineer was actually required to do. Clause 3 - Authority and Duties of the Engineer is vague and unspecific. No schedule of duties was attached as required by the terms of this clause. 53 Mr Sigg claimed that the applicant's role changed from that of an engineer to a pre-sales consultant in early 2004. Strangely, there was no evidence of any change in his contract. There was no letter or annexure to his contract which altered his duties. No evidence was deposed - even by Mr Sigg himself - as to the exact nature of any conversation with the applicant about this change. The best the evidence got from Mr Sigg was that he thought someone may have told him. 54 With these weaknesses in the respondent's case, the Commission is left with the largely unchallenged evidence of the applicant. Notwithstanding this, I am satisfied that the applicant gave frank and honest evidence. I am prepared to accept him as a witness of credit. 55 Accordingly, I find that while the applicant did not know it at the time, the work he performed was covered by the terms of an industrial instrument, being the Draughtsmen, Planners, Technical Officers, (State) Award. 56 It follows therefore that the applicant's unfair dismissal claim is competently before the Commission. However, even if I be wrong about this finding, for similar reasons I have just expressed about the paucity of the respondent's evidentiary case, I am further convinced that the applicant's remuneration did not exceed the statutory threshold of $90,400 at the time of his dismissal. It is to this issue which I now turn. What was the applicant's annual remuneration? 57 The applicant's salary was $78,000. He was paid a $15,000 per annum car allowance, of which he had claimed 90 per cent as business usage in his taxation returns, leaving an amount of $1,500. He said that the 90 per cent business usage of his vehicle had not been queried by the Tax Office. He had received an amount of 9 per cent as superannuation calculated on the salary and car allowance combined - ($8,370). Therefore, his total annual remuneration was $87,870. Ms Doust however, queried whether it was appropriate to include the superannuation amount in the remuneration calculation. I shall come back to this matter later. 58 The applicant gave detailed evidence of his vehicle use and the requirement for a vehicle to perform his duties. The applicant deposed that he would not have leased a vehicle were it not for his employment. Indeed, he owned another vehicle for private use and lives close to most amenities in King Street, Newtown. 59 The applicant then described his various lease arrangements. When he commenced employment with the respondent he was already a party to a lease arrangement under which he had leased a 2000 Subaru Liberty. He said he continued this arrangement and used the car allowance towards meeting the vehicle's leasing and running costs. In November 2003, he had entered a new lease arrangement for a 2003 Subaru Liberty. In the two lease agreements, he had declared both vehicles as wholly for business use. 60 The applicant said he made a total of $11,688 in lease payments from 1 July 2003 to July 2004. He also paid for comprehensive insurance ($115 a month) and compulsory third-party insurance ($284 and $298), registration costs ($330) and fuel and maintenance costs ($4,927.55). In the result, the applicant deposed that the total cost of the vehicle in the 2003/04 financial year was actually more than the $15,000 car allowance. 61 As to the nature of his work, the applicant said that he had been required to travel from the respondent's office at North Sydney to Sydney airport, Parramatta and other metropolitan and interstate locations. He claimed to have worked 55 - 60 hours a week and to have been "on call" when not working. 62 The applicant said in the six telecommunications companies he had worked for previously, he had always received either a company vehicle or car allowance. He believed a vehicle was a necessary tool for the type of work he performed. He used the vehicle on a daily basis to travel to customers' businesses to work on their PABX systems. 63 In a reply affidavit, the applicant maintained that a vehicle was a vital tool used in his everyday duties. The applicant deposed that he had never been offered the option of converting the car allowance to salary, nor was it mentioned at any time throughout his employment. 64 The applicant denied that in the six-month period January to June 2004, he was only performing dial up modem work from the office. He said that during this time he had been working on the HIC project at either Lidcombe or Parramatta. Travelling to these sites was business travel. The respondent's records show only a small part of his work. The records did not reflect interstate work or visits to customers for sales or planning meetings. In any event, in oral evidence, the applicant said that the respondent's record system was inadequate and "riddled with bugs". 65 The applicant gave details of his interstate work when he worked on the HIC project. He had travelled around Australia to ensure every site was upgraded. This had included travel to Darwin, Adelaide, Hobart, Queensland and the ACT. He had travelled many times to Queensland and the ACT using his leased vehicle. The applicant said he had kept a log book for three months in accordance with Tax Office requirements. 66 In cross examination, the applicant agreed that his contract of employment did not specifically require him to have a vehicle. However, he said he couldn't have performed his job, nor would he have been hired, without a licence and a vehicle. The applicant agreed that the contract provided for a remuneration package which consisted of salary, car allowance, commission, superannuation and non-salary benefits, being non cash components. He accepted that the agreement also provided that the package of benefits could be altered by consent so long as the total amount of the package was not exceeded. 67 The applicant tendered his various tax returns. He agreed that the first tax return for 2000 was at a time when he had not worked for the respondent. However, in the document there was a non leased vehicle identified during the relevant period. The reference being to November 2003. He observed that this tax return disclosed 90 per cent business usage of his vehicle. The second tax return from 15 February 2004 to 8 May 2004 disclosed a business usage percentage of the 89.44. The applicant agreed there was no log book for this period and his accountant had made a mistake with the dates. Nevertheless, the applicant maintained that 89 per cent was the correct figure. 68 In oral evidence, the applicant was asked if he recalled a conversation in October 2004 with Mr Michael Rings, another employee of the respondent, in which he had told Mr Rings that he wanted to sue the respondent for the maximum amount. Despite a statutory declaration produced by Mr Powter from Mr Rings, he said he could not recall this conversation. However, Mr Powter declined to tender the statutory declaration during the proceedings. The Commission will therefore not rely on it. For the respondent 69 Mr Sigg referred to the applicant's contract of employment which provided for: $78,000 - Salary plus 2 per cent commission on first year maintenance sales $ 8,370 - 9 per cent employer superannuation contribution $15,000 - Car allowance 70 As the applicant had made no claim for commissions, his total remuneration was therefore $101,370. Mr Sigg said that the applicant had also taken a loan with the respondent for $14,562.94 of which $6,549.80 had been repaid. (The balance of $8,013.14 was presently being pursued in the Local Court). 71 Mr Sigg said that at all times, the applicant retained possession of the motor vehicle and met all costs and running expenses. He was provided with $15,000 to assist with these expenses, but he could have elected to have the car allowance paid as salary. 72 Mr Sigg deposed that he believed most of the work performed by the applicant was from the respondent's office. Any travel outside Sydney could be claimed as an additional expense and all interstate travel and expenses were paid by the respondent. 73 Attached to Mr Sigg's affidavit was what he claimed was the applicant's tax return for the year 2003/04 which disclosed a total remuneration of $101,370. However, I note that this was not the tax return, but rather the Company's Group Certificate. It disclosed $78,000 salary and $15,000 car allowance. There was no reference to superannuation. This document does not prove the amount of the applicant's remuneration. 74 In a reply affidavit, Mr Sigg said that the estimate of 90 per cent business travel was not supported by the respondent's own business records. Moreover, the period referred to in the applicant's tax return was in 2000 when the applicant was not even working for the respondent. Mr Sigg reaffirmed that it was not compulsory for the applicant to have a motor vehicle. Most of the work was conducted from the office and if he needed to travel, taxis could be utilised. 75 Mr Sigg rejected the applicant's claim that in the six months from January to June 2004 he had worked at Lidcombe or Parramatta. He said this was not supported by the respondent's records. Mr Sigg said that none of his other employees had claimed 90 per cent of business related car use. Mr Sigg said he only claimed 30 per cent himself. 76 Mr Sigg disputed that the applicant had worked 55 to 60 hours a week and said he was never on a callout roster because he refused to do so. 77 In cross examination, Mr Sigg denied that there were problems with the respondent's internal software system. He did not believe a faster system was necessarily more reliable. Mr Sigg said that when an internal review found $10,000 worth of missing work, it was due to certain engineers having failed to input all their work. 78 Mr Sigg said the respondent offered employees a car allowance as an option which assisted with their tax. What employees tell the Tax Office was entirely up to them. He said no employees presently have a company car. 79 Mr Sigg agreed that he did not accompany the applicant on various work trips, nor did he know what the applicant took with him on these trips. Mr Sigg deposed that he had based his view of what work the applicant had performed, by reviewing the respondent's business records filled out by the applicant himself. However, he agreed he had no first hand knowledge of the work the applicant had actually performed. 80 Mr Sigg was asked questions about the HIC job. Mr Sigg said his own role was only in respect to the master supply agreement. He said it was a big and important job which was still ongoing and located in 14 sites across Australia. Mr Sigg said he understood the applicant went to Queensland for the project, but believed he had flown there. Mr Sigg agreed it was a demanding job and acknowledged that the applicant had been involved in the project, but could not say what role he had performed. Mr Sigg said that a bonus had been offered to the applicant on successful completion of the HIC job. 81 Mr Sigg was asked if he was in a position to contradict what the applicant had said about his work. He replied that he could only go on the respondent's business records as to what the applicant had claimed in them. 82 Mr Sigg was questioned about these records. Mr Sigg believed that the records disclosed short duration jobs performed from the office. Mr Sigg was asked about the gaps in the records between 21 January - 2 February and 2 February - 12 February. He was asked how this could possibly be a complete record of the applicant's work. Mr Sigg said that he could not say, but he would be concerned if work had not been performed during this period. He acknowledged that the applicant could have been performing other work. 83 In re-examination, Mr Sigg said that employees coming into the city would usually travel by taxi. Travel interstate or to Canberra was by air. 84 Mr Sigg said that previously non-billable work would not have been recorded in the respondent's records. Any preliminary work for a tender, sometimes up to a month, would be non-billable. The procedure had now been changed and every job must be logged and the hours billed. SUBMISSIONS 85 Ms Doust recognised that the applicant's salary was $78,000 and he was paid superannuation of $8,370. 86 However, Ms Doust submitted that it remained an open question as to whether superannuation payments, pursuant to the Commonwealth's Superannuation Guarantee ('SGC') legislation, should be included in the remuneration calculation. This issue had been referred to, but not resolved by a Full Bench decision. See Kagan v Primus Telecommunications (Aust) Pty Ltd (No 2) [2000] NSWIRComm 185. In this respect, Ms Doust drew a distinction between ordinary remuneration and a payment made to a third party (the superannuation fund) and not directly to the employee and which may not necessarily be received by the employee (in the event of a death benefit paid to a beneficiary). 87 As to the vehicle component, Ms Doust said that the applicant's evidence was largely unchallenged. Once the real cost was subtracted from the car allowance, the applicant was left with a deficit. He had properly estimated business usage of 89 to 90 per cent. He gave evidence of the various locations he had travelled to. However, Mr Sigg's evidence was vague and inconclusive. But for his employment, the applicant would not have leased the vehicle as he owned another vehicle and rarely needed his car as he lived close to all amenities in Newtown. 88 Ms Doust put that the applicant was a truthful witness. He had estimated 90 per cent business travel on his tax return and this claim had not been queried by the Tax Office. That was the figure, Ms Doust said, which should be accepted by the Commission. For the respondent 89 Mr Powter put that the applicant's remuneration was $101,370 - well above the statutory threshold. Mr Powter relied on Mr Sigg's evidence and the terms of the applicant's contract of employment. His remuneration was divided into four components - salary, commission, superannuation and non salaried benefits. The components may be packaged in any way the employee wishes, subject to the consent of the employer. 90 The applicant freely entered into the contract and could have opted to take the car allowance as salary. The vehicle belonged to him and was not a company car. He could sell the vehicle at any time, and could claim tax benefits for business related use. It was therefore a benefit in the hands of the employee. 91 As to superannuation, Mr Powter submitted that the decision in Kagan recognised that the principle of including superannuation in the calculation of remuneration was correct, but may require further exploration. He said that all the relevant decisions of the Commission have included superannuation as a component of remuneration. 92 Mr Powter accepted that this was probably the first case under s83(1)(b) which had considered a leased vehicle owned and retained by the employee as distinct to a company provided vehicle. He stressed that it was not mandatory for the applicant to have a vehicle. Employees could use taxis or fly interstate. 93 Mr Powter submitted that despite a notice to produce, the applicant produced no log book or record of conversations to substantiate his tax claim of 90 per cent business usage for his vehicle. Mr Powter submitted that there was no log book. Rather, reliance had been placed on an incorrect tax return which the applicant intended to resubmit. 94 Mr Powter referred to the respondent's business records which demonstrated that the applicant performed short jobs and non-billable work from the Cremorne office. No travel time was required. As to the gaps in the records, these reflected non-billable work which did not prove the applicant travelled anywhere and certainly not for 90 per cent business usage. CONCLUSIONS 95 I should say from the outset, that I regard as somewhat disingenuous, the argument pressed by the respondent that a vehicle was not required for the job. It would seem to me, that even on the respondent's own evidence, it was a necessary requirement for the type of work in question. Why would the standard contract of employment include provision for a car allowance, if this was not so? However, that is not necessarily the critical point. 96 Of course, this is a very unusual case. It is the first occasion consideration has been given to a remuneration package which included a vehicle which is not a company owned vehicle, but one which is leased and retained by the employee for which a car allowance is paid. Notwithstanding this unique set of factors, it seems to me, however, that the following issues are relevant. 97 Firstly, there was no dispute that the actual cost of maintaining and running the vehicle far exceeded the value of the car allowance. In these circumstances, if there is a percentage of business usage, then the employee may be out of pocket. However, in my view, this will be difficult to estimate. Secondly, the employee may receive a tax benefit by claiming a certain percentage of business usage for the vehicle. This amount is also difficult to assess. 98 That being so, it seems to me that the most practical way of resolving this matter, (and indeed how the matter was argued), is to estimate the percentage of business use and discount the car allowance by that percentage. This approach would seem to accord with the principle discussed in Kagan. In that case the employee used his private motor vehicle for business purposes and received a car allowance of $12,000. There, the Full Bench noted that the applicant's expenses exceeded the car allowance ($12,290.20) and accepted his estimate of 90 per cent of business related usage. The Full Bench calculated 90 per cent of the actual cost of the vehicle. That is, 90 per cent of the allowance and the extra costs borne by the applicant. My approach will actually provide a less generous result. I will come to the details shortly. 99 In Kagan, after discussing the definition of remuneration, the Full Bench concluded at paras 12 and 13: 12 In a situation such as that considered in the present proceedings, an employee who accepts employment on the basis of a certain salary package, which includes allowance for the use of his private motor vehicle in the course of his employment, could not be reasonably said to have been remunerated for the work done or services provided in terms of the whole salary package if some of that package is shown to be referable to the provision of the employee's private motor vehicle for use in the course of the employment. Provided that the extent of business use can be demonstrated with reasonable accuracy, the employee's remuneration would be the relevant salary package less the amount referable to business use of the employee's motor vehicle. In those circumstances, the proportion of the salary package referable to the use of the motor vehicle is not part of the employee's remuneration for the work done or services provided to the employer. 13 Accordingly, we do not agree with the Commissioner's conclusion that "[any] concession the applicant is entitled to for using his car for business purposes would be the consideration that might be given to him by the ATO in calculating his taxation obligations". We consider that the only conclusion available on the evidence is that, to the extent that the appellant used his vehicle in the course of his employment, the amount of his salary package referable to that use was not "remuneration" for the purposes of s 83(1)(b). This conclusion not only derives from the decision in Shead v Summit Western Pty Ltd and the judgment in Higgins v Prospect County Council but also from four decisions of Presidential Members of the Commission to which brief reference was earlier made and to which we now refer. The judgments are, in chronological order: (a) Simmonds v Pongrass Furniture Pty Limited (1997) 74 IR 443 ( Peterson J); (b) McBlane v National Transport Insurance Limited (1997) 77 IR 185 ( Harrison DP); (c) Schmidt and Paino Holdings Pty Limited (unreported, Sams DP, 5 February 1999); (d) Talbot and Rostcom Pty Ltd (unreported, Sams DP, 2 September 1999). 100 As I have said, the discount would be higher if I applied 90 per cent to the total cost of the vehicle to the applicant. However, the issue is further complicated by the two leasing arrangements over the relevant 12 months period. For caution, I prefer to calculate 90 per cent on the car allowance only. 101 For the reasons I have earlier expressed, the respondent has again provided very little basis for a finding to be made in its favour on this issue. Mr Sigg had very little knowledge of what the applicant did on a day to day basis. Mr Sigg conceded the applicant had worked on the HIC job and had travelled to Queensland and other locations. He claimed that he could produce company records showing taxi claims and air travel approvals. However, none were produced. On the state of the evidence, the respondent could not, in any material way, contradict the applicant's claim that he had utilised his vehicle for 90 per cent business purposes. Mr Sigg's reliance on the inadequate and incomplete records for January to June 2004 was not at all helpful or enlightening. 102 As I said earlier, I regard the applicant as an honest and reliable witness. I do not believe the applicant, or his accountant, would seriously risk severe penalties for providing false information to the Tax Office or making false claims in his tax returns. I accept that these claims are realistic and can be substantiated. 103 Mr Powter's criticism of the accountant's mistake with dates does not essentially alter the claim of 89 to 90 per cent for business use over the full life of the two leased vehicles. Moreover, the 90% figure was not some recent assessment invented by the applicant for the purposes of these proceedings. It is plain from the documents, that in the lease agreement he entered into in November 2003, he declared the vehicle to be "wholly or predominantly for business or investment purposes". 104 Accordingly, I am prepared to accept that 90 per cent of the $15,000 car allowance was for business use and 90 per cent therefore should be deducted from the $15,000, leaving a balance of $1500. Whether superannuation is remuneration 105 This leaves the contentious and unresolved issue of superannuation. Of course, it is not strictly necessary to consider this issue as my earlier findings will result in the applicant's remuneration being below the threshold; even with superannuation of $8,370 included, ie $87,870. 106 However, in deference to the thoughtful submissions of Ms Doust, I propose to make some pertinent observations about the matter. 107 Ms Doust argued that the question of whether the employer's contributions under the Commonwealth Superannuation Guarantee (SGC) legislation is remuneration for the purposes of s83(1)(b) of the Act remains an open one; particularly in view of the comments of the Full Bench in Kagan. She argued that superannuation is an amount paid to a third party (a superannuation fund) and not direct to the employee and may not always result in the employee deriving a benefit from the contributions: for example, in the case of the death of the employee where a benefit passes to a beneficiary. 108 As to this last submission, I would observe that the same result would occur if the employee made voluntary additional contributions to a superannuation fund from his/her net income. That is an entirely personal matter for the employee. In these circumstances, I do not see how it could possibly be argued that the employee's salary should be discounted by any voluntary amount made to a superannuation fund. That being said, I turn to the judgment in Kagan. At para 23 the Full Bench said: 23 The final matter that should be referred to is the issue of superannuation as an ingredient of an employee's "remuneration" for the purposes of s 83(1)(b). While it is plain, on an analysis of relevant authorities that, where an employee for whom conditions of employment are not set by an industrial instrument in terms of s 83(1)(b), has superannuation benefits in excess of statutory requirements those benefits are part of the employee's remuneration, irrespective of whether they are part of a salary packaging arrangement. What has yet to be considered at Full Bench level is whether the statutory superannuation entitlements under the SGC legislation should be considered part of an employee's remuneration for the purposes of s 83(1)(b). We consider that this issue should be reserved for future consideration by a Full Bench in an appropriate case. In reserving this issue we are mindful of the analysis in, for example, McBlane v National Transport Insurance Limited which we consider is correct in principle. (my emphasis) However, this issue may become of great significance and may require Full Bench determination. 109 It would seem, at least from the bolded sentence above, that the question of whether superannuation forms part of remuneration will, in most cases, be resolved in the affirmative. The Full Bench accepted in principle, the decision of Harrison DP in McBlane v National Transport Insurance Ltd (1997) 77 IR 185. It is necessary to refer to his Honour's decision. At p188, his Honour said: Mr Higgins argued that the full amount of superannuation should be included, relying on a decision of Deputy President Watson of the Australian Industrial Relations Commission in Cordon v G James Extrusion Company (1997) 74 IR 283 in which the matter was considered in the context of s170CC(3)(b) of the Workplace Relations Act 1996 (Cth) which states: the rate of remuneration applicable to the employee immediately before termination exceeds a rate specified, all worked out in a manner specified, in the regulations (a specified rate) as the means of describing and determining salary threshold above which award free employees are excluded from application for relief from unfair dismissal under the provisions of the Workplace Relations Act. In his decision Watson DP was required to consider a comparison between the term "relevant wages" determined by Wilcox CJ in Ardino v Count Financial Group Pty Ltd (1994) 1 IRCR 221; 57 IR 89 to be exclusive of superannuation, and the term "remuneration" as found in section 170CC. Watson DP concluded that the terms were not synonymous. At 287 of his decision Watson DP states: Remuneration is a broader concept, with superannuation in my view forming a part of that broader concept, whether by way of statutory obligations or contributions beyond those required by legislation. Mr Higgins further relied upon the judgment of his Honour Justice Marshall in Rigby v Technisearch Pty Ltd (1996) 67 IR 68 at 91 in the Industrial Relations Court of Australia, wherein his Honour concludes that: Superannuation is unquestionably, in my view, when paid into a fund by an employer are on behalf of an employee, part of the remuneration of the employee. The conclusions in these matters are equally sustainable within the Act. In this case superannuation is clearly and positively part of the contract of employment from the outset I include the full amount of $4,500 superannuation as part of the annual remuneration for the purpose of s 83(1)(b) of the Act. 110 I would respectfully concur with his Honour's conclusions and add some further observations of my own. 111 Firstly, employer contributions to superannuation are a deferred benefit paid by the employer to a superannuation fund on behalf of the employee. Eventually the benefit either passes to the employee or his/her named beneficiary; not unlike any other accrued legislative benefit that might be paid to an employee in the event of the employee's death or disability. 112 Secondly, the original concept of compulsory employer contributions to superannuation arose from negotiations between the ACTU and the Federal Government in 1986 during what was known as the Accord years. It was said at that time, that the initial 3 per cent contribution was in lieu of an equivalent productivity wage increase which was otherwise due to all Australian workers. The June 1986 National Wage Case 301 CAR 611 referred to the ACTU/Commonwealth agreement at p639: We further mentioned that as part of the package sought by the ACTU and supported by the Commonwealth, union applications were made pursuant to Principle 2 of the 1983 Principles for the payment by employers of either a 4% increase in wages and salaries or a "3% wage equivalent" to approved superannuation schemes in favour of their employees. We discuss now the arguments pressed strongly by the ACTU and the Commonwealth and supported by a number of States, in favour of employer contribution to superannuation schemes as against a wage increase based on productivity. It was submitted by the ACTU and the Commonwealth that the claims to superannuation was in line with the 1985 Agreement regarding the implementation of the Accord over the following two years, which is as follows: Superannuation . It is agreed that superannuation should be extended and improved on an industry by industry, occupation by occupation or, in limited circumstances, company by company basis. The improvement should be offset against national productivity and be based on a 3 per cent wage equivalent. As can be seen from this passage, the employer's superannuation contribution (at least as far as the SGC legislation is concerned) was seen as part of a wage increase that would otherwise have been claimed, and likely granted, by the then Australian Conciliation and Arbitration Commission. 113 Thirdly, in another significant area of the Commission's jurisdiction - unfair contracts - employees invariably claim (and employers invariably accept) all superannuation contributions as a component of remuneration for any claims made under Pt 9 ch 1 of the Act. Orders made by the Commission under s106 invariably include superannuation in the calculation of remuneration. For reasons which hardly need stating, if superannuation was held to be not part of remuneration, then there would be, in my opinion, significant and serious implications for the Commission's unfair contract jurisdiction. 114 Before leaving this matter, I should say that I concur with Harrison DP and draw no distinction between SGC contributions and payments made in excess of SGC obligations as to whether or not they should be included in the calculation of remuneration. 115 For the aforementioned reasons, it would be my view that superannuation, including that which is an employer's contribution required by the SGC legislation, should be regarded as remuneration for the purposes of s83 (1)(b) of the Act. Summary of findings 1) The applicant was not dismissed on 7 July 2004, but at least one week later and more probably on 23 July 2004. 2) As a result, the applicant' s84 unfair dismissal claim was filed within 21 days and is therefore not barred by s85(1) of the Act. 3) The applicant's duties and work performed were covered by the definitions found in the Draughtsmen, Planners, Technical Officers, (State) Award . 4) The applicant was therefore not prevented from bringing an unfair dismissal claim by virtue of s83(1)(b) of the Act. 5) The applicant's leased vehicle was used for 90 per cent of business related purposes. 6) The car allowance of $15,000 should be discounted by 90 per cent. 7) The respondent's superannuation contribution of $8,370 was part of the applicant's total annual remuneration. 8) The applicant's annual remuneration at the time of dismissal was no more than $87,870. 9) Therefore, the applicant's s84 unfair dismissal claim is competently before the Commission and should proceed to determination on its merits. 116 The Commission directs the parties to confer with a view to settling the applicant's claim. In the event of no agreement, the Commission will list the matter for further directions on Monday, 14 March 2005 at 10.00am. Peter J Sams, AM Deputy President DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.