Dolkens v Burdekin Area Business Association Inc. [2005] QIRC 138 (2005) 180 QGIG 631

[Extract from Queensland Government Industrial Gazette, dated 7 October, 2005, Vol. 180, No.9, pages 631-633] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 276 – power to amend or void contracts Bastiaan Willem Frederik Dolkens AND Burdekin Area Business Association Inc. (B/[2005/811) COMMISSIONER BROWN 22 September 2005 DECISION On 30 May 2005 the Applicant lodged an application pursuant to s. 276 of the Industrial Relations Act 1999 (the Act) to amend or void the employment contract between himself and Burdekin Area Business Association Inc. An amended application was subsequently lodged on 9 June 2005. The grounds of the application were that its conditions were unfair. The Applicant sought an order of compensation to remedy the alleged unfairness. Section 276 of the Act states: “Power to amend or void contracts (1) On application, the commission may amend or declare void (wholly or partly) a contract if it considers – (a) the contract is – (i) a contract of service that is not covered by an industrial instrument; or (ii) a contract for services; and … (2) In deciding whether to amend or declare void a contract, or part of a contract, the commission may consider – (a) the relative bargaining power of the parties to the contract and, if applicable, anyone acting for the parties; or (b) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, a party to the contract; or (c) an industrial instrument or this Act; or (d) the Queensland minimum wage; or (e) anything else the commission considers relevant. … (3) The commission may consider a contract to be an unfair contract if it considers the contract – (a) was an unfair contract when it was entered into; or (b) became an unfair contract after it was entered into because of the conduct of the parties, or a variation to the contract or for any other reason it considers sufficient.”. Exhibit 2 is a letter from the Applicant to the Respondent dated 13 March 2005 wherein the Applicant requests a correction to his remuneration package. Of interest to the Commission is the fact that the Applicant bases his argument regarding salary packaging on the Local Government Employees’ (Excluding Brisbane City Council)Award – State 2003. Whilst the point was not taken by the Respondent, it seems that if this award or any other industrial instrument had application to the work of the Applicant then the Applicant would be excluded from taking action under s. 276 of the Act. Two other awards that come to mind are the Community Employment, Training and Support Services Award 1999, an award of the Australian Industrial Relations Commission and the Social and Community Services (Queensland) Award 2001, also an award of the Australian Industrial Relations Commission. However, as no evidence or submissions were forthcoming on this point I take the matter no further. The unfairness, according to the Applicant stemmed from the method used by the Respondent to calculate the salary for superannuation purposes and the treatment of the vehicle allowance component of his package. -- 1 of 4 -- 2 The Applicant’s evidence was that soon after commencement of his employment with the Respondent he entered into a contract, under duress, which delivered less in dollar terms to the Applicant than would have been the case had the contract reflected the Applicant’s understanding of the salary package offered prior to commencement. Specifically, he stated that the $65,000.00 salary package which included provision for a vehicle and superannuation should have been exclusive of superannuation which the Applicant states would have resulted in a total package of $70,850.00 being $65,000.00 and $5,850.00 superannuation. The unfairness with respect to the vehicle allowance according to the Applicant lay in the fact that the value to the Applicant of the private use component was considerably less than the $10,000.00 referred to in his contract and that the refusal on the part of the Respondent to rectify this was unfair. The Applicant’s evidence was that, based on his experience, he understood the term “salary” package to be the term commonly used to describe employment entitlements exclusive of superannuation and the term “remuneration” to be used to describe the total value of all entitlements including superannuation. The Applicant provided no material to support this assertion. He claimed that when he was advised by the Respondent by phone of his success in attaining the position on 21 May 2003 he held this view and given that during his job interview he was told that the package of $65,000.00 was “salary”, he believed he was right to hold that view. The evidence was that 2 days later (23 May 2003) the Respondent confirmed the Applicant’s appointment in an email and subsequently a letter both of which detailed the wage structure (Ex.4 attachment C) as follows: “Fully maintained company vehicle $ 10,000 Wage (gross) 49,600 Superannuation 5,400 Total $ 65,000.”. The Applicant claims that in the time between receiving the telephone advice of his appointment and receiving written confirmation of his appointment he had incurred financial debt and obligations in relation to: 1. A boat; 2. A car; 3. Rental accommodation. This he claimed put him in a position where he felt unable to rectify the deficiency in the proposed arrangements and forced him into accepting the terms without question. Under cross-examination the Applicant conceded that he was happy to take the position on the terms offered and indeed was very happy in the position for at least the first 12 months. Soon after starting in the job the Applicant prepared a draft employment contract (Ex.4 attachment D) in which he included at clause 5: “5. Your Remuneration Package is made up as follows:  You will be paid an Annual Salary of $49,600 paid as a fortnightly salary at a rate of $1907.69 per fortnight.  There will be an Annual Leave Loading of 17.5% ie 17.% of $3,815.38 = $667.69.  Accumulative Sick Leave of 4 weeks per annum. Any unused balance will be paid out to you on termination of employment.  You will be eligible for Long Service Leave, at the rate of 1.3 weeks for each year of service and pro rata on part thereof, on the completion of seven years service.  A fully Maintained Company Vehicle valued at $10,000 per annum. 6. The Association will also contribute $5,400 per annum in fortnightly instalments of $207.68 to a qualifying superannuating fund from the first day of your employment.”. The evidence was that the sick leave provisions were not agreed to by the Respondent although the Applicant was subsequently successful in having his annual leave increased to 5 weeks. (Note: The amount of $3,815.38 is 4 weeks pay arrived at by dividing $49,600 by 52 and multiplying the outcome by 4). -- 2 of 4 -- 3 Also in cross-examination the Applicant stated that there were no negotiations regarding conditions at his employment interview other than an explanation that the “salary” package was up to $65,000 and a comment that the Applicant’s skill levels would place him at the top of the range if he were the successful applicant. The Applicant’s evidence was that some 3 and a-half months following the commencement of his employment he met with the Respondent’s President (Mr Bruno Van Der Heide) where he was presented with a written employment contract. He stated (Ex. 1 para.1.17): “I was under the clear impression that I had to sign it for legal and insurance reasons and an implication that signing the contract and being confirmed in my position were linked”. At paragraph 1.18 of Ex.1 the Applicant stated “I signed the contract to keep my job”. During this exchange the Applicant claimed to have asked for changes to the contract and claimed that the President of the Respondent then agreed to the 5 weeks leave and undertook to review the contract at some future time. The Applicant sought reimbursement of a $762.26 fuel bill incurred travelling in late 2004 to Adelaide whilst on annual leave in the vehicle provided by the Respondent. Initially his claim was refused, however, the Respondent paid the claim subsequent to conciliation in the Queensland Industrial Relations Commission. The Applicant claimed that he made repeated requests to define “reasonable private use” and received no response until told late in the employment relationship that private travel within the Burdekin Shire was reasonable. Evidence for the Respondent was given by Brenton John Randall, Manager of the Respondent, Bruno Simon Van Der Heide, President of the Respondent and Brett John Schreiber, Public Accountant and Financial Advisor and Honary Treasurer with the Respondent. Brenton John Randall gave evidence that the Applicant did not raise any issue of concern or express unhappiness regarding the details of his wage structure contained in his letter of appointment emailed to the Applicant on 23 May 2003. Mr Randall confirmed the Applicant’s evidence that the Applicant had prepared a draft employment contract in July 2003 which contained provisions for wages, superannuation and the motor vehicle in the same terms as the appointment letter (Ex.4 attachment D) namely a salary of $49,600, a “fully maintained company vehicle valued at $10,000” and $5,400 in superannuation contributions. Mr Randall stated that his own salary package provided $11,000 for the provision of a vehicle. This Mr Randall stated was because his vehicle was slightly more expensive than that provided to the Applicant. Mr Randall stated that the Applicant had at no time expressed concern that his probationary period of 3 months had expired prior to the signing of the contract. Mr Randall denied the Applicant’s claim that he suggested to the Applicant that the contract needed to be signed because of legal and insurance reasons. He further denied the Applicant’s assertion that his employment was contingent upon the signing of the contract. Mr Randall agreed that the Applicant sought and was granted 5 weeks’ annual leave (previously 4 weeks). Regarding the reimbursement of fuel costs for the Applicant’s private trip to South Australia, the evidence of Mr Randall was that this was paid to the Applicant after having been initially refused on the basis that it was considered excessive. He believed that the Applicant had been paid all entitlements pursuant to his agreed conditions. The evidence of Brett John Schreiber was that the figure of $10,000 attributed to the provision of a fully maintained company vehicle to the Applicant was reasonable and comparable to other employment packages. In his evidence Bruno Simon Van Der Heide denied the Applicant’s claim that he made repeated requests for a definition of reasonable private (vehicle) use and further denied that the Applicant raised any problems with the Management Committee regarding his employment contract prior to the disagreement over the payment of the Applicant’s claim for reimbursement of travel expenses in early 2005. The material shows that on 20 July 2004 the Applicant emailed Bruno Van Der Heide regarding his vehicle and the Respondent’s approach to the provision of the vehicle to the Applicant. He concludes this correspondence with the following: “As I said before, I am quite happy with the car and I am satisfied with the arrangements, even though it is not good management and the cost to me is somewhat excessive. I would like your approval to fit a tow bar and will hunt around for a better deal.”. This, in my view is evidence of the Applicant’s understanding and accepting the vehicle arrangements. It is not evidence of his happiness with them. -- 3 of 4 -- 4 It appears that the first written evidence of any serious dispute over the method of treatment of the value of the vehicle in so far as it relates to the contract of service of the Applicant, appears in Exhibit 3 an email from the Applicant to 9 people presumably all associated with the Respondent and including, Bruno Ven Der Heide. It is difficult to understand exactly what the complaint is, however, it alludes to the dissatisfaction of the Applicant with the vehicle arrangements. There is no mention of superannuation in the email. Considering that the Applicant himself prepared and submitted a draft contract to the Respondent that dealt with the issues of wages, superannuation and vehicle component in exactly the manner contained in his letter of appointment and the contract of service that he subsequently signed, I find that the Applicant understood, accepted and abided by the employment conditions including the salary, superannuation and the assigning of a nominal value of $10,000 to the provision of a fully maintained vehicle. I reject the Applicant’s submissions (TP 85 L 10-12) that at his job interview he “negotiated a salary package which has subsequently not been paid”. The primary reason for this rejection is the Applicant’s own evidence that no negotiations occurred at the interview. Regarding the relative bargaining power of the parties, I find that at the outset of the employment the Applicant was invited in the letter of appointment to raise any concerns he may have had and did not do so the Applicant had the ability to raise for discussion, elements of his employment package and in fact did so when he successfully sought to increase the annual leave component from 4 weeks to 5 weeks and he further successfully reversed a decision by the Respondent to refuse his claim for reimbursement of travel costs. The relative bargaining power appears to reflect a normal employer-employee relationship. I reject the Applicant’s assertion that he was coerced into signing the contract and prefer the evidence of the Respondent on this point. Considering all of the circumstances and submissions, I find no unfairness in the actions of the respondent in declining to restructure the salary/remuneration package in line with the Applicant’s desires after the contract was entered into and also find that the contract was not unfair when entered into. I dismiss the Application. Order accordingly. D.K. BROWN, Commissioner. Hearing Details: 2005 22 August Appearances: Mr B.W.F. Dolkens on his own behalf. Mr T. Baxter of Ruddy, Tomlins & Baxter Solicitors, instructed by Mr B. Randall for the Respondent. Released: 22 September 2005 Government Printer, Queensland The State of Queensland 2005. -- 4 of 4 --