An electrician’s ill-fated collision with a kangaroo while driving to work has resulted in a Fair Work Commission (FWC) decision that his contract was repudiated when his employer withdrew his use of the company car for personal use, even though he continued his job after the accident.
On 11 February 2019, Mr Darren Bradley commenced work with Solarig Australia Pty Ltd (Solarig) as an electrician at Solarig’s solar farm in regional South Australia. He was given a company car to use onsite and for limited personal use.
Mr Bradley was allowed to use the company car for up to 20,000km per year, but he admitted he clocked up around 70,000km over 18 months. Mr Bradley also allowed his own private vehicle registration and insurance to lapse and used the company car for all purposes, including personal trips to Adelaide.
On 3 February 2021, Mr Bradley struck a kangaroo while driving to work. After inspecting the damage, Mr Bradley drove the remaining 20km to his workplace. He reported the incident when he arrived and Solarig subsequently assessed the car as unroadworthy.
The next day, Solarig advised Mr Bradley that he would no longer be allowed to drive the company’s cars to and from work and that he will not be given a replacement car.
On 4 March 2021, Solarig’s Operations Manager and a supervisor met with Mr Bradley and advised that a disciplinary sanction was warranted because he had breached company values and policies in his use of the company car. On 17 March 2021, Mr Bradley applied to the FWC for an unfair dismissal remedy.
Mr Bradley argued that the withdrawal of his personal use of the company car was contrary to his contractual rights, and in doing so, Solarig repudiated his employment contract. It followed that the repudiation was a dismissal, and while he continued to work for Solarig, he did so under a separate employment arrangement with around 15 per cent less value.
Solarig claimed it did not repudiate Mr Bradley’s contract because it was not a term of his employment that he be provided with a company car for personal use. They argued that Mr Bradley had breached his contract in both exceeding the annual kilometre usage limit for the car and in failing to follow accident procedures.
The two key issues considered by the FWC were whether Mr Bradley was ‘dismissed’ and if so, whether his dismissal was harsh, unjust or unreasonable.
Was Mr Bradley dismissed?
Deputy President Anderson acknowledged that “there are circumstances where a repudiatory breach that has been accepted has the effect of terminating the employment relationship even where the employee continues working for the employer.” He noted that if the breach was at the initiative of the employer, the employment contract would have come to an end “with the effect that the employee would have been ‘dismissed’ within the meaning of the FW (Fair Work) Act.”
DP Anderson relied on the following factors in concluding that a “fundamentally different employment relationship” now existed between Mr Bradley and Solarig:
Was the dismissal harsh, unjust or unreasonable?
DP Anderson referred to the criteria in section 387(a) of the Fair Work Act 2009 (Cth), and in particular, found that what had happened was not a valid reason for dismissal because:
In conclusion, DP Anderson held that Mr Bradley’s dismissal was harsh, unjust and unreasonable.
DP Anderson found that there was no reason why Mr Bradley could not be reinstated to his former position and that he again be given the benefit to use a company car for private purposes. However, DP Anderson rejected Mr Bradley’s claim for back pay due to the level of private usage of the company car.
Employers should understand that once a benefit of employment becomes an established feature of a role, they may not be able to withdraw such benefit without the agreement of the employee or a substituted benefit or compensation. This is the case even if the benefit is not part of the employees’ contractual arrangements.
Holding Redlich has a team of experts in employment and workplace relations law. If you have any employment law questions, issues or concerns, please contact us.
Authors: Edmund Burke & Joseph Sherman
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