AAT overturns ATO refusal of $65K luxury car tax claim
In the matter of Skourmallas and Commissioner of Taxation (Taxation) [2019] AATA 5535 the Administrative Appeals Tribunal overturned a decision of Australia Taxation Office after it disallowed a taxpayers claim for input tax credits and decreasing adjustment, resulting in a shortfall of $65,652.
Mr Skourmallas was a motor vehicle dealer who acquired an Audi R8 Coupe as trading stock for a purchase price of $263,750.01. He subsequently claimed GST input tax credits of $19,809 and decreasing adjustment of $45,843.
However, these claims were rejected by the ATO which asserted that he was not carrying on an enterprise but had instead obtained the vehicle for personal use. Mr Skourmallas subsequently applied to the AAT for review of the ATO’s decision.
Before the Tribunal, the ATO relied on the fact that Mr Skourmallas did not operate from a car yard or showroom to support its claim that Mr Skourmallas was not carrying on an enterprise. Further, the ATO asserted that Mr Skourmallas was dishonest and not a credible witness.
The AAT accepted that while Mr Skourmallas could be perceived as belligerent, this did not render him dishonest.
In making a determination as to whether Mr Skourmallas was in fact conducting a business, the court noted that the low kilometres travelled by the car were consistent with it having been obtained as trading stock. Further, it accepted that despite lacking the features of a traditional motor vehicle dealership, Mr Skourmallas’ business model was consistent with the niche market in which he traded.
Ultimately, the AAT ruled that Mr Skourmallas was entitled to the GST input tax credits and luxury car tax decreasing adjustment. However, it did advise that Mr Skourmallas ‘prudently improve’ his record keeping.
Insolvent trading moratorium extended to New Year
This morning the Federal Government announced it will continue to provide regulatory relief for businesses impacted by COVID-19 by extending temporary insolvency and bankruptcy protections until 31 December 2020.
These measures, originally set to expire on September 30, include:
Bankruptcy changes
- Increase in the minimum debt threshold for a creditor-initiated bankruptcy procedure from $5,000 – $20,000;
- The time to respond to a bankruptcy notice increased from 21 days to 6 months;
- An extension of the protection period for individual’s declaring an intention to present a debtor’s petition extended from 21 days to 6 months.
Insolvency Changes
- Increase in minimum amount for a statutory demand from $2,000 – $20,000;
- Increase in time to respond to a statutory demand from 21 days to 6 months;
- Temporary suspension of directors’ personal liability for insolvent trading for six months (egregious cases of dishonesty will still attract criminal liability);
- Insertion of s 588GAAA which provides an additional temporary safe harbour provision during the six-month period.
Treasurer Josh Frydenberg commented that “the extension of the temporary changes to the insolvency and bankruptcy laws will continue to provide businesses with a regulatory shield to help them get across to the other side of the crisis.”
AAT rejects ‘very important’ claim for GST tax refunds
In a recent decision, the Administrative Appeals Tribunal has rejected a taxpayer’s claim for GST refunds after they claimed to be operating a gold refinery.
In Very Important Business Pty Ltd and Commissioner of Taxation (Taxation) [2019] AATA 1120, Very Important Business (VIB) claimed it was entitled to input tax credits with respect to scrap gold it made in the course of its business. In doing so, VIB contended that it was a refiner of precious metal pursuant to the A New Tax System (Goods and Services Tax) Act 1999. Further, VIB claimed that subsequent supplies of gold it had refined into bullion were GST-free supplies. Accordingly, it submitted that it was under no obligation to remit GST on those dealings and was entitled to claim full input tax credits on all its acquisitions.
However the Commissioner of Taxation disputed these propositions. In doing so, it questioned whether the acquisitions occurred as claimed in VIB’s invoices and records, arguing that VIB provided insufficient evidence of consideration for all acquisitions of scrap gold. Further, the Commissioner submitted that VIB’s record keeping was ‘seriously deficient’.
In March 2016, after seeking to verify the relevant GST return, the Commissioner withheld GST refunds that would have otherwise been paid to VIB. The following May, the Commissioner issued an amended assessment of net amount GST in which he disallowed the input tax credits. The Commissioner also conducted an assessment for penalty on the basis of reckless non-compliance with taxation laws.
In June 2016, VIB objected to the amended assessments on the basis that it had provided consideration for some of the acquisitions and that the Commissioner had erred in verifying those cash payments. VIB also contended that the Commissioner had erred in evaluating the legal position regarding input tax credits claimed for the purchase of scrap gold from unregistered suppliers. In doing so, VIB claimed that it had correct tax invoices. Despite this, in November 2016, the Commissioner disallowed VIB’s objection.
VIB subsequently brought the matter before the tribunal, seeking review of the Commissioner’s objection decisions.
Accordingly, the tribunal was required to determine whether VIB was entitled to input tax credits in the sum of $55,153 for the acquisition of $606,702 of scrap metal in the quarterly tax period ending 31 December 2015. Ultimately, determination of this issue was dependent on whether VIB had made creditable acquisitions for the purposes of the GST Act.
The matter was considered on 4 June 2019, at which the Tribunal was not satisfied that VIB had taken over the refinery business or that it was regularly refining prior to 31 December 2015. The Tribunal also concluded that there were inadequacies in the evidence and documentation of the alleged purchase transactions, including that a number of the transactions were actually made by the refinery’s previous operator.
Ultimately, the Tribunal was not satisfied that VIB was a refiner of precious metal in the relevant period, however did accept that VIB was undertaking some activities and was therefore ‘carrying on an enterprise’ for the purposes of the GST Act. In doing so, the Tribunal affirmed the Commissioner’s objection decisions in relation to both the assessment of net amount and penalties.
Strict new anti-phoenix measures to take effect today
Earlier this year, the senate passed the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 through parliament. The Bill, which was originally introduced in February 2019, and reintroduced in July 2019, presents new measures to combat Australia’s increasing illegal phoenix activity. In doing so, it amended the Corporations Act 2001, A New Tax System (Goods and Services) Act 1999 and the Taxation Administration Act 1953 from 1 April 2020.
Phoenix activity occurs where a new company is created to continue the business of an existing company. Typically, this will involve a company entering into a transaction with another related entity for the sale of its assets. This allows the business to continue, however the new company will not have any of the liabilities that the original business had, such as obligations to creditors, the ATO or employees. This activity becomes illegal where the old company is placed in liquidation after all assets have been transferred.
In seeking to curb this illegal activity, the Bill has introduced the following measures:
Creditor-defeating disposition
The Bill introduces new offences for creditor-defeating disposition. In doing so, it provides that a creditor-defeating disposition will be made out where:
- The consideration paid to the company for the relevant property was less than the lesser of:
-
- The market value of the property; or
- The best price that was reasonably obtainable for the property, having regard to the circumstances existing at that time.
and;
2. The disposition has the effect of preventing the property from becoming available for the benefit of the company’s creditors in the winding-up of the company; or hindering, or significantly delaying that process.
Further, the Bill introduces criminal and civil penalties for company officers that fail to prevent the company from making creditor-defeating dispositions, or other persons that facilitate creditor defeating dispositions.
ASIC permitted to recover company property
ASIC will be entitled to order a person to:
- return to the company for distribution among creditors, any property that was transferred subsequent to the initial creditor-defeating disposition;
- Pay an amount equal to the benefit the person received from the creditor-defeating disposition;
- Transfer property that was purchased with the proceeds of sale of a creditor-defeating disposition.
Limitations on Director resignations
Directors will be prohibited from backdating resignations or ceasing to be a director if this would leave the company with no directors.
GST Liabilities
Under the A New Tax System (Goods and Services Tax) Act 1999 and Taxation Administration Act 1953, from 1 April 2020, the Commissioner of Taxation will be entitled to collect estimates of anticipated GST liabilities. Company directors may also be made personally liable for their company’s unpaid GST, Luxury Car Tax and Wine Equalisation Tax liabilities in certain circumstances.
Tax Refunds
The Bill will amend the Taxation Administration Act 1953 to enable the ATO to retain tax refunds where a taxpayer has failed to lodge a return or failed to provide other information that might affect the amount of a refund.
In delivering his second reading speech to Parliament, the Honourable Michael Sukkar, Assistant Treasurer and Minister for Housing, asserted that “this bill will give our regulators additional enforcement and regulatory tools to better detect and address illegal phoenix activity and, importantly, to prosecute or penalise directors and others who facilitate this illegal activity, such as unscrupulous pre-insolvency advisors.”
Do Australia’s bankruptcy laws breach its freedom of movement obligations?
In 1972, Australia signed the United Nations International Covenant on Civil and Political Rights (ICCPR), before ratifying the Convention in 1980. In doing so, the nation agreed, among other commitments, to uphold Article 12 which codifies the freedom of movement. However, Australian bankruptcy law continues to provide that limitations may be imposed on a bankrupt’s international travel, with scholars and bankrupts alike asserting that such restrictions are too harsh and constitute a breach of Australia’s obligations under international law.
Australian bankruptcy law provides that a bankrupt’s international travel is at the discretion of the trustee of their bankruptcy. Section 77 of the Bankruptcy Act provides that a bankrupt must surrender their passport to the trustee, whilst section 272 requires that a bankrupt seek their trustee’s approval before leaving the country. The law was not designed as a punitive measure, but rather to facilitate the efficient administration of a bankrupt’s estate. This rationale was predicated on the basis that proper administration of an estate requires the bankrupt to be physically present in Australia, and that by seizing their passport, the bankrupt will be unable to flee.
Relevantly, in Re Tyndall, the court noted that:
“Restrictions upon such travel under the bankruptcy legislation must be seen as being aimed at ensuring the proper administration of the bankruptcy laws and of bankrupt estates under such laws and not as a penalty imposed upon a citizen as a consequence of inability to pay debts leading to the making of a sequestration order.”
In Weiss v Official Trustee in Bankruptcy the court said at 43:
“I am conscious of the fact that the evidence revealed in [the bankrupt's] public examination suggests that [the bankrupt] has committed various offences against the Bankruptcy Act 1966 (Cth) which have characteristics involving nondisclosure and concealment. However, these are matters to be litigated at the proper time. It is a basic principle that a resident of Australia is entitled to expect that he may travel freely notwithstanding the fact that he is a bankrupt provided it will not lead to his staying overseas in order to defeat or delay his creditors and provided it will not interfere with the due administration of his bankrupt estate (see Tyndall's case at 15). It is to secure the proper administration of bankrupt estates that bankrupts are required by the Bankruptcy Act 1966 (Cth) to give their passports to the trustee (par. 77(a)) and to obtain the permission of the trustee before travelling overseas (par. 272(c)). This interference with the travel of bankrupts is not for the purpose of punishing or expressing disapproval of them for offences or alleged offences against the Bankruptcy Act 1966 (Cth).”
The considerations Australian Courts often deliberate, although not exclusive, are:
- Is the proposed visit genuine?
- Is the bankrupt likely to return to Australia as promised?
- Will the visit hamper the administration of the estate?
Meanwhile, Article 12 of the ICCPR provides that everyone shall be free to leave any country, including their own, except where restrictions are necessary to “protect national security, public order, public health or morals or the rights and freedoms of others.”
In Re Tinkler, Nicholas J recognised that “a trustee’s decision to refuse a bankrupt permission to travel overseas is in a special category because it affects the freedom of movement of a person who may not have committed or been charged with any offence.” Further, in Re Hicks, the court noted that a trustee’s power to restrict travel can significantly affect the bankrupt’s freedom.
Accordingly, in its 2015 Report on Traditional Rights and Freedoms – Encroachments by Commonwealth Laws, the Australian Law Reform Commission called for review of section 77, asserting that the requirement ‘may not be a proportionate response to concerns about bankrupt individuals absconding.’ In doing so, it posited that travel restrictions should only be imposed subject to ‘precise criteria and judicial oversight’.
In reaching this conclusion, the ALRC relied on submissions made by Associate Professor Christopher Symes who argued that the requirement for bankrupts to surrender their passport fails to reflect the reality of the modern era. Namely, it is common for people to frequently travel internationally, and enhanced technological affordances make international communication a seamless process, rendering it possible for estates to be effectively administered even where bankrupts are not physically present in Australia.
Despite this, the Australian Government has not taken steps to adopt the ALRC’s recommendation.
On one view, the law appears to need reform but equally, Australia should be permitted to regulate these issues to protect the legal rights of various parties. Finding the right balance is the key. However, the issue is complex as while the existing model fails to accommodate commercial reality, it would also be impractical to require a court to hear an application every time one of Australia’s 15,000+ bankrupts wishes to travel abroad.
Ultimately, while no definitive solution is apparent, it is worth noting that directors of insolvent Australian companies are not subject to the same limitations as personal bankrupts. Further, in no comparable jurisdiction, including the UK, USA, Canada, New Zealand, South Africa, Malaysia, Singapore, India or Ireland, is forfeiture required. As such, there is merit to the argument that bankrupt estates can be effectively administered without unduly restricting travel.
So, should the process be flipped on its head whereby Australian bankrupts are not required to surrender their passports to the trustee and free to travel as they wish? On one view the answer is yes and this could be achieved by reforming the existing practice by transferring the burden onto the bankruptcy trustee to object to travel in any event, rather than requiring the bankrupt to seek permission in the first place.
Any time a bankrupt has sought to rely on the ICCPR in supporting an application for travel, it has been held that Australia’s international agreements have no direct legal effect on domestic law as the provisions have not been incorporated in domestic legislation. Perhaps it is time that Australia updates its bankruptcy laws to not only reflect current times, but to simultaneously uphold its international human rights obligations.
Are beneficiary's always entitled to access trust documents?
Trust documents are commonly understood to include ‘those which evidence or record the nature, value and condition of trust assets.’ Relevantly, trust documents have been distinguished from those which are merely prepared by the trustee for their own purposes, with Hartigan Nominees deeming that documents which disclose deliberations about how the trustee should exercise their discretionary powers, are not trust documents. Similarly, certain correspondence between trustees does not constitute trust documents.
While beneficiaries of a trust have a prima facie right to inspect trust documents, disputes between the beneficiaries of a trust and Trustees, regarding access to documents and information are commonly encountered, with case law offering competing perspectives as to the circumstances which give rise to the provision of trust documents to beneficiaries.
In Re Londonderry’s Settlement, the Court held that as trust documents are property of the trust, the beneficiaries retain a proprietary interest in them. In doing so, it noted that this interest in trust property gives rise to the right to access trust documents.
Conversely, in Schmidt v Rosewood Trust, the court held that a beneficiary does not have an equitable interest that gives rise to an inherent right to view trust documents and that a trustee may therefore refuse a beneficiary’s request to inspect trust documents. However, as the Court retains an inherent jurisdiction to oversee the correct administration of trusts, a beneficiary may seek that the Court compel the trustee to enable inspection by the beneficiary.
Although the High Court is yet to make an explicit ruling as to the preferred approach, it relied on Schmidt in the 2017 decision of Palmer v Ayres to support the Court’s authority to compel the provision of information. Schmidt has also been followed in recent cases in the both the Federal Court and the New South Wales Supreme Court, whilst the Victorian Supreme Court relied on the Londonderry approach in the 2016 decision of Duetsch v Trumble.
In circumstances where the Court has adopted the Schmidt approach, it has relied on the following considerations to determine whether disclosure is warranted to safeguard the proper administration of the trust:
- Scope of requested documents
The Courts have traditionally been less inclined to grant access where the beneficiary seeks a wide scope of documents. Relevantly, requests for access to all documents have typically been perceived as a ‘fishing expedition’, with the Court instead favouring access in circumstances where select documents are sought to address a specific issue in the administration of the trust.
- Documents already disclosed
The disclosure of trust documents serves to ensure the beneficiary has sufficient information to evaluate the proper administration of the trust. As such, if a Court deems that the trustee has already made genuine attempts to provide appropriate information, it will likely determine that no further disclosure is required.
- Confidentiality
Trustees have traditionally been entitled to reject access to trust documents containing confidential information on the basis that disclosure is not in the best interest of all beneficiaries. Although there exists debate over whether confidentiality remains a full defence to disclosure, Justice Hammerschalg in Silkman posited that is nevertheless remains a necessary consideration.
- Secrecy
In some circumstances a trust deed may contain a provision which mandates that the details of the trust remain secret from its beneficiaries. Although the courts are yet to consider whether such a provision inhibits disclosure, the existence of a secrecy provision will likely be a relevant consideration of the Court in determining whether to exercise its discretion.
- Necessity
As the Court’s jurisdiction to intervene in trust matters serves to ensure proper administration of the trust, access will only be granted where beneficiaries ought to be privy to the documents. As such, if the requested documents will not cure a deficiency in the trust, the court is unlikely to exercise its discretion to order disclosure. To date, case law fails to signal a clear precedent as to how a court will determine a beneficiary’s request to access to trust documents, however, it does appear that the limited approach contained in Schmidt is being preferred by courts over the expansive approach contained in Londonderry.
Federal Court rules 'casual' worker entitled to paid leave
The Federal Court of Australia recently handed down a significant decision in the matter of WorkPac Pty Ltd v Rossato [2020] FCAFC 84, redefining Australia’s employment law landscape.
Mr Rossato was employed by WorkPac between July 2014 and April 2018. During this time, he supplied labour to companies within the Glencore Group under six consecutive contracts, all of which specified that he was a casual employee.
As such, WorkPac contended that pursuant to sections 86, 95 and 106 of the Fair Work Act 2009 (Cth), Mr Rossato was employed on a casual basis and was therefore not entitled to paid annual leave, compassionate leave or personal/careers leave. Further, it contended that section 116 precluded Mr Rossato from claiming payment for public holidays. Finally, WorkPac sought declarations that as a ‘Casual Field Member’, Mr Rossato was barred from claiming corresponding entitlements under the applicable enterprise agreement.
In the event that the Court found against WorkPac’s submissions, it sought declarations that it was entitled to restitution of the casual loading included in Mr Rossato’s hourly rate.
WorkPac noted that casual employment arises in the absence of a “firm advance commitment as to the duration of the employee’s employment or the days/ hours the employee will work.” Despite this, it asserted that as the terms of Mr Rossato’s contract specified that he was a casual employee, there was no need to have regard to how the contract was performed in practice.
The Court rejected this argument, contending that the presence or absence of the “firm advance commitment” should be assessed with regard to the employment contract as a whole. In doing so, it noted that whilst the description of the party’s relationship is relevant, it is not conclusive, and regard should also be had to whether WorkPac:
- provided for the employment to be regular or intermittent;
- permitted Mr Rossato to elect whether to offer employment on a particular day; and
- permitted Mr Rossato to elect whether to work and the duration of the employment.
The Court concluded that in spite of the language used in his employment contract, Mr Rossato was not a casual worker under the Fair Work Act or the Enterprise Agreement. Rather, the parties had agreed on employment of indefinite duration, which was stable, regular and predictable. As such, Mr Rossato was entitled to paid annual leave, paid personal/carer’s leave, paid compassionate leave and payment for public holidays.
The Court also rejected WorkPac’s claim for restitution for the causal loading paid to Mr Rossato, contending there was no relevant mistake and no failure of consideration.
Ultimately, this case highlights the need for employer’s to carefully consider the nature of work being undertaken by staff in order to prevent the risk of ‘double dipping’. It follows the 2018 decision of WorkPac v Skene [2018] FCAFC 131 which similarly held that employees who receive casual loadings may nevertheless be entitled to annual and personal leave.
Insolvency industry bears brunt of COVID-19 concessions
A survey conducted by ARITA, Australia’s peak body for insolvency and restructuring experts, has revealed the substantial impact the Government’s response to COVID-19 has had on the industry.
As outlined in a previous update, the Government has introduced a series of temporary measures in response to the pandemic, including; increasing the minimum amount for a statutory demand from $2,000 to $20,000, suspension of director's personal liability for insolvent trading and an additional safe harbour provision.
Conducted on April 17, the survey of almost 200 insolvency professionals indicated that as a result, insolvency levels have fallen significantly below the standard.
Relevantly, 38.6% of insolvency professionals surveyed reported that their current level of work was significantly less than this time last year and a further 17.8% said it was slightly less. Moreover, 31% of respondents indicated that the quantity of ‘safe harbour’ advisory work was down on the same time last month.
As the current environment continues to place pressure on the industry, more than half of all insolvency firms have registered, or intend to register, for the Government’s JobKeeper subsidy, indicating that year-on-year revenue has declined by at least 40%. The survey also revealed that 13.6% of firms are very concerned about their viability in the next 6 months and a further 42.4% are slightly concerned, with 19% having recently implemented redundancies.
In presenting the findings of the survey, ARITA CEO John Winter noted that, ‘In a typical year, we see around 8,000 natural insolvencies. There is always a natural level of insolvencies as businesses go through their natural lifecycle and it’s a healthy process. What we are seeing is that even businesses that are insolvent are delaying taking action to deal with that.’
Despite acknowledging that the Government efforts had been effective in supporting many businesses struggling in light of the pandemic, he warned that ‘a side effect of that is that businesses that under normal circumstances would have been wound up, are continuing to trade. Many of them will continue to rack up debts with unwitting creditors – quite likely SME’s themselves who are already under financial pressure, too.’
Finally, he acknowledged the ‘genuine concerns from insolvency professionals that, without the behavioural handbrake of insolvent trading laws, directors of businesses large and small are going far deeper into insolvency than they otherwise would have, with no chance of turning their business around. And it’s creditors who will wear the cost of that down the line.’
The survey follows an earlier study conducted by the ABS in April which found that two thirds of Australian businesses were experiencing a reduction in turnover or cash flow and that 64% reported a reduction in demand for their products or services.
Legislators simplify will-making process in the wake of COVID-19
Last week the Queensland Government passed legislation in an effort to allow wills and enduring power of attorney’s to be witnessed via video conference.
Pursuant to regulation 9 of the COVID-19 Emergency Response Bill 2020 (Qld), the Government is entitled to make regulations where an Act permits or requires the signing or witnessing of a document. This regulation making power affords the making of “modified requirements or arrangements”. In effect, the legislation allows the Court to dispense of the formal witnessing requirements and determine whether an informally made will is valid.
The move follows a Practice Direction issued by the Queensland Supreme Court on the same day which allows applications for informal wills to be heard by a Registrar rather than a judge.
Specifically, the Direction grants a Registrar power to constitute the Supreme Court and hear and decide application under section 18(2) of the Succession Act 1981 (Qld). In doing so it dispenses the requirement for a party be in the physical presence of the testator, provided the Registrar is satisfied that:
- A solicitor drafted, witnessed or supervised the will’s execution;
- The deceased intended for the document to take immediate effect;
- The testator executed the will in the presence of one or two witnesses via video conference;
- The witnesses were able to identify the documents executed; and
- The reason the testator was unable to execute the will in person arose from complications relating to the COVID-19 pandemic.
The direction was issued in accordance with Rule 452(2) of the Uniform Civil Procedure Rules 1999 (Qld) and applies only to documents executed between 1 March 2020 and 30 September 2020.
Queensland is not alone in embracing technology, with a number of other jurisdictions also introducing modifications to the will-making process. In New South Wales, temporary regulations made under section 17 of the Electronic Transactions Act 2000 (NSW) facilitate witnessing via video conferencing, while across the ditch the Epidemic Preparedness (Wills Act 2007 – Signing and Witnessing of Wills) Immediate Modification Order 2020 alters section 11 of the Wills Act 2007 to permit the use of audio-visual links.
COVID-19: FWC approves reduction in redundancy pay
The Fair Work Commission (FWC) has approved the first application for a reduction in redundancy pay during the COVID-19 pandemic.
Employers may apply to the FWC to vary redundancy pay under section 120 of the Fair Work Act 2009. The section allows an application to be made where the employer either (a) obtains other employment for the redundant employer, or (b) cannot pay the redundancy pay the employee is entitled to. The FWC has discretion to reduce the amount of redundancy pay (including to a nil amount) if it is considered necessary.
In Mason Architectural Joinery Pty Ltd [2020] FWC 1897, the small business Mason Architectural Joinery Pty Ltd (Mason Joinery) had taken many steps to reduce its overheads in the wake of a downturn of business. These steps included reduction of spending, sale of the company car and redundancy of two employees.
The employee was entitled to 3 weeks’ notice of termination and 7 weeks’ redundancy pay under the Joinery and Building Trades Award 2010. Mason Joinery was able to pay the employee his accrued annual leave and accrued roster days off entitlements as well as the notice amount. Mason Joiner was however unable to pay the full redundancy pay. Mason Joinery sought an order decreasing the redundancy amount.
Commissioner McKinnon was satisfied that Mason Joinery was under significant financial strain. The Commissioner noted that the business had not received income for two months and had lost some pre-booked jobs resulting in the viability of the business being highly dependant on the how long the pandemic situation would last.
The Commissioner noted that the employee was able to secure a new job only 8 days after his termination. The new job also paid $2 an hour more than the previous position with Mason Joinery. The notice of termination that the employee received was equivalent to 15 days’ pay and covered that 8 days of non-employment.
The employee had also taken a holiday that was pre-booked during his employment with Mason Joinery from 15 March 2020 to 21 March 2020 (a month after he started his new job). Upon his return the employee was required to self-isolate for 14 days. The Commissioner held that as the employee had been paid out his accrued annual leave the employee suffered no loss in this regard as the amount was sufficient to cover both the holiday and period of self-isolation.
Accordingly, the Commissioner held that it was appropriate to reduce the amount of redundancy pay for the employee to 1 week’s pay.
