Clayton Utz Insights

02 August 2012

Earning or learning? Reimbursement for training away from home

By Shae McCartney and Andrew Wydmanski.

Key Points:

The living away from home allowances must only be paid in respect of travel for work, and not for training.

In a decision with important implications for the potential costs of training for employers, the Federal Magistrates Court has held that a trainee employee was not entitled to be reimbursed for travel, accommodation and meal costs when he attended work-related training courses.

Federal Magistrate Cameron held in CEPU v Excelior Pty Ltd [2012] FMCA 621 that attending training is not "work" for the purposes of the Telecommunications Services Award 2010. The Award provisions that were considered by the Federal Magistrate are similar to working away from home allowance provisions that are contained in a number of Modern Awards.

The facts

Sean Butterworth entered into a traineeship for a Certificate II in Telecommunications with a company called Excelior. It was a formal New South Wales Apprenticeship/Traineeship Training Plan. Excelior is a labour hire company that provides a number of traineeships in partnership with Telstra Corporation Limited. Mr Butterworth was employed by Excelior and so was covered by training provisions in the Award.

Mr Butterworth lived in Albury, but was required to commence his training in Newcastle for a three-week period in May 2010. He then underwent further training at the Telstra Learning Academy in Sydney for four days at the end of May 2010.

The trip to Newcastle was about 760 kilometres each way. At Newcastle he shared accommodation with two other trainees (each paying about $50 a night), spending about $200 for groceries and, from time to time, lunches and other meals. While in Sydney he was paid a travelling allowance of $175 per night from Telstra.

Mr Butterworth was directed to attend further training in Newcastle from 11-29 October 2010. As before, he stayed in a flat with two other trainees, paying approximately $50 per night. He also paid for his own meals.

For each of the May and October training periods in Newcastle, Mr Butterworth was paid $600 gross by Excelior for “classroom recognition”, but was not otherwise reimbursed for his expenses or paid any travel allowances by Excelior. He received some assistance payments from the NSW Government under its Vocational Training Assistance Scheme.

What the court was asked to decide

The CEPU applied to the Federal Magistrates Court for Mr Butterworth under the Fair Work Act 2009. It claimed that Excelior had breached the terms of the Award by failing to pay travel and living away from home expenses and allowances.

The CEPU asked the Federal Magistrates Court to rule on the meaning of "work" as defined in clause 17 of the Award (the "away from home" compensation clause) on the basis that "work" included "training" for the purposes of the "away from home" allowances.

Excelior disputed the CEPU’s construction of the Award, denying that it was required to pay Mr Butterworth for his travelling time or for expenses incurred when staying away from home for the purposes of his training.

The CEPU submitted that the national training wage provisions in Schedule E of the Award relating to travelling and working away from home allowances applied to trainees.

What the court decided

The first matter that Federal Magistrate Cameron had to decide was whether the following words in clause E.6.3 modified the meaning of “work” in the Award so that work included “training":

"Time spent by a trainee… attending any training… in, or associated with, the training contract is to be regarded as time worked for the employer for the purposes of… determining the trainee’s wages and employment conditions" [emphasis added].

That is, did the words in E.6.3 mean that training was work? If so, did clause 17 of the Award (which provided for travel entitlements and expenses incurred in the course of work) also apply to time spent in training?

Federal Magistrate Cameron held that Schedule E did not change the definition of "work" in the Award. He noted that there was a historical distinction between training and work in previous decisions. While clause 17 would compensate trainees who had to travel for work, it did not provide allowances for travelling for training purposes.

The Federal Magistrate was also asked to decided if the words "associated with… in attending " in relation to the provision "time spent by a trainee… in attending any training… in, or associated with… the training contract" meant that expenses associated with training, but not directly travel or the training, were compensable expenses, if training was included in the definition of work.

For this question, Federal Magistrate Cameron held that the words "associated with and in attending” do not expand the operation of cl. E.6.3 to activities or expenses beyond actual attendance at the training – activities such as the associated travel, accommodation and meals while at the training.

Further, clause 17 of the Award provided that payments for travelling time are to be based only on the travelling time that exceeds the time which the employee would normally take to travel from home to work. This provision itself makes it clear that the Award does not provide an independent source of travel allowances or compensation for travel expenses.

Lessons

  • Check the Award provisions that govern your industry. What are your true obligations in respect of pay and conditions?
  • The distinction between training and work remains. The living away from home allowances must only be paid in respect of travel for work, and not for training. 
  • It might still make good business sense to pay living away from home-style allowances for training to offer more competitive working conditions than rival employers and thus attract higher calibre employees. However, this may be a commercial decision rather than a legal necessity.

 

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For more information, contact...
Email: Shae McCartney, Partner
Tel: +61 7 3292 7306
Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
Shae McCartney
Shae McCartney