• The impact of this case on ATO policy is discussed in Decision Impact Statement: John Holland Group Pty Ltd & Anor v Commissioner of Taxation (Published 15 December 2015).

JOHN HOLLAND GROUP PTY LTD & ANOR v FC of T

Judges: Edmonds J
Logan J

Pagone J

Court:
Full Federal Court, Sydney

MEDIA NEUTRAL CITATION: [2015] FCAFC 82

Judgment date: 11 June 2015

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Pagone J:

50. The issue in this appeal is whether employees of John Holland Group Pty Ltd and John Holland Pty Ltd attract the " otherwise deductible " rule in s 52 of the Fringe Benefits Tax Assessment Act 1986 (Cth) ( " the FBT Act " ). John Holland Group and John Holland have been assessed to fringe benefits tax under s 66 on their respective fringe benefits taxable amounts in relation to the cost of their employees ' air travel between Perth and Geraldton. Their liability is to be reduced under s 52 of the FBT Act if their employees would have been entitled to a deduction under s 8-1 of the Income Tax Assessment Act 1997 (Cth) ( " the 1997 Act " ) for the amounts of expenditure on that air travel upon the hypothesis that the employees had paid the amounts.

51. The Commissioner ' s contention that the employees would not have been entitled to a deduction depends upon whether an employee ' s air travel between Perth airport and Geraldton was travel between the employee ' s residence and a place of work or whether that travel was undertaken in the course of the employee ' s employment. It has long been established that an employee is not entitled to a tax deduction for the cost of travel between home and work notwithstanding that the travel to work might be a prerequisite to the derivation of income or that the travel is connected with the derivation of income by the employee:
Lunney v Commissioner of Taxation (1957) 100 CLR 478, 485-6; 498-9 ;
Newsom v Robertson [ 1953 ] 1 Ch 7 . The principle in Lunney was applied in
Federal Commissioner of Taxation v Payne (2001) 202 CLR 93 at 101 [ 14 ] to deny a deduction for travel between two places of unrelated income derivation.

52. The allowability of a deduction under s 8-1(1)(a) requires, under the first limb, that any loss or outgoing be incurred " in " the gaining or producing of assessable income and excludes losses or outgoings which may otherwise have been incurred " for the purpose of " the derivation of assessable income or as a prerequisite to its derivation. The principle was explained in the joint judgment of Gleeson CJ, Kirby and Hayne JJ in Payne at 102 [ 16 ] :

The principle which had to be applied in [ Lunney ' s ] case, and must be applied in this, is one which limits the allowance of a deduction for outgoings to those outgoings that are incurred in the course of deriving assessable income. It is a principle which excludes outgoings which, although incurred for the purpose of deriving assessable income, are not incurred in the course of doing so. [ Emphases in original ]

The relevant connection of a loss or outgoing with the derivation of income which must be demonstrated for the loss or outgoing to fall

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within s 8-1(1)(a) is, as their Honours said at 99 [ 9 ] , that the loss or outgoing be incurred " in " gaining or producing income. The connection is not satisfied by showing some broader connection such as that the loss or outgoing was incurred " in connection with " the derivation of assessable income, that it was incurred " for the purpose of " deriving such income, or that it was a prerequisite to the derivation of income.

53. The taxpayers, however, contended that the hypothetical expenditure of the employees, which was required to be considered by s 52 of the FBT Act, in this case, would have been incurred " in " the derivation of income by the employees and that the decision in Lunney itself provides an informative analogy to require that conclusion. The appeals in Lunney raised for the court ' s consideration the question, described by Dixon CJ at 485, as " whether the fares paid by ordinary people to enable them to go day by day to their regular place of employment or business and back to their homes are deductible expenses allowable against the assessable income earned by the employment or business " . Mr Lunney earned his income as an employee and claimed a deduction for the cost of his travel from home to work. He had been employed as a ship ' s joiner by the Union Steamship Company of New Zealand for the hours from 7.45am to 4.30pm daily Mondays to Fridays and:

[ … ] was required to report at the office of the company at No. 11 Darling Harbour, both at the commencement and at the completion of each day ' s work. From the said office he travelled at the expense of the company to various parts of the port of Sydney to carry out his work.

The cost of travel for which Mr Lunney claimed a deduction, and which the court did not allow, was not the travel from the company ' s office at No. 11 Darling Harbour to the various ports to carry out his work, but from his domestic residence in Narraweena to his employer ' s office at No. 11 Darling Harbour. Counsel for John Holland Group and John Holland contended that the equivalent outgoing in this case (which the employees would not be able to deduct) would be the cost of travelling from the employees ' individual residences to Perth airport, but that the employees ' arrival at Perth airport was equivalent to the arrival of Mr Lunney at the office of his employer at No. 11 Darling Harbour. In other words that arrival by the employees at Perth airport was the employees ' arrival at work from which they then travelled to Geraldton to undertake other tasks. The employees were submitted to be " in " their employment from the moment of their arrival at Perth airport and were not travelling " to " their employment at Geraldton. In contrast, the Commissioner contended that the employees were employed, and paid, to undertake activities at Geraldton and that their employment did not include their travel from Perth airport to Geraldton.

54. It is not uncommon for an employee ' s employment to include travel as a necessary incident of the employment. A number of examples in different fields of employment were considered during the course of argument at the hearing of the appeal. Thus, for example, a person employed as a professional footballer to train and play football may also be required to travel interstate as a necessary incident of the employment as a footballer. Government employees may, similarly, be required to travel to different locations for the purpose of undertaking tasks and duties at the place of arrival. In each case the travel may not be the primary activity for which the person is employed, but may be a necessary incident of the employment and undertaken in, and as part of, the employment for which the employee may be remunerated without specific reference to the travel.

55. Section 52 of the FBT Act requires a conclusion to be reached about whether the hypothetical expenditure of money would have been allowable as a deduction to the employee if the employee had incurred that expenditure. The hypothesis to be considered by s 52 requires the making of the assumption that the expenditure actually incurred by the employer had been incurred by the employee. The hypothesis does not require, or permit, the consideration of alternative facts or circumstances other than that the actual unreimbursed expenditure had been incurred and paid by the recipient of the benefit. The section does not permit, or require, the Commissioner to hypothesise about other reasonably likely alternative losses or outgoings

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but, rather, calls for a judgment about whether the expenditure actually incurred would have entitled the employee to obtain a deduction upon the hypothesis that it had been incurred by the employee rather than the employer.

56. A consideration of the hypothesis in this case requires the conclusion that the employees would have been entitled to a deduction for the cost of travel from Perth airport to Geraldton because the travel between those two locations was part of their employment. John Holland Group and John Holland were both members of the John Holland Group of companies which conducted a large rail construction and maintenance business ( " JH Rail " ) throughout Australia. The labour force were classified as either " workforce " (who were paid an hourly rate) or " staff " (who were salaried workers). John Holland employed all " workforce " employees and John Holland Group employed all " staff " employees. There were approximately 91 workforce and 31 staff employees employed by them on a rail upgrade construction project on a railway line east of Geraldton in Western Australia between May 2011 and September 2012 ( " the Midwest Project " ). The relevant, and uncontested, facts as set out by her Honour, were:

• 6 John Holland Group Pty Ltd ( John Holland Group ), the applicant in proceeding NSD 357 of 2014, has a rail business, referred to as JH Rail . JH Rail is a major participant in the industry of rail construction and maintenance in Australia. In Western Australia, many of the rail construction projects in which JH Rail is involved are connected with the requirements of mining projects. To carry out its rail projects, JH Rail needed to be able to deploy skilled people to projects in different areas as those projects came on line. In JH Rail ' s experience, its work requirements could not be satisfied from the available pools of local workers. JH Rail thus sought to employ, train and maintain its own skilled labour force available for deployment on a project-by-project basis. Once an employee was demobilised from one project, JH Rail would try to transfer the employee to another project to maintain the continuity of employment. Upon failing (but only then), the employee would be made redundant (with the prospect of being re-employed in the future. This approach was possible because, before and at the time of the Midwest Project being undertaken, JH Rail had three or more years of projects in the pipeline.
• 7 Most employees of JH Rail ' s labour force in Western Australia lived in Perth. Most of JH Rail ' s projects in Western Australia were in remote and regional areas. Most projects lasted about a year. Most areas in which a project was located did not have sufficient accommodation available to function as permanent accommodation for employees and their families. JH Rail ' s employees generally did not take up an option they were offered of relocating to a place near the project for various reasons. For the Midwest Project, the accommodation used was a resort in Geraldton which provided apartment style group accommodation, suitable for employees but not for partners and families. Partners and families were not generally permitted to stay at the employee accommodation.
• 8 The FIFO arrangements for the Midwest Project involved the following:
  • • Employees are designated as either " workforce " or " staff " . John Holland Pty Ltd, the applicant in proceeding NSD 358 of 2014, employed all workforce employees. John Holland Group employed all staff employees. Staff employees were subject to individual employment contracts and workforce employees were subject to the John Holland Pty Limited and RTBU - Rail Maintenance Agreement - 2009 - 2012 ( the 2009 Rail Agreement ).
  • • There were approximately 91 workforce and 31 staff employees employed on the Midwest Project.
  • • Employees travelled at their own expense to Perth airport. Perth airport was designated in JH Rail documents as the " point of hire " .
  • • The relevant employer would pay for the employees ' flights from Perth to Geraldton, the nearest airport to the Midwest Project. Most flights were chartered by the

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    employers.
  • • JH Rail would arrange for transport of the employee, at the employer ' s cost, to the accommodation, also arranged and paid for by the employer.
  • • Generally, employees worked on the project during their rostered on period which was for a duration of two to four weeks (although some staff employees worked a five day week, Monday to Friday, and were flown in Monday morning and out Friday night).
  • • At the end of their rostered on period, the employees would be transported back to Geraldton airport and would catch a flight back to Perth, at the cost of the employer. The employees would make their way home from Perth airport at their own expense.
  • • It is possible to ascertain from pay slips that all flights returning from Geraldton to Perth occurred while the employee was rostered on. That is, the flight was undertaken on the time of the employer. Although it is not possible to ascertain from pay slips that the flights from Perth to Geraldton were also undertaken while the employee was rostered on (the periods of rostering did not coincide with pay periods), there is no real doubt that this was the case. Amongst other things, it was a requirement of the 2009 Rail Agreement.
  • • Following a two week or longer rostered on schedule, the employees would have a period of at least one week when they were rostered off - referred to as " R & R " (or rest and recreation) on the pay slips.
  • • Employees, travelling on the employer ' s time (as they were), were bound to comply with all JH Rail directives and policies, and disciplinary action could result if an employee breached any such requirement during a flight.

The employees ' arrival at Perth airport from their respective homes was not travel in the employees ' derivation of income, and any expenditure incurred by the employees from their homes to Perth airport would not have been deductible, but, the employees were relevantly at work from arrival at Perth airport and were deriving income from that point and would be entitled to a deduction for the cost of air travel from Perth airport to Geraldton.

57. The trial judge concluded that established authority required the conclusion that the employees would not be entitled to a deduction if they had incurred the cost of air travel from Perth airport to the project location. At [ 30 ] her Honour said:

Untrammelled by authority, it is likely that I would find the features identified above sufficient to conclude that cost of flights was incurred in each employee gaining or producing their assessable income within the meaning of s 8-1. Other considerations emphasised by the authorities do not permit me to reach this conclusion.

That conclusion depended upon her Honour ' s view that the employee ' s place of work was the project location and that their employment did not commence from arrival at the airport. At [ 27 ] her Honour noted a submission for the taxpayers (in reliance upon the decision in
Commissioner of Taxation v Day (2008) 236 CLR 163 ) " that the travel between Perth and Geraldton was within the scope of the employee ' s employment and productive of assessable income " . At [ 32 ] her Honour said:

Second, in Day itself the High Court said that " [ e ] ssential to the inquiry is the determination of what it is that is productive of assessable income " (at [ 31 ] ). In the present case, there was no suggestion in the evidence that the employees were doing anything other than travelling to their place of work. While they were being paid to travel, and thus travelling was undertaken as part of their employment, that was a result of the deal negotiated between the employers and the employees. Their place of work remained the project location. On the statutory hypothesis that each employee paid the cost of flights, their work productive of income remained the work they did at the project location.

The facts, as her Honour had observed at the outset, were not in dispute but her Honour was in error to conclude that the authorities required the conclusion that the cost of flights would not have been incurred by the employees in gaining

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or producing their assessable income. The answer to the question in dispute depended upon whether the travel undertaken by the employees between Perth airport and Geraldton was within the employment of the employees. The Commissioner ' s challenge had been that the scope of the employment was to be considered more narrowly than the taxpayers had submitted in reliance upon Day , namely, as the performance of the duties at the project location and to exclude the travel by air from Perth airport to the project location which the employer required the employees to undertake. The taxpayers ' reliance upon what had been said by the High Court in
Commissioner of Taxation v Day (2008) 236 CLR 163 had been directed to the proposition that the employee ' s activities included the travel and, therefore, that the travel was undertaken by those employees as part of the employment, albeit that it might be to undertake activities at the project location in much the same way as the travel by, for example, a tax official from one city airport to another might be ancillary to attending the location of a taxpayer under audit at the place of destination.

58. The authorities did not require the conclusion that the employees would not be entitled to a tax deduction for the travel between Perth airport and Geraldton if they had incurred the outgoing themselves. Her Honour erred by taking too narrow a view of what was productive of the employee ' s assessable income. In
Commissioner of Taxation v Day (2008) 236 CLR 163 the majority said in a joint judgment at 180, [ 33 ] :

That no narrow approach should be taken to the question of what is productive of a taxpayer ' s income is confirmed by cases which acknowledge that account should be taken of the whole of the operations of the business concerned in determining questions of deductibility. A similar approach should be taken to what is productive of a salary-earner ' s income, whether it be described as employment or by reference to a bundle of tasks to be performed and duties to be observed. In some cases those duties to be observed may extend beyond what is contained in a contract of employment. In Cooper , Hill J, referring to the statement in Ronpibon Tin , observed that it will often be necessary to analyse with some care the operations or activities regularly carried on by the taxpayer, and Lockhart J referred to the need to have regard to the terms and conditions of a taxpayer ' s employment. A reference to the " day-to-day " activities undertaken by a taxpayer may not be a sufficient description of what their position involves. So, in Federal Commissioner of Taxation v Finn expenses of a senior design architect in the public service incurred in travelling in order to improve the taxpayer ' s knowledge were considered in the context of his employment by the government in accordance with his conditions of service, and as referable to his prospects of promotion. The essential difficulty with the Commissioner ' s argument in this case is that it does not fully recognise the scope of the respondent ' s role as an officer of the Public Service and what his office exposed him to.

Travelling from Perth airport to Geraldton was part of the employment of those employees. Each of the employees commenced their " rostered on " duties on arrival at Perth airport and took the flights because they were directed to do so and were required to do so as part of their employment obligations. The terms of employment of the " workforce " employees provided that the employees commenced their " rostered on " employment duties from their time of arrival at Perth airport. Those employees were governed by the 2009 Rail Agreement which expressly provided in cl 24.5.2 that the time in travel from an employee ' s Home Station was part of an employee ' s working time for the roster period. Staff employees were not covered by the 2009 Rail Agreement but the standard terms of employment provided that staff employees may be required to travel to project locations and to spend days away from their usual place of work. The standard terms of employment provided for a project allowance to compensate for the project location and other disabilities associated with the projects. Both workforce and staff employees were required to act in accordance with directions from their employers, including to observe codes of conduct whilst travelling by aeroplane from their departure airport to

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the point of destination. The outgoing incurred in the travel from the departure airport to the project location is not excluded from deductibility as a loss or outgoing incurred " for the purpose " of, but not " in the course of " , deriving assessable income: cf
Commissioner of Taxation v Payne (2001) 202 CLR 93, 102, [ 16 ] . An outgoing is not deductible merely because it is a necessary prerequisite to the derivation of income (see
Lodge v Federal Commissioner of Taxation (1972) 128 CLR 171, 173-4, 175-6 ), but it is allowable as a deduction if incurred " in " the derivation of income.

59. The hypothetical expenditure of the employees in this case, unlike that considered in
Commissioner of Taxation v Cooper (1991) 29 FCR 177 , would have been incurred in an activity which was part of the employment. In Cooper , the taxpayer, a professional rugby league player, had been directed by his employer to consume specified quantities of steak, potato, bread, beer and Sustagen each week in addition to his normal meals in order to retain his " optimum playing weight " in the off-season. The deduction he claimed for the expenditure incurred in acquiring that additional food and drink can readily enough be seen as having been incurred " in connection with " , and perhaps as a pre requisite for, the income producing activity, but not as part of the income producing activity itself. Lockhart J said at 185:

The taxpayer incurred the expenditure on additional food and drink for the purpose of increasing his weight and thus to play professional football and earn assessable income. But its character as the cost of additional food and drink is neither relevant nor incidental to the training for and playing of football matches, which is the activity by which he gained assessable income. The expenditure was not incurred in or in the course of that activity. The taxpayer was paid money to train for and play football, not to consume food and drink. His income-producing activities did not include the consumption of food and drink.

Hill J said at 199 - 200:

The income-producing activities to be considered in the present case are training for and playing football. It is for these activities that a professional footballer is paid. The income-producing activities do not include the taking of food, albeit that unless food is eaten, the player would be unable to play. Expenditure on food, even as here " additional food " does not form part of expenditure related to the income-producing activities of playing football or training.

The conclusion in that case that the consumption of food was not part of the income producing activities of playing football and training was not based upon a narrow view of the income producing activity but upon the fact that the income producing activity did not include eating, however essential that might be as a prerequisite to playing football or training or to perform those activities. In this case, in contrast, the employment necessitated that travel be part of the activities productive of assessable income. It was the remoteness of the project location that caused there to be a need for travel to be part of that for which employees were employed. There is no suggestion of the obligation to travel being created other than by the demands of the nature of the employment, or as device to clothe what would be a private journey before the derivation of income with the appearance of a journey as part of the employment.

60. The distance between an employee ' s home and place of work is, of course, not sufficient to make deductible the expense of travel from one place to the other. The taxpayer in
Newsom v Robertson [ 1953 ] 1 Ch 7 was not entitled to a deduction for the cost of travel between Whipsnade (the location of the taxpayer ' s residence) and London (the location of the taxpayer ' s base of work) because the former location had no relevant connection with the taxpayer ' s derivation of income. Somervell L.J. observed at 14 that " Whipsnade as a locality [ had ] nothing to do with " the taxpayer ' s practice and that his purpose in making the journey " was to get home in the evenings or at week-ends " . Denning L.J. (as he then was) said at 16:

A distinction must be drawn between living expenses and business expenses. In order to decide into which category to put the cost of travelling, you must look to see what is the base from which the trade, profession, or

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occupation is carried on. In the case of a tradesman, the base of his trading operation is his shop. In the case of a barrister, it is his chambers. Once he gets to his chambers the cost of travelling to the various courts is incurred wholly and exclusively for the purposes of his profession. But it is different with the cost of travelling from his home to his chambers and back. That is incurred because he lives at a distance from his base. It is incurred for the purposes of his living there and not for the purposes of his profession, or at any rate not wholly or exclusively; and this is so, whether he has a choice in the matter or not. It is a living expense as distinct from a business expense.

On this reasoning I have no doubt that the commissioners were right in regard to Mr. Newsom ' s travelling expenses during term time. The only ground on which Mr. Millard Tucker challenged their finding during term time was because Mr. Newsom has a study at his home at Whipsnade completely equipped with law books and does a lot of work there. The commissioners did not regard this as sufficient to make his home during term time a base from which he carried on his profession, and I agree with them. His base was his chambers in Lincoln ' s Inn. His home was no more a base of operations than was the train by which he travelled to and fro. He worked at home just as he might work in the train, but it was not his base. The commissioners found, however, that during the vacation his professional base was not at his chambers in Lincoln ' s Inn but at his home at Whipsnade. I do not think this was a correct inference from the facts before them. His professional base was throughout in Lincoln ' s Inn, and it did not cease to be so simply because he rarely went there during the vacation. [ … ]

Romer L.J. said at 16 - 17:

[ … ] In order that the taxpayer ' s expenses of travelling to and fro between Whipsnade and London should qualify for tax purposes as permissible deductions from his gross earnings as a barrister, it must be shown that they were incurred wholly and exclusively for the purposes of his profession.

The criteria for deductibility is thus not that there is a great distance to travel from home to work but that the travel is a part of the employment. A distant or remote location for the performance of employment duties may, however, be a relevant factor in determining whether travel is part of the employment. The location of the place at which work needs to be performed may occasion a need for travel to be part of the employment. The remoteness of the project location in this case provides the explanation for the travel being part of the employment in contrast to the need to incur the " living expense " of the kind considered in Newsom .

61. Mr Bingham was one of the employees whose facts and circumstances were relied upon as illustrative of the employment arrangement in this case. He was appointed by John Holland as a track maintainer level 4 as a full time employee. He had initially been offered employment by John Holland Rail Pty Ltd as track maintainer level 2 on 6 January 2009 and had been located at the WestNat Infrastructure Maintenance Project. His " Home Station " was identified as " Harvey " in the letter offering him employment. On 29 April 2011 Mr Bingham was offered a transfer by John Holland as a track maintainer level 4 full time employee to be located at the Midwest Rail Upgrade Project located " between Geraldton and Mullewa " . Clause 3.1 of that letter of offer identified his " home base " as being " Perth airport " with the qualification that he " may be required to travel to work at other locations as required " by the company.

62. The offer to Mr Bingham in the letter dated 29 April 2011 stipulated that the " John Holland Pty Ltd and RTBU Rail Maintenance Agreement 2009 - 2012 " applied to his employment. That agreement had been approved under the Fair Work Act 2009 (Cth) and, by its terms, bound all employees of John Holland. Clause 24.5 of that agreement provided:

• 24.5 Travel
  • 24.5.1 For the purpose of this clause all Employees are allocated a Home Station. Where the Home Station is unspecified the Home Station will be Midland.

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  • 24.5.2 All travel time where an Employee is required to travel from their Home Station to a temporary work location shall be deemed working time for the Roster period in which this occurs. Any travel time outside the Roster period shall be by mutual agreement at the applicable overtime rate.

" Home Station " was defined by cl 5.10 of the agreement to mean " the designated work location, depot or facility which will be defined for individual employees at the time of appointment or at time of transfer " . The time spent in travelling from Perth airport to Geraldton was part of the employee ' s employment for which he received wages and was entitled to an additional allowance if the period exceeded that provided for. Clause 24.5.2 of the industrial agreement deemed the travel from the Home Station to be " working time " for the roster period and specifically provided that any travel time outside of that period was to be at the applicable overtime rate by mutual agreement. Employees could make other arrangements with their employer ' s consent to travel to the project location other than by the means arranged by the employer but that was not an option available at the employee ' s unilateral discretion and was generally impractical. Mr Bingham gave evidence in cross examination of one occasion when he travelled to Geraldton with his own motorcar but that he had done so with the agreement of his employer. The uncontradicted evidence of Mr Hikawai was that the employees were " required to report to Perth airport and embark on the [ employer ' s ] chartered flight to Geraldton " . The number of staff and workforce travelling on each trip, and the distance of the travel to the project site, meant that it was more economical and convenient for the employer to book a charter flight rather than to arrange individual flights for employees with commercial airlines.

63. Mr Chan was an employee of John Holland Group whose circumstances differed from those of Mr Bingham because his flights from his " nominal base " of Perth to the project location were organised by him. Mr Chan was the commercial manager at John Holland Group. In April 2010 he was appointed as senior contracts administrator on a project known as the " RGP5 Southern Rail Project " under terms which included return economy flights between the project location and Mr Chan ' s nominal base in Perth. They also included company provided camp accommodation whilst on site. Mr Chan was employed by John Holland Group as a senior quality surveyor by letter of offer dated 4 May 2006. His location identified in that letter was Port Hedland in Western Australia. His duties were stated as requiring travel " to and from the areas in which John Holland operates " and that he may be required to spend days away from his usual place of work. His total remuneration included a project allowance to compensate him for the location and a living away from home allowance. A specific amount was not allocated for travel but travel was part of the duties he was expressly required to perform as part of his employment. Mr Chan was subsequently promoted and transferred on several occasions, namely, 2 May 2011, 1 November 2012 and 18 November 2013. In each case his employment conditions included a travel allowance for the cost of travel between Perth domestic airport and the project site. Mr Chan was, like Mr Bingham, also travelling " in " his employment between Perth domestic airport and the project location, and was not travelling " to " or merely " in connection with " his employment. His travel to the airport from his home was travel " to " or " in connection with " his employment, but upon arrival at the airport was performing one of the activities required of him to perform his duties. Mr Chan was not employed on terms that required his attendance only at the project location but, rather, upon terms that required his attendance at an airport from which he was required to travel to the remote location in order to undertake the particular duties at that location. The requirement to attend at the airport was one arising from the particular nature of the tasks to be performed at remote locations. He was told, at employee briefings by management, as were all employees subject to the " fly in/fly out " basis, that his employer ' s code of conduct and other policies applied to him, and to the other employees, whilst travelling between Perth domestic airport and the project site. Misbehaviour on flights " paid for by the company " could result in disciplinary action against him or other employees.

64. The case under consideration in Lunney was of " ordinary people " paying fares " to enable them to go day by day to their regular place of employment or business and back to their homes " ; it was not about the specific demands occasioned by employment that required, as part of the employment, travel to a remote place. The employees in this case are required to travel as part of their employment to a remote location. Accordingly, the appeal should be allowed.