Atie Saad v Kelly Management Group Pty Ltd

[2017] FWC 5966

[2017] FWC 5966

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Atie Saad
v
Kelly Management Group Pty Ltd
(U2017/9861)

COMMISSIONER CAMBRIDGE SYDNEY, 28 NOVEMBER 2017

Unfair dismissal - jurisdictional objection - s.382 (b) whether a Modern Award covers the applicant - application dismissed.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Sydney on 11 September 2017. The application was made by Atie Saad (the applicant), and the respondent employer was identified to be Kelly Management Group Pty Ltd (the employer).

[2] The application identified that the applicant was represented by a Company named Specialist HR (Specialist HR). The application also stated that the date of the applicant’s dismissal was 21 August 2017. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act. The application indicated that a remedy of compensation was sought but it contained no further information about the dismissal.

[3] Madison Marcus Law Firm (Madison Marcus), lawyers acting on behalf of the employer, provided an employer's response to the application for unfair dismissal remedy which raised jurisdictional objections on the basis that: 1; the applicant was not covered by a Modern Award or enterprise agreement and his annual rate of earnings exceeded the high income threshold, (the s. 382 (b) objection); and 2; the employer is a small business employing 2 employees, and the dismissal of the applicant was consistent with the Small Business Fair Dismissal Code (the s. 385 (c) objection); and 3; the application failed to provide any details of the reasons for dismissal, or why the dismissal was allegedly unfair.

[4] The employer advised that it did not intend to participate in Conciliation of the claim and instead it sought to have its jurisdictional objections determined under s. 396 of the Act as initial matters to be determined before any consideration of the merits of the application. Specialist HR subsequently provided an amended application which included material in support of the claim, and thus objection number 3 had been addressed. There appeared to be no contest that the employer was a small business, and similarly, there seemed to be agreement that the s. 382 (b) objection regarding the high income threshold should be determined as the employer strongly asserted that the applicant was not a person protected from unfair dismissal.

[5] Consequently, the Parties have provided documentary material in support of their respective positions on the s. 382 (b) objection, and upon which it has been agreed that the Commission could determine this question. Specialist HR provided a submission document dated 12 October 2017, which supported the applicant’s contention that he was a person protected from unfair dismissal in satisfaction of s. 382 (b) of the Act. Madison Marcus filed two affidavits, respectively sworn on 30 and 31 October 2017, and a response submissions document as material in support of the employer’s s. 382 (b) objection.

[6] Accordingly, this Decision which has been confined to the determination of the employer’s s. 382 (b) objection, and it has been made upon examination and consideration of the documentary material that has been filed by the Parties.

[7] Section 382 of the Act is in the following terms:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

[8] In this instance there was no dispute that the applicant's annual earnings exceeded the high income threshold, and that there was no enterprise agreement that applied to the applicant in relation to his employment. Therefore, the nature of the s. 382 (b) objection was confined to a determination as to whether a Modern Award covered the applicant.

The Applicant’s Case

[9] In summary, it was submitted by Specialist HR that the applicant was covered by the Clerks – Private Sector Award, [MA 000002] (the Award).

[10] Specialist HR submitted that it was expressed within the employment contract that the applicant was covered by a Modern Award. Specialist HR referred to two clauses of the Employment Agreement document dated 7 March 2016, which had been signed by the applicant. Clause 1 of the Employment Agreement document defined “the Award” to mean the Clerks - Private Sector Award 2010, and clause 4.3 which relevantly stated:

“The Employee acknowledges that he / she shall not be entitled to additional remuneration for work performed outside the normal working hours specified in Item 6 of Schedule 1 of this Agreement unless otherwise allowed for in the Award.”

[11] Specialist HR submitted that as a result of these references to the Award which were contained in the applicant’s employment contract, the applicant was covered by the Award. Consequently it was submitted by Specialist HR that the applicant was a person “…protected from unfair dismissal as a modern award applies.”

The Employer’s Case

[12] Madison Marcus made submissions on behalf of the employer which strongly opposed the claim that the applicant was covered by the Award. These submissions noted that it was not disputed that the applicant was paid more than the high income threshold, and that his work was not covered by an enterprise agreement.

[13] The submissions made by Madison Marcus asserted that the principal purpose test was the correct approach to the proper determination as to whether the applicant was covered by the Award.Madison Marcus submitted that the onus was upon the applicant to establish that his duties were subject to the Award. In this regard, the submissions of Madison Marcus referred to the coverage clause of the Award as the basis for determination as to whether the work of the applicant was covered by the Award.

[14] Madison Marcus submitted that it was a “…heroic submission to assert that a person is subject to an award at the time of termination purely because an award is referenced in the Employment Agreement.” It was further submitted that other than in respect to the definition clause, the Employment Agreement only referred to the Award in one clause, clause 4.3. Madison Marcus submitted that in the absence of any statutory declaration or affidavit evidence about the nature of the work performed by the applicant, the mention of the Award in the Employment Agreement did not establish that the applicant was covered by the Award.

[15] According to the submissions of Madison Marcus, the evidence that had been provided by way of the two affidavits from relevant managers of the employer, established that the work performed by the applicant could not, upon application of the principal purpose test, be found to be subject to the Award. The submissions made by Madison Marcus set out the particular responsibilities and functions that the applicant undertook in his position as a Site Manager, and it was submitted that upon examination of this material, the principal purpose of the position did not meet the definition of “clerical work” so as to come under the coverage of the Award.

[16] In summary, Madison Marcus submitted that the proper application of the principal purpose test would lead to a conclusion that the applicant was a person actually employed to conduct site management functions in the Building and Construction Industry with very limited clerical type duties. Consequently, it was submitted that the applicant was not covered by the Award. Madison Marcus urged that the Commission dismiss the claim for unfair dismissal as it lacked jurisdiction.

Consideration

[17] In this instance, the determination of the question of Modern Award coverage for the purposes of subsection 382 (b) of the Act has involved application of what is described as the principal purpose test. Further, it would appear that the analysis as understood by the principal purpose test, would be necessary in order to satisfy subsection 48 (5) of the Act.

[18] The principal purpose test involves an analysis that has often been adopted as the basis for determination of the question of Award or other industrial instrument coverage. Various decided cases which have applied the principal purpose test can be referred to including; Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387; Brand v APIR Systems Ltd (2003) (PR 938031); City of Wallaroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426; Kingmill Australia Pty Ltd T/as Thrifty Car Rental v Federated Clerks’ Union of Australia, New South Wales Branch (2001) 106 IR 217; and Halasagi v George Weston Foods Ltd[2010] FWA 6503; Kaufman v Jones Lang LaSalle (Vic) Pty Ltd T/A JLL[2017] FWC 2623.

[19] Consequently, the approach to the question of Award coverage in this instance has involved, firstly, an examination of the evidence of the duties performed and responsibilities held by the applicant. Secondly, the evidence of the duties performed and the responsibilities held by the applicant has been assessed so as to determine the principal purpose for which the applicant was employed. Thirdly, the principal purpose of the applicant’s employment has been examined so as to determine whether that principal purpose aligned with the coverage terms of the Award.

[20] It is relevant to note that the principal purpose assessment should include consideration of a variety of factors, none of which are singularly determinative of the outcome. Thus, the principal purpose test can be distinguished from the concept of the substantive role or function of an individual which involves an examination of the actual time that an individual may have occupied performing different tasks, and which ultimately arrives at a determination of the nature of the work based upon that aspect which is performed for the largest proportion of time worked.

[21] There are notable factors which are often relevant to the principal purpose assessment. These factors are not universally applicable but in most cases have some level of significance. Some of the factors which appear to regularly contribute to the determination of the principal purpose for which an employee was engaged include:

● the contents of any job description, person specification or job advertisement
● the level of remuneration assessed against Award levels of remuneration and also considered in the context of remuneration levels within the employing organisation
● the actual time occupied in different duties (a substantive role/function analysis)
● the status and level of the position occupied within the organisational structure
● possession or absence of particular qualifications and whether such qualifications are necessary for the exercise of the primary functions that are performed
● the exercise of authority and direction over others including in particular, the extent of such authority
● the level of importance and relevance of particular duties in the context of the employing organisation’s overall purpose
● the level of decision-making capacity in the context of the employing organisation’s overall operation
● the nature and extent of any role as representative of the employing organisation to third parties

[22] The applicant was employed in a position described as Site Manager. The work of the applicant involved the day-to-day running of a construction project site. This work included; opening and locking of the site; organisation of subcontractors and other site personnel; reporting to management via fortnightly and monthly programming; responsibility for maintaining a safe site; coordination with contract teams and other subcontractors regarding general contract documentation; performing quality assurance checks on works carried out on the site by contractors and other site personnel; maintaining site documentation including drawings and the like; chair weekly coordination meetings with contractors; act as the site contact person and have overall responsibility for the site; draft and coordinate preliminary plans for scaffolding, crane and other construction work; communicate with client, senior management and other stakeholders regarding the status of the project.

[23] The applicant was paid remuneration levels significantly above the highest rates of pay contemplated by the Award.

[24] The applicant held and exercised authority and direction over subcontractors and other personnel who entered the construction site. The applicant made decisions about a variety of aspects of the general conduct of operations on the site.

[25] The applicant occupied a position of some significance within the employer’s operation and was broadly responsible for the overall delivery of a wide range of aspects of the site development. At times the applicant exercised a role as representative of the employer in negotiations and other communications with third parties.

[26] The duties performed and responsibilities held by the applicant have been assessed against the relevant coverage terms of the Award. The relevant coverage terms of the Award involve a combination of clause 4.1, and the definition provided for “clerical work” found in clause 3 of the Award. The relevant Award provisions are set out as follows:

“4.1 Coverage

This award covers employers in the private sector throughout Australia with respect to their employees engaged wholly or principally in clerical work, including administrative duties of a clerical nature, and to those employees. However, the award does not cover:”

and

“3. Definitions and interpretation

“clerical work includes recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard and attending a reception desk”

[27] Having regard for the uncontested evidence of the duties and responsibilities of the work performed by the applicant, the extent to which the applicant engaged in any clerical work as defined in the Award, was, at best, minor or incidental. The position that was advanced by Specialist HR on behalf of the applicant appeared to have mistakenly attempted to translate the reference to a particular term of the Award in the Employment Agreement to represent coverage of the Award.

[28] The primary purpose of the applicant's role was that of a Construction and Building Industry Site Manager. Following analysis of the evidence of the particular work performed and responsibilities held by the applicant, and by way of application of the principal purpose test, the employment of the applicant was not covered by the Award. Although some aspect of the employment of the applicant was derived from a term of the Award by virtue of terms contained in the Employment Agreement, the application of particular terms of the Award does not establish that the Award covered the employment of the applicant.

[29] Consequently, the applicant was not covered by the Award. It was not suggested that any other Modern Award covered the applicant. Further, an enterprise agreement did not apply to the applicant, and his annual rate of earnings exceeded the high income threshold. Therefore, the applicant was not a person protected from unfair dismissal. The s. 382 (b) objection raised by the employer must be upheld, and the application for unfair dismissal remedy must be dismissed.

[30] An Order dismissing the application in accordance with this Decision shall be issued separately.

COMMISSIONER

Final written submissions:

Applicant: 12 October 2017.

Respondent: 26 October 2017.

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<Price code C, PR597697>