Chris Trutwein v Harness Energy Services Pty Ltd t/as Harness Energy

[2015] FWC 1816

[2015] FWC 1816

FAIR WORK COMMISSION

DECISION

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

Chris Trutwein
v
Harness Energy Services Pty Ltd t/as Harness Energy
(U2014/12627)

DEPUTY PRESIDENT SAMS SYDNEY, 7 APRIL 2015

Termination of employment - application for relief from unfair dismissal - hydrocarbons industry - Health Safety and Environment Advisor - high income threshold - whether applicant covered by an Award - ‘principal purpose’ test - applicant’s role not unskilled - applicant not covered by an Award - applicant’s earnings exceed high income threshold - application dismissed.

[1] This decision will determine a jurisdictional objection to an unfair dismissal application, lodged by Mr Chris Trutwein (the ‘applicant’), pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’). Notwithstanding that the respondent, Harness Energy Service Pty Ltd t/as Harness Energy (‘Harness’) raised a second jurisdictional objection, namely, that the applicant was not an employee, but an independent contractor, the parties agreed that the most expeditious course for determining this matter, was for the Fair Work Commission (the ‘Commission’) to determine whether the applicant was covered by an Award, being the Hydrocarbon Industry (Upstream) Award 2010 [MA000062] (the ‘Award’).

[2] This question arises from s 382 of the Act, which sets out the criteria for determining whether a person is protected from unfair dismissal. The section is expressed as follows:

‘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.’

[3] Section 396 of the Act requires the Commission to determine a number of preliminary matters before considering the merits of an unfair dismissal application. Section 396 is in the following terms:

‘396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.’

[4] Mr Trutwein’s unfair dismissal application was made within the 21 days statutory time period, as defined in s 394(2) of the Act (s 396(a)). While the respondent initially claimed to be a small business employer, meaning the engagement of the applicant over 6.5 months raised a further jurisdictional hurdle as to his minimum employment period, this objection was not pressed at the hearing. Consequently, s 396(c) is not applicable. In addition, this is not a case of genuine redundancy (s 396(d)). There is no dispute that the applicant’s earnings exceeded the Act’s high income threshold (at the relevant time, $133,000). His annual earnings were $193,800 based on $950 a day for work performed on 15 days a month over 6.5 months.

[5] The jurisdictional objection was listed for hearing on 20 January 2015. Mr P Hardman, Solicitor, appeared for the applicant and Mr G Pinchen, Solicitor, appeared for the respondent. Both parties were granted permission to be legally represented, pursuant to s 596 of the Act.

THE EVIDENCE

[6] A number of tendered documents are relevant to the issue to be determined by the Commission. The applicant was first engaged by the respondent on 24 February 2014 as a Health, Safety and Environment Advisor (HSE Advisor). His letter of offer was in the following terms:

‘Dear Chris,

We are very pleased to offer you the position of HSE Advisor.

Your employment with Harness Energy is to commence on or around 25 February 2014. This is subject to change on notification from the client. Should this date change you will be notified of the changes immediately.

Please find enclosed in this letter the following documents:

● Employment Agreement setting out the terms and conditions of employment. Please read this information carefully and if you choose to accept this offer, please sign and return a copy to us;
● Fair Work Information Statement;
● Personal details form; and
● Superannuation Choice Form; and
● Position description.

We look forward to having you join the team.

Should you have any questions, please do not hesitate to contact me.’

[7] The applicant attached three identical employment agreements to his statement. The first was unsigned, because the named employee was incorrect. The second was signed by the applicant. The third agreement, sent on 6 March 2014, arose as a result of a claim by the respondent that the applicant was being paid at the wrong daily rate ($1,155 a day should have been $950 a day). While the applicant could not recall signing the third agreement, it would appear he reluctantly accepted the reduction in the daily rate. The new figure was set out in the new agreement.

[8] Relevantly, cl 2 describes the applicant’s position as follows:

2. Position

2.1 You will be employed on a casual basis as a HSE Advisor.

2.2 Throughout the duration of this Agreement, you may be employed as and when required by the Employer for specified periods of employment that are non-continuous. Each single period of employment shall be separate from other periods of employment. The duration of each period of employment may vary pending operational requirements.

2.3 Your employment will be governed by the Hydrocarbons Industry (Upstream) Award 2010 (“the Award”), as amended from time to time.

2.4 Due to the nature of the industry, the Employer makes no commitments that you will continue to be engaged on a long-term basis or that you will be provided with ongoing employment. Your employment will terminate at the end of each shift for which you are engaged.

[9] Clause 6 details the applicant’s remuneration in the following way:

6. Remuneration

6.1 You will be paid as a casual employee on a composite daily rate in accordance with the Award. This rate includes a 25% casual loading in order to compensate you for not receiving the leave entitlements that would be paid to a full-time or part-time employee.

6.2 Your composite daily rate will be paid at an indicative rate as per the schedule below. The full day rate only applies whilst working in the field and is subjected to taxation. This amount may differ from site to site; dependable on which position you are accepted for by the client. Should there be any changes to your rate, you will be notified of the changes immediately.

6.3 You agree that the composite daily rate outlined above compensates you for certain, applicable entitlements that are outlined in the Award, namely: -

6.3.1 Clause 15 - Allowances;

6.3.2 Clause 24 - Overtime and penalty rates.

6.4 You agree that this Agreement operates in conjunction with the provisions of the Award and that this Award shall apply to the extent of any inconsistency.

6.5 Remuneration for travel days is covered by the Hydrocarbon Industry Upstream Award 2010and shall operate together with the policy of the Client or Customer.

HSE Advisor	$950.00
Training and Office Rate (at Client premises and upon approval of the Client)
HSE Advisor	$567.63
Use of own Vehicle (only payable on days of travel from point of hire to site and return)	$149.00

[10] Clause 8 dealing with Modern Award Flexibility states:

8. Modern Award Flexibility

8.1 Your daily rate includes an all purpose industry allowance of 5.96% of the standard rate (as outlined in the Award) per week. The industry allowance recognises and is in payment for all aspects of work in the industry, including but not limited to the location and nature of hydrocarbons operations, dislocation, clothing, boiler cleaning, dirt, wet, height, fumes, heat, cold, confined space, and all other disabilities not expressly dealt with under this clause.

The Hydrocarbons Industry (Upstream) Award 2010

[11] The coverage clause (clause 4) of the Award is expressed in detailed terms, including exclusions. I set out the clause in full below:

4. Coverage

4.1 This industry award covers employers throughout Australia who are engaged in the hydrocarbons industry in respect of work by their employees engaged in the classifications listed in this award, to the exclusion of any other modern award.

4.2 Definition of hydrocarbons industry

For the purposes of this clause, hydrocarbons industry means:

(a) the exploration and/or drilling for hydrocarbons by use of on and offshore drilling rigs or platform drilling rigs or any other means;

(b) the preparatory work and development of an oil or gas field, including well servicing, and decommissioning of hydrocarbon facilities;

(c) the extraction, separation, production and processing, piping, storage, distribution and transport (including handling or loading facilities) of hydrocarbons;

(d) provision of services incidental to the activities set out in clause 4.2(a) to (c) above, including:

(i) provision of clerical and administrative, warehousing, stores and materials, medical, laboratory, utility or general services, or platform services at a location where the activities in clause 4.2(a) to (c) above are being performed;

(ii) provision of catering, cleaning and accommodation services where owned or operated by an employer engaged in the activities set out in clause 4.2(a) to (c) above at a location where the activities in clause 4.2(a) to (c) above are being performed;

(iii) provision of supply base services owned or operated by an employer engaged in the activities set out in clause 4.2(a) to (c) above;

(e) the commissioning, servicing, maintaining (including mechanical, electrical, fabricating or engineering and preparatory work) modification, upgrading or repairing of facilities, plant and/or equipment used in the activities set out above by employees principally employed to perform work on an ongoing basis at a location where the activities described above are being performed; or

(f) the provision of temporary labour services used in the activities set out in clause 4.2(a) to (e) above, by temporary labour personnel principally engaged to perform work at a location where the activities described above are being performed.

4.3 Exclusions

This award does not cover:

(a) employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees;

(b) employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees;

(c) an employee excluded from award coverage by the Act;

(d) employers in respect of their operations or activities in the following industries or occupations:

(i) employees principally engaged as maritime officers, maritime engineers, ratings and catering crew on any vessel used in offshore hydrocarbon operations (including but not limited to any propelled or non-propelled vessel used in navigation, construction or drilling, ship, barge, drilling vessel, rig, crane vessel, floating production facility, tug boat, support vessel, supply vessel, stand-by/emergency vessel, pipe laying vessel, diving support vessel, lighter or like vessels);

(ii) refining hydrocarbons including crude oil, petroleum and petro-chemical products and manufacture of hydrocarbon-based products;

(iii) transportation, storage, distribution, marketing and sale of products produced in clause 4.3(d)(ii) or finished hydrocarbons products, including operations at bulk liquid terminals, refineries, airports and depots;

(iv) information technology professionals, professional engineers, geologists and scientists;

(v) security, catering, cleaning and accommodation services (unless employed by an employer engaged in the hydrocarbons industry or related company); or

(vi) aviation industry; or

(e) employers in respect of their operations or activities covered by the Manufacturing and Associated Industries and Occupations Award 2010, except for work covered by clause 4.2 above.

4.4 This award covers employers which provide group training services for apprentices and trainees engaged in the industry and/or parts of industry set out at clause 4.1 and those apprentices and trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. This subclause operates subject to the exclusions from coverage in this award.

4.5 Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an award with occupational coverage.

[12] The applicant argued that he was covered by Classification B.2.1 - Hydrocarbon Industry Services Employees. This classification is defined as follows:

B.2.1 Hydrocarbons Industry Services Employees

A Hydrocarbons Industry Services Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to: clerical and administrative duties; labouring; assisting drilling and processing employees, and tradespersons; rigging, scaffolding; cargo-handling, operation of plant and equipment; maintenance work on plant, equipment or buildings; performance of general plant, stores and materials, workshop, warehouse and packaging tasks; performance of first aid; preparing and cleaning equipment and materials; and on site catering, accommodation, cleaning and security.

[13] The following persons provided written and oral evidence in the proceedings:

• Ms Alanna Fitzpatrick, Solicitor for the respondent;



• Ms Vanessa Kavanagh, General Manager, People for the respondent; and



• the applicant.

[14] While there is some overlap, I will not refer to, or consider the evidence dealing exclusively with matters relevant to whether the applicant was an independent contractor or an employee. Of course, if he was covered by the Award, it may point to him not being an independent contractor.

The applicant

[15] The applicant holds the following qualifications: Diploma Occupational Health and Safety and Certificate IV Training and Assessment. He is currently working towards a Masters Degree of Occupational Health and Safety.

[16] The applicant claimed that when he was told his daily rate was to be reduced, he had little bargaining power. It was presented by Ms Kavanagh on a ‘take it or leave it’ basis. In mid-March 2014, he requested that he be paid through his existing ABN, which covers a partnership between the applicant and his wife and has been in place since 2005. He claimed Ms Kavanagh did not explain to him whether this change would alter his legal position in respect to his workplace rights and protections. The applicant could not recall receiving a new contract to reflect this change. The applicant believed he was in an employment relationship with Harness Energy and seconded to work for Origin Energy (‘Origin’).

[17] The applicant worked full time, 12 hours a day, on a fly in/fly out rotating roster of two weeks on and two weeks off. He was paid travel days at the beginning and end of each cycle and for additional training days. He was required to submit monthly time sheets to Origin and Harness Energy and invoice Harness Energy for days worked. While being paid GST, he was not paid superannuation, annual leave, sick pay or RDOs. He said that his work conditions were directed by Origin.

[18] The applicant described his duties as follows:

‘In my duties with Origin Energy I was providing Health and Safety support across multiple sites. The sites were drilling sites that are on either Origin owned land, or land that Origin has gas exploration rights by permit from the Government. The sites were managed by an Operating Company Representative (OCR), who was an Origin employee or contracted OCR. The drilling operations were being performed by contracted drilling companies. These companies were Savanna Energy Services, Ensign Energy, TDC Drilling, Atlas Drilling and Dynamic Drilling. There were up to 27 functional sites at any given time. Some drill sites were occupied for 4 to 5 days, other for weeks, dependant on the actual nature of the operation at the time. I worked from a mobile office trailer that was attached to a Savanna Energy Services rig camp. This trailer had single mans accommodation and a full office with internet service. This facility was provided by Origin Energy.’

[19] In oral evidence, the applicant said he had never received the job description, which was referred to in Ms Kavanagh’s statement, until these proceedings. He had asked Origin for a job description, but could not recall if he had asked anyone from Harness Energy. The applicant further explained his usual duties as follows:

‘Thank you. Now, I want to clarify, and I think this is the key to the matter, Mr Trutwein, is the question is in basic terms. Can you inform his honour what you do each day?---On a daily basis, 12 hour shift, 6 am to 6 pm, my role was providing support services to drilling rigs on the Origin APLNG project. Generally I do a rig visit every day conducting audits, assurance audits, I would sit in and watch over or supervise incident investigations which were being conducted by the contractor companies, and just give any assistance to the
well-site representative, the Origin manager on-site.

Now, when you conduct the audit, who provides the audit sheets?---Origin Energy, particularly Origin would.

When you pick up something that is not right, what do you do?---I would raise it with the well-site representative who is the on-site safety manager on each joint lease.

And if there is something that is technical, what do you do?---If it was technical information in relation to drilling operations, I would talk to a technical expert which was usually the well-site representative.

Do you have any people that report to you?---No.

Who takes decisions in reference to your workplace?---The Origin health and safety team leader or the well-site representative on the drilling site.’

[20] For the majority of the applicant’s working life, he was a Police Officer. He had been recruited for the HSE position after a phone discussion with Ms Marie Brannigan, the respondent’s People Manager. His technical experience was as a Field Health and Safety Officer with Weatherford and as a rig labourer for a year in 2008. He did not believe that he had a particularly extensive knowledge and if there was anything complicated or out of the ordinary, he would consult with Origin’s Well Site Manager or Site Manager. He had not managed workplace safety, environment and compliance, but had a basic support role. In contrast, a high level of discretion and independent judgement was the responsibility of the onsite Health and Safety Manager.

[21] In cross examination, the applicant said he had used a mobile van as accommodation and to travel between various rig sites. He did not conduct or review risk assessments, but he would sit in on these assessments.

[22] The applicant agreed he had knowledge of the Petroleum & Gas (Production and Safety) Act 2004 (Qld) the Work Health and Safety Act 2011 (Qld), relevant regulations and industry codes of practice and Australian Standards. His role was to advise on and support the site management about these matters. This role included ordering documents, providing support in relation to accident investigation and researching and advising on relevant legislation and compliance.

[23] It was the applicant’s evidence that he had complained to management about the other HSE Advisor who undertook his role on the alternative two weeks when he was off roster. He was concerned that this person had misrepresented his qualifications and experience in the industry and fell short of what was required in the position description of Origin. He believed the person did not have five years experience (as required), whereas he had the experience. The person was not sufficiently experienced or qualified to be a member of the Safety Institute of Australia. He was also concerned with complaints about this person’s ‘people skills’, whereas the applicant claimed he had very good ‘people skills’ after 19 years as a Police Officer. In addition the applicant had said:

‘...after a recent incident investigation that Angus had conducted, it came to my notice that he had potentially coerced witnesses to change their statements. Further to this, Angus had represented himself to rig personnel as Origin's investigations specialist.’

[24] The applicant was referred to his CV, which stated the following:

‘Senior Level Executive - HSE Management

~ Health and Safety Management ~ Emergency Response Management ~Safety Training ~

Technically sophisticated and business-savvy professional with 12+ years of experience in occupational health and safety, and environmental management. Progressive leadership experiences have created a passion for maintaining safe and healthy work environments.

Team leader with impressive communication skills, superior people management and analytical abilities and a flair for motivating and building competencies of employees. Can accomplish multiple priorities within aggressive timelines and solve problems effectively.

Computer Skills: Microsoft Windows 7, MS Word/ MS Word/ Excel/ Outlook

Signature Strengths

Risk management/ mitigation - safety risk assessments, ICAM incident investigations, and safety audits
Development and implementation of safety and emergency management plans
Deployment of safety management systems
Training management - needs analysis, strategy
Development, and workshop design and delivery
Contingency planning
Compliance management
Conflict management
Change management
Job safety analysis, Safe Work practices
Operations documentation
Advanced first aid
Leadership and team building/ mentoring
Stakeholder relationship management
Analytical troubleshooting’

[25] As a Police Officer, the applicant was also Chairman of his Local Area Command Health and Safety Committee. Despite all his experience and expertise, the applicant said he was not required to call on his expertise. His role basically entailed a ‘tick and flick’ exercise. However, he conceded his experience as a Police Officer assisted in investigations and reviewing witness statements. Even so, most of this work was undertaken by other work and safety advisors.

[26] The applicant insisted his role was a clerical or administrative semi-skilled role. He agreed he had moved between sites working autonomously with direction from a Team Leader in Brisbane, who he saw about once every three months.

[27] In re-examination, the applicant believed that base labourers on the rigs were paid up to $130,000-$140,000 a year. He agreed that while his resume was impressive, he had not actually performed the roles in it when he worked for Harness.

For the respondent

Ms Alanna Fitzpatrick

[28] Ms Fitzpatrick, as the respondent’s solicitor, gave evidence in respect to a search she had undertaken of an Australian Bureau of Statistics (ABS) document of Australian and New Zealand Standard Classification of Occupations 2005 (ANZSCO). Specifically, Ms Fitzpatrick sought links to the words ‘health, safety, environment and advisor’. She had found a result of Unit Group 2513 Occupational and Environmental Health Professionals.

[29] This result disclosed an indicative skill level in Australia and New Zealand as described below:

‘Most occupations in this unit group have a level of skill commensurate with a bachelor degree or higher qualification. In some instances relevant experience and/or on-the-job training may be required in addition to the formal qualification (ANZSCO Skill Level 1)

Registration or licensing may be essential.’

[30] The tasks identified were:

‘ developing, implementing and reviewing environmental health management plans and occupational health and safety plans

• preparing and implementing plans and strategies for the safe, economic and suitable disposal of commercial, industrial, medical and household wastes



• advising on and enforcing legislation, implementing prevention programs and strategies for communicable diseases, food safety, waste water treatment and disposal systems, recreation and domestic water quality, contaminated and hazardous substances and minimising air, sea, water and noise pollution to improve health outcomes



• identifying hazards, and assessing and controlling risks in the workplace



• developing, implementing and monitoring programs minimising workplace and environmental pollution involving chemical and physical hazards



• promoting ergonomic principles within the workplace such as matching furniture, equipment and work activities to the needs of employees



• inspecting and auditing workplaces, processes, plant, and chemical and physical hazards for legislative compliance



• training employees in personal protective equipment and safe working procedures



• recording and investigating injuries and equipment damage, and reporting safety performance



• coordinating the return of injured workers into the workplace’

Ms Fitzpatrick believed that this role aligned with the applicant’s role of HSE Advisor.

[31] The ABS identifies five skills levels and at Skill Level I states:

‘Occupations at Skill Level 1 have a level of skill commensurate with a bachelor degree or higher qualification. At least five years of relevant experience may substitute for the formal qualification. In some instances relevant experience and/or on-the-job training may be required in addition to the formal qualification.’

[32] In cross examination, Ms Fitzpatrick said that to assist her research, she had relied on the position description attached to Ms Kavanagh’s statement. She acknowledged that she had not conducted any independent investigation of what the applicant’s duties actually were in the field.

Ms Vanessa Kavanagh

[33] Ms Kavanagh’s statement set out the chronology of events leading to the applicant’s engagement by Harness. Ms Kavanagh said that the first employment agreement sent by Ms Brannigan to the applicant on 21 February 2014 was a standard template, used for all employees engaged by Harness in oil and gas roles. She claimed that any reference to the Modern Award in the template was not an indication that the Award applied to the specific person, but was merely a standard template.

[34] Ms Kavanagh confirmed the offer of two further agreements to the applicant as described earlier in paragraphs [7] and [8].

[35] Ms Kavanagh said the applicant worked fifteen days a month and was paid travelling time on either side of his rotation. He worked an average of 17 days a month, with a daily rate of $950 and an average full time rate of earnings of $193,800. A copy of the applicant’s position description is annexed to this decision and marked as ‘Annexure A’.

[36] In summary, Ms Kavanagh described the HSE Advisor role as:

‘A HSE Advisor position is a technical professional role, requiring extensive knowledge and practical experience managing workplace safety and environmental compliance. An HSE Advisor is required to consider complex and unpredictable situations and form conclusions on the basis of their technical skills and abilities. A high level of discretion and the exercise of independent judgement are required along with the ability to make decisions about matters with significant consequences.’

[37] Ms Kavanagh gave oral evidence by phone as she was at that time on maternity leave. She confirmed that she had been the respondent’s General Manager for the past twelve months.

[38] In cross examination, Ms Kavanagh said that she was aware of the recruitment of the applicant, but had not been directly involved. She accepted that he may have been interviewed over the phone. She agreed that applicants for a job would sometimes exaggerate their résumé. She said that Ms Brannigan would have accepted, as a former police officer, with prior experience as a health and safety professional, that the applicant was suitable for the position.

[39] It was Ms Kavanagh’s evidence that while the three employment agreements sent to the applicant referred to the Award, the documents were derived from a standard template that was varied according to the particular arrangements with a specific employee. The template agreement is offered to all persons, whether they are riggers or managers. She did not believe the applicant had been thinking about the Award at all. She believed, after extensive conversations with herself and Ms Brannigan, that the applicant was very much aware of his rights and responsibilities. She agreed these conversations did not include pointing out to the applicant that he was not covered by the Award. Moreover, the applicant was not engaged under an employment contract, but a contractor contract (as a subcontractor to Origin). This contract was because the applicant wished to be paid as a contractor. It was an oversight that the applicant had not signed it. She believed there was a fourth unsigned contract (it had not been provided).

[40] As to what the applicant actually did in the field, Ms Kavanagh conceded she had not personally been in the field, but she certainly spoke to Origin and the applicant’s supervisor once each day.

SUBMISSIONS

For the applicant

[41] The applicant’s submissions as to his alleged Award coverage were relatively brief and I quote them as follows:

‘31. The Applicant’s third contract clearly indicates at clause 2.3 that the Applicant is covered by the Award: “Your employment will be governed by the Hydrocarbons Industry (Upstream) Award 2010 (“the Award”), as amended from time to time.”

32. The Applicant’s third contract further stipulates in clause 6.1 that “remuneration rates are calculated in accordance with the Award,” and in clause 6.3 that the Applicant’s daily rate compensates the Applicant for Award-bases entitlements, namely allowances and overtime and penalty rates. Clause 6.5 indicates that payment for travel days is also Award-based. In clause 6.4 that “this Agreement operates in conjunction with the provisions of the Award and that this Award shall apply to the extent of any inconsistency.”

33. The Award’s coverage provision stipulates as follows:

4. Coverage
4.1 This industry award covers employers throughout Australia who are engaged in the hydrocarbons industry in respect of work by their employees engaged in the classifications listed in this award, to the exclusion of any other modern award.

34. We submit that the Applicant’s employment complies with the Classification Group of a Service Employee, wherein he performed all tasks as directed by his employer which include but are not limited to clerical and administrative duties:

B.2.1 Hydrocarbons Industry Services Employees
A Hydrocarbons Industry Services Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to: clerical and administrative duties; labouring; assisting drilling and processing employees, and tradespersons; rigging, scaffolding; cargo-handling, operation of plant and equipment; maintenance work on plant, equipment or buildings; performance of general plant, stores and materials, workshop, warehouse and packaging tasks; performance of first aid; preparing and cleaning equipment and materials; and on site catering, accommodation, cleaning and security.

35. The Applicant is therefore protected from unfair dismissal.’

For the respondent

[42] The respondent obviously conceded that the applicant’s contracts state that his employment would be governed by the Award, as amended from time to time. However, it was submitted that the words in the contract cannot change the substantive position at law. The Award must cover the employee or ‘the Award applies to the person’ (ss 47 and 48 of the Act).

[43] It was further submitted that the Award must apply of its own force and volition under the coverage terms expressed in the Award. Employers and employees cannot simply ‘opt into’ the coverage of an Award where the Award itself is not expressed to cover the employee. To the extent that the applicant relied on the words of his 24 February 2014 contract to determine Award coverage, this was misplaced and without foundation. Ms Kavanagh’s statement as to the use of a standard template agreement, did not answer whether the employee was covered by the Award or not. This question must be assessed objectively, without reference to the contract between the parties.

[44] The respondent submitted that the coverage clause (cl 4.1) identifies two elements for determining whether the Award covered the applicant:

1. The employer is engaged in the hydrocarbons industry (This is conceded); and

2. The employee was engaged under a classification in the Award (This is disputed).

[45] As the applicant claimed he was engaged under the Hydrocarbon Industry Services Employee group in that his duties, included, but were not limited to clerical and administrative duties, the respondent put that the applicant must fit within one of the three structures under that group, being:

B.3.1 Entry Level;

B.3.2 Level 1 - Basic; or

B.3.3 Level 3 - Intermediate.

[46] ‘Intermediate’ is defined as follows:

‘An employee at this level will have been assessed as being competent to carry out semi-skilled work on a broad range of plant and equipment functions. The employee exercises discretion within their level of skill and is responsible for the quality of the work subject to routine supervision.’

Assessing the classification issue requires the Commission to consider the ‘principal purpose’ test. See: Faulder v Lanteri Partners Financial Management Pty Ltd T/A Lanteri Partners Group[2012] FWA 4801, Hehir v Schweitzer Engineering Laboratories Pty Ltd [2011] FWA 3763 (‘Hehir’); Brand v APIR Systems Limited [PR938031](‘Brand’) and Carpenter v Corona Manufacturing Pty Ltd [PR925731].

[47] The respondent also relied on s 143(7) of the Act, which provides as follows:

‘143 Coverage terms of modern awards other than modern enterprise awards and State reference public sector modern awards

...

Employees not traditionally covered by awards etc.

(7) A modern award must not be expressed to cover classes of employees:

(a) who, because of the nature or seniority of their role, have traditionally not been covered by awards (whether made under laws of the Commonwealth or the States); or

(b) who perform work that is not of a similar nature to work that has traditionally been regulated by such awards.

Note: For example, in some industries, managerial employees have traditionally not been covered by awards.’

[48] The respondent submitted that the role and duties of the applicant as a Health Safety and Environment Advisor, include the following:

(a) Providing support and assistance to the Drilling and Completion teams on HSE matters;

(b) Developing and implementing HSE policies and procedures, HSE training programs and Emergency and Medical Response procedures;

(c) Monitoring all HSE performance and compliance;

(d) Implementing the HSE management systems and compliance with legislative obligations;

(e) Implementing HSE improvements;

(f) Ensuring HSE data is collected, analysed, tracked and reported according to internal procedures and regulatory requirements;

(g) Providing technical advice on HSE matters and analysing data to identify and trend emerging health and safety issues;

(h) Implementing and monitoring Safety and Environmental Management plans, Emergency Response plans and associated systems and procedures;

(i) Performing reviews and audits of HSE compliance;

(j) Undertaking investigations into safety incidents; and

(k) Providing coaching and mentoring on all health and safety activities.

[49] In his statement, the applicant admitted that: ‘In my duties with Origin Energy I was providing Health and Safety support across multiple sites’, and ‘I was generally responsible for providing Health and Safety support to Drilling Field Superintendents, Site Operator Company Reps (OCRs), facilitate and assist with incident investigations.’ Relevantly, it was said, the applicant made no mention of performing clerical or administrative duties. He did not perform such duties.

[50] The respondent submitted that on the application of the ‘principal purpose’ test, the applicant was engaged in providing occupational health, safety and environmental services. It was said that the applicant’s position was a technical professional role, requiring extensive knowledge and practical experience. He was required to consider complex and unpredictable situations and form conclusions on the basis of his skills and abilities. It involved a high level of discretion and the exercise of independent judgement. On a drilling site, the HSE Advisor has a critical role requiring a comprehensive knowledge of safety legislation, practices and procedures, including strong written and oral communications skills and problem solving ability.

[51] It was further submitted that the Award classifications do not reflect the duties the applicant had performed. The scope, importance and seniority of the applicant’s role far exceeded the narrow scope of clerical and administrative duties. The applicant’s position did not fall within any of the classifications in the Award. The mere fact the applicant may have performed duties incidental to clerical work (such as responding to emails or answering the phone) does not indicate the ‘principal purpose’ of the applicant’s duties.

[52] The respondent further submitted that even at its highest, the minimum weekly Award rate for a Level 2 employee is $724.10 compared to $950 a day paid to the applicant.

[53] Finally, it was submitted that the nature and seniority of the role of occupational health and safety professionals have not historically been covered by the Award. The role was akin to a HR Manager requiring specialised and technical skills. Further, the profession is one that is not new or emerging, so as to have not been considered during the Award Modernisation Process.

CONSIDERATION

[54] While I accept that the respondent uses a standard template for all its employees and contracts, which makes reference to the Award not once, but a number of times, I am prepared to accept Ms Kavanagh’s evidence that the template does not actually reflect the contractual arrangements the respondent has with its senior employees or contractors. In this case, the applicant not only received three such contracts, but it appears he wished to use his own ABN as a means to alter his contractual terms with the respondent and ultimately as a subcontractor with Origin.

[55] While the terms of an employment contract are usually indicative of what the parties intend by the offer and acceptance of these terms, a person’s employment or engagement can only be assessed by reference to the work performed and the nature of that work. This is particularly so where there is a dispute about whether a senior person is covered by a Modern Award according to that instrument’s coverage and/or classifications. In my opinion, the use of a template document might be convenient, but it does have the potential for creating the difficulties evidenced in this case. The respondent might reconsider the utility of using standard templates for its senior employees.

[56] The relevant statutory provisions which are applicable to this matter are to be found at ss 46-48 of the Act. These provisions provide as follows:

‘46 The significance of a modern award applying to a person

(1) A modern award does not impose obligations on a person, and a person does not contravene a term of a modern award, unless the award applies to the person.

(2) A modern award does not give a person an entitlement unless the award applies to the person.

47 When a modern award applies to an employer, employee, organisation or outworker entity

When a modern award applies to an employee, employer, organisation or outworker entity
(1) A modern award applies to an employee, employer, organisation or outworker entity if:

(a) the modern award covers the employee, employer, organisation or outworker entity; and

(b) the modern award is in operation; and

(c) no other provision of this Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity.

Modern awards do not apply to high income employees
(2) However, a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) at a time when the employee is a high income employee.

Modern awards apply to employees in relation to particular employment
(3) A reference in this Act to a modern award applying to an employee is a reference to the award applying to the employee in relation to particular employment.

48 When a modern award covers an employer, employee, organisation or outworker entity

When a modern award covers an employee, employer, organisation or outworker entity
(1) A modern award covers an employee, employer, organisation or outworker entity if the award is expressed to coverthe employee, employer, organisation or outworker entity.’

[57] I also accept that s 143(7) of the Act is also relevant to this case. Its terms are as follows:

‘Employees not traditionally covered by awards etc.


(7) A modern award must not be expressed to cover classes of employees:

(a) who, because of the nature or seniority of their role, have traditionally not been covered by awards (whether made under laws of the Commonwealth or the States); or

(b) who perform work that is not of a similar nature to work that has traditionally been regulated by such awards.’

[58] It will be seen from a clear reading of these provisions that a person cannot claim an entitlement, nor can an award impose an obligation on that person, unless the award ‘applies to that person’. The respondent argued that an employee cannot ‘opt into’ an Award, merely by expressing an intention to do so, or by signing a contract to that effect, where the Award itself is not expressed to cover the employee. In other words, a contract, agreement or letter of appointment cannot, as a matter of law, purport to apply to an employee when the Award does not cover that employee. I agree with this submission.

[59] In my view, that disposes of the applicant’s argument that his contract of employment expressly stated that his employment was governed by the Award. It could not do so, if he was not covered by the Award. But it does not necessarily answer the wider question as to whether the Award covered the applicant. It is to that matter that I now turn.

[60] An important, but not exclusive, consideration in this case is for the Commission to apply the ‘principal purpose’ test. The application of this test is consistent with the authority of this Commission when determining whether or not a person is employed under a Modern Award. In Brand, a Full Bench of the Australian Industrial Relations Commission (AIRC) said at paras [13] and [14]:

‘[13] We note that the Commissioner adopted and applied a test based on the principal purpose for which the applicant was employed. She relied upon the Full Bench decision in Carpenter v Corona Manufacturing Pty Ltd in that respect An analysis of the authorities referred to in that case shows that industrial courts and tribunals have at different times adopted different formulations of the test to be applied in determining whether the work of an employee or group of employees is within a particular occupation or classification. One formulation requires that the question should be decided by reference to the major and substantial employment of the employee. Another formulation requires that the principal purpose or purposes of the employment be identified. In some cases the formulations have both been referred to. In one case a Full Bench of the Commission held that the principal purpose formulation was a refinement of the major and substantial employment formulation. A Full Court of the Federal Court of Australia, without reference to other authorities, adopted a test based on whether the employees were "engaged substantially" in the duties of the relevant occupation.

[14] In this appeal both parties accepted that the "principal purpose" formulation as stated in Carpenter v Corona Manufacturing Pty Ltd should be applied. We are content to decide this application on that basis. We should add, however, that we are satisfied that whichever of the formulations referred to might be applied, in this case the result would be the same [footnotes omitted].’

[61] Brand was referred to by a Full Bench of Fair Work Australia (FWA, as the Commission then was) in McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting[2012] FWAFB 7184, which stated at para [11]:

‘[11] As already suggested above, her Honour approached the determination on the basis of whether or not the Appellant was employed in the above classification by reference to the principal purpose test as articulated in the Full Bench decision of the Australian Industrial Relations Commission (as it then was) in R Brand v APIR Systems Limited. That decision, in turn, cited the decision of the Full Bench of the Australian Industrial Relations Commission (as it then was) in Carpenter v Corona Manufacturing Pty Ltd, which stated relevantly as follows:

In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed. In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not "employed in the process, trade, business or occupation of ... soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials" and was not, therefore, covered by the Award [footnotes omitted]. 

[62] Cloghan Cusefully set out the test in Hehir, where at para [34], the Commissioner said:

‘[34] To determine whether an employee is employed in a classification in the Modern Award, it is necessary to apply the “principal purpose” test. The “principal purpose” test can be addressed by determining what was the most important intention of the employer in requiring the functions of the position to be carried out by the employee. In answering such a question, it is appropriate to examine the job description, the nature of the work performed and any relevant circumstances surrounding the performance of the duties by the employee. By their nature, job descriptions cannot detail all the functions of a position. Further, time spent on tasks, functions and responsibilities evolve as people, business, systems and technologies come together. While such factors may change the duties and responsibilities, the principal purpose of the position generally retains steadiness.’

[63] I intend to adopt these principles to the facts and circumstances of this case, by particular reference to the intention of the employer requiring the functions of the position to be carried out by the applicant.

[64] In my view, the applicant seriously downplayed his duties and responsibilities to little more than a clerical role which involved a simple ‘tick and flick’ exercise of documents. This downplaying is difficult to reconcile with his own view of his skills and experience, as disclosed by his impressive resumé and his evidence concerning the lack of experience and personal skills of his fellow rotation HWE Advisor, about which he was very critical. It is also inconsistent with the details of his job description and role, which I am satisfied the applicant was well aware of, even if one accepts he had not seen a copy of. I repeat the first two paragraphs of the applicant’s resume to demonstrate this inconsistency:

‘Senior Level Executive - HSE Management

~ Health and Safety Management ~ Emergency Response Management ~Safety Training ~

Technically sophisticated and business-savvy professional with 12+ years of experience in occupational health and safety, and environmental management. Progressive leadership experiences have created a passion for maintaining safe and healthy work environments.

Team leader with impressive communication skills, superior people management and analytical abilities and a flair for motivating and building competencies of employees. Can accomplish multiple priorities within aggressive timelines and solve problems effectively.’

[65] As an aside, I find it intriguing, that in many unfair dismissal cases, the dismissed employee will tell me that he/she was an invaluable asset to the employer. The dismissed employee often cites an extensive range of skills and wide experience in order to challenge the basis for their dismissal. Yet, in this case, a senior employee, being paid well above the high income threshold, contends that he was covered by a Modern Award and argued he was really just an unskilled worker with little independent discretion or responsibility in his job. The objective evidence does not bear this out.

[66] To the extent that the applicant was engaged in any industry, in my view it was the workplace health, safety and environment industry, not the hydrocarbon industry. The applicant has a Diploma of Occupational Health and Safety and is working towards a Masters Degree in Occupational Health and Safety. He is a Member of the Safety Institute of Australia. These specific and high level qualifications are applicable to any industry and can be transferable from industry to industry as his own history of employment demonstrates. My conclusion as to the industry the applicant was engaged in, is supported by the application of the ‘principal purpose’ test.

[67] It seems clear that health and safety professionals have never been historically covered by awards; See s 147(7) of the Act. There was no evidence to demonstrate a contrary position. I accept that the duties of the applicant included:

(a) The provision of support and assistance to the Drilling and Completion teams on HSE matters;

(b) The development and implementation of HSE policies and procedures, HSE training programs and Emergency and Medical Response procedures;

(c) The monitoring of all HSE performance and compliance;

(d) The implementation of the HSE management systems and compliance with legislative obligations;

(e) The implementation of HSE improvements;

(f) Ensuring that HSE data was collected, analysed, tracked and reported according to internal procedures and regulatory requirements;

(g) The provision of technical advice on HSE matters and analysing data to identify and trend emerging health and safety issues;

(h) The implementation and monitoring of Safety and Environmental Management plans, Emergency Response plans and associated systems and procedures;

(i) Performing reviews and audits of HSE compliance;

(j) Undertaking investigations into safety incidents; and

(k) The provision of coaching and mentoring on all health and safety activities.

[68] In my view, in fulfilling these duties, the applicant was required to exercise an extensive knowledge and practical experience in managing workplace safety and environment compliance. The role involves a high level of discretion and the exercise of independent judgement. The classifications in the Award do not, expressly or impliedly, reflect these duties or the nature of the applicant’s work. His duties most certainly did not primarily amount to semi-skilled (clerical) and administrative duties, notwithstanding that from time to time, he was required to complete relevant paperwork. Such duties were incidental to the ‘primary purpose’ of his role.

[69] It was the applicant’s case that he was engaged at Level 2 Intermediate Level of Classification B.2.1. The current minimum wage rate for this classification is $724.10 a week. It was not in dispute that the applicant was engaged at a rate of $950 per day. Even assuming the minimum hourly rate for a 38 hour week was $19.05 and assuming the applicant worked 12 hours per day, the resultant difference between $79.06 per hour and $19.05 per hour is very significant. Without any other consideration, it is difficult to imagine the Award coverage contemplating an hourly rate of $79.16 for ‘semi-skilled work ... subject to routine supervision’. Nor is it consistent with the ABS classifications, which I accept, equate to the applicant’s role and duties to those of a Human Resources Manager.

[70] Finally, on any objective assessment of the tasks under the Hydrocarbons Industry Services Employees classification the notion that a person of the applicant’s skills and experience or the generic role of HSE Advisors, fits neatly in within that group, is at best wishful thinking, or to my mind, quite fanciful.

[71] For all these reasons, I am satisfied that the applicant was not covered by the Hydrocarbon Industry (Upstream) Award 2010 (or any other Modern Award). His annual earnings were above the high income threshold. It must follow that the applicant is not a person protected from unfair dismissal. Accordingly, this application for an unfair dismissal remedy must be dismissed.

[72] An order to that effect will accompany the publication of this decision.

DEPUTY PRESIDENT

Appearances:

Mr G Pinchen, Solicitor for the applicant.

Mr P Hardman, Solicitor for the respondent.

Hearing details:

2015:

Brisbane.

20 January

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