David Faulder v Lanteri Partners Financial Management Pty Ltd T/A Lanteri Partners Group
[2012] FWA 4801
•28 JUNE 2012
[2012] FWA 4801 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
David Faulder
v
Lanteri Partners Financial Management Pty Ltd T/A Lanteri Partners Group
(U2012/6736)
COMMISSIONER LEE | MELBOURNE, 28 JUNE 2012 |
Application for unfair dismissal remedy - jurisdiction - whether applicant covered by a modern award.
[1] This matter was listed for jurisdiction hearing before me on 1 June 2012 in Melbourne. At the conclusion of the hearing I made an ex tempore decision. What follows is a revised and edited version of that ex tempore decision.
[2] This matter involves an application pursuant to section 394 of the Fair Work Act 2009 (the Act) for unfair dismissal remedy. Mr David Faulder (the Applicant) claims that he was unfairly dismissed from his employment with Lanteri Partners Financial Management Pty Ltd T/A Lanteri Partners Group (The Respondent).
[3] The Applicant claims that he is a person protected from unfair dismissal within the meaning of the Act. The Respondent refutes that contention and claims that he is not a protected person. This decision is entirely directed at a determination as to whether or not the applicant is a person protected from unfair dismissal. The relevant provision of the Act is section 382. Section 382 of the Fair Work Act reads 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.
Note: High income threshold indexed to $118,100 from 1 July 2011”
[4] It has not been contested in this matter that the Applicant satisfies subsection 382(a) of the Act. That is, the Applicant is an employee who has completed a period of employment with his or her employer of at least the minimum employment period. It is common ground between the parties that no enterprise agreement applies to the applicant (subsection 382(b)(ii) of the Act) and it is also agreed between the parties that the applicant’s annual rate of earnings was above the high income threshold (subsection 382(iii). Having regard to the agreed position then, the Applicant can only be a person protected from unfair dismissal if a modern award covers him.
[5] The Applicant claims he is covered by a modern award, that being the Banking, Finance and Insurance Award 2010 (the modern award). The Respondent for their part claims that the Applicant is not covered by the modern award. There has been no suggestion by either party that the Applicant is covered by any other modern award, or indeed any other instrument. It is necessary to make a determination then as to whether or not the employee is covered by the modern award.
[6] The first consideration is the law that needs to be applied in reaching a determination in this particular matter. The Applicant referred me to a decision of Commissioner Cloghan which was issued on 27 June 2011, Mr David James Hehir v Schweitzer Engineering Laboratories Pty Ltd. 1 In particular the Applicant took me to that decision to indicate his view that the consideration and the approach I should apply is one where the employer is charged with the onus to demonstrate that the Applicant was not performing the duties that meet the requirement in the modern award and was not covered by the classification structure.
[7] The Respondent did not materially address that particular element of the claim of the Applicant.
[8] The abovementioned decision of Commissioner Cloghan was also relied on by the Respondent, in that it contains a reference at paragraph [34] to the “principal purpose test”. To paraphrase from that paragraph in the decision of Commissioner Cloghan:
“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.” 2
[9] For his part the Applicant did not directly address me on his view as to whether or not that was a relevant principle to be applied.
[10] I can indicate that I consider that both aspects that have been referred to, both by the Applicant and Respondent, are relevant in terms of my consideration. I do think that the “principal purpose test” is one that should be applied when considering matters of this nature. I also have adopted the approach that is urged by Commissioner Cloghan at paragraph 36, that the employer is charged with the onus in the proceedings.
[11] The Respondent in their written submissions referred me to the decision in Norwest Beef Industries Ltd v Australian Meat Industry Employees Union of Workers (WA Branch) 3(Norwest Beef). To quote from the Respondent’s submission, in Norwest Beef, when stating the principles for interpreting industrial instruments Holding J noted, "The first task in every case will be to determine whether the words used are capable in their ordinary sense of having an unambiguous meaning". I agree that that is a relevant consideration when one is constructing the meaning, of an industrial instrument.
[12] However I will also adopt the approach to interpreting industrial instruments that I most recently relied on in my own decision in Australian Rail, Tram and Bus Industry Union and Australian Federated Union of Locomotive Employees v QR Limited T/A Qr National 4(the QR decision), and in particular in that decision paragraphs [23] to [29]. In the QR decision I referred to a number of authorities which summarise the relevant principles that should be applied when interpreting industrial instruments. Those paragraphs are set out as follows;
“The Unions’ drew my attention to the decision of the High Court of Australia in Project Blue Sky Inc & Others v Australian Broadcasting Authority 5in which it was stated that:
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole.”” [Footnotes removed]. 6
QR National drew my attention to the decision of the High Court of Australia in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue 7 in which it was stated that:
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of the legislation is the surest guide to the legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”[Footnotes removed]. 8
The main principles governing the construction of industrial agreements are well set out and discussed in the 2008 decision of Vice President Lawler in Watson & Ors v ACT Department of Disability Housing and Community Services. 9
The consideration of the relevant principles was summarised by His Honour as follows:
“In summary, the general principles governing the construction of contracts laid down by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales apply to the construction of industrial agreements. However, consistent with the approach in Kucks and Short v FW Hercus Pty Ltd, an industrial agreement must always be construed in context: the context of particular provisions within the agreement as a whole and the context in which the agreement was made including any relevant statutory or historical context. Extrinsic evidence as to the context in which the agreement was made, including the statutory and historical context, will be admissible to demonstrate the existence of ambiguity and or to resolve ambiguity.”[Footnotes removed] 10
[13] I will apply those principles as relevant to my consideration and determination in respect to this matter. I will now turn to the submissions and evidence that has been led in this particular case.
[14] I have taken into account all of the evidence but I will refer here to the evidence that is relevant to my consideration and my ultimate determination of this matter. Firstly, it is common ground between the parties that the Respondent company is covered by the modern award. What is at issue, as I have already alluded to, is whether or not the Applicant is also covered by the modern award. Section 48 of the Act provides for when a modern award covers an employer, employee, organisation or outworker entity. Section 48 states;
“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.
Note: In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).”
[15] The Applicant referred me to the coverage clause contained in the modern award at Clause 4, suggesting that he is clearly covered by the award. The coverage clause in clause 4 pertains to the coverage of the award in respect of the industry that it covers. On that point, as I have already alluded to, there is agreement between the parties that the award covers employers including the type of employer that the Respondent is. That does not satisfy the test as to whether or not the Applicant is covered.
[16] The Applicant drew my attention to the fact that the Respondent has a licence which outlines their licensed and registered business and operating activities. There was an attachment to the submissions of the Applicant which was a copy of the Respondent’s AFSL licence which specified their registered and licensed activities. Again, this evidence dealt with the issue as to whether or not the employer is covered by the award, which we have established is common ground.
[17] Attachment B to the Applicant’s submissions was a copy of his employment contract. The Applicant drew my attention to the various places in the contract to which it was referred that the Respondent “solely and explicitly acknowledge FWA and its tribunals for all disputes under [the applicant’s] contract indicating full intention of the respondent to have [the applicant] bound by Fair Work Australia, the Act and all appropriate awards”. 11
[18] Part III of the Applicant's submissions referred to the Respondent not operating in a vacuum or parallel universe. The Applicant attached at Attachment F, information from the Fair Work Ombudsman. The purpose of that was to highlight that the Respondent is most likely to be included by modern awards and not excluded from an award. Then at Part IV of his submissions, the Applicant asserted that that Lanteri Partners are not an excluded organisation under the award, and referred me to supporting evidence attached and marked Attachment C, the modern award highlighting the exclusion section; and highlighted that because Lanteri Partners Financial Management were not specifically excluded in any way, that then the Applicant should be seen to be covered by the award.
[19] The Respondent in their written submissions did not deal directly with whether they as an employer generally fell within the coverage of the modern award. But as I have already alluded to, the Respondent conceded in the course of proceedings that they are covered. Again the question is, is the applicant covered?
[20] The Applicant’s submission on this point is that in his regular duties he is covered under the classification Level 5 or classification Level 6 quite easily by title, duties and responsibilities and it was also stated by the Applicant that he was “not specifically in word or otherwise excluded from this level 5 or level 6 classification". There is further reference to the managerial title and a reference to any of the three titles in classification level 6 covering if required only, but that level 5 is broad and can include and not exclude the role.
[21] The Applicant drew my attention to key words in the Level 5 classification which support the Applicant's contention that the position that he occupied is covered by the relevant modern award. Paragraph 19 referred to the title job description and duties analysis, which is an attachment, and there was a further reference to the organisational structure. The applicant claimed he was not party to any board or director business decision.
[22] Attachment G to the Applicant’s submissions is a table entitled “Job Description and Duties Analysis” which lays out various components of his employment contract which are said to be relevant to a consideration as to whether or not he is covered by the Banking, Finance and Insurance Award 2010.
[23] The Applicant further took me to the case that I have already referred to of Commissioner Cloghan in Mr David James Hehir v Schweitzer Engineering Laboratories Pty Ltd and also directed me to a decision of Commissioner Bissett in Sarah Marie Tauri v Flight Centre Limited. 12
[24] The submissions of the Respondent are whether the Applicant is covered by the modern award as a question of fact, and it involves an analysis of the Applicant's role including his position description and duties when compared to the classification of Level 6 under the modern award.
[25] The submissions of the Respondent describe classification Level 6 as a managerial role - with responsibilities which pertain to the administration and conduct of part of the business.
[26] The Respondent asserts that the Applicant was employed in the position of manager portfolio and funds management, and very relevantly that the Applicant's position description, provided to me in to Schedule 1 of Attachment 2 of their submissions, provides that the applicant was responsible for “[e]stablishing, reviewing and monitoring the performance of the model portfolios for the Lanteri Partners Group (LPG) clients....” and further that he was required to be a “liaison and provide expert advice to other Business Units within LPG” and be an “[a]ctive member of Lanteri Partners Group Investment Committee”.
[27] The Respondent submitted that;
“In his role with the Respondent, the Applicant held a very senior specialist and advisory role and was actively involved in the broader management of the business. This is evidenced by his role in the Lanteri Partners Group Investment Committee and the requirement to advise other business units within LPG.” 13
[28] The Respondent referenced the Applicant's own admissions that he was a senior portfolio manager and that was born out in evidence before me on 1 June 2012. The Applicant noted that he held the next most important role in the company after the managing director and CEO, Mr Lanteri, who also gave evidence in proceedings before me. The submission of the Respondent is that the role the Applicant was performing does not fall within the scope of middle management, nor is the role of the Applicant administrative in character within the ordinary meaning of the word. Rather, he was responsible for all aspects of portfolio funds management within the organisation and was a key adviser to other business units and the company's management team, sole director and shareholders.
[29] The submissions of the Applicant were that the award modernisation process and pre-modern awards were not relevant to a consideration as to determining this matter. I disagree with that. There is some ambiguity and it is relevant to consider, in determining this matter, the history of the development of this particular modern award.
[30] The Respondent asserts in submission that the Award Modernisation Request relevantly provided that the creation of modern awards was not intended to extend award coverage to those classes of employees such as managerial employees who, because of the nature or seniority of their role, have traditionally been award free. There is a reference to two pre-modern awards which applied in the financial and investment services industry in Victoria, The Finance and Insurance Industry Sector - Minimum Wage Order - Victoria 1997 (the 1997 award) and the Finance Industry - Finance Company Employees' Award 2001 (the 2001 award).
[31] It is submitted by the Respondent that neither of those awards cover the Applicant's role and I agree, having examined those awards, that they do not cover the Applicant's role. The Respondent asserts that the 1997 award only covered relatively junior employees performing predominantly clerical functions, or who managed a clerical work group or section, 14 and I agree with that submission. It is also clear that the Respondent was not a respondent to the 2001 award, and having examined that award it was not a common rule award and so did not apply to the Respondent.
[32] On this basis, it is clear that the Applicant would not have been covered by an award prior to the commencement of the modern award on 1 January 2010. The Respondent submits that it is inconsistent with the objects of the award modernisation process and the approach taken by the Commission in drafting the award, to extend award coverage to the Applicant after 1 January 2010 where that position was not previously covered by an award. The Respondent’s summarised the way in which I should approach what the Commission’s intention was in terms of the coverage of the award in their submissions as follows;
“29. As noted at paragraphs 21 to 27 above, it was not within the objects of the award modernisation process or the Commission's intention when making modern awards to cover employees who have not previously been covered by an award, including the Applicant.
30. Further, when making the Award, the Full Bench in the Award Modernisation decision [2009] AIRCFB 50 at paragraph [64] noted that:
"Award covered employees are predominantly engaged in white collar clerical related roles with particular finance industry knowledge andskills." (emphasis added)
31. When making the Award, the Commission clearly had in mind coverage of "white collar clerical related roles".
32. In Federal Clerks' Union of Australia (NSW Branch) v The Australian Workers' Union [1971] AR (NSW) 419 (Federal Clerks Union of Australia), Justice Sheldon was asked to determine the meaning of the words "in a clerical capacity". At paragraph [421] Justice Sheldon stated:
" ... Obviously all employees in an office are not engaged in a clerical capacity. It is clear that professional employees are not nor are those who are truly and basically executive officers." (emphasis added)
33. The Applicant's role is more akin to a professional, specialist or executive role, rather than a clerical role.
34. Further, in Ross Walker v Perpetual Trustees Australia Limited (PR950452) (Walker), at paragraph [23] Commissioner Lewin referred to Justice Sheldon's statement in Federal Clerks' Union of Australia, and in the context of the Insurance Industry Award 1998 (Insurance Award) (which was a reference instrument for the Award) said:
"In my view the same sentiments [in relation to defining clerical capacity] ought reasonably be applied in respect of the word "administrative"". (emphasis added)
35. In Walker, Commissioner Lewin ultimately found that the Classifications of Specialists Grades 6 and 7 in the Insurance Award applied a broad meaning to the word "administrative" and covered relatively senior positions by virtue of the express words used in describing those classifications under the Insurance Award. The Specialist classifications include terminology such as "expert advisory" and "professional service".
36. The term "administration" has also been used in the Award to describe the duties of Classification Level 6. However Classification Level 6 does not use terminology such as "expert advisory" and "professional service".
37. Interestingly, in the Transcript of Proceedings for the variation or termination of transitional instruments (including the Insurance Award) (AM201 0153), the Financial Services Union (FSU) submitted that Specialist Grades 6 and 7 under the Insurance Award are not covered by Classification Level 6 under the Award. Rather, Classification Level 6 applies to administration functions in a middle managerial capacity.
38. The FSU argued that the Insurance Award should not be terminated to ensure that Specialists remain covered by an award. The Commission recognised the exclusion of Specialists from the Award, and the Insurance Award has not been terminated.
39. As a corollary, the Award cannot be interpreted to extend to cover employees in the banking or finance industry who were not previously covered by an award, such as the Insurance Award, and who do not fall within the classifications under the Award.
40. Whilst the Award covers employees with particular knowledge and skills, the Award does not cover employees in senior managerial/executive and expert advisory roles within the finance industry such as the Applicant.”
[33] I agree with those submissions that that is the approach that should be considered, albeit that I would apply the principles that I have alluded to earlier in my decision today. Nevertheless the finding would not differ. That in essence the intention of the Full Bench was to cover with the modern award employees that are not engaged as professional employees, or who are truly and basically executive officers, as is referred to in the decision in Federated Clerks' Union of Australia (NSW Branch) v The Australian Workers' Union as outlined above.
[34] I do not necessarily agree, however, with the submissions of the Respondent that the FSU submitted that specialist grade 6 and 7 under the Insurance Award are not covered by classification Level 6 under the award. That rather classification level 6 applies to administration functions in a middle managerial capacity. That may or may not be the case, but in any event a determination on that does not have any material effect on how I have approached my decision in respect of this matter.
[35] There is little doubt that the modern award covers the employer to the extent at least that it is engaged in investment activity. The key consideration is whether the duties of the Applicant fall within the classification structure of the modern award. The roles and duties were clearly set out in Schedule 1, Attachment 2, of the Respondent's submissions and there is no need for me to return to those for the purpose of this decision. The Respondent has referred to the history of the development of the modern award and the intent of the Tribunal, reflected in its obligation to not extend the coverage. As I have said, in my view this is a relevant consideration in determining whether or not the applicant is covered.
[36] On that point I agree with the submissions of the Respondent that the applicant's position was not covered by the two pre-modern awards. Nevertheless I agree with the Applicant that irrespective of the intention it is important nonetheless to consider whether or not the Applicant's position falls within the classification. That is, whether or not I agree that the intention was not to cover, but does not mean that the award does cover the Applicant.
[37] If the Applicant is covered by this award or was covered by this award when he was employed, he can only be covered by Level 5 and/or Level 6. On a plain reading of the modern award it does not appear that the position that he held fits within the managerial role. He did not manage people at either a Level 5 or a Level 6. It is also clear in terms of the evidence that it is not possible to characterise the role of the Applicant as a middle managerial role, which is what the relevant instrument asks us to do. There is a query as to whether or not the role of the Applicant could be held to fit within level 5A which is described as:
“A position as a specialised role possibly supported by one or two junior staff members requiring formal qualifications and / or specialised vocational training.”
[38] On this, in terms of an interpretation one needs to consider the indicative job list that is part of the Level 5 position. That is, in applying the relevant authorities one should not take a narrow and pedantic approach to considering the applicability of this instrument but look at the instrument as a whole. In doing so I do not find that the Applicant's role, as has been evidenced before the Tribunal in the written submissions and in the evidence before me fits comfortably within that list, which includes roles such as human resources consultant, senior learning and development officer, and so on.
[39] On all of the evidence the Applicant held a very senior, specialist and advisory role of enormous responsibility for many millions of dollars' in funds and how they were invested. I have referred already in particular to the Respondent's submission on that point. Having considered all of the evidence I prefer the Respondent's characterisation of the role and its relationship to the classification structure as they have set it out, largely in paragraphs 10 to 18 of their written submissions. I should state that I do not accept that there is a consistency with the decision in Jenny Craig Weight Loss Centres Pty Ltd v Margolina, 15 as that tends to rely on the supervisory or managerial focus.
[40] In terms of the ultimate consideration one must consider the “principal purpose test” and, as I alluded to at the outset of this decision, I indicated that I agree that it was appropriate to apply that test as part of the consideration. It is not disputed by the Applicant that the principal purpose of the role was, as was put by the Respondent in their closing submissions, to make money autonomously. He did this by making decisions about investing substantial quantities of money, buying and selling shares on a daily basis. As such the Applicant was operating at a highly professional level and operating at a very high level in the organisation.
[41] He directly reported to the Managing Director. He met with clients at any time and at any place. It was uncontested that when the Managing Director was overseas the applicant reported to no one, and on his own admission he was the second most important person in the business. This was put as the principal purpose of the role and cannot be overlooked in a consideration as to whether or not the modern award applies. The principal purpose in my view does not at all find a place within the classification structure of the modern award, particularly when one considers the history of the development of that award that I have alluded to.
[42] Further, I agree with the submissions of the Respondent that, for example, not having a separate budget line and considerations of the title specifics - I agree that they do have to be considered but in totality do not overcome the principal purpose test. To take an approach that sought to establish that the Applicant's role was covered by the classification structure of the award, one would have to take a narrow and pedantic approach, and that is not one which the authorities to which I have had regard allow me to do, and it would not be appropriate to do so.
[43] In conclusion, to the extent that it is necessary for the Respondent to discharge the onus of establishing that the applicant is not covered by the modern award I find, for the reasons that I have alluded to, that they have discharged that onus. I determine for the reasons alluded to that the Applicant is not covered by a modern award. It therefore follows that the Applicant is therefore not a protected person for the purposes of section 394 and there is no jurisdiction to progress the matter.
[44] For these reasons I dismiss the application. An order [PR525747] dismissing the application will issue with this decision.
COMMISSIONER
Appearances:
D Faulder on his own behalf
J Lane of Thomsons Lawyers for the respondent
Hearing details:
2012
Melbourne
June 1
1 [2011] FWA 3763
2 Mr David James Hehir v Schweitzer Engineering Laboratories Pty Ltd[2011] FWA 3763, [34]
3 (1984) IR 314
4 [2012] FWA 3730
5 (1998) 194 CLR 355
6 Project Blue Sky Inc & Others v Australian Broadcasting Authority (1998) 194 CLR 355, 381
7 [2009] HCA 41
8 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41, [47]
9 [2008] AIRC 291, [7]-[15]
10 Watson & Ors v ACT Department of Disability Housing and Community Services[2008] AIRC 291, [15]
11 Applicant’s submissions, filed 21 May 2012, [6]
12 [2010] FWA 7718
13 Respondent’s submissions, filed 7 May 2012, [16]
14 Respondent’s submissions, filed 7 May 2012, [24]
15 [2011] FWAFB 9137
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