DNBP and Secretary, Department of Employment

[2017] AATA 1097

DNBP and Secretary, Department of Employment [2017] AATA 1097 (17 July 2017)

Division: General Division

File Number(s):      2015/6189

Re:DNBP

APPLICANT

AndSecretary, Department of Employment

RESPONDENT

DECISION

Tribunal:Deputy President SA Forgie

Date:17 July 2017  

Place:Melbourne

The Tribunal decides to:

affirm the decision made by a delegate of the respondent on 27 October 2015 affirming an earlier decision dated 6 May 2015; and

notes that:

the effect of the decision is that:

(1)the applicant was eligible for an advance under the Fair Entitlements Guarantee Act 2012;

(2)the amount of the advance is made up of:

(a)$2,451 in respect of unpaid wages (1 week);

(b)$11,264.20 plus $1,374.21 in respect of annual leave (4.6 weeks);

(c)$12,255 in respect of payment in lieu of notice (5 weeks); and

(d)$26,005.65 (11 weeks) less $9,456.60 (4 weeks) in respect of redundancy (7 weeks).

..........[sgd]........................................................

Deputy President S A Forgie

Catchwords

FAIR ENTITLEMENTS GUARANTEE – amount advanced for redundancy payment – whether governing instrument relating to employment provided for redundancy payment – provided for in National Employment Standards from 1 January 2010 but whether entitlement prior to 1 January 2010 – whether covered by clerical award - principal purpose of employment – account manager of large enterprise including duties to manage clients and attract new clients – applicant’s employment governed by agreement with employer – no provision for redundancy pay - decision affirmed

PRACTICE AND PROCEDURE – jurisdiction of Tribunal – whether entitled to advance and amount of entitlement – no powers as to recovery of amount

WORDS AND PHRASES – recipient – advance paid through intermediary – whether employee recipient of advance

Legislation

Administrative Appeals Tribunal Act 1975 ss 26, 27, 37

Bankruptcy Act 1966 s 109

Corporations Act 2001 s 560

Fair Entitlements Guarantee Act 2012 ss 3, 4, 5, 6, 10, 14, 16, 17, 18, 19, 23, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35, 36, 37, 38, 40, 50, 52

Fair Work Act 2009 ss 2, 5, 119

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 ss 2, 3, Part 3 and Sch 4 and item 5, Sch 2

Student and Youth Assistance Act 1973 s 289

Taxation Administration Act 1953 Sch 1 and ss 11-5, 12-85

Workplace Relations Act 1996 ss 41, 493A

Explanatory Memorandum to the Fair Entitlements Guarantee Bill 2012

Cases

Brand v APIR Systems Ltd [2003] AIRC 1161

Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387

Dragani v Peter W Beck Pty Ltd [2016] FWC 1500

Layton v North Goonyella Coal Mines Pty Ltd [2007] AIRCFB 713

Re Kita and Secretary, Department of Employment [2016] AATA 214

Robert Currie v SMA Super Pty Ltd [2013] FWC 3225

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127

Secondary Materials

AW773032 Clerical and Administrative Employees (Victoria) Award 1999

Chambers 21st Century Dictionary (1999, reprinted 2004)

REASONS FOR DECISION

Deputy President S A Forgie

1. On 7 September 2006, DNBP was employed by by BP Shopfitting (NSW) Pty Ltd (BP Shopfitting NSW).  He was employed as an Account Manager but, on 22 November 2010, his employment was transferred to BP Shopfitting (VIC) Pty Ltd (BP Shopfitting) and he became a Senior Account Manager.  Administrators, Jones Partners, were appointed to BP Shopfitting on 13 August 2013 and DNBP’s employment was terminated on the same day.[1] 

[1] T documents; T7 at 285-286

1. On 14 August 2013, DNBP lodged a claim with the Secretary of the Department of Employment (Secretary) on the basis that he was eligible for an advance under s 14 of the Fair Entitlements Guarantee Act 2012 (FEG Act).  On 17 February 2014, a delegate of the Secretary decided that DNBP was eligible for an advance and that the amount of that advance was $51,975.85 before the deduction of any amount for tax.  DNBP was advised of this decision in a letter dated 17 February 2014.  The letter advised him that the amount would be forwarded to Jones Partners, an insolvency practitioner managing the affairs of his former employer.  Jones Partners would deduct any tax and other relevant payments (such as HECS-HELP or child support payments) and then forward the remaining amount to DNBP within 14 days of their receiving it.  The amount was made up of $2,451 (unpaid wages for one week), $11,264.20 (annual leave of 4.6 weeks), $12,255 (payment in lieu of notice being payment for five weeks) and $26,005.65 (redundancy being payment for 11 weeks). 

1. Initially, DNBP asked the Secretary to review the decision under s 38 of the FEG Act but he later withdrew his request. The Secretary, however, initiated her own review under s 37. After receiving submissions from DNBP, another delegate of the Secretary decided on 6 May 2015 that DNBP had been underpaid $1,374.21 in respect of annual leave but overpaid $9,456.60 in respect of redundancy payments as he was entitled to seven weeks’ pay and not to eleven. Both amounts were calculated on the basis of DNBP’s gross entitlements before tax. The Secretary’s delegate affirmed the decision in respect of the other amounts leaving DNBP a debt of $8,082.39.

1. When DNBP applied to the Secretary under s 38 of the FEG Act for review of the decision that a delegate had made under s 37 on own motion, the Secretary affirmed the decision she had made under s 37. She did so on 27 October 2015 and then sought to recover from DNBP the difference between the amount to which she had first determined DNBP to be entitled and the amount to which she had now found DNBP to be entitled. In doing so, she made no allowance for the fact that DNBP had received the amount of $51,975.85 from the liquidator (and not directly from the Secretary’s Department) less the amount due to the Commissioner of Taxation (Commissioner) by way of tax. That is to say, she sought to recover from DNBP, who had received from the liquidator the net amount of the overpayment remaining after the payment of tax, the gross amount that she had overpaid to the liquidator. DNBP now applies to this Tribunal for review of the Secretary’s decision.

1. There are two issues.  One relates to the calculation of the amount of the advance to which DNBP is entitled in respect of redundancy for the period before 1 January 2010.  I have decided that DNBP was not covered by the relevant award and so was not entitled to redundancy pay for that period.  Therefore, I affirm the decision in relation to his being entitled to an amount of employment entitlements reduced by $8,082.39.  That raises the second issue, which relates to the Secretary’s seeking to recover from DNBP the gross amount of the overpayment made in respect of those redundancy payments when DNBP has received only the net amount after deduction of taxation in respect of them from the administrator, Jones Partners.  I have concluded that I have no power to review the decision to recover the overpayment but have explored whether the Secretary or her Department could advise Jones Partners of the recovery of the overpayment so that Jones Partners could issue a new payment summary statement to DNBP.  A new payment summary statement could be used by DNBP in either lodging an amended income tax return if able to do so or in seeking an extension of time within which to lodge an objection against the assessment. 

   DNBP’S CASE

2. DNBP said that he had signed two employment agreements.  Under the first, he was the Account Manager for a particular client of BP Shopfitting NSW.  He did all of the ordering for that client and ensured that the goods were delivered to that client but his contracts were authorised by either the Sales Manager or the General Manager.  No other staff member reported to him while he held that position and he was not entitled to hire or fire anyone.  He was not in a managerial position.  In his application for review under s 38 of the FEG Act, DNBP had said that the award covering an employee in his situation was the AW773032 Clerical & Administrative Employees Common Rule Award.  In particular, his duties were consistent with the Grade 6 classification under that award.[2]

   [2] T documents; T29 at 445-446

1. Little changed, DNBP said, when he was transferred to BP Shopfitting.  His title changed to that of Senior Account Manager but his tasks stayed the same.  He prepared tenders and placed offers and he was highly skilled in preparing spreadsheets and in knowing the goods that were needed and those that needed to be made.  Between 2006 and 2010, he was paid a leave loading but, when he agreed to the new contract of employment, he forwent the leave loading in order to receive a pay increase.

1. DNBP said that he did not regard his circumstances as taking him outside the award.  He was not a manager and therefore not excluded from its ambit on that basis.  BP Shopfitting NSW had paid him a leave loading.  That made him believe that he would be entitled to redundancy payments in respect of that period and also in respect of the subsequent period of his employment with BP Shopfitting.  It was a small company and he was often required to perform administrative tasks in addition to his other work. 

1. In correspondence following the hearing, DNBP asked how the law relating to the waiver of debts arising under social security law due to administrative error interacted with the FEG Act.  There is no crossover between provisions relating to debt recovery under the social security law and that under the FEG Act.  They are the subject of separate legislative regimes to be found in separate legislation. 

1. DNBP also raised the fact that the Secretary had given him a list of authorities on the day before the hearing.  This had not, he said, given him an opportunity to seek legal advice.  The material that was lodged included the FEG Act, relevant extracts from the Fair Work Act 2009 and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, and the AW773032 Clerical and Administrative Employees (Victoria) Award 1999. These are all documents to which reference has been made in the Secretary’s reasons for decision found in the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents).  The AW773032 Clerical and Administrative Employees (Victoria) Award 1999 was also included at T3 of the T documents. 

1. Copies of six authorities were included in the material lodged on 19 October 2016.  One of them, Layton v North Goonyella Coal Mines Pty Ltd,[3] has been referred to in some detail in the Secretary’s reasons in the T documents.  It is available online at and refers to, and quotes from, a second case included in the Secretary’s bundle: Carpenter v Corona Manufacturing Pty Ltd.[4]  That case is also available online at On 3 June 2016, Mr Holcombe had lodged the Secretary’s Statement of Facts, Issues and Contentions and sent them by email to DNBP.  In that document, Mr Holcombe referred to the two authorities, to which I have just referred, and to four others being Brand v APIR Systems Ltd,[5] Dragani v Peter W Beck Pty Ltd,[6] and Robert Currie v SMA Super Pty Ltd.[7]  Mr Holcombe did not refer to the case of Re Kita and Secretary, Department of Employment[8] but that is the only case or matter of which he was not given notice on or before 3 June 2016 for a hearing held on 20 October 2016.  I do not regard the Secretary’s acting unfairly in that situation.  The case of Re Kita and Secretary, Department of Employment summarised principles that are consistent with those set out in the other five authorities to which the Secretary referred.  DNBP had full knowledge of the Secretary’s case from 3 June 2016 and was not denied an opportunity to seek legal advice regarding the issues raised by Mr Holcombe on her behalf.

   [3] [2007] AIRCFB 713

   [4] (2002) 122 IR 387

   [5] [2003] AIRC 1161

   [6] [2016] FWC 1500

   [7] [2013] FWC 3225

   [8] [2016] AATA 214

SECRETARY’S CASE

1. On behalf of the Secretary, Mr Holcombe submitted that the test for determining whether an employee is covered by a particular award is the “principal purpose” test.  That test focuses on the principal purpose for which an employee was employed by reference to the relevant industry or duties covered by the award.  If DNBP’s duties take him within the ambit of the AW773032 Award, I must also determine the appropriate classification under which he would have been engaged.  Mr Holcombe cited various authorities, to which I will return.

1. Mr Holcombe analysed the various aspects of DNBP’s employment including his duties, role in the organisational structure of BP Shopfitting NSW, salary, annual leave loading and contractual provisions.  He agreed with DNBP that a statement in his employment agreement dated 11 September 2006 that his role was a “non-award position” could not exclude the operation of an award where it applies.  That statement, Mr Holcombe contended, was consistent with the pattern formed by the other elements of DNBP’s employment and pointed to his not being engaged to perform principally clerical duties of the sort covered by the AW773032 Award.

LEGISLATIVE BACKGROUND

1. The FEG Act provides for financial assistance on account of employment entitlements.  That financial assistance, known as an “advance”,[9] is available to those who have not been fully paid for work done for employers who are insolvent or bankrupt in certain circumstances.  In broad terms, those circumstances are that the end of the employment of the employees was connected with the insolvency or bankruptcy and the former employees cannot get payment of the employment entitlements from other sources.[10]  The FEG Act also allows the Commonwealth to recover the advances through the winding up or bankruptcy of employers and from other payments the former employees receive for entitlements.[11]     

   [9] FEG Act; ss 4(2) and 5

   [10] FEG Act; Long Title and s 3(a)

   [11] FEG Act; s 3(b)

Conditions for eligibility for advance

1. Section 10 sets out the conditions that a person must fulfil in order to be eligible for an advance. There is no question that DNBP is eligible for assistance but there is disagreement about the amount of the assistance for which he is eligible. He has made a claim as required by s 14.

Calculating the amount of the advance

A.        Working out the amount of an advance: Division 1 of Part 3

1. The Secretary decides the amount of the advance according to the provisions of Part 3 of that legislation.  The general rule is that the amount of the advance to which an employee is entitled is the total of the amount worked out under Division 2 of Part 3 for each of the employee’s “employment entitlements” for the employment.[12]  The expression “employment entitlement” refers to annual leave entitlement, long service leave entitlement, payment in lieu of notice entitlement, redundancy pay entitlement or wages entitlement.[13]  A person’s receipt of some or all of an amount to which he or she was entitled under the governing instrument does not affect his or her employment entitlement under s 6.[14]

   [12] FEG Act; s 16(1)

   [13] FEG Act; s 5

   [14] FEG Act; s 6(7)

1. I am concerned only with redundancy pay entitlement.

   “A person’s redundancy pay entitlement is the amount of redundancy pay the person is entitled to under the governing instrument from the employer for the termination of the employment.”[15]

   [15] FEG Act; s 6(5)

1. The expression “governing instrument for employment” means:

   “… any of the following that governs the employment:

   (a)a written law of the Commonwealth, a State or a Territory;

   (b)an award, determination or order that is made or recorded in writing;

   (c)a written instrument;

   (d)an agreement (whether a contract or not).”[16]

   [16] FEG Act; s 5

2. Part 3 of the FEG Act is concerned with the calculation of the amount of an advance.  Assuming a person is eligible for an advance, the general rule is that the amount of the advance is the total of the amount worked out under Division 2 of Part 3 for each of the person’s employment entitlements for the employment.[17]  The amount worked out for a person’s redundancy pay entitlement is excluded in the circumstances specified in ss 16(2), (3) and (4) but those circumstances do not apply in this case.  The business of BP Shopfitting was not transferred to another entity.

   [17] FEG Act; s 16(1)

1. Other reductions are provided for in ss 17 and 18.  Section 17 provides that the Secretary may reduce the amount of an advance worked out under s 16 for a person’s employment by an employer by an amount not exceeding the sum of the person’s debts to the employer.  If the Secretary is satisfied that, within the following 112 days, the employer’s liquidator or bankruptcy trustee can fully pay the employee an amount equivalent to the advance and do so without regard to any advance made under the FEG Act, the Secretary may reduce the amount of the advance to nil.  That is the effect of s 18.

B.       Working out the amount of an employment entitlement: Division 2 of Part 3

1. The amount of each employment entitlement to which a person is entitled is assessed by working out the basic amount for each under Subdivisions B and C of Division 2 of Part 3 and reducing the basic amount by the sum of amounts described in ss 19(2) and (3) provided the remaining amount is not less than nil.  Those amounts do not apply in this case. 

1. The basic amount for a person’s redundancy pay entitlement for his or her employment by an employer is so much of the entitlement as is not a cost of the winding up or bankruptcy of the employer and:

   “does not exceed the total of:

   (i)4 weeks’ pay (at the rate relevant to working out that entitlement) for each full year of the person’s service with the employer for which the employer was required to pay redundancy pay by the governing instrument for that employment; and

   (ii)if that instrument requires payment of redundancy pay for a proportion of a year (less than a full year) of the person’s service with the employer – that proportion of 4 weeks’ pay (at the rate relevant to working out that entitlement).

   Note:Sections 25 and 26 may affect the basic amount.”[18]

   [18] FEG Act; s 23(b)

1. Sections 25 and 26 are found in Subdivision C of Part 3.  The basic amount is not affected by s 25 as the terms and conditions of DNBP’s employment were not changed less than six months before the end of his employment or the appointment of an insolvency practitioner.  Section 26 applies to all employment entitlements other than a wages entitlement.  It provides:

   “(1)     This section affects a basic amount for a person’s employment entitlement for his or her employment if the governing instrument for the employment provided for a rate of pay relevant to working out the basic amount that, when expressed as a weekly rate, exceeded the maximum weekly wage rate at the end of the employment.

   (2)Work out the basic amount as if the governing instrument had provided for the relevant wage rate to be the maximum weekly wage rate at the end of the employment.

   Note:This affects the basic amount by affecting the amount of the employment entitlement.  It may also affect the basic amount by affecting limits on the basic amount such as those in paragraphs 22(b) and 23(b).”

Section 23 refers to the basic amount for a redundancy pay entitlement and is set out in the previous paragraph. 

Payment of advance

1. Part 4 of the FEG Act is concerned with the payment of an advance.  It may be paid in a lump sum or by instalments.  As the amount paid to DNBP has been paid as a lump sum, I will set out only s 28(1), which applies to payment in that form:

   “On behalf of the Commonwealth, the Secretary must pay an advance a person is eligible for in relation to his or her employment by an employer:

   (a)       to the person; or

   (b)to the liquidator or bankruptcy trustee of the employer, for the liquidator or trustee to pass on to the person, subject to the liquidator or trustee withholding or deducting an amount as required by law; or

   (c)to another person (the payee) for the payee to pass on to the person in accordance with a contract between the payee and the Commonwealth, subject to the payee withholding or deducting an amount as required by law.”

Recovery of advance

1. Part 5 of the FEG Act provides for the recovery of an advance paid to a person.  Putting aside situations in which the employer is a partnership,[19] Part 5 has two aspects.  The first, which is the subject of Division 1, is concerned with the recovery of the amount of the advance in the winding up of a corporate employer, in the bankruptcy of the employer if the employer is an individual or in the liquidation or bankruptcy of a partnership if the employer is a partnership.  The second aspect is the subject of Division 2 of Part 5.  It provides for recovery from the person eligible for the advance.

   [19] Section 33 of the FEG Act provides that ss 29, 30 and 31 apply in relation to each of the partners, being two or more, who employed the person.  The Commonwealth cannot recover through the winding up of or bankruptcy of the partnership of all of those partners one or more amounts totaling more than the amount of the advance.

A.        Recovery through winding up or bankruptcy: Division 1 of Part 5

1. In the case of a redundancy pay entitlement where the employer is a corporation, so much of the advance that is paid to the liquidator and is for that particular employment entitlement is taken to be an advance of money by the Commonwealth for the purpose of making a payment in respect of the termination of DNBP’s employment.[20] The effect of its doing so is to bring the advance within the scope of s 560(b) of the Corporations Act 2001 (Corporations Act) and to treat the Commonwealth as a creditor of BP Shopfitting with the same priority of payment in respect of that advance as DNBP would have had he not received it.  That is the effect of s 29.

[20] FEG Act; s 29(c)

1. A similar provision is made in respect of an employer who has become bankrupt and the payment of the advance is made to the employer’s bankruptcy trustee under s 28. For the purposes of ss 109(2) and (3) of the Bankruptcy Act 1966 (Bankruptcy Act), a payment of an advance for a person’s employment by an employer that is made to the bankruptcy trustee of the employer under s 28 of the FEG Act is to be treated in accordance with ss 30(a) and (b).  Those paragraphs provide for so much of the advance is for the person’s wage entitlement, annual leave entitlement or long service leave entitlement.

1. Section 31 applies when an advance is paid under s 28 for a person’s employment by an employer.  To the extent of the amount of the advance paid, there are two consequences.  The first is that employer’s liability is discharged.[21]  The second is that the rights that the person had immediately before that discharge in relation to that liability in the winding up or bankruptcy of the employer become rights of the Commonwealth.  So far as the advance is for a particular employment entitlement, the Commonwealth has the same priority as the person had for that entitlement.[22]

   [21] FEG Act; s 31(1)(a)

   [22] FEG Act; ss 31(1)(b) and 31(2)

1. Section 32 provides for the situation in which an advance is reduced under s 17 for the person’s debts to the employer.  That is not a situation which applies to DNBP.

B.       Recovery from the person eligible for the advance: Division 1 of Part 5

1. Section 34 of the FEG Act applies if:

   “(a)     the Commonwealth pays someone (the payee) an advance for a person’s employment by an employer; and

   (b)an amount (the later amount) for an employment entitlement of the person for which an amount was included in the advance is later paid by someone (the later payer) to the person or for the benefit of the person or in accordance with the person’s directions; and

   (c)the later payer is not:

   (i)the Commonwealth; or

   (ii)the liquidator or bankruptcy trustee of the employer; or

   (iii)the payee.”

2. If section 34 applies, s 34(2) provides that:

   “There is a debt due by the person to the Commonwealth of the lesser of the following (or either of them if they are equal):

   (a)       the later amount;

   (b)       the difference between the advance and the sum of:

   (i)the amounts paid to the Commonwealth in the winding up or bankruptcy of the employer because of Division 1; and

   (ii)the debts (if any) created by previous operations of this section in relation to the person.”

A debt under s 34 may be recovered by the Secretary, on behalf of the Commonwealth in a court of competent jurisdiction.[23]

[23] FEG Act; s 34(3)

Decision-making about advances

1. The Secretary may presume that information relating to a person and given to the Secretary by an insolvency practitioner for the employer is accurate provided it is given for the purpose of making two decisions.  One decision is whether the person is eligible for an advance for the employment of the person by an employer.  The other is the amount of such an advance.  This is the effect of s 35 of the FEG Act.  The Secretary must go on to give a person written notice of those two decisions in accordance with s 36(2).

Internal review of decisions about advances

1. Division 2 of Part 6 provides for the review of decisions made about advances.  Provision is made for two avenues of review: internal review on the Secretary’s own initiative and internal review on an application made to the Secretary.

A.        Review on the Secretary’s own initiative

1. Section 37(1) provides that:

   “If the Secretary is satisfied that there is sufficient reason, the Secretary may review:

   (a)a decision whether a person is eligible for an advance; or

   (b)a decision on the amount of an advance a person is eligible for.”

1. The Secretary may exercise the power given to her under s 37(1) even if an application for review has been made to this Tribunal.[24] That means that the Secretary may revisit a decision that she has previously made on review on her own initiative under s 37 or after a person has applied for that review under s 38. The Secretary, however, may not review a decision under s 37(1) while conducting a review under s 38.[25]

   [24] FEG Act; s 37(2)

   [25] FEG Act; s 37(3)

1. After reviewing the decision, the Secretary may affirm it, vary it or set aside the decision and substitute a new decision.[26] The Secretary is required to give the person written notice of the decision made on review under s 37.[27]  If an application for review of an earlier review decision has already been made to the Tribunal and the fresh review decision varies that decision or substitutes another, the Secretary must also give the Registrar of the Tribunal notice of the decision.[28]

   [26] FEG Act; s 37(4)

   [27] FEG Act; s 37(5)

   [28] FEG Act; s 37(7) The effect of reading s 37(7) ss 26(1)(a) and (2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) is that the decision that is reviewed by the Tribunal becomes the decision that is the subject of the application for review made to it but as subsequently varied or substituted by the decision made by the Secretary.  This is expressly stated to be the situation in s 40(3) of the FEG Act.

B.       Internal review on application made to the Secretary

1. Section 38 provides that, within 28 days after the date of the notice of decision, or such longer time as the Secretary allows:[29]

   “A person may apply to the Secretary for review of:

   (a)a decision whether the person is eligible for an advance; or

   (b)a decision on the amount of an advance the person is eligible for.”[30]

   [29] FEG Act; s 38(2)

   [30] FEG Act; s 38(1)

1. The person must give reasons for making the application and set out or include any information or documents relating to those reasons and not already referred to in the notice of decision.[31]  If the person wishes to withdraw the application, he or she may do so at any time before the review is completed and do so either orally or in writing.[32]

   [31] FEG Act; s 38(3)

   [32] FEG Act; ss 38(4) and (5)

1. After reviewing the decision, the Secretary may affirm it, vary it or set aside the decision and substitute a new decision.[33]  The Secretary is required to give the person written notice of the decision made on review under s 38, the reasons for it and the person’s rights to have that decision reviewed.[34] 

   [33] FEG Act; s 39(1)

   [34] FEG Act; ss 39(2) and (3)

Review by the Tribunal

1. Section 40(1) of the FEG Act provides:

   “An application may be made to the Administrative Appeals Tribunal by a person for review of:

   (a)a decision by the Secretary whether the person is eligible for an advance that has been affirmed under Subdivision B or has been substituted under that Subdivision for an earlier decision; or

   (b)a decision by the Secretary on the amount of an advance the person is eligible for that has been affirmed or varied under Subdivision B or substituted under that Subdivision for an earlier decision.”

1. It is apparent that an application may be made only by the person who may be eligible for an advance or who is eligible under the FEG Act.  That is apparent from the link made in s 40(1) between the application made by “a person” for review of a decision whether “the person” is eligible or of a decision on the amount of an advance “the person” is eligible for.  The limitation inherent in the words used in s 40(1) is made express when s 40(2) provides that s 40(1) has effect despite s 27(1) of the AAT Act.[35]

   [35] Section 27(1) of the AAT Act provides that, where an enactment provides that an application may be made to the Tribunal, that application may be made by or on behalf of a person or persons “whose interests are affected by the decision”.  Section 40(2) has limited the person who may make an application to one person.

1. Section 41 limits the power of the Tribunal by providing that it can neither exercise nor review the exercise of the Secretary’s power under s 17 to reduce the amount of an advance a person is eligible for because of a debt owed by the person to an employer. 

Appropriation and recovery

1. The Explanatory Memorandum to the Fair Entitlements Guarantee Bill 2012 explained that cl 52:

   “201.    … acknowledges that incorrect payments may be made inadvertently from time-to-time under the scheme and provides an avenue for the recovery of these funds.

   202. Subclause 52 (2) provides that the amount of the payment that was not authorised by the Bill will be a debt due to the Commonwealth and may be recovered by the Secretary, on behalf of the Commonwealth, in a court of competent jurisdiction.”

1. This explanation has to be kept in mind when reading s 52 for it does not express the power it confers as clearly as its description in the Explanatory Memorandum.  What s 52 does is, first, authorise a payment that was made but for which there was no authority to make and then make that payment a debt due to the Commonwealth and recoverable in a court.  Therefore, the purpose of s 52(1) is to authorise a payment made to a recipient when, apart from s 52(1), payment of an amount as an advance or as financial assistance would not have been authorised under the FEG Act or a regulation.  Having authorised the making of that payment, s 52(2) then provides that the payment made to the recipient under s 52(1) is a debt due to the Commonwealth by the recipient and may be recovered by the Secretary, on behalf of the Commonwealth, in a court of competent jurisdiction.

1. As the wording of s 52 is important, I will set it out in full:

   “(1)     If, apart from this subsection, the Commonwealth does not have power under this Act or a regulation made for the purposes of section 50 to pay an amount (the relevant amount) to a person (the recipient) purportedly as an advance or as financial assistance under such a regulation, then the Commonwealth may pay the relevant amount to the recipient.

   (2)If a payment is made under subsection (1) to the recipient, the relevant amount:

   (a)is a debt due to the Commonwealth by the recipient; and

   (b)may be recovered by the Secretary, on behalf of the Commonwealth, in a court of competent jurisdiction.”[36]

   [36] Section 50 of the FEG Act provides for assistance to be given to individuals who are not employees but who have done work for a specified person who is insolvent or is reasonably expected to be insolvent.

   CONSIDERATION

1. Provided they have been affirmed under s 38 of the FEG Act, the decisions that the Tribunal may review are limited to whether a person is eligible for an advance and the amount of that advance.  The Tribunal’s powers do not extend to reviewing a decision to recover amounts that have been paid as an advance or to issues relating to the recovery of amounts withheld by the insolvency practitioner for the employer and paid to the Australian Taxation Office (ATO) in respect of a person’s taxation obligations.  For the purpose of making the decision in this case I will, therefore, confine myself to those matters that I may properly review.  DNBP and his wife, however, were very concerned about the recovery proceedings and I will begin by making some observations regarding the power on which the Secretary relies to recover those amounts from them.

Commonwealth’s power to recover payments

1. I agree with Mr Holcombe that s 52 provides an avenue for the recovery of funds incorrectly paid in administering the FEG Act and the regulations made under it.  Whether I agree with Mr Holcombe’s submission that the funds may be recovered from DNBP depends on whether the reference in s 52 to the “recipient” is to the person who is eligible for an advance, whether or not it is paid directly to that person under s 28 or, where the person to whom the advance is paid under s 28 is an intermediary, the intermediary.  Mr Holcombe submits that s 52 permits recovery from the person who is eligible for the advance that has been paid regardless of whether it has been paid through an intermediary. 

1. A “recipient” is “… a person or thing that receives something …”.[37]  Under s 28, the Secretary may pay an advance directly to the person who is eligible for it.  That person would be the “recipient”.  Alternatively, the Secretary may pay the advance to the liquidator or to a third person.  In either case, that third person is required to pass the advance to the person who is eligible for it in relation to his or her employment but only after deducting or withholding any amount as required by law.  Assuming that the advance is passed on in this way, the person who is eligible for it in respect of his or her employment ultimately receives the amount of the advance less any deduction or withholding.  The person who is eligible becomes the “recipient” of the payment he or she actually receives.  That amount is recoverable under s 52.  AS DNBP received the advance less the amount withheld or deducted as PAYG taxation, he is the recipient of that net amount and so much of it as was not payable to him is a debt due to the Commonwealth under s 52.

[37] Chambers 21st Century Dictionary (1999, reprinted 2004)

1. The issue in this case relates to the amount withheld or deducted as PAYG taxation. Is the person who is eligible for the advance also the recipient of that amount, or part of that amount, if he or she did not actually receive it? It seems to me that he or she can be said to be its recipient for the liquidator is required to make the deduction or withholding under s 12-85(b) of Schedule 1 to the Taxation Administration Act 1953 (TA Act), which relates to payments for the termination of employment.  The liquidator has applied the amount deducted or withheld for the benefit of DNBP.  By virtue of s 11-5(2) of the TA Act, the liquidator is taken to have paid that amount to DNBP when it paid that amount, as it was required to do, to the Commissioner on his behalf.[38]  Therefore, for the purposes of s 52 of the FEG Act, DNBP is the “recipient” of the amount that he was actually paid by the liquidator and the amount of taxation that was paid to the Commissioner on his behalf.

   [38] In further submissions lodged on 3 November 2016, DNBP drew my attention to the case of Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127 decided by Finn J. Austudy payments, to which Mr Prince was not entitled, had been paid into his bank account. The issue to be decided concerned waiver of the consequential debt he owed. It could be waived under s 289(2)(b) of the Student and Youth Assistance Act 1973 if Mr Prince had received them in good faith.  His Honour held that the payments had been “received” when they were available for Mr Prince’s use and that occurred when they were deposited in his bank account.  I am concerned with the application of the taxation law, which expressly recognizes that an amount is payable by one entity to another if the first entity is required to apply or deal with it, as here in making a PAYG payment, on behalf of the second entity.  Cases concerned with other legislation and in other contexts cannot affect the operation of the taxation law and of the FEG Act.

1. In this case, the Commonwealth did not pay an amount as an advance or financial assistance to DNBP.  It did make such a payment to Jones Partners, the insolvency practitioner managing BP Shopfitting’s affairs.  Therefore, Jones Partners was responsible for passing the payment to DNBP less the amount withheld under the TA Act.  The amount it withheld and paid to the Commissioner is taken to have been paid on DNBP’s behalf so that he is the recipient of the payment made by the Secretary on behalf of the Commonwealth and it is that gross amount [i.e. the whole advance including the amount deducted for taxation] – called the “relevant amount” - that becomes a debt due to the Commonwealth by the recipient i.e. DNBP.  That is the debt that may be recovered by the Secretary on behalf of the Commonwealth in a court of competent jurisdiction.

1. Although no provision is made for it in the FEG Act, it would seem to be administratively expedient if the Secretary, or her Department, were to advise Jones Partners of any decision that it makes varying the amount of a payment it has previously forwarded to it for payment to a person entitled to an advance as an employee and of the recovery of that amount.  As the entity making the withholding or deduction of the PAYG tax, it would then be in a position to prepare a new payment summary that it could forward to the person reflecting the correct amounts paid to the person and to the Commissioner.  The person requires that payment summary as a basis for either lodging an amended income tax return or, if the time for lodgement has passed, for seeking an extension of the time within which to lodge an objection against the assessment for the relevant income tax year affected by the variation in the payment of FEG.

The amount of the advance or financial assistance

A.        Legislative framework

1. I am concerned only with DNBP’s redundancy pay entitlement.  That is determined by reference to the instrument governing his employment with DNBP.  Both he and the Secretary agree that the National Employment Standards (NES) are the governing instrument in this case.  The NES are found in Part 2.2 of the Fair Work Act 2009 (FWA) and set out minimum terms and conditions that apply to all national system employees.[39]  Division 11 of Part 2.2 provides for notice of termination to be given or payment to be given in lieu of notice as well as for redundancy pay but its provisions only came into effect from 1 January 2010.[40]  From that date, the amount of redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the table set out in s 119(2) and calculated on the basis of the employee’s base rate of pay for his or her ordinary hours of work.[41]  If s 119 applies to DNBP, the redundancy pay period would be 11 weeks.  That follows from the fact that his period of continuous service with BP Shopfitting before his employment was terminated was just short of seven years.[42]

[39] FWA; s 5(3)

[40] FWA; s 2(1) and F2009L02563

[41] FWA; s 119(2)

[42] FWA; s 119(2), Item 6

1. The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (FWTP Act) deals with transitional and consequential matters in relation to the FWA and to the replacement of the legislative regime previously found in the Workplace Relations Act 1996 (WR Act).  Of relevance in this case is Part 3 of Schedule 4 to the FWTP Act as it relates to the operation of the NES.  Schedule 4 came into operation on 1 July 2009[43] and is one of the “transitional Schedules”.[44]  Schedule 4 provides for the continued application of WR Act minimum entitlements provisions (other than wages) during bridging period.  The “bridging period” is the period starting from the WR Act repeal day (i.e. 30 June 2009)[45] and ending immediately before the FW (safety net provisions) commencement day i.e. 1 January 2010.[46] 

   [43] FWTP Act; s 2(1), Item 2

   [44] FWTP Act; s 3 and Schedule 2, Item 1(b)

   [45] The “WR Act repeal day means the day on which the WR Act repeal commences.”: FWTP Act; s 3 and Schedule 2, item 2

   [46] The “FW (safety net provisions) commencement day means the day on which Parts 2-2, 2-3 and 2-6 of the FW Act commence.”: FWTP Act; s 3 and Schedule 2, item 2

1. Part 3 of Schedule 4 is entitled “Operation of the National Employment Standards”.  Division 1 of Part 3 applies in relation to employees other than Division 2B State reference employees.  DNBP is not a Division 2B State reference employee.  Item 5(1) sets out the general rule which is that:

   “An employee’s service with an employer before the FW (safety net provisions) commencement day counts as service of the employee with the employer for the purpose of determining the employee’s entitlements under the National Employment Standards, other than entitlements to:

   (a) paid annual leave; and

   (b) paid personal/carer’s leave.”

1. Under the general rule, therefore, DNBP’s service before 1 January 2010 counts as his service with BP Shopfitting for the purpose of determining his entitlements under the NES.  There are, however, qualifications to the general rule.  One qualification is found in Item 5(4):

   “Subitem (1) does not apply in relation to an employee and an employer for the purposes of Subdivision B of Division 11 of the National Employment Standards (which deals with redundancy pay) if the terms and conditions of employment that applied to the employee’s employment by the employer immediately before the FW (safety net provisions) commencement day did not provide for an entitlement to redundancy pay.”

B.       DNBP’s terms and conditions of employment

1. That takes me to DNBP’s terms and conditions of employment.  Only if they provided for an entitlement to redundancy pay will DNBP’s redundancy pay period be 11 weeks for regard can be had to the period of his continuous service before 1 January 2010 as well as to that from 1 January 2010.  If the terms and conditions did not provide for an entitlement to redundancy pay, his redundancy pay period will be seven weeks as it will be based on his period of continuous service being three years but less than four.[47]  They were not the subject of the WR Act. 

   [47] FWA; s 119(2), Item 3

1. BP Shopfitting and the employees and the Construction Forestry Mining and Energy Union (CFMEU) entered a Collective Bargaining Agreement Off Site/On Site 2009-2011.[48]  Clause 3(a) stated that the agreement applied to BP Shopfitting’s employees engaged in New South Wales.  As DNBP was not engaged in New South Wales but in Victoria, the agreement does not apply to him.

   [48] T documents; T4 at 133-174

1. BP Shopfitting and the Victoria Construction and General Division of the CFMEU entered a further Shopfitting Manufacturing Industry Enterprise Bargaining Agreement 2011-2014.  The agreement applied in Victoria in relation to BP Shopfitting’s employees who were performing work within the scope of the National Joinery and Building Trades Product Award 2002.  Although DNBP was an employee of BP Shopfitting in 2011 and through to 2013, that agreement is not relevant as it does not apply to the period of his employment up to 31 December 2009.  As I have said, the governing instrument for the period from 1 January 2010 is the NES set out in the FWA.

B.1     Clerical and Administrative Employees (Victoria) Award 1999

1. DNBP has submitted that his terms and conditions were the subject of the Clerks – Private Sector Award 2010 but, as that was not in operation before 1 January 2010, I have had regard to the earlier AW773032 Clerical and Administrative Employees (Victoria) Award 1999 (Clerical Award).  It is a common rule award made by the Industrial Relations Commission under ss 41 and 493A of the WR Act and applicable from 1 January 2005.[49] 

   [49] T documents; T3 at 128-132

1. Except for the modifications to its applications made in cll 4 to 11 of the Clerical and Administrative Employees Victorian Common Rule Award 2005 (Clerical Common Rule Award) dated 7 August 2004,[50] the Clerical Award applied to those employers and employees in industry in Victoria.  The reference to “the industry” is a reference to:

   “… the industry of the process, trade, business or occupation of a person or persons or classes of persons (by whatever name called) employed wholly or principally in clerical work which may include administrative duties of a clerical nature.”[51]

   [50] T documents; T3 at 128-132

   [51] Clerical Common Law Award; cl 2: T documents; T3 at 128

1. “Employees” are defined in cl 1 to mean:

   “… employees in the industry who perform work of a kind that is covered by the award, but not any person who is a director or manager of an employer or a person to whom such a person has delegated the right to engage and terminate the employment of the employees”.[52]

The Clerical Common Rule Award does not apply to the persons specified in cl 4 but DNBP does not fall within any of the exceptions.

[52] Clerical Common Law Award; cl 2: T documents; T3 at 128

1. Wages and related matters are the subject of Part 5 of the Clerical Award.  Clause 16 deals with classifications and wage rates.  All employees covered by the Award are to be graded according to the grading structure set out in cl 16.  The grading by the employer must be carried out according to the skill level or levels required to be exercised by the employee in order to carry out the principal functions of the employment as determined by the employer.  There are six grades specified in cl 16.2.  A weekly award rate is specified against each grade.  Various skill sets are specified and described in relation to each grade.

1. DNBP describes himself as working at the grade specified as “Grade 6 administrative officer”.  The general description of the duties performed by employees at this grade, for which the weekly award rate was $679.00,[53] is:

   “Employees in this grade perform clerical and administrative duties using a more extensive range of skills and knowledge at a level higher than required in Grade 5.  They are responsible and accountable for their own work, and may have responsibility for the work of a section or unit.  They exercise initiative, discretion and judgement within the range of their skills and knowledge.  Supervision is by means of reporting to more senior staff as required. 

   Employees shall be graded at this level where the principal functions of their employment, as determined by the employer, require the exercise of any one or more of the skill levels set out below.

   Employees may be required to train other employees in the skills of their own grade and below by means of personal instruction and demonstration.”

   [53] T documents; T3 at 52

1. Five skill levels are described in cl 16.2.6.  That which is most relevant to DNBP’s circumstances is:

   “Enterprise/industry, specialist skills – skill level 6

   Apply knowledge of the organisation’s objectives and performance, and apply specialised knowledge, in areas such as projected growth, product trends and general industry conditions, examples include: knowledge of competitors and major clients [sic] market structure in the performance of own responsibilities; import/export activities.  Indicative Specialist Skills Include; Use Knowledge of basic statistics to interpret data from spreadsheets, statistical tables, graphs and frequency tables in the performance of own responsibilities.  Administration of workers compensation claims, insurance and disputed claims.”[54]

   [54] Clerical Award; cl 16.2.6(c): T documents; T3 at 52

1. Clause 14 of the Clerical Award provides for redundancy.  Entitlement to severance pay on a redundancy is determined by reference to whether the employer was a small employer or otherwise.  DNBP was the employee of an employer who was not a small employer.  If he comes within the Clerical Award, cl 14.3.1 would provide that the amount of severance pay to which he would be entitled for six, but fewer than seven, years’ continuous service would be 11 weeks’ pay.  A “week’s pay” means the ordinary time rate of pay for the employee concerned but excludes overtime, penalty rates, disability allowances, shift allowances, special rates, fares and travelling time allowances, bonuses and any other ancillary payments of a like nature.[55]

B.2Agreement between DNBP and BP Shopfitting NSW dated 11 September 2006 and relating to employment commencing on 7 September 2006

[55] Clerical Award; cl 14.1.5: T documents; T3 at 37

1. In a letter dated 11 September 2006, the Managing Director of BP Shopfitting NSW (not BP Shopfitting who was DNBP’s employer at a later date) wrote to DNBP a letter setting out the terms on which the company employed him.[56]  He signed a copy of the letter on 25 September 2006 after the Managing Director had signed it on 18 September 2006.  DNBP’s employment had commenced on 7 September 2006 and the letter stated that it was an agreement setting out the terms on which BP Shopfitting NSW would employ DNBP and on which DNBP would serve BP Shopfitting (2006 Agreement).  At cl 15, the statement was made that the document represented the entire agreement of the parties in relation to DNBP’s employment.[57]

   [56] T documents; T32 at 455-459

   [57] T documents; T32 at 459

1. Clause 3 of the agreement required DNBP to perform the duties of the position of “… [Named Retail Enterprise] Account Manager” in accordance with the reasonable directions of the company and any statement of duties attached to the agreement.  The opening paragraphs to the letter described DNBP’s place of work as being at the premises of the Named Store in Melbourne.[58]  DNBP was described as the “Company’s representative” and it developed what was expected of him in that role:

   “In carrying out your duties under this agreement, you are expected to develop good professional relationships with clients and potential clients of the Company and to have knowledge of the business affairs and interests of those clients.

   The Company is entitled to the benefit of such relationships and knowledge.  The terms of this agreement provide that you may not exploit them for the benefit of any other person or company or for your benefit during and after the employment.”[59]

   [58] T documents; T32 at 455

   [59] T documents; T32 at 455

2. A Job Description appears in the T documents.  It is undated but I note that one copy of it was attached to an email written by DNBP to the Department on 4 June 2015.  He attached it in the context of explaining how his duties corresponded with those of a Grade 6 classified clerk under the Clerical Common Rule Award, and so under the Clerical Award.  That is a 2005 award and, in the absence of any other evidence, I accept that his Job Description was relevant to the position that was the subject of the 2006 Agreement.

1. The Job Description related to the position of “Account Manager”.  It required the occupant of that position to report to the Sales Manager.  The Job Description set out a Key Description of the position as:

   “∙         Strong customer service skills;

   ∙Process and co-ordinate customer requests.

   ∙Monitor and maintain order book.

   ∙Collate quote & tender submissions.

   ∙General administrative duties as requested.

   ∙Participate in Sales meetings.

   ∙Meeting Minutes documentation.”[60]

   [60] T documents; T29 at 451 as an attachment to DNBP’s email dated 4 June 2015

The Key Responsibilities of that position were:

“∙         Business administration, estimating and stock control.

∙Data entry and management of business documents and reports

∙Customer service function to the GPS business units.

∙Liaise and update other departments on changes to the order book.

∙Monitor orders and advise relevant personnel of progress.”[61]

[61] T documents; T30 at 451

1. The qualities and skills that the holder of the position was expected to hold were set out at the end of the Job Description:

   “·         Good communication skills.

   ·Competency in Microsoft Word and Excel.

   ·Experience in account management.

   ·Demonstrate problem solving skills.

   ·Good time management skills.

   ·Positive approach and results orientated.

   ·Sense of urgency.

   ·Knowledge of market place.

   ·Interpret customer data.”[62]

   [62] T documents; T30 at 451

1. The 2006 Agreement was stated to be:

   “… a non-award position and the terms of this agreement will apply to your employment by the Company from the 7^th September 2006, until the termination of your employment with the Company or until this agreement is amended, varied or replaced by some other agreement in writing signed by both parties.

   The terms of this agreement will continue to govern the employment relationship during that period regardless of any changes to your position, title, duties or remuneration or of the location of the employment.”

1. As for DNBP’s hours of work, cl 3 stated:

   “Except when you are absent on authorised leave you are expected to attend work during normal office hours and for such further time as may be required for the proper performance of your duties under this agreement.

   The Manager to whom you initially report is the Managing Director.  Following the appointment of a CEO you report direct to him.”[63]

   [63] T documents; T32 at 456

1. The 2006 Agreement provided for DNBP to be remunerated at the rate of $120,000 per annum.  Normal office hours were from 8.00am to 5.00pm Monday to Friday with half an hour for lunch.  That rate included a car allowance of $6,000 per annum and superannuation of $9,412.84 as well as:

   “… an element for overtime which you may be required to work in accordance with the demands of your position.  Further this package may be varied from time to time in agreement with you.  You will also be provided with a Motorpass fuel and oil card, and an E-tag.

   Any commission or bonus payments made under this agreement will be additional to the remuneration amount.”[64]

   [64] T documents; T32 at 457

1. The 2006 Agreement provided for annual leave, long service leave, sick leave and parental leave entitlements.  Annual and long service leave entitlements were as provided in the relevant Victorian legislation.  Provision was made for the termination of DNBP’s employment either summarily for cause or on notice.  If terminated on notice, BP Shopfitting NSW was entitled to make payment in lieu of notice.  No provision was made for redundancy.

1. DNBP produced a Payroll Advice for the week ending 18 December 2007 showing holiday leave loading paid for the week and another for the week ending 22 December 2009 which also showed leave loading as paid.

B.2Agreement between DNBP and BP Shopfitting dated 22 November 2010 and relating to DNBP’s continuing employment

1. On 22 November 2010, BP Shopfitting and DNBP entered a new agreement regarding his continuing employment (2010 Agreement).[65]  He was employed in the position of Senior Account Manager and reported to the Group Sales Manager or such other person as nominated by BP Shopfitting.  He was located at BP Shopfitting’s premises in Melbourne and his remuneration was increased to a gross sum of $149,000 per annum inclusive of superannuation and comprising a base annual salary of $134,000 and a $15,000 car allowance.  Reference was also made to a commission scheme with details to be advised.  Provision was made for annual leave, personal/carer’s leave and other leave, such as compassionate leave and community service leave in accordance with the FWA.  No reference is made for redundancy or severance entitlements. 

[65] T documents; T32 at 462-481

1. Clause 6.2 stated that DNBP was expected to perform his duties during BP Shopfitting’s normal business hours and during such additional hours as it might reasonably require of him.  DNBP acknowledged that the hours of work were reasonable, given his position, his duties and remuneration.  Clause 6.3 stated that DNBP’s:

   “… Remuneration has been set at a level that takes into account his ordinary hours and any reasonable additional hours which the Employee may be required to work.  The Employee is not entitled to any overtime or additional payment or benefit for work performed outside his ordinary hours.”[66]

   [66] T documents’ T32 at 467

B.3     DNBP’s description of his duties

1. In claiming FEG, DNBP was asked to list the most common tasks and duties that he had undertaken in his job.  He wrote:

   “Clerical duties, in office administration, quotations, client liaising, take phone calls, queries from clients, queries from suppliers fill in forms.”[67]

   [67] T documents; T7 at 284

1. In his application for review, DNBP stated that:

   “My role within BP encompassed administrative duties which were clerical in nature and that the applicable award was –AW773032 The Clerical & Administrative Employees Victorian Common Law Award 2005. …

   …

   I would like to emphasise that my role did not encompass managerial duties. In describing management duties, industrial tribunals have referred to; ‘the unfettered discretion that is the hallmark of the independent manager.’ The role of recruiting and responsibility of dismissing employees is one of determinants of the existence of management responsibility. However, a manager who is subject to supervision by a higher authority within the company to recruit or terminate employees on an incidental basis may not be exercising management responsibility, but acting as a functionary of higher management.

   There have been examples, such as were [sic] an employee who was described as a ‘field sales manager’ was deemed by an industrial tribunal to be covered by the relevant clerical award because the employee had no authority to bind the company to any contracts, no authority to hire and dismiss staff, no authority to set sales targets, or otherwise participate in the policy direction of sales and marketing procedures of the company. This was despite the employee being categorised by the employer as a member of ‘middle management.’

   All customer arrangement/contracts I facilitated were authorised by my superior’s i.e. Sales Manager, General Manager.”[68]

   [68] T documents; T29 at 445-446

1. In a document DNBP lodged in the Tribunal (FN? Under covering email of 9 March 2016) responding to the Secretary’s position, he stated that:

   “Having the title ‘manager’ does not automatically grant me the title of award free status.  One must look at the principle [sic] responsibilities, tasks and nature of work performed against the award that covers the industry one is working within.  There are certain functions that are principle function of a ‘manager’ of which I did not inherit as part of my responsibilities.  Such as:

   -          Authority to recruit and dismiss staff

   -Authority to bind company to any contracts

   -Authority to set sales targets

   -Participate in the policy direction of the Company

   -And responsibility for preparing a budget

   This was undertaken by two superiors.  I was an Account Manager reporting to the National Sales Manager of which he reported to the GM S&M.  (… organisational chart 2013).  Not a Manager as stated in the Employment Contract, but purely an administrator looking after a customer.

   An employee is simply not award free only because there [sic] weekly rate is greater than the Award.  The Clerks Private Sector Award covers employees of employers in the private sector who are wholly or principally engage in administrative work and not a professional as such.  A vast % of my work was clerical in nature as I was required to record, type, calculate, invoice, bill, charge, check, receive and answer to customer calls or queries.  As noted on the Payroll Records (Refer T11 pg. 328)

   Furthermore I have no post graduate qualification to call myself a professional and far from a manager or specialist in a field.  Besides being motivated and dedicated to my job I have no specialist skills.”

1. DNBP also produced an organisational chart for BP Shopfitting for the relevant period:

Managing Director
Chief Operating Officer
General Manager Finance		General Manager Operations		General Manager Sales and Marketing				Victorian State Manager
Design& Supply Manager		NSW Operations Manager		Victorian Operations Manager		National Sales Manager
Account Manager (DNBP)

C.       The authorities

1. In Re Kita and Secretary, Department of Employment,[69] Deputy President Frost summarised a number of authorities, which have considered whether a person’s employment is, or is not, covered by the terms of an award.  I will repeat his summary:

   [69] [2016] AATA 214

   “THE TEST FOR DETERMINING AWARD COVERAGE

   23.The answer to the question whether a person’s employment is covered by an award is not to be found in the title given to the employee because the job title may mislead as to the nature of the job: Joyce v Christofferson (1990) 33 IR 390, per Grey J at 405.

   24.In Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387, a Full Bench of the Australian Industrial Relations Commission said at [9]:

   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.

   25.This approach was followed by a Full Bench of Fair Work Australia, in McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184, where it was said at [37]:

   … consistent with the decision [in Carpenter], an own employee’s estimation of the quantification of their workload is not determinative of the classification, if any, in an award, into which they might fall.  One reason for this (and there will be more) is that an employee might perform duties (where they are not closely supervised) which the employee prefers, or believes to be required, but which are not the duties the employee is necessarily directed (or employed) to perform.  This is why the Full Bench articulated the task of ascertaining the principal purpose of the employment as requiring ‘an examination of the nature of the work [...] the employee is employed to do’.

   26.In Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCCA 4, Driver J said at [128]:

   Courts and industrial tribunals have developed principles to be applied to ascertain whether an employee fits within a particular classification described in an award or agreement.  Where the employee performs mixed functions, the approach has been to examine the ‘major and substantial employment’ of the employee or the ‘principal purpose’ or ‘primary function’ of the employee.

   27.His Honour went on to say:

   [133]    The task of the Court or Tribunal is to examine the major, substantial or principal aspect of the work performed by the employee.  That will include consideration of the amount of time spent performing particular tasks, but also the circumstances of the employment and what the employee was employed to do.  The question is one of fact to be determined by reference to the duties actually attaching to the position, rather than its title.

   …

   [169]    In Tucker v Digital Diagnostic Imaging Pty Ltd …, Commissioner Cambridge set out a range of factors relevant to the principal purpose assessment, relevantly including (amongst others) the contents of any job description, person specification or job advertisement; the actual time occupied in different duties (a substantive role/function analysis); possession or absence of particular qualifications and whether such qualifications are necessary to the exercise of the primary functions that are performed; the level of importance and relevance of particular duties in the context of the employing organisation’s overall purpose; and the nature and extent of any role as representative of the employing organisation to third parties.

   28.In summary, the question is: what was the principal purpose for which Mr Kita was employed as at 31 December 2009?  The amount of time spent performing particular tasks is not irrelevant to that enquiry but it is not determinative.  One must also have regard to the factors identified in Tucker, and as summarised by Driver J in TWU v Coles at [169] (see [27] of these reasons).”

D.       Was DNBP covered by the Clerical Award?

1. I accept DNBP’s evidence that, in carrying out his duties, he was required to undertake clerical duties, engage in office administration, prepare quotations, liaise with clients, take phone calls, fill in forms and respond to queries from clients and suppliers.  When listed in that way and without context, his duties are consistent with those described as the duties of a Grade 6 administrative officer specified in the Clerical Award. 

1. When listed with context, the perspective is a little different.  The context is found in the Clerical Award in the relevant skill set which, in this case, is the enterprise/industry, specialist skills – skill level 6.  Those skills are indicative of a person who is carrying out clerical and administrative tasks but with particular knowledge of the employer’s business and the environment in which the employer conducts that business and particular skills to interpret that environment and to manage staff and associated matters.

1. The context in which DNBP carried out the duties and tasks he performed is found in the 2006 Agreement.  The Key Description of DNBP’s position is consistent with the duties as he described them in his FEG application and at the hearing.  He was required to process and co-ordinate customer requests, collate quotation and tender submissions, undertake general administrative duties as requested, monitor and maintain the order book, participate in sales meetings and keep minutes and possess customer service skills.  Therefore, the skills that he was required to possess included competency in Microsoft Word and Excel and the ability to interpret customer data. 

1. What that list does not do is to place those duties in their environment.  The environment was one in which DNBP was, when the 2006 Agreement was reached between him and BP Shopfitting NSW, the Account Manager for one retail enterprise.  That retail enterprise was, and remains, an enterprise with a considerable number of stores throughout Australia and beyond.  The account was of some consequence to BP Shopfitting NSW for DNBP was, at least in 2006 when the 2006 Agreement was signed, located on the retail enterprise’s premises in Melbourne.  DNBP was seen as BP Shopfitting NSW’s representative.  He was expected to develop good professional relationships not only with clients but also with potential clients.  As such, he was required to have knowledge of the business affairs and interests of those clients or potential clients.  A clerical officer would also be expected to have good relationships with the employer’s clients but the relevant skill set, and indeed, none of the skill sets given in relation to a Grade 6 clerical officer, requires such an officer to engage with external officers and agencies and to go beyond clerical and administrative duties and tasks.  The description as DNBP as BP Shopfitting NSW’s representative in the 2006 Agreement suggests that his position was not that of a clerical or administrative officer.

1. That suggestion is strengthened by the salary paid to DNBP.  While the amount is not determinative of whether or not the Clerical Award applied to him, it is indicative that BP Shopfitting NSW regarded him as worth well above the award wage that would have been paid to a Clerical Officer Grade 6.  He was paid $120,000 per annum which was more than three times the annual base rate of $35,308 due to a Clerical Officer Grade 6.  He was paid annual leave loading but the 2006 Agreement expressly provided that his remuneration was inclusive of any element for overtime which he might be required to work in accordance with the demands of his position.  The 2006 Agreement also recognised that any payment by way of commission or bonus would be in addition to his remuneration although I accept DNBP’s evidence that he was paid none.  The specific provisions made in the 2006 Agreement regarding DNBP’s remuneration are consistent with the statement in the agreement that the position he held in BP Shopfitting NSW was a non-award position and that his employment was governed by the terms of the agreement.

1. Having regard to all of the evidence, I am satisfied that clerical work was an adjunct or necessary consequence of the work undertaken by DNBP but I am also satisfied that clerical work was not the principal purpose for which he was employed.  He was employed as the person to manage an account for one of BP Shopfitting NSW’s clients, and, later, accounts for BP Shopfitting’s clients and to attract other clients.  Clerical work was a consequence of managing accounts but not the principal purpose for which he was employed. 

1. It follows from my conclusion that DNBP was entitled only to seven weeks’ redundancy pay under the FWA and not to eleven.  Therefore, I affirm the decision made by the Secretary on 27 October 2015 affirming her earlier decision dated 6 May 2015.  This means that the amount initially worked out for DNBP’s employment entitlements exceeded the amount to which he was actually entitled by the amount represented by four weeks of redundancy pay. 

I certify that the eighty-nine [89] preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie

Signed:           ………[sgd]............................................

Associate

Date of Hearing  20 October 2016

Last Submission  3 November 2016

Date of Decision  17 July 2017

Self-represented Applicant                  DNBP

Solicitor for the Respondent               Mr Lex Holcombe

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