John Boreland v Reserve Hotels Pty Limited

[2013] FWC 2063

[2013] FWC 2063

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

John Boreland
v
Reserve Hotels Pty Limited
(U2012/17268)

DEPUTY PRESIDENT BOOTH SYDNEY, 12 APRIL 2013

Termination of employment - alleged unfair dismissal - jurisdiction - high-income employee - whether covered by award or agreement.

[1] I provided an ex tempore decision in this matter on 15 March 2013.

[2] On 23 March 2013, I was asked by Mr Philip Ryan, Director, Legal and Industrial Affairs at the Australian Hotels Association (NSW), on behalf of Reserve Hotels Pty Limited (the Respondent) for written reasons for my decision.

[3] These reasons are an edited version of my ex tempore decision of 15 March 2013.

[4] In this matter Mr John Boreland (the Applicant) asks the Fair Work Commission (the Commission) to exercise its discretion under s.394 of the Fair Work Act 2009 (the Act) to grant a remedy for unfair dismissal from his employment with the Respondent. The Applicant was employed on either 5 or 6 March 2012, depending on whether the Applicant’s or the Respondent’s documentation is correct and it is not a matter that is pertinent to my decision. He was notified of his dismissal again on either 2 November or 11 October 2012, depending on whether the form F2 or F3 is correct and again for the purposes of this decision the dates are not pertinent. Suffice to say that he was employed by the Respondent for a period of less than a year but more than the six month qualifying period for the purposes of making his application.

[5] There was also a disagreement between the parties in relation to the date of effect of the Applicant’s dismissal and that matter would have been necessary to determine if my decision pertained to the limitation period in the Act for the time of making his application, but since it does not, again, that dispute does not need to be determined by me in this decision. There is no disagreement that he lodged his application with the Commission on 21 December 2012. At the outset the Respondent made three jurisdictional objections to the application. One related to the matter to which I have just adverted, that is, the date of effect of his dismissal and the consequent period of time that ran from that point to the point of lodgement of the application. The Respondent contended that the dismissal took effect on 8 November 2012 and therefore the lodgement on 21 December 2012 was well out of time.

[6] On the other hand the Applicant contended that his application was within time, having been made 14 days after the date of effect of his dismissal, which he contended was 7 December 2012. That was the first jurisdictional objection made and Directions were issued to put on submissions and witness evidence in relation to that matter and the matter was listed for hearing before me on 15 March 2013. The second jurisdictional objection was in relation to whether or not the Applicant was a person protected from unfair dismissal pursuant to s.382 of the Act. In the contention of the Respondent, his annual rate of earnings was higher than the high income threshold and he was not covered by either a modern award or an enterprise agreement. That objection was also the subject of Directions to put on submissions and witness statements and was listed before me on 15 March 2013.

[7] The third objection was that the Applicant was a person who was dismissed as a result of genuine redundancy and, to that extent, argument would have needed to proceed in relation to s.385 of the Act, which states that a person has been unfairly dismissed if the Commission is satisfied, amongst other things, that the dismissal was not a case of genuine redundancy. As it happened, that was not a jurisdictional objection that was subject to the directions and was not listed for hearing before me. By agreement of the parties, the argument before me proceeded with, firstly, the question of whether or not the Applicant was a person protected from unfair dismissal and, particularly, in relation to the high income threshold and the other criteria that would be required to apply if the high income threshold was exceeded. My decision is in respect to that matter.

[8] The Applicant was self-represented and the Respondent was represented by Mr Ryan from the Australian Hotels Association (NSW). The Applicant was employed by the Respondent as an operations manager reporting to Mr Balagiannis in relation to a number of hotels in the group. The hotels in the group included the Albion Place Hotel, the Chamberlain Hotel, the Crest Hotel, the Haymarket Hotel and Mr B's. The statutory framework that I am required to apply to make my decision is contained in s.382 of the Act. It says 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 $123,300 from 1 July 2012”

[9] I am required to consider whether the Applicant is a person protected from unfair dismissal. Examining s.382(a) of the Act, it is not contested that the Applicant is an employee or was an employee and it is not contested that he had been employed for at least the minimum employment period.

[10] In relation to s.382(b) of the Act and specifically to paragraph (b)(iii), the Applicant did contend that his earnings for the time of the year to the point of his dismissal did not reach the high income threshold. In relation to that contention it was not disputed that his base rate of pay was $150,000 per year and there was evidence in relation to his weekly rate and the multiplier of a calendar year reaching $150,000. In his evidence, the Applicant agreed that that was both the mathematical outworking of his weekly rate of pay as well as clear from the face of his employment agreement that that was his annual earnings. So the question becomes is the figure a question of the annual earnings, or is it a question of what was earned in the year to the Applicant’s termination?

[11] Mr Ryan took me to the decision of Francesco Zappia v. Universal Music Australia Pty Ltd trading as Universal Music Australia, 1 a decision of a Full Bench of Fair Work Australia dated 24 July 2012. In that decision the Full Bench considered this very question and at paragraph 9 of that decision in the last sentence of the paragraph the Full Bench stated, "What needs to be ascertained is the annual rate of earnings at that time, not the annual earnings to that time (the amount earned in the 12 months to that time)."2 It is clear to me that the Applicant did in fact earn an amount that exceeded the high income threshold which on his own submissions was at that time some $123,000. Therefore, the Commission must consider, that the finding having been made, whether or not the Applicant was covered by a modern award or an enterprise agreement.

[12] The Applicant contended in submissions and confirmed in evidence his view that he was covered by a modern award, specifically, the Hospitality Industry (General) Award 2010 (the Hospitality Award) for two lines of reasoning. Firstly, his employment agreement had in effect an appendix that was titled Reserve Hotels Pty Ltd Terms and Conditions of Employment, and in that appendix to his employment agreement a paragraph existed as follows:

"Award coverage - As an operations manager your employment terms and conditions are governed by the Hospitality Industry (General) Award 2010. Under this award your classification and wage will be as per the managerial staff classification clause 20.2, nothing contained below is intended to breach the provisions of this award."

[13] The Applicant is a lay person, notwithstanding his qualifications in hotel management. It is unsurprising that he formed the view that he was covered by that award, though there was some contention adverted to in regards to the authenticity of the combination of the employment agreement and the Reserve Hotels Pty Ltd terms and conditions of employment. That matter was not pressed and, in any event, the Applicant was able to obtain that document and contained it within his material.

[14] His second line of reasoning emerged during the hearing because of a question that I asked him. I wanted to be satisfied about the nature of his function in order that I could compare that to the award's coverage. I was fortified in my intention by the decision of Gay C in David McMillan v. Northern Project Contracting trading as NPC and Graham Norman v. Northern Project Contracting trading as NPC of 17 August 2012 3 in relation to a similar jurisdictional argument. Gay C at paragraph 14 of that decision says:

"The fact that the contract of employment says that does not make it so; because the Award and its coverage are not determined by the contract but rather determined by the legislation, and it is the case that section 48 of the Act sets out how it is that the award coverage has effect."

Section 48(1) of the Act states:

"A modern award covers an employee/employer/organisation or outworker entity if the award is expressed to cover the employee/employer organisation or outworker entity."

[15] I concur with Gay C in his conclusion that that is the key test. I find that the reference to the award in his employment agreement is not conclusive of the coverage by the Applicant of the award, however, I am required to consider the Applicant’s role and to compare that with the provisions of the relevant award. Neither party suggested that any other award had relevance and so it is to that award that I must now turn my attention and to compare the coverage of that award with the evidence regarding the Applicant’s role with the Respondent.

[16] I refer to clause 4 and Schedule D of the Hospitality Award. Clause 4 reads as follows:

"4. Coverage

4.1 This industry award covers employers throughout Australia in the hospitality industry and their employees and the classifications within schedule D classification definition to the exclusion of any other modern award. The award does not cover employers in the following industries:

(a) clubs registered or recognised under State or Territory legislation;

(b) boarding schools;

(c) residential colleges;

(d) hospitals;

(e) orphanages;

(f) any council, county council, municipal council, shire, shire council or local government body as defined by the Local Government Act 1993 (NSW); the Local Government Act 1989 (Vic); the Local Government Act 1993 (Qld); the City of Brisbane Act 1924 (Qld), the Local Government Act 1995 (WA); the Local Government Act 1999 (SA); the Local Government Act 1993 (Tas); and the Local Government Act 2008 (NT);

(g) catering by a restaurant business;

(h) theme parks;

(i) in-flight catering for airlines;

[4.1(j) substituted by PR994455 from 01Jan10]

(j) restaurants covered by the Fast Food Industry Award 2010, the Registered and Licensed Clubs Award 2010 or the Restaurant Industry Award 2010;

(k) contract cleaning undertaken by companies not operating exclusively in the hospitality industry;

(l) catering services provided by aged care employers (except where these services are provided by a hospitality industry employer for or within an aged care facility);

(m) contract security, contract gardening or contract maintenance provided by an external provider, whose primary business falls outside the hospitality operation; and

(n) businesses primarily concerned with the sale of petroleum or mixed functions involving the sale of petroleum.

[4.5 renumbered as 4.2 and substituted by PR994455 from 01Jan10]

4.2 For the purpose of clause Error! Reference source not found., hospitality industry includes hotels; motor inns and motels; boarding establishments; condominiums and establishments of a like nature; health or recreational farms; private hotels, guest houses, serviced apartments; caravan parks; ski lodges; holiday flats or units, ranches or farms; hostels, or any other type of residential or tourist accommodation; wine saloons, wine bars or taverns; liquor booths; resorts; caterers; restaurants operated in or in connection with premises owned or operated by employers otherwise covered by this award; casinos; and function areas and convention or like facilities operating in association with the aforementioned.

[4.2 renumbered as 4.3 by PR994455 from 01Jan10]

4.3 The award does not cover an employee excluded from award coverage by the Act.

[4.3 renumbered as 4.4 and substituted by PR994455 from 01Jan10]

4.4 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

[4.4 and 4.6 deleted by PR994455 from 01Jan10]

[New 4.5, 4.6, 4.7 and 4.8 inserted by PR994455 from 01Jan10]

4.5 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.6 This award covers any employer which supplies labour on an on-hire basis in the industry set out in clause Error! Reference source not found. in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance of work for a business in that industry. This subclause operates subject to the exclusions from coverage in this award.

4.7 This award covers employers which provide group training services for apprentices and/or trainees engaged in the industry and/or parts of industry set out at clause Error! Reference source not found. and those apprentices and/or trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. This subclause operates subject to the exclusions from coverage in this award.

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

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

The classifications are listed in Schedule D. The relevant part of the Schedule D for the purposes of this matter (which was not contested) is Schedule D2.9 which reads as follows:

“D2.9 Managerial staff—hotels

[D.2.9 varied by PR994455 from 01Jan10]

For the purpose of this additional classification, hotels means hotels, resorts, casinos, taverns, wine saloons, wine and spirit merchants retailing to the general public and other retail licensed establishments in or in connection with accommodation, with the selling of drinks, preparing and serving food and drinks, cleaning and attending to the premises and all other services associated therewith.

In this additional classification, hotel manager means an employee (however designated) who:

under the direction of senior management is required to manage and co-ordinate the activities of a relevant area or areas of the hotel; and

directs staff to ensure they carry out their duties in the relevant area or areas of the hotel; and

implements policies, procedures and operating systems for the hotel;

but excludes an employee who is employed to undertake the duties of senior management, responsible for a significant area of the operations of one or more hotels. Indicative position titles for such an employee include:

Company secretary;

Chief accountant;

Personnel or human resources manager;

Financial controller;

Industrial relations manager;

Venue manager;

General/hotel manager;

Executive assistant manager;

Regional manager; or

a Manager to whom any of those positions report or are responsible.

An employee appointed as a Manager will have completed an appropriate level of training in business management or have relevant industry experience including the supervision of staff in one or more areas of an hotel. In a General Hotel, this classification is commonly known as an Assistant manager. In an Accommodation Hotel, this classification may include any of the following positions: Duty manager; Assistant food and beverage manager; Assistant rooms division manager; Assistant front office manager or equivalent position.

This additional classification does not apply to:

Any hotel manager who is an employee of a proprietary or private company (within the meaning of the Corporations Law) where the Hotel Manager holds sufficient number of shares to entitle the Hotel Manager to voting control at general meetings of the company; or

Any hotel manager who is the senior partner of a partnership or has at least 49% of that partnership; or

A parent, spouse or de facto partner, son or daughter of a hotel manager excluded from the additional classification by this paragraph.”

[17] It is not contested that Reserve Hotels is indeed a hotel group and it is a hotel group that in my view would fall within the definition of this particular paragraph. The Applicant gave evidence and Mr Ryan cross-examined the Applicant and followed with submissions, testing the Applicant’s nominal as well as substantive position against this classification. Therefore, to be defined as a “hotel manager” pursuant to this award the Applicant’s duties needs to meet the following. That is:

“[a] hotel manager means an employee (however designated) who:

under the direction of senior management is required to manage and co-ordinate the activities of a relevant area or areas of the hotel; and

directs staff to ensure they carry out their duties in the relevant area or areas of the hotel; and

implements policies, procedures and operating systems for the hotel;

but excludes an employee who is employed to undertake the duties of senior management, responsible for a significant area of the operations of one or more hotels.”

[18] The Applicant’s evidence was clearly that he was a direct report to Mr Balagiannis, that he worked across a number of hotels and that he undertook activities in relation to a number of hotels. Whilst he made the point in evidence that he from time to time would be assigned to a particular hotel, his global duties were as directed to attend to particular hotels on particular days, but his role and the purpose of his position was to be across all of the hotels and to be available as needed to address issues in those hotels with their respective management and to work across a multiple number of venues. I find the Applicant’s duties do not meet the definition of a “hotel manager” as quoted above.

[19] The Applicant’s evidence was that whilst he nominally reported to Mr Balagiannis he was if I can use a colloquialism micro-managed by Mr Balagiannis. He gave evidence that he was often overruled by Mr Balagiannis. However, it was conceded by the Applicant that at least one manager, Mr Shane Lennon, reported to him and the activities that he undertook across the hotels were consistent with the general position description that was contained within the material tendered before the Commission, notwithstanding the Applicant’s resistance to some elements of that job description. The Applicant’s evidence causes me to conclude that he was an operations manager, that his duties were broader than that which are specifically contemplated by the Hospitality Award in its inclusive provisions, but that his role was challenging in that he had a strong willed and activist manager who often countermanded his decisions. That is a question of managerial style, it may not be modern, it may not be ideal, it may not even be the healthiest style for the person who demonstrates it, but it does not undermine the role that the Applicant had for the purposes of identifying the coverage of the Hospitality Award.

[20] The Hospitality Award specifically excludes some employees and I believe these exclusions are also relevant to my decision. It excludes employees who are employed to undertake the duties of senior management responsible for a significant area of the operations of one or more hotels. As I say, notwithstanding the Applicant’s complaints about being micromanaged, that description fits the evidence of what the Applicant’s role was. He was responsible for a significant area of the operations of one or more hotels. That his specific title is not one of the indicative titles does not detract from my conclusion in that matter, but what is important is that the title “venue manager” and “general hotel manager” are included in those exclusions, as well as "[a] manager to whom any of those positions report are responsible." The evidence is clear that at least in the case of Mr Lennon, he was a manager of that nature, a hotel manager so described in his letter of appointment which was signed by the Applicant. The Applicant, according to the letter of appointment, was the person to whom Mr Lennon was to report in his role and, therefore, the Applicant becomes, in the terms of the Hospitality Award, a manager to whom any of those positions report or are responsible.

[21] Notwithstanding the Applicant’s undoubtedly genuine belief that he was covered by the Hospitality Award and his undoubted genuine complaint that he was undermined in his ability to do his job and I make no comment about whether that is true or not. I have not received sufficient evidence and it is not pertinent for me to comment any further on as it is not relevant to the decision I am making. I make the point that notwithstanding those things the Applicant was a person who was not only not included in the Hospitality Award but was actually specifically excluded from the award. Mr Ryan took me to a decision of the Australian Industrial Relations Commission, in the matter of James Mark Staples v Omnibell Pty Ltd trading as the Grove Inn Hotel of 15 November 2005 4 (Staples) where the question of whether an employee was covered by a federal award was considered. In that case the question was not the Hospitality Award as this this decision preceded that award being made, but the Liquor and Accommodation Industry - Hotels, Resorts and Gaming - (Managerial Staff) Award 2003 and The Hospitality Industry - Accommodation, Hotels, Resorts and Gaming Award 1998.

[22] It was submitted by Mr Ryan that those two awards were the antecedent awards to the Hospitality Award and that the logic of the Full Bench in respect to their decision in that matter was pertinent to my consideration of this matter. I agree with that submission and particularly I agree with the Full Bench who upheld Hamberger SDP in the conclusion that it would be absurd for an employee to whom another employee reported, if the employee was to be considered covered by the award but the employee reporting to that employee was not considered to be covered by the award. As I have already said it is very clear that at least in the case of Mr Lennon, that his title is one of the excluded roles and that the effect is that a manager to whom any of those positions report or are responsible renders the Applicant excluded by the Hospitality Award and I am fortified in my view by the decision in Staples that I have referred to.

[23] That being the case I have concluded and so find that the Applicant was not covered by the Hospitality Award and since I already formed the view and found that he was a person who was not earning less than the higher income threshold, that is, he was a person who was excluded from being a person protected from unfair dismissal by earning more than the higher income threshold, those two conclusions taken together means that he fails the threshold set out in s.382 of the Act that a person is protected from unfair dismissal at a time if, at that time, he would have needed to either have income less than the high income threshold which we have concluded that he did not, and that he would have needed to be covered by a modern award or enterprise agreement. I should say at this point that it was never submitted by either party that an enterprise agreement covered the Applicant. The contest really was around the modern award and I thoroughly examined that and come to the conclusion that he was not covered by the Hospitality Award and, therefore, he is not a person protected from unfair dismissal. The application is dismissed.

DEPUTY PRESIDENT

Appearances:

J Boreland, the Applicant

P Ryan, Australian Hotels Association (NSW), for Reserve Hotels Pty Limited

Hearing details:

2013.

Sydney:

March 15.

 1   [2012] FWAFB 6108

 2   Ibid., PN9

 3   [2012] FWA 7049

 4   PR964245

Printed by authority of the Commonwealth Government Printer

<Price code C, PR535409>