Jye Freeman v Team Dreegan Pty Ltd T/A Team Dreegan

[2020] FWC 5453

[2020] FWC 5453

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jye Freeman
v
Team Dreegan Pty Ltd T/A Team Dreegan
(U2020/9107)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 13 OCTOBER 2020

Application for relief from unfair dismissal – jurisdictional objection – did an enterprise agreement apply to the applicant?

[1] Mr Jye Freeman was employed by Team Dreegan Pty Ltd (Team Dreegan) in the position of Civil Supervisor. He was dismissed on 25 June 2020. Mr Freeman contends that his dismissal was harsh, unjust and unreasonable. Team Dreegan denies those allegations and contends that the Fair Work Commission (Commission) does not have jurisdiction in relation to Mr Freeman’s unfair dismissal claim because he was not covered by a modern award or an enterprise agreement and the sum of his annual rate of earnings was more than the high income threshold. 1

[2] Mr Freeman accepts that his annual rate of earnings exceeded the high income threshold and does not contend that he was covered by a modern award, but submits that an enterprise agreement known as the Team Dreegan Pty Limited Employee Collective Agreement 2006 (Agreement) applied to him during his employment with Team Dreegan. A copy of an agreement known as the Team Dreegan Pty Limited Employee Collective Agreement 2014 was provided by Team Dreegan, but it accepts that no such enterprise agreement has been approved by the Commission. Team Dreegan also accepts that, at the time of Mr Freeman’s dismissal, the Agreement applied to some of its employees, but contends that Mr Freeman was not one of those employees.

[3] I conducted a hearing, by telephone, on 2 July 2020. Mr Freeman gave evidence in support of his application. Mr Sames, Civil Project Manager of Team Dreegan, gave evidence for Team Dreegan. Subsequent to the hearing, I gave both parties an opportunity to file further submissions in relation to issues related to the Agreement and the 2014 agreement. Team Dreegan took up that opportunity and Mr Freeman chose to rely upon the evidence and submissions already filed.

[4] This decision deals solely with the question of whether the Agreement applied to Mr Freeman in relation to his employment with Team Dreegan at the time of his dismissal.

Legal principles – application of an enterprise agreement

[5] Section 382(b) of the Fair Work Act 2009 (Act) provides that “A person is protected from unfair dismissal at a time if, at that time: (b)  one or more of the following apply: (ii)  an enterprise agreement applies to the person in relation to the employment”.

[6] The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) regulates certain agreements made prior to the introduction of theAct (such as the Agreement in question in this case). The Transitional Act provides that ‘Part 3-2 of the FW Act (which deals with unfair dismissal) applies, on and after the WR Act repeal day, as if: … (b) the reference in subparagraph 382(b)(ii) …of that Act to an enterprise agreement included a reference to an agreement-based transitional instrument.’ 2 Pursuant to sub-section 2(5)(b) of the Transitional Act a ‘collective agreement’ which is a ‘transitional instrument’ is an ‘agreement-based transitional instrument’ and thus an enterprise agreement for the purposes of section 382(b)(ii) of the Act.3 A ‘collective agreement’ is a ‘workplace agreement’ and thus a ‘WR Act Instrument’.4 Where a ‘WR Act instrument… was in operation immediately before the WR Act repeal day’ (30 June 2009) it is a ‘transitional instrument’.5

[7] The Transitional Act also deals with when transitional instruments no longer apply to or cover an employee. The Transitional Act provides that ‘(2) If an enterprise agreement… starts to apply to an employee, or an employer or other person in relation to the employee, then a collective agreement-based transitional instrument ceases to cover (and can never again cover) the employee, or the employer or other person in relation to the employee’. 6 Where an agreement does not ‘cover’ an employee it cannot ‘apply’.7 The Transitional Act also deals with variations to and termination of transitional instruments.8

[8] Each WR Act instrument which becomes a transitional instrument ‘continues in existence in accordance with this Schedule from when it becomes a transitional instrument, despite the WR Act repeal’. 9 A transitional instrument ‘covers’ the ‘same employees, employers and any other persons that it would have covered (however described in the instrument or WR Act) if the WR Act had continued in operation’ and ‘applies’ to ‘persons the instrument covers as would, if the WR Act had continued in operation, have been: (a) required by the WR Act to comply with terms of the instrument; or (b) entitled under the WR Act to enforce terms of the instrument.’10 The WR Act did not use the concepts of coverage and application. Instead, the WR Act provided that ‘A workplace agreement that is in operation binds: (a) the employer in relation to the agreement; and (b) all persons whose employment is, at any time when the agreement is in operation, subject to the agreement;…’.11

[9] Therefore, for the Agreement to apply to Mr Freeman I must be satisfied that:

•  the Agreement is a ‘collective agreement’;

•  the Agreement was in operation immediately before 30 June 2009;

•  no enterprise agreement or workplace determination (under the Act) started to apply to Mr Freeman during his employment with Team Dreegan; and

•  Mr Freeman’s employment was subject to the Agreement.

[10] The ‘principal purpose test’ is relevant to whether an employee is covered by an industrial instrument such as an enterprise agreement or a collective agreement. The test was summarised in Carpenter v Corona Manufacturing 12 as follows:

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

[11] A Full Bench of the Commission explained various features of the ‘principal purpose test’ in Broadspectrum Limited v United Voice 13:

“… the required analysis of the principal purpose is to be conducted by reference to the work performed by the employee. The test enunciated is primarily of utility where an employee performs a mixture of duties some of which fall, prima facie, within the coverage of the award or classification under consideration and some of which do not. However the test cannot be used to bring an employee within the coverage of an award or classification where the employee does not perform any of the prescribed work duties.”

Agreement

[12] Clauses 5.1 and 5.2 of the Agreement deal with its scope:

“5. PARTIES, SCOPE & DURATION

5.1 Parties Bound: The Agreement will be binding on Team Dreegan Pty Limited ABN 23 113 885 000 on the one hand and the Company’s employees on the other.

5.2 Scope: This Agreement will apply to all on site building related employees of the Company.”

[13] Parts of clauses 10 and 11 of the Agreement are of relevance:

10. CONTRACT OF EMPLOYMENT

10.1 Engagement of Employees:

…

(iii) All employees other than casuals will be on a full-time hourly hire arrangement. Each day is an individual engagement and no entitlements accumulate beyond that day. All employees will be paid for a minimum of three (3) hours work at each engagement.

…

11. REMUNERATION

11.1 Tradespersons & Labourers: The hourly rates applying to tradespersons and labourers, where paid, are agreed as being paid and received in satisfaction of all rates, allowances …

Rates of pay will be per the following table:

Base Rate Per Hour	Agreement Loading Per Hour	Aggregate Rate Per Hour
CLASSIFICATION	$	$	$
Carpenter	18.23	6.92	25.15
Carpenter’s Labourer	16.68	6.47	23.15

11.2 Apprentices: Remuneration and most other conditions for apprentices are per the Apprentice clause of this Agreement…”

Relevant facts

[14] The records associated with Work Choices era collective agreements are held by the Fair Work Ombudsman (FWO). On request by the Commission, the FWO provided to the Commission: (1) a receipt dated 27 June 2008 which indicates that the Agreement, and declaration, was received by the Workplace Authority Director on 27 June 2008; 14 and (2) a notice required under section 346M of the Workplace Relations Act 1996 (WR Act), dated 27 November 2008, notifying the employer (listed as Team Dreegan Pty Ltd) that the employee ‘collective agreement’ named ‘Team Dreegan Pty Limited Employee Collective Agreement 2008’ passed the no disadvantage test and that it would start operating on the seventh day after the date of the issue of the notice, that is, 4 December 2008.15 Neither the FWO nor the Commission have any record of a variation to or termination of the Agreement.

[15] Mr Freeman’s contract of employment states that his duties will include, but not be limited to, site co-ordination, site management, OHS management and reporting, “as required to facilitate works”, “as directed by Project Manager”, and “follow the information outlined in the Plant Operators Manual and Safe Work Method Statements”.

[16] Mr Freeman worked in the civil branch of Team Dreegan’s business. The work undertaken by that branch included a range of civil work, including road building, subdivisions, drainage, car parks, and constructing retaining walls, bridges and structures such as a storage shed. Another branch of Team Dreegan’s business undertakes construction work, principally the fit out of buildings but some construction of buildings.

[17] Mr Freeman gave unchallenged evidence, which I accept, that he worked on site all day every day during his employment with Team Dreegan. The work he undertook on site involved supervising employees undertaking civil work. Mr Freeman also did some hands on work with the employees he was responsible for supervising.

[18] Mr Freeman was paid an annual salary of $130,000 by Team Dreegan, rather than an hourly, daily, or weekly rate of pay.

[19] Mr Sames gave evidence, which I accept, that employees in the construction branch of Team Dreegan’s business are paid different rates, and on a different basis, to employees in its civil branch. Mr Sames contends that the Agreement covers building employees in its construction branch.

Consideration

[20] Based on the evidence discussed above,I am satisfied that the Agreement is a ‘collective agreement’ which was in operation immediately before the WR Act repeal day and is therefore a ‘transitional instrument’. Being a collective agreement that is a ‘transitional instrument’ the Agreement is an ‘agreement-based transitional instrument’. I am also satisfied that no other enterprise agreement or workplace determination (under the Act) started to apply to Mr Freeman during his employment with Team Dreegan. There is no evidence or suggestion that the Agreement has been terminated or otherwise ceased to operate. Hence, I am satisfied that the Agreement continues to operate in accordance with the Transitional Act and is an enterprise agreement for the purposes of section 382(b)(ii) of the Act. Therefore, if the Agreement ‘applied’ to Mr Freeman at the time of his dismissal, he will meet the requirement in s 382(b)(ii).

[21] Pursuant to the Transitional Act, the Agreement ‘covers’ and ‘applies’ to Team Dreegan and ‘all persons whose employment is, at any time when the agreement is in operation, subject to the agreement’. Therefore, to determine whether Mr Freeman’s employment was subject to the Agreement I must construe clause 5 of the Agreement (in context) and apply it to Mr Freeman’s employment with Team Dreegan.

[22] The principal purpose of Mr Freeman’s role with Team Dreegan was to supervise, at site, employees undertaking a range of civil work.

[23] The expression “on site building related employees” in clause 5.2 of the Agreement is, on one view, broad enough to include a supervisor such as Mr Freeman because he worked on site every day and he supervised employees undertaking civil work, which included building structures such as bridges, retaining walls, and storage sheds. The phrase “building related employees” is potentially broad enough to include employees undertaking such work and employees who supervise them.

[24] However, clause 5.2 of the Agreement must be construed in context with the other provisions in the Agreement. Part of that context includes the fact that the Agreement does not contain rates of pay other than for the classifications of carpenter, carpenter’s labourer, and apprentice. The Agreement does not specify a rate of pay for a supervisor, team leader or Mr Freeman’s position of Civil Supervisor. This is relevant but not determinative of the question of whether Mr Freeman’s employment was subject to or covered by the Agreement. Although it would be unusual, it is possible for an enterprise agreement or collective agreement to cover an employee even though it does not contain a pay rate for the employee. However, there would need to be a proper basis for the Commission (in the case of an enterprise agreement made under the Act) or the Workplace Authority Director (in the case of a collective agreement made under the WR Act) to be satisfied that the agreement passed the better off overall test (in the case of an enterprise agreement made under the Act) or the no disadvantage test (in the case of a collective agreement made under the WR Act).

[25] Also of contextual relevance is the fact that various provisions of the Agreement direct an employee to bring particular matters to the attention of their supervisor or team leader. 16 However, there are no provisions of the Agreement which expressly confer on a supervisor any benefits or entitlements. These matters add weight to Team Dreegan’s argument that Mr Freeman’s employment was not subject to or covered by the Agreement.

[26] In my view, if a reasonable person considered the Agreement as a whole and construed clause 5.2 in context with the provisions of the Agreement to which I have referred, they would come to the conclusion that Mr Freeman’s employment was not subject to or covered by the Agreement. Construed in context, the expression “building related employees” in clause 5.2 includes employees who undertake building work, such as carpenters, carpenter’s labourers, and apprentices, but does not extend to supervisors whose principal purpose is to supervise workers undertaking civil work.

Conclusion

[27] For the reasons stated, the Agreement did not apply to Mr Freeman at the time of his dismissal. It follows that Mr Freeman was not protected from unfair dismissal within the meaning of s 382(b) of the Act. Mr Freeman’s unfair dismissal application must therefore be dismissed.

DEPUTY PRESIDENT

Appearances:

G Pinchen on behalf of the Applicant
J Rapson on behalf of the Respondent

Hearing details:

2020.
Newcastle (by telephone):
2 September.

Final written submissions:

23 September 2020

Printed by authority of the Commonwealth Government Printer

<PR723514>

 1 s 382(b) of the Fair Work Act2009 (Cth) (Act)

 2 s 36(b), schedule 3 of the Transitional Act

 3 sub-s 2(5) and s 36(b), schedule 3 of the Transitional Act

 4 sub-s 2(2)(c), schedule 3 of the Transitional Act

 5 sub-s 2(3)(a), schedule 3 of the Transitional Act

 6 s 30, schedule 3 of the Transitional Act

 7 sub-s 3(2), schedule 3 of the Transitional Act

 8 s 9, schedule 3 of the Transitional Act

 9 sub-s 2(1), schedule 3 of the Transitional Act

 10 s 3, schedule 3 of the Transitional Act

 11 s 347 WR Act

 12 (2002) 122 IR 387 at [9]

 13   [2017] FWCFB 3202 at [31]

 14   Declaration Receipt – Employee collective agreement, Agreement number 085065255, dated 27 June 2008

 15 s 346M(1) of the WR Act provided that the Workplace Authority Director must notify the employer of its decision, which it was required to make under sections 364L and 346D, that the agreement passes the no-disadvantage test; and under s 347 of the WR Act, a workplace agreement came into operation on, “for an employee collective agreement [on] the seventh day after the date of issue specified in the notice under subsection 346M(1)…”

 16   See, for example, clauses 7.2(i), 21(a), 21(b), 21(c)