Karen Brown v Ark Swimwear Pty Ltd
[2022] FWC 3088
•9 DECEMBER 2022
| [2022] FWC 3088 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Karen Brown
v
Ark Swimwear Pty Ltd
(U2022/8675)
| COMMISSIONER MCKINNON | SYDNEY, 9 DECEMBER 2022 |
Application for an unfair dismissal remedy – high income threshold – whether covered by a modern award
Ms Karen Brown was employed as the General Manager of Ark Swimwear Pty Ltd (Ark) from 27 July 2021 until 24 August 2022. On the day her employment ceased, Ms Brown applied for an unfair dismissal remedy from the Commission. Ark objects to the application on the jurisdictional grounds that Ms Brown’s earnings were above the high income threshold and that her dismissal was consistent with the Small Business Fair Dismissal Code (the Code).
I have decided that because Ms Brown’s earnings were above the high income threshold, she is not protected from unfair dismissal in relation to her employment by Ark. These are my reasons.
Protection from unfair dismissal
A person is protected from unfair dismissal if, at the time of dismissal, they have completed at least the minimum employment period and they are covered by a modern award, and/or an enterprise agreement applies to them, and/or their annual rate of earnings is less than the high income threshold.[1]
Ms Brown was employed by Ark for more than 12 months. She completed at least the minimum employment period as an employee of Ark.
Ms Brown was dismissed on 10 August 2022. The dismissal took effect on 24 August 2022. At the time of dismissal, Ms Brown’s annual rate of earnings was $200,000, which is above the relevant high income threshold of $162,000. No enterprise agreement applied to Ms Brown’s employment.
Against this background, Ms Brown will only be protected from unfair dismissal in relation to her employment with Ark if she was covered by a modern award at the time of dismissal.
Award coverage
Ms Brown submits that she was covered by the General Retail Industry Award 2020 (the Award) and that the Commission can deal with her application. Ark denies that Ms Brown was covered by the Award.
A modern award covers an employee if the award is expressed to cover the employee.[2] In this case, the Award is an industry award that covers, to the exclusion of any other modern award:
“(a) employers in the general retail industry throughout Australia; and
(b) employees (with a classification defined in defined in (sic) Schedule A—Classification Definitions) of employers mentioned in clause 4.1(a).”[3]
The general retail industry is defined in the Award to mean the retail sale or hire of goods or services for personal, household or business consumption. This includes the retail sale of clothing. Ark is an employer in the general retail industry.
Ms Brown was an employee of Ark. The question is whether she was employed in a classification defined in Schedule A to the Award. Ms Brown submits that she was employed either as a Retail Employee Level 6, Retail Employee Level 7, Retail Employee Level 8 or Clerical Officer Level 5.
The “principal purpose test” is relevant to whether an employee is covered by a modern award or enterprise agreement.[4] The test was summarised in Carpenter v Corona Manufacturing[5] 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.”
The Award classifications
The Award classification structure is a cascading one, commencing with Retail Employee Level 1 and ending with Retail Employee Level 8. After Level 1, the classification structure steps up by reference to the level below. So, while Level 1 is prescriptive in meaning, the subsequent levels are basically defined as “an employee performing work in or in connection with a retail establishment at a higher level than” an employee of the level below. The Award classification structure covers both retail and clerical employees. For the most part, I have limited the description below to retail employees other than clerical employees, because the only clerical classification relied upon by Ms Brown is that which falls within the scope of Retail Employee Level 8.
Retail Employee Level 1 means an employee performing clearly defined functions, including receiving, preparing or packing goods for sale, recording sales, delivering goods, assisting customers, preparing goods for repair or replacement or performing routine clerical and office functions requiring an understanding of clear, straightforward rules or procedures. Examples of an employee at this level include shop assistant, store worker and basic receptionist.
Retail Employee Level 2 performs work at a level higher than Level 1. Examples of a Level 2 employee include forklift operator and ride on equipment operator.
Retail Employee Level 3 is performing work at a higher level again. Their indicative tasks are providing supervisory assistance to a designated section manager or team leader; opening or closing premises or providing associated security; securing cash; and fitting surgical corsets. Indicative job titles include machine operators, persons who are second-in-charge to a department manager and senior salespersons.
Retail Employee Level 4 may include a person who is trade qualified to Certificate III level and who is required to use these qualifications in the course of their work. Indicative tasks for an employee at this level include managing a defined department or section, supervising up to 4 sales staff, stock control, buying or ordering, and using trades skills for the majority of time in a week (for example, as a butcher, baker, pastry cook or florist). Other examples of a Level 4 employee include an assistant, deputy or second-in-charge shop manager of a shop without departments, qualified auto parts and accessories salespersons, window dressers, boot or shoe repairers, shiftwork supervisors, department or section managers with up to 2 employees (including self), service supervisors of up to 15 employees and nightfill supervisors or leaders.
Retail Employee Level 5 performs work at a level higher than Level 4. Indicative job titles include tradesperson in charge of other tradespersons within a department or section and service supervisor of more than 15 employees.
Retail Employee Level 6 performs work at a higher level than Level 5. Indicative job titles usually within this classification include department or section manager with 5 or more employees (including self), a manager or duty manager in a shop without departments or sections (including under direction of a person not exclusively involved in shop management), and assistant or deputy or second-in-charge to a shop manager of a shop with departments or sections.
Retail Employee Level 7 performs work at a level above Level 6. An indicative job title that is usually within the scope of Level 7 is a Diploma qualified visual merchandiser.
Retail Employee Level 8 performs work in or in connection with a retail establishment at a higher level than a Retail Employee Level 7. They may have diploma qualifications. Other than a clerical officer, the only indicative job title provided by the Award is “shop manager of a shop with departments or sections”.
A Clerical Officer Level 5 is an employee who is subject to broad guidance or direction and who reports to more senior staff as required. They will typically have worked or studied in a relevant field and will have achieved a standard of relevant or specialist knowledge and experience sufficient to enable them to advise on a range of activities and features and contribute, as required, to the determination of objectives, within the relevant field(s) of their expertise.
Level 5 clerical employees are responsible and accountable for their own work and may have delegated responsibility for the work under their control or supervision, in terms of, among other things, scheduling workloads, resolving operations problems, monitoring the quality of work produced as well as counselling staff for performance as well as work related matters. They would also be able to train and supervise employees in lower levels through personal instruction and demonstration. They would be able to assist in the delivery of training courses, and often exercise initiative, discretion and judgment in the performance of their duties. They may, but would not necessarily, hold post-secondary qualifications.
Indicative typical duties and skills of a Clerical Officer Level 5 include:
(a) applying knowledge of the organisation’s objectives, performance, projected areas of growth, product trends and general industry conditions,
(b) applying computer software packages within either a micro personal computer or a central computer resource, including integrating complex word processing or desktop publishing, text and data documents,
(c) providing reports for management in accounts or financials, staffing, legislative requirements or other company activities, and/or
(d) administering individual executive salary packages, travel expenses, allowances and company transport; administering salary and payroll requirements of the organisation.
The nature of Ms Brown’s role
At the time of her dismissal, Ms Brown was the General Manager of Ark. The position description for her role, which accompanied her contract of employment, was as follows:
“Reporting to the Director, the General Manager will help strengthen and scale the Business Operations. In this role, you will be required to be across every department, managing, implementing and/or assisting where necessary. This involves:
1. Leadership: Providing the team with spirited operational guidance and direction along with development, talent management and succession planning.
2. Operations and Manufacturing: Providing day-to-day management of the Operations function inclusive of warehousing, inventory management, sourcing and supply chain strategies.
3. Brand and Marketing: Playing a key role in developing and implementing strategy with the Marketing team, both on and offline, across Branding, Marketing and Communications.
4. E-commerce: Managing the internal and external e-commerce teams across customer service, website product management, logistics management and website development.
5. Finance and Strategy: Developing strategy across all departments, alongside the Director, with a focus on ROI. You will present clear strategic growth vision along with identifying and executing business improvement processes.
6. Supervision, Hiring and Training: Will oversee and divide employees up on tasks. You will be responsible for interviewing, bringing preferred candidates to the Director, and provide necessary training.”
Consistent with this position description, Ms Brown described her role as General Manager to “help grow the business”, to “move into different country markets”, to “grow the range”, and “make the business more profitable”. Before she took on the role, there were no set procedures to follow. Ms Brown “set them up”: for example, to make picking and packing compatible with new RFID technology that she introduced and integrated into the business. Ms Brown conceived and developed an internship program for the business and used her industry contacts to create new opportunities and generate return on investment. She managed operations, including warehousing and logistics. She managed human resources and oversaw Ark’s customer service functions. She analysed sales, carried out forecasting and merchandise planning against budgets. She collaborated with the sole Director of the business, Ms Renee Kirby, on strategy, new product ranges and prints. She took the lead on production of Ark products in China, including the negotiation of costs and product specifications. She created and executed significant marketing opportunities for the business and directed strategic marketing activities.
In all of this, Ms Brown reported to Ms Kirby – in the same way that a Chief Executive Officer would report to a company board. To the extent that Ms Brown seeks to downplay the seniority or scope of her role for the purpose of this proceeding, I reject her evidence. Ms Brown was the most senior manager in the business. She had a significant degree of autonomy in her day‑to‑day role which encompassed a range of business strategic and management functions over and above the day‑to‑day management of an online retail shop.
Ms Brown’s role does not fall comfortably within even the most senior Award classifications of Retail Employee Level 8 (such as a shop manager of a shop with departments or sections) and Clerical Officer Level 5 (someone reporting to management, applying knowledge gleaned from management about the direction of the business or the context in which it operates). A “shop with departments or sections” is defined in the Award to mean “a shop that has a clearly distinguishable department or section staffed by a manager and at least 3 subordinate employees who work solely or predominantly in that department or section.” The evidence does not establish that Ark meets this description. Ark sells swimwear. It has no other identifiable retail departments or sections within its online shop.
When one looks at the overall picture, Ark is more than a shop, and Ms Brown was more than a shop manager. She was not “exclusively involved in shop management”.[6] Ms Brown had overall managerial responsibility for the growth and success of the business. She was required to lead the Ark team, to develop and manage its talent, and undertake succession planning. She managed operations and manufacturing, including sourcing and supply chain strategies, and worked with Ms Kirby in the development and implementation of strategy, on branding and marketing, finance, growth and business improvement. She managed four e-commerce teams and brought in, managed and trained other employees.
The principal purpose of Ms Brown’s role was to manage and grow Ark’s business. In doing so, she was required to draw on her own experience and industry contacts, subject only to the direction of Ms Kirby. The principal purpose of Ms Brown’s role was not the management of a shop, or of one or more shop departments or sections. Nor was it to undertake senior clerical duties, such as applying knowledge, using computers for complex documents, reporting to management or managing travel diaries or payroll.
For these reasons, I find that Ms Brown was not employed in a classification defined in Schedule A to the Award. She was not covered by the Award at the time of her dismissal. It follows that Ms Brown is not protected from unfair dismissal in relation to her employment with Ark.
It is not separately necessary to decide whether Ms Brown’s dismissal was consistent with the Small Business Fair Dismissal Code.
Disposition
The application is dismissed.
COMMISSIONER
Appearances:
S Dryley-Collins of Supportah Australia Pty Ltd T/A Industrial Relations Claims on behalf of the applicant.
R Kirby for the respondent.
Hearing details:
2022.
Sydney:
November 21.
[1] Fair Work Act 2009 (Cth), s.382.
[2] Fair Work Act 2009 (Cth), s.48.
[3] General Retail Industry Award 2020, cl 4.1.
[4] See, for example, Graham v Globus Medical Australia Pty Ltd[2016] FWCFB 5495; McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184; Layton v North Goonyella Coal Mines Pty Ltd [2007] AIRCFB 713; The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd[2014] FWCFB 5643.
[5] 122 IR 387 (AIRC, 17 December 2002) at [9].
[6] Award, Retail Employee Level 6.
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