Kita and Secretary, Department of Employment
[2016] AATA 214
•6 April 2016
Kita and Secretary, Department of Employment [2016] AATA 214 (6 April 2016)
Division
GENERAL DIVISION
File Number(s)
2015/0492
Re
Andrew Kita
APPLICANT
And
Secretary, Department of Employment
RESPONDENT
DECISION
Tribunal Deputy President S E Frost
Date 6 April 2016 Place Sydney The decision under review is set aside. The matter is remitted to the Secretary for reconsideration in accordance with a direction that, as at 31 December 2009, Mr Kita was covered by the Technical Services Professional Engineers (General Industries) Award 1998, the provisions of which were incorporated into the Technical Services Professional Engineers (General Industries) (Roping-in No. 2 Victoria) Award 2002.
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Deputy President S E Frost
CATCHWORDS
Fair Entitlements Guarantee – redundancy payment – entitlement to payment prior to 1 January 2010 – whether conditions of employment provided entitlement – whether applicant covered by award – principal purpose of employment – decision under review set aside
LEGISLATION
Fair Entitlements Guarantee Act 2012
Fair Work Act 2009
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
CASES
Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387
Joyce v Christofferson (1990) 33 IR 390
McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184
Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCCA 4
Tucker v Digital Diagnostic Imaging Pty Ltd [2011] FWA 1767
SECONDARY MATERIALS
Technical Services Professional Engineers (General Industries) Award 1998
REASONS FOR DECISION
Deputy President S E Frost
6 April 2016
INTRODUCTION
In April 2013 Andrew Kita’s employment with his employer, OTEK Australia Pty Ltd (OTEK) was terminated. OTEK had been placed into administration and the administrator declared Mr Kita’s position redundant.
Mr Kita lodged a claim with the Department of Employment for assistance under the Fair Entitlements Guarantee Act 2012 (FEG Act). The Department decided that Mr Kita was entitled to an ‘advance’ under the FEG Act (FEG advance) of $53,349.43, but it later reviewed that decision and approved a further FEG advance of $526.32.
Mr Kita thinks he is entitled to a greater FEG advance than he has so far been paid. He has applied to this Tribunal for review of the Department’s decision.
THE ISSUE FOR DETERMINATION
The Tribunal has to determine whether Mr Kita was covered, as at 31 December 2009, by the Technical Services Professional Engineers (General Industries) Award 1998, the provisions of which were incorporated into the Technical Services Professional Engineers (General Industries) (Roping-in No. 2 Victoria) Award 2002 (together ‘the Award’).
If he was covered by the Award, then his service with OTEK prior to 1 January 2010 should have been included in the calculation of the redundancy pay entitlement he received as part of the advance under the FEG Act. If he was not, then that earlier service will have been correctly ignored in the calculation of the FEG advance.
THE LEGISLATIVE BACKGROUND
The FEG Act provides in s 3 for a statutory scheme to advance unpaid employment entitlements to former employees where the employer is insolvent or bankrupt, and the employee cannot otherwise recover payments.
Section 6 provides that an employee may receive payment for a number of employment entitlements, including annual leave, long service leave, redundancy pay, payment in lieu of notice, and unpaid wages.
Section 10 sets out the conditions for eligibility of an advance. Relevantly, a person’s employment must have ended as a result of the insolvency of their employer; the person must be owed a debt in respect of their employment entitlements; the person must have taken reasonable steps to prove the debt in the winding up or bankruptcy of the employer; the person must be an Australian citizen, permanent resident or holder of a special category visa at the time the employment ended; and an effective claim must be made to the Secretary for payment of an advance.
On receipt of an effective claim, the Secretary is required to decide if the person is eligible for an advance, and the amount of the advance: s 15.
Where, as here, the Secretary has made a decision on the amount of an advance a person is eligible for, and that decision has been affirmed, varied or substituted under the internal review process established under ss 38 and 39 of the FEG Act, the person may apply to the Tribunal under s 40(1)(b) for review of the decision.
WHAT IS THE DISPUTE ABOUT?
The Secretary decided that Mr Kita was eligible for an advance, but – and this is where the dispute is centred – that he had no ‘redundancy pay entitlement’ in respect of any period of employment prior to 1 January 2010.
The reason for the 1 January 2010 cut-off is that the Secretary concluded that Mr Kita was not covered by the Award. As an ‘award-free’ employee, and with no reference to redundancy pay in his employment contract (see [17]-[19] below), if Mr Kita were to have an entitlement to redundancy pay it could only be in reliance on the National Employment Standards contained in the Fair Work Act 2009 (FW Act), and then only subject to the conditions and restrictions in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (FW Transitional Act).
Section 119(1) of the FW Act sets out the circumstances in which an employee is entitled to a redundancy payment upon termination of their employment. This includes circumstances where a person’s employment is terminated as a result of the bankruptcy or insolvency of the employer (as is the case with Mr Kita). Section 119(2) of the FW Act then provides for the amount of a person’s redundancy pay entitlement to be calculated by reference to years of service, as follows:
Redundancy pay period Employee’s period of continuous service with the employer on termination Redundancy pay period 1 At least 1 year but less than 2 years 4 weeks 2 At least 2 years but less than 3 years 6 weeks 3 At least 3 years but less than 4 years 7 weeks 4 At least 4 years but less than 5 years 8 weeks 5 At least 5 years but less than 6 years 10 weeks 6 At least 6 years but less than 7 years 11 weeks 7 At least 7 years but less than 8 years 13 weeks 8 At least 8 years but less than 9 years 14 weeks 9 At least 9 years but less than 10 years 16 weeks 10 At least 10 years 12 weeks
However, item 5(4) in Schedule 4 to the FW Transitional Act provides that an employee’s period of service prior to 1 January 2010 does not count for the purposes of redundancy pay under the National Employment Standards if the terms and conditions of employment that applied as at 31 December 2009 did not provide for an entitlement to redundancy pay. The Secretary contends this is the position with Mr Kita. Mr Kita on the other hand contends that, since he was covered by the Award, and since the Award provided in Appendix B for redundancy pay to be payable to employees covered by the Award, the calculation of the redundancy pay component of his FEG advance should not stop at 1 January 2010 but should take into account his entire length of service with OTEK.
MR KITA’S EMPLOYMENT WITH OTEK
Mr Kita was initially employed by OTEK in November 2002, as a Project Manager. In March 2003 he was promoted to the position of Senior Environmental Scientist – Level 6 (Senior Hydrogeological Engineer) and then in late 2005 he was promoted to the position of Principal Hydrogeological Engineer.
An important development in Mr Kita’s employment with OTEK occurred on 1 December 2006, when he was appointed to the position of ‘Manager NSW’. This is the position he held continuously until November 2011 and, most significantly, the position he held on 31 December 2009 (the critical date for the purposes of the National Employment Standards).
The Letter of Appointment to the position of Manager NSW (T10-61) explained:
Your position with OTEK will be that of Manager NSW.
This position is a secondment and you will be based in the Sydney office for a period of two years commencing 1 December 2006. You will report to the Chief Executive Officer, Michael Tighe. The secondment expires on 30 November 2008.
Your primary duties and responsibilities are set out in the attached position description.
In addition to the stated roles and responsibilities you are expected to perform such other duties as may from time to time be assigned to you and to use your best endeavours to promote the interests of OTEK. You are also required to carry out such other instructions and directions as OTEK may from time to time reasonably and lawfully give to you.
…
The document at T11-72 provides the following ‘Position Description’:
Full Profit and Loss responsibility for the business activities of the staff and operations of OTEK in New South Wales. Support and drive staff development to grow and expand OTEK Australia Pty Ltd.
The ‘Qualifications and Experience’ were stated to be:
·Education: Degree qualified, preferably Science/Engineering and/or Business;
·Eight to ten years experience in a professional role, preference towards environmental or engineering; business administration and/or
·Management experience of a department or division.
The question is whether, occupying that position and performing the functions required of that position, Mr Kita was covered by the Award as at 31 December 2009.
THE RELEVANT PROVISIONS OF THE AWARD
Mr Kita claims to have been covered by clause 13.1.4 of the Award, as a Level 4 Professional Engineer. The clause reads as follows:
13.1.4 Level 4 Professional Engineer
13.1.4(a) Classification level definition
A professional engineer required to perform professional engineering work involving considerable independence in approach, demanding a considerable degree of originality, ingenuity and judgement, and knowledge of more than one field of, or expertise (for example, acts as his/her organisation's technical reference authority) in a particular field of professional engineering. The professional engineer:
13.1.4(a)(i)initiates or participates in short or long-range planning and makes independent decisions on engineering policies and procedures within an overall program;
13.1.4(a)(ii)gives technical advice to management and operating departments;
13.1.4(a)(iii)may take detailed technical responsibility for product development and provision of specialised engineering systems, facilities and functions;
13.1.4(a)(iv)co-ordinates work programs; and
13.1.4(a)(v)directs or advises on use of equipment and material.
The professional engineer makes responsible decisions not usually subject to technical review, decides courses of action necessary to expedite the successful accomplishment of assigned projects, and may make recommendations involving large sums of money or long-range objectives.
Duties are assigned only in terms of broad objectives, and are reviewed for policy, soundness of approach, accomplishment and general effectiveness. The professional engineer supervises a group of groups (sic) including professional engineers and other staff, or exercises authority and technical control over a group of professional staff, in both instances engaged in complex engineering applications.
Clause 6 contains definitions that apply throughout the Award. Relevant definitions are:
6.2Professional engineering duties shall mean duties carried out by a person in any particular employment, the adequate discharge of any portion of which duties requires qualifications of the employees as (or at least equal to those of) a graduate member of the Institution of Engineers, Australia.
6.3Professional engineer shall mean an adult male or female person qualified to carry out professional engineering duties as above defined. …
THE TEST FOR DETERMINING AWARD COVERAGE
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.
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.
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”.
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.
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[1], 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.
[1] [2011] FWA 1767 at [22]
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).
MR KITA’S DUTIES AND ROLES AS MANAGER NSW OF OTEK
The position documentation
It is convenient to start with the documentation. I have already set out the ‘Position Description’ but I repeat it here for convenience:
Full Profit and Loss responsibility for the business activities of the staff and operations of OTEK in New South Wales. Support and drive staff development to grow and expand OTEK Australia Pty Ltd.
There were five ‘Key Responsibility Areas’: Human Resources (Training and development); Operations; Customer; Financial; and Strategic. Each of them had a number of components, many of which are managerial in nature, rather than technical. For example, Mr Kita had responsibility for staff billable hours; for ensuring that staff attended sufficient professional development sessions; and for providing a monthly business report promptly after the end of the month. He was also the one held accountable for the billing of work in progress; for restricting write-offs to less than 2% of annual sales; and for preparing an annual ‘Sales and Marketing’ plan, to be updated every six months.
However, he was not expected to abandon the technical side of his work. This is made plain by the specification of his expected ‘Overall Business Activity’, which had only 50% of his time to be dedicated to a combination of training and development and administration (properly regarded as managerial duties), and the remaining 50% to be dedicated to customer management, new business development, fieldwork, and reviewing tenders and bids.
Mr Kita’s evidence
Mr Kita explains in his statement dated 22 May 2015 (Exhibit A2) that the technical work that he undertook while he worked at OTEK as a Project Manager included the performance of designated fieldwork/sampling and the completion of associated paperwork, giving technical advice, coordinating work projects, liaising with clients, meeting billable goals, making technical recommendations, reviewing reports, proposals and invoices and supervising and exercising technical control over other employees. Those categories of work continued into his roles, first, as Senior Hydrogeological Engineer and then as Principal Hydrogeological Engineer.
He characterises his role from December 2006 until November 2011 not only as Manager NSW (and in fact he says he was also responsible for the ACT) but also as Principal Hydrogeological Engineer. He says that he continued to perform those categories of technical work, as a continuation of his previous role of Principal Hydrogeological Engineer.
He says that he also became responsible for the supervision of a small team of environmental scientists and engineers and in so doing, became responsible for technical oversight and technical review of their work. He acknowledges that he took on some administrative roles including liaising with new and existing clients, developing new business opportunities, completing monthly management reports, meeting financial targets, conducting write-offs, and strategic work ensuring the New South Wales division was profitable.
Nevertheless, and despite the additional administrative responsibilities, he says that his role continued to be technical and project oriented, and that he continued to undertake tasks as a Principal Hydrogeological Engineer. The majority of his time, he says, was spent undertaking technical work including delivering technical advice, coordinating work projects, making technical recommendations, preparing and reviewing technical reports and proposals (including authoring or co-authoring various reports) and supervising and mentoring engineers and scientists within his office. He estimates that he spent on average 70-80% of his time performing technical work throughout the time that he held the position of Manager NSW.
He suggests that OTEK acknowledged the significance of his continuing technical role by asking him to travel to Houston, Texas, for a technical due diligence project at a former Eastman Chemicals site, for meetings with key technical contacts at the large global engineering firm, ARCADIS, at multiple locations across the USA, and for a meeting with specialist fracturing, injection and drilling company, ARS Technologies, Inc. He explains that ARCADIS was partnering with OTEK on a large remediation project tender in Australia.
Included in the documentation provided to the Secretary in support of Mr Kita’s claim for an FEG advance are copies of various technical reports issued by OTEK to its clients during the period December 2006 to November 2011 and indicating either that the ‘Final Review’ was undertaken by Mr Kita, or that he was the ‘Reviewer’ or the ‘Secondary Author/Reviewer’; in each case Mr Kita has signed the report as ‘Principal Hydrogeological Engineer’, and sometimes also as ‘State Manager’ or ‘General Manager’[2].
[2] T30, pages 142-143, 150-151, 161-162, 166-167, 183-184, 230-231
There are also multiple letters and proposals sent by OTEK to clients, and which have been signed by Mr Kita as ‘Principal Hydrogeological Engineer’, and sometimes also as ‘State Manager’ or ‘General Manager’[3].
[3] T30, pages 147, 155-156, 157-158, 159-160
The evidence of other witnesses called by Mr Kita
Grant Scott is one of the founding directors of OTEK in 1991. He remained involved with the company until it ceased trading in 2013, as a director and sometimes as the managing director.
In his written statement dated 22 May 2015 (Exhibit A1) Mr Scott says he had a close working relationship with Mr Kita. In relation to Mr Kita’s duties from the time he was promoted to the position of Manager NSW in December 2006, Mr Scott says this, at [9]-[10] of his statement:
In this role the Applicant was responsible for promoting and developing OTEK’s business in New South Wales, ensuring the State was profitable, setting budgets, conducting performance reviews and managing a group of engineers and scientists. At the same time, the Applicant continued in his role as Principal Hydrogeological Engineer meaning the majority of the Applicant’s working hours were occupied by his Engineering Tasks[4]. In particular, the Applicant continued to deliver, and ultimately to be responsible for technical projects delivered to clients, including by preparing and reviewing technical reports and proposals.
During his time as a General Manager, the Applicant also continued to be internally referred to as a resource for people both within his own team and territory but also for those Managers and engineers in other locations across the country. The Applicant would frequently be sought out by his colleagues for advice, and he would be consulted on various projects, particularly on areas of ground water contamination, to review technical reports and to assist them in providing accurate recommendations to clients.
[4] Mr Scott earlier described ‘Engineering Tasks’ as reviewing relevant data (usually related to the incidence and migration of contaminated ground water) and writing detailed reports outlining the specific issues presented and possible solutions including formulating complex conclusions and recommendations for a given project.
Mr Scott confirmed in cross-examination that Mr Kita was responsible for “the full financial management of the New South Wales operations”.
Christopher Dyball was the Chief Executive Officer of OTEK from about July 2004 until about July 2007. Later, in about July 2011, he was called upon to provide CEO services to the company again and he did so until about October 2011. During the period July 2007 to July 2011 Mr Dyball remained a director of OTEK and in that time he had “a lot” of interactions with Mr Kita, during interstate visits and while attending management meetings.
Mr Dyball says in his witness statement dated 22 May 2015 (Exhibit A4) that in his estimation, Mr Kita spent about 40% of his time on administrative work from 2007 until the end of 2009. He then says, at [9] of that statement:
For the remainder of his working time, the Applicant continued to perform Technical Work and remained heavily focused on his role as an engineer and technical specialist within OTEK. The Applicant continued to be responsible for overseeing many of the reports and proposals that would be provided to clients and focused on the technical delivery aspect of projects to clients. The Applicant also continued to be actively involved in the technical mentoring of his team, the preparation and review of technical reports and proposals, and he continued to be involved in billable fieldwork. The Applicant also continued to be involved in Technical Work including the development and implementation of remediation projects.
In cross-examination, Mr Dyball was asked whether Mr Kita had “full responsibility financially for the New South Wales business”. He said he did, “within certain limitations”, which were not further explored. He said that Mr Kita had a responsibility to train his staff, and to supervise them “to a degree”, noting that they were actually “self-managed teams”. Mr Kita was also a member of the Senior Management Group, but Mr Dyball noted that there were also some other senior technical staff involved in that group as well.
Glenn Thiele was OTEK’s State Manager for Victoria during the period when Mr Kita was Manager NSW. Mr Thiele described his own role as “broadly similar” to Mr Kita’s role – they were “equal counterparts with the only difference in position title being the geographical location of our areas of responsibility” (Exhibit A5 [12]). His witness statement continues, at [13], [14] and [16]:
We both had hybrid roles, undertaking Administrative Work and Technical Administrative Work, but also maintaining a large proportion of Principal Engineering Tasks. In addition to his promotion [to the position of Manager NSW], the Applicant continued concurrently in his role as Principal Hydrogeological Engineer.
Despite the additional managerial responsibilities vested in the Applicant from December 2006, to the best of my knowledge the Applicant’s technical contribution did not cease and did not significantly reduce. I was aware of this because during his time as General Manager, the Applicant continued to be referred to internally as a technical resource across OTEK’s entire Australian operations (including in Victoria) for risk assessment on various projects and to provide assistance to other teams. He continued to be involved in Technical Work on client projects including the reviewing of technical reports (including for clients based on (sic) Victoria), the scoping and tendering of projects, the coordination of work programs and making relevant recommendations and was consistently utilised by the Victorian division to provide technical assistance and consultation. I would estimate that we spoke several times a week during this period and on some occasions several times a day in relation to Technical Work.
…
Based on my working relationship with the Applicant and my own experience in my own role, I estimate that during the period from 2006 to 2011 while the Applicant was employed as General Manager, Administrative Tasks occupied approximately 10 to 20% of working hours. The remainder of the work he performed was Technical Work and Technical Business Development Work performed in conjunction with his dual role as Princip[al] Hydrogeological Engineer.
The evidence of the witness called by the Secretary
Rick Marmur was the Chief Executive Officer of OTEK for most of the time that Mr Kita was the Manager NSW. Mr Marmur provided a witness statement dated 31 July 2015 (Exhibit R2) in which he explains his involvement with the company and his understanding of Mr Kita’s role in it.
Mr Marmur’s statement acknowledges, at [7], that as Manager NSW Mr Kita “continued to do some technical work” but notes that Mr Kita also had responsibility for finding new work in New South Wales and that he had “some responsibility for revenue and expense management”.
Mr Marmur’s statement also claims that it was he, Mr Marmur, who created two new management positions for each State following a review in May-June 2007. One of the positions he describes as General Manager, the other as Operations Manager. He explains the roles of each of these positions at [11] of his statement:
The General Manager position had responsibility for managing the business within the State, including: revenue; expenses; business development; write-offs; and general financial management. The primary purpose of this position was managerial with a strong business development focus.
The Operations Manager position was a technical role, with responsibility for oversight of the technical and project management aspects of OTEK’s work within each State, as well as managing the allocation of work to teams within the State.
Mr Marmur explains that Mr Kita acted for a short time, from about July 2007, in the position of NSW Operations Manager because OTEK was experiencing some difficulty finding someone to fill that position. The position was eventually filled towards the end of 2007, and then from early 2008 until Mr Marmur left OTEK in July 2011, Mr Kita was employed solely in the position of General Manager NSW/ACT.
Mr Marmur’s statement continues at [21]:
Andrew did remain engaged over a transitional period of a few months in operational activities until the new Ops Manager was bedded in. He also continued to do some technical work beyond that point as an internal consultant and subject matter expert to others in the company, something that was necessary in a company OTEK’s size. Andrew was not, however, expected to undertake field work or spend any significant time on technical work. He did from time to time attend client review meetings in the field which were technically focused.
Mr Marmur also states that Mr Kita “continued to have some involvement in technical work from the beginning of 2008 onwards” but it was not his principal responsibility. According to Mr Marmur, Mr Kita’s principal responsibility was “to grow OTEK’s business in NSW, and achieve or exceed all the targets that have been established and agreed with him for the State, annually.” Mr Marmur expected that those duties would have taken up 80% of his time.
In his second witness statement, dated 2 October 2015 (Exhibit A3), Mr Kita took issue with some of the things Mr Marmur asserted. He also supplemented Mr Marmur’s comments with some of his own.
Mr Kita disagreed with the timing of the creation of the Operations Manager positions, claiming that they had existed in the company’s organisational structure well before 2007. Furthermore, he maintained, particularly by reference to documentation of the kind referred to in [37] and [38] of these reasons, that he continued to be employed in the position of Principal Hydrogeological Engineer even after he had been appointed State Manager NSW/ACT.
Mr Marmur conducted an appraisal of Mr Kita’s performance in early 2010. The appraisal form, at T12, reflects the common practice by which the employee self-appraises his performance (supported by ratings and comments) and the manager – here, Mr Marmur – adds ratings and comments as well. The form notes the ‘Review Period’ is January/February 2010 but in fact it reviews Mr Kita’s performance for the last six months of 2009 and gives guidance on things to focus on in the first six months of 2010.
Mr Kita’s own comments are generally brief; Mr Marmur’s are somewhat longer. In the category ‘Consistently meets or exceeds billability target’ Mr Kita notes that he is ahead of budget. Mr Marmur comments:
this is good. Make sure the (sic) you don't get dragged into technical work at the expense of business development. No question that with your experience and knowledge that people would see you as a goto person on technical matters so controlling the balance is important.
CONSIDERATION
The question is whether or not the principal purpose for which Mr Kita was employed by OTEK as at 31 December 2009 was, as he claims, as a Level 4 Professional Engineer.
It is clear from the evidence that, although his position was described as ‘Manager NSW’, Mr Kita had both technical and managerial responsibilities as at 31 December 2009. Mr Kita himself said so, when he characterised his new position from December 2006, despite its formal job title, as one that included an ongoing responsibility to perform the role of Principal Hydrogeological Engineer. I accept that characterisation. It is supported by the continuing reference to Mr Kita, in reports, proposals and correspondence issuing from OTEK, as ‘Principal Hydrogeological Engineer’.
Of course, as to that last point, it must be accepted that at least some of the outgoing correspondence emanated from Mr Kita himself, and as State Manager he is likely to have had some control over his own signature block. Nevertheless, the company did not at any stage take issue with Mr Kita’s identification of himself in the way that he did. It was content to allow very significant and apparently expensive reports to issue to clients with final technical sign-off undertaken by Mr Kita. Whether expressly or by implication, OTEK was holding Mr Kita out to its client base as a (and perhaps as the only) Principal Hydrogeological Engineer in New South Wales.
I also find it most likely, consistent with Mr Kita’s second witness statement, that his selection for the Manager NSW position was based on his technical experience and capability. He noted that at the time of his appointment to that position he had no previous management experience or qualifications.
Mr Kita, Mr Scott, Mr Dyball and Mr Thiele all gave evidence, which I accept, to the effect that Mr Kita remained involved in undertaking or reviewing technical work. Although it is not the determinative factor, Mr Kita’s witnesses said the time Mr Kita spent on technical work was significant – Mr Scott said “the majority” of his time, Mr Dyball said 60%, Mr Thiele said up to 80%. They all spoke from positions of knowledge and experience, Mr Scott and Mr Dyball as directors of the company and Mr Thiele as Mr Kita’s State manager counterpart in Victoria. In addition, Mr Scott and Mr Thiele are both qualified engineers themselves, with significant insight into the duties expected of a person with that qualification and occupying the position of Manager NSW.
Mr Marmur on the other hand does not come from an engineering background. His view of the duties of the person occupying the position of Manager NSW was a reflection of his background as a business manager rather than a professional engineer. That is why, in my view, there is a different focus between what he says and what Mr Kita and the other OTEK directors and employees say.
It seems an unlikely proposition that the principal purpose for which a person with Mr Kita’s training, background and experience was employed by OTEK from December 2006 and right through to at least 31 December 2009 was anything other than to continue with the company as a very senior engineer providing technical input to and oversight of the work performed for clients. And yet that is the proposition that is put against Mr Kita. Having regard to all the evidence, I think the proposition is wrong. In coming to that view, I do not ignore the fact that Mr Kita took on some responsibility for monitoring the financial performance of the NSW operation, but I do not consider that to have been either the principal purpose of his employment or the primary function that he performed.
Even Mr Marmur’s emphasis, in his appraisal of Mr Kita’s performance for the six months ended 31 December 2009, was on the importance for Mr Kita of “controlling the balance” – not between so-called technical work on the one hand and financial management on the other (as one would have expected if he had thought Mr Kita was not giving sufficient attention to his management obligations), but between technical work and business development. To me, that is a significant factor, since it is more likely that a technical expert will recognise business development opportunities than, say, a financial manager will. In other words, the business development activities that Mr Marmur wanted Mr Kita to spend more time on are more closely aligned with Mr Kita’s technical role than a managerial one.
There are two other significant factors. The first is that the only major training or development activity of Mr Kita’s that was referred to in these proceedings was a ‘Remediation Technologies Boot Camp’ that he attended in Denver, Colorado, in mid 2012. Although it occurred after the critical date of 31 December 2009, it provides some indication of OTEK’s attitude towards Mr Kita’s professional development needs. There is no indication that Mr Kita was encouraged to attend, or did in fact attend, any training activities directed towards his ‘managerial’ roles.
The second is that OTEK chose to send Mr Kita, in March 2011, to Houston, Texas, for the Eastman Chemicals assignment (referred to in [36] of these reasons). I infer that his involvement in the assignment was entirely technical in nature.
The principal purpose of Mr Kita’s employment falls comfortably within clause 13.1.4 of the Award, as set out in [21] of these reasons. Mr Kita was plainly OTEK’s technical reference authority[5] (or at least one of them) in his field of expertise and his technical activities are covered by, at least, subclauses (a)(ii), (a)(iii) and (a)(iv), and the concluding words of the clause.
[5] Chapeau of clause 13.1.4(a)
CONCLUSION
Since the principal purpose for which Mr Kita was employed by OTEK as at 31 December 2009 was as a Level 4 Professional Engineer, he was covered by the Award at that date. That means that he had a redundancy pay entitlement when his employment was terminated as a result of OTEK’s insolvency.
DECISION
The decision under review is set aside. The matter is remitted to the Secretary for reconsideration in accordance with a direction that Mr Kita was covered by the Award as at 31 December 2009.
I certify that the preceding 68 (sixty -eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President S E Frost ................................[sgd]........................................
Associate
Dated 6 April 2016
Date(s) of hearing 2 and 3 November 2015 Solicitors for the Applicant FCB Workplace Law Solicitors for the Respondent Clayton Utz
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