Oliver Walsh v Indesco Pty Limited - [2023] FWC 2523

[2023] FWC 2523

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Oliver Walsh
v

Indesco Pty Limited

(U2023/6615)

COMMISSIONER LIM

PERTH, 2 NOVEMBER 2023

Application for an unfair dismissal remedy – jurisdictional objection – high income threshold – whether the employee was covered by the Professional Employees Award 2020 – jurisdictional objection dismissed.

Introduction

On 20 July 2023, Mr Oliver Walsh (Applicant or Mr Walsh) applied to the Fair Work Commission (FWC or Commission) alleging that he was unfairly dismissed from his employment with Indesco Pty Limited (Respondent or Indesco).

Indesco is an Australian-based engineering consultancy. Mr Walsh commenced employment with Indesco on 20 July 2020 as a Principal Civil Engineer. He was dismissed on 30 June 2023.

Indesco have raised a jurisdictional objection to Mr Walsh’s application on the basis that Mr Walsh was not protected from unfair dismissal under s 382 of the Fair Work Act 2009 (Act). This is on the basis that Mr Walsh earned more than the high-income threshold and was not covered by an enterprise agreement or award.

It is accepted between the parties that Mr Walsh did earn more than the high-income threshold and he was not covered by an enterprise agreement. However, Mr Walsh contends that at the time of his dismissal, he was covered by the Professional Employees Award 2020 (PE Award).

It is uncontroversial that to establish whether Mr Walsh was protected from unfair dismissal pursuant to s 382 of the Act, I must determine:

what was Mr Walsh’s role at the time of his dismissal; and
did his role fall under the coverage of the PE Award.

I conducted a case management conference on 5 September 2023. Directions for the filing of material were subsequently issued. A hearing was conducted via MS Teams on 4 and 5 October 2023. At the hearing, Mr Walsh represented himself and Indesco was represented by Mr Angus Gorman. Mr Gorman is a Director for Indesco.

Having considered the relevant evidence and submissions of the parties, I find that Mr Walsh was covered by the PE Award. The Application can accordingly proceed to be determined on the merits.

My detailed reasons follow.

Relevant legislation

It is helpful to set out the relevant legislation and the recently amended provisions of the PE Award.

Section 382 of the Act provides:

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.

It is common ground that Mr Walsh has completed the minimum employment period, is not covered by an enterprise agreement and earned more than the high income threshold.

The contention concerns s 382(b)(i), and whether Mr Walsh was covered by the PE Award.

The Professional Employees Award 2020

The PE Award is an industry and occupational award that covers:[1]

Employers with respect to their employees performing professional engineering and professional scientific duties who are covered by the classifications in Schedule A, and those employees.
Employers principally engaged in the information technology industry, the quality auditing industry or the telecommunications services industry and their employees who are covered by the classifications in Schedule A.

Employers principally engaged as medical research institutes with respect to their employees performing professional medical research duties who are covered by the classifications in Schedule B, and those employees.

It is common ground that Indesco falls within the first category with respect to their employees performing professional engineering duties.

The chapeau of Schedule A (Classification Structure and Definitions) provides, “An employee performing professional engineering duties, professional scientific duties, professional information technology duties or quality auditing must be classified in one of the following classifications provided that the employee is not employed in a wholly or principally managerial position” (emphasis added).

As noted above, the wording in Schedule A was amended earlier this year.

In the recent case of Zheng v Poten & Partners (Australia) Pty Ltd,[2] a Full Bench examined the coverage of the PE Award in relation to a jurisdictional objection under section 382(b)(i) of the Act. The Full Bench observed that there has been “excessive litigation as to whether unfair dismissal applicants are covered by the [PE] Award”[3].

Accordingly, a variation of the PE Award was commenced on the Commission’s own motion (PE Award Variation)[4] to consider two issues in respect of the PE Award: hours of employment and overtime; and coverage of the PE Award.

In finding that the coverage of the PE Award required clarification, the Full Bench noted at [79]:

“As explained in paragraph [46] of Zheng, it is well-established that the “principal purpose” test is used to determine the application of the classifications in Schedule A of the Award. However, for the reasons stated above, we agree with the conclusion in paragraph [45] that this test is “singularly ill-suited” to determine the application of those classifications, and the uncertainty this has caused has led to excessive litigation about the coverage of the Award in individual cases. We therefore consider that some modification to Schedule A is required in order to more clearly elucidate the circumstances in which an employee will be covered by any of the classifications without either expanding or contracting the coverage of the Award. This conclusion necessarily involves a rejection of the Ai Group’s submission that we should, in effect, do nothing.”

And relevantly at [80]-[82]:

“[80] Subject to one important limitation, it appears to us that the classifications in Schedule A are drafted on the basis of an assumption that, once a person is engaged to perform duties of the requisite nature, they will fall within one of the classifications. That is, the classifications have the function of determining in what grade an employee covered by the Award will fall rather than whether an employee is covered by the Award in the first place. The limitation is that the classifications do not extend to positions which are principally managerial in nature. Level 4, the highest classification, covers a person performing professional work at a senior or leading level. However, there is no indication that this is intended to cover a managerial position. Clause A.1.11(d), which refers to a Level 4 employee being assigned duties “only in terms of broad objective” which are “reviewed for policy, soundness of approach, accomplishment and general effectiveness”, makes it apparent that a Level 4 employee remains subject to higher managerial control. Further, clause A.1.11(e) provides:
(e)The employee supervises a group or groups including professionals and other staff, or exercises authority and technical control over a group of professional staff. In both instances, the employee is engaged in complex professional engineering or professional scientific/information technology applications.

[81] This provision identifies that the Level 4 employee exercises only supervisory authority and control in respect of professional/technical matters. In short, a Level 4 employee is not a manager, even if the role of manager in some respects require engineering, scientific, or information technology qualifications.
[82] No party suggested that, in order to resolve the difficulty we have identified, we should review and recast the classification definitions in Schedule A. We agree that this would be a major undertaking beyond the scope of the current proceedings. We think that a better approach would be to add a provision to Schedule A which makes it clear that the classifications will apply in a way identified above – that is, they apply to all employees who perform professional engineering duties, professional scientific duties, professional information technology duties or quality auditing unless the person holds a position which is principally managerial in nature. Such an approach involves a combination of the approaches advanced by the APESMA and ABI and the NSWC.”

It is uncontroversial that Mr Walsh performed professional engineering duties as a Principal Civil Engineer for Indesco. Further, the parties agree that Mr Walsh’s role was not wholly managerial. What is in contest between the parties is whether Mr Walsh’s role was principally managerial.

Observations on the evidence

General observations

At the hearing, Mr Walsh gave evidence for his case. The Respondent called Mr Gorman, Mr Anthony Pickrell, Mr Matthew Zollinger, Ms Jo Livingstone, and Mr Brandon Gathercole.

All the witnesses intertwined their evidence with opinions on matters that are for the Commission to determine. This is not unusual for laypeople, particularly where they are unrepresented. Where this has occurred, I have treated such ‘evidence’ as submissions.

I also note that the parties included substantial evidence on matters that were not relevant to the jurisdictional objection. In particular, both parties led evidence that was more appropriate for a merits determination. Accordingly, I do not traverse all the evidence and factual disputes between the parties.

To the extent that either party asserted facts outside of sworn evidence, I have not relied on those facts in reaching any findings.

Mr Walsh

Mr Walsh has a Bachelor of Civil Engineering with Honours, a Bachelor of Commerce, and is a Chartered Engineer with Engineers Australia. As a Chartered Engineer, Mr Walsh has credentials in Civil Engineering and Project Management as areas of practice recognised by Engineers Australia. Prior to working for Indesco, Mr Walsh was employed as a Civil Project Engineer and Associate at Stantec.

I found that Mr Walsh gave his evidence openly and honestly. Mr Walsh made concessions where appropriate and did a commendable job of preparing and conducting his matter as an unrepresented party. I generally accept his evidence about the objective facts.

Mr Gorman

Mr Gorman is a long-time employee of Indesco. Mr Gorman has extensive engineering qualifications including a Bachelor of Civil Engineering and a Masters in Project Management.

Mr Gorman was both a witness and the Respondent’s advocate in these proceedings. He unfortunately had difficulty with this balancing act.

This was evident during his cross-examination, where Mr Gorman would at times answer questions with submissions and avoid answering questions directly.

I attribute this to Mr Gorman not understanding the proceedings rather than malice or ill-intent.

Mr Pickrell

Mr Pickrell is a Chartered Accountant and Indesco’s Chief Financial Officer. Mr Pickrell worked with Mr Walsh for approximately five months prior to Mr Walsh’s termination.

I find that Mr Pickrell gave his evidence honestly.

Mr Zollinger

Mr Zollinger is the Associate Director of Indesco’s Sydney Civil unit. Mr Zollinger is a chartered civil engineer and is accredited with the National Professional Engineers Register. Mr Zollinger commenced with Indesco in October 2022 and at the time of Mr Walsh’s termination, had primary responsibility for the Indesco Sydney civil unit.

Mr Walsh and Mr Zollinger worked closely together from October 2022 until Mr Walsh’s termination on 30 June 2023. Mr Walsh also reported directly to Mr Zollinger from 19 May 2023 onwards.

I found Mr Zollinger to be an excellent witness in terms of his honesty; ability to communicate the technical aspects of engineering; and clarity in conveying Indesco’s operations. Mr Zollinger was open in his evidence, even when that evidence may not have assisted the Respondent’s case. I have given his evidence significant weight.

Ms Livingstone

Ms Livingstone is Indesco’s People and Culture Manager and was employed in April 2022. The bulk of Ms Livingstone’s written evidence comprised of opinions on whether Mr Walsh was covered by the PE Award, and thus was of little probative value in this proceeding. I have given Ms Livingstone’s evidence little to no weight in my findings.

Mr Gathercole

Mr Gathercole is a Principal Civil Engineer in Indesco’s Newcastle Office. Mr Gathercole reports to Matthew Snelson, who is a Director, and to Mr Zollinger for business activities related to the Sydney Civil unit. Mr Gathercole has a Bachelor of Civil Engineering; is a Chartered Engineer; and is registered with the Board of Professional Engineers Queensland.

I found that Mr Gathercole gave his evidence openly and honestly. Mr Gathercole’s evidence was helpful in understanding the role of Principal Civil Engineer across different Indesco business units.

The evidence

What does Indesco do?

Indesco provides engineering consultancy, project management and design services in a variety of engineering or engineering-adjacent disciplines. These include civil engineering; structural engineering; façade engineering; urban infrastructure; transport planning; construction phase administration; hydrology and hydraulics; land development; and road design.[5]

Indesco’s primary work is the delivery of engineering services, such as those required to deliver engineering projects[6] or engineering design.[7]

Indesco’s structure

Indesco has approximately 120 employees that are based in offices in Canberra, Parramatta, Wollongong, Melbourne, Newcastle and Brisbane.[8] Canberra is the largest office with approximately 60 staff, followed by 30 staff in Parramatta and 2-10 staff in the other offices.[9]

Indesco provided a company organisational chart dated 26 June 2023 (Organisational Chart).[10] Operationally, Indesco has a multi-tiered hierarchy comprising of the following roles across the six offices:

Directors;
Associate Directors;
Technical Directors;
Principals (i.e. Principal Civil Engineer, Principal Structural Engineer, Principal Construction);
Team/Section Leads;
Senior Engineers, Senior Project Managers, Senior Construction Managers
Design Managers;
Engineers, Senior Designers, Project Managers;
Graduates; and
Designers, Drafters and Site Staff.

The above list is in approximate descending authority and seniority. However, it became clear during the proceedings that reporting lines were not always linear. Further, many of the Directors and Associate Directors are also Principal Civil Engineers, but not all.

Mr Walsh’s evidence was that both he and Mr Zollinger are marked as Principal Civil Engineers and are designated in the same level on the Organisational Chart. However, the Organisational Chart does not acknowledge that Mr Zollinger is an Associate Director and does not show that Mr Walsh reported to Mr Zollinger. I accept this evidence.

Indesco’s evidence was that all its staff, even the Managing Director, perform engineering or technical work, as that is one of the selling points of the business. The parties agree that the roles of Directors and Associate Directors involve significant management duties, such as the management of the business and staff.

It was also not contested between the parties that the Technical Director role performs more technical functions compared to Directors and Associate Directors.

It was Mr Gorman’s and Mr Zollinger’s evidence that a Principal Civil Engineer’s career trajectory can either lead to an Associate Director role or a Technical Director role.[11] There was agreement between the parties that there was a shared desire for Mr Walsh to take the route that would eventually lead to an Associate Director role.

Indesco also provided a skills matrix chart[12] (Skills Matrix) that set out the company’s expectations for roles in the business. This is done by assigning a “H” (high), “M” (medium) or “L” (low) against specified skills.

Indesco’s position is that the Skills Matrix maps out to employees how to progress upwards through the roles in Indesco.[13]

During his evidence, Mr Gorman referred to the expectations for the Principal role in the Skills Matrix. In particular, the expectations for the management of the ‘business unit’ were all marked as ‘H’. The expectations are:

Understands and can articulate the Business Plan for the Business Unit.
Demonstrates commitment to the growth and development opportunities for the Business Unit in line with the Business Plan.
Demonstrates complete understanding of the financial performance requirements (revenue, costs and invoicing) for the business unit and takes responsibility for ensuring these targets are achieved for business unit.
Shows clear leadership in managing the operation of team.
Demonstrates a focus on business profitability and improvement of the Business Unit profits.
Able to plan, recruit for and deliver long term work programs and workflows for the Business Unit to match the business unit strategy.
Demonstrates high levels of independence in managing the business unit.
Takes responsibility for procuring the workload required to achieve the Business Plan for the Business Unit.
Provides mentoring and invests in the development of staff skills to ensure their career progression and the ability to meet strategic goals of the business plan.

Indesco’s utilisation rate

Indesco requires its employees to record the time spent on specific activities each day in their timesheets. Timesheet entries are categorised as either ‘project’ or ‘non-project’ time. ‘Project time’ refers to time spent on the delivery of engineering projects. Indesco refers to this as ‘utilised’ or ‘non-utilised’ time.[14]

From this, Indesco measures how an employee’s time is spent with a ‘utilisation rate’. This utilisation rate is expressed as a percentage of an employee’s time spent on project-related tasks or activities in comparison to the quantum of all time entered into their timesheets.[15]

Indesco categorises the following activities as ‘non-utilised’ time:[16]

IT downtime;
administration, which includes business development, business management, CAD management;
business support, which includes business development, finance, HR, legal, marketing, QA and WHS;
internal CAD standards;
training; and
leave.

Mr Zollinger’s evidence was that the utilisation rate is a method of setting revenue targets, as it is the project work that generates revenue.[17] There is however an understanding that if an employee is not meeting their utilisation rate, but revenue is positive, that is not a cause for concern. This was corroborated by Mr Gathercole and not challenged by Mr Walsh.

Indesco has target utilisation rates for employees who perform engineering roles. The utilisation rates for the different roles are as follows: [18]

Role	Utilisation
Director	50%
Associate Director	50%
Technical Director	50%
Principal Engineer	70%
Senior Engineer	90%
Engineer	90%
Graduate Engineer	90%

At the time of Mr Walsh’s dismissal, his target utilisation rate was 70%. Indesco provided Mr Walsh’s utilisation statistics and timesheets that show that his actual utilisation was 70.43% for May 2023 and 71.37% for June 2023.

The start of Mr Walsh’s employment with Indesco

In 2020, Mr Walsh was recruited to Indesco by Darren Flynn, the then Associate Director for Indesco’s Sydney Civil unit. At the time Mr Walsh lived in Sydney.

On 4 June 2020, Mr Gorman emailed Mr Walsh a letter of offer for the position of Principal Civil Engineer. The email included the words, “[w]e also reiterate that a key expectation for the position of Principal Civil Engineer is Chartered status. This will need to be obtained as soon as possible.”[19]

The letter of offer set out Mr Walsh’s terms and conditions of employment. The letter also stated, “Unless further provisions are provided in this schedule or covering letter, the terms and conditions of your employment will be those set out in the provisions of the Professional Employees Award (“Modern Award”) and the Fair Work Act 2009 also apply to your employment, though they do not form part of this contract.”

A position description was also attached to the letter of offer. The position description is set out below:

POSITION DESCRIPTION
Principal Civil Engineer
Name: Oliver Walsh
Reports to: Associate Director

PRIMARY OBJECTIVES
As a Principal Civil Engineer assume responsibility for the leadership, continued growth and development of the business unit.
RESPONSIBILITIES
General:
·Assume responsibility for the execution of projects in accordance with the project brief and fee;
·Display a consistent uncompromising message on quality by following the Indesco company standards;
·Provide mentoring, training and career path development to junior team members to meet the workload requirements;
·Assume responsibility for the implementation of the Indesco QA and Business Management System on projects;
·Implement the company’s WHS and EMS policies;
·Act in the best interest of Indesco as a senior member of the firm and a role model with the team; and
·Maintain a program of continuous self-improvement and professional development.

Strategic/Operational:
·Actively participate in the framing of the business plan and the implementation of the agreed strategic objectives for the business unit;
·Actively participate in the setting and the implementation of the agreed recruitment strategies for the business unit;
·Take responsibility for the growth and ongoing development of the team;
·Achieve and maintain Chartered Engineer Status;
·Actively collaborate with all other business units in marketing, tendering, business development and delivery of projects;
·Work within the agreed protocols framed for the Indesco South Coast operations including the geographical boundaries for project procurement and delivery.

Marketing and Procurement of Workload
·Take responsibility for procuring the work load required to meet revenue targets;
·Attract new clients, and show a commitment to marketing the services of Indesco;
·Take responsibility for the completion of fee proposals, tender submissions and expressions of interest; and
·Demonstrate a proactive approach to client management and the ability to develop long term client relationships.

Project Management:
·Plan internal and external resources;
·Procure and manage external subconsultants;
·Arrange that assigned personnel have access to information, material and training to complete that project in accordance with specification;
·Supervise the work of project engineers, designers and drafters;
·Submit fee accounts and verify invoices form [sic] external subconsultants; and
·Monitor project costs and report progress to the company directors

Design Management:
·Manage the design and verification of the design in accordance with the quality system procedures;
·Undertake components of design as appropriate to the needs of the project within one’s capabilities;
·Plan design packaging and design interfaces;
·Monitor and report on design approvals and liaise with relevant authorities for endorsement; and
·Prepare specifications, bills of quantities, pre-tender estimates and contract documents.

SKILLS AND EXPERIENCE:
·Minimum 10 years’ experience practising in a relevant engineering field essential;
·Knowledge of OH&S Acts/Legislation essential; and
·Knowledge of Environment Legislation essential.

QUALIFICATIONS:
·Tertiary degree admitting to the Institution of Engineers Australia essential;
·Post Graduate qualifications in a related field desirable; and
·Obtained or actively seeking Chartered Engineer status essential.

Along with the employment contract, Mr Walsh was also offered the opportunity to buy an equity option; specifically, to buy shares in Indesco as a Category 2 candidate.

Indesco provided a copy of its Shareholding Framework dated May 2021 (Shareholding Framework).[20] The Shareholding Framework sets out the share allocation process and the different shareholding categories:

Category 1 (Director);
Category 2A (current leaders);
Category 2B (future leaders);
Category 3A (Key Senior Staff); and
Category 3B (Key Staff).

The Shareholding Framework defines Category 2A candidates as, “candidates that hold senior positions of Associate Director, Principal or Chief Financial Officer. Requisite qualities of Category 2A candidates include: candidates that demonstrate levels of leadership and performance that readily identify them as future business leaders and hence demonstrate the potential and personal desire to progress to Director status and Category 1 shareholding with suitable enhancement of skills and/or experience.”

Category 2B candidates are defined as, “Requisite qualities of Category 2B candidates include: candidates who demonstrate sufficient early signs of leadership traits and professional performance to suggest that they have the potential and the personal ambition for career growth and progression through to a senior leadership position and hence higher categories of shareholding with suitable enhancement of skills and/or experience”.

The maximum individual shareholding for a Category 2A candidate is 5%. For a category 2B candidate the maximum individual shareholding is 2%. Mr Walsh had a 2.9% shareholding.

However, Mr Gorman’s evidence in chief was that when Mr Walsh commenced his employment and bought his equity option, there wasn’t a detailed conversation about what category Mr Walsh fell into. In Mr Gorman’s words, there was a “general acceptance or comfort that Category 2 applied and [Indesco] didn’t filter it beyond that in terms of the analysis”.[21]

I also note that the Respondent did not provide the Shareholding Framework that Mr Walsh signed.

The Perth Business Plan

In late 2021, Mr Walsh advised Mr Gorman that he wished to relocate back home to Perth, Western Australia for family reasons. There was a discussion about Mr Walsh spearheading the establishment of an Indesco Perth unit.

There was a mutual interest and benefit in Mr Walsh returning to Perth to do this. Mr Gorman’s evidence was that a Perth office was not in the pipeline at the time, but it was consistent with Indesco’s geographic diversification strategy.[22]

In line with this, Mr Walsh prepared a business proposal for the establishment of an Indesco Perth office (Perth Business Plan).[23]

The Perth Business Plan opened with the below personal statement from Mr Walsh:

“Opening a branch in Perth is an exciting opportunity to progress my career with Indesco. It is a step towards senior management, and it will enable me to further prove my value to the firm.
The venture will undoubtedly present a number of challenges, however I believe that I am capable of meeting the challenges with the support and mentoring of Indesco’s leadership team.
I believe that my personal goals and the strategic goals of Indesco are aligned, and that there is a sound framework for continued alignment.”

The Perth Business Plan included a transition period, where Mr Walsh’s share of Sydney Civil projects would wind down to give Mr Walsh the capacity to establish and grow the Perth office. This transition period was necessary as Indesco needed the time to find a new Principal Civil Engineer to replace Mr Walsh in the Sydney Civil division. This is noted at 7.2 of the Perth Business Plan (“OW Exit Strategy”):

“The establishment of a Perth office is aligned with Indesco’s long-term strategic goals. In the short-term OW must continue to support the Sydney civil team to ensure (1) a continued level of service to our existing clients, and (2) that our existing NSW staff are supported.
It is envisaged that OW will gradually transition from Sydney operations to Perth operations over approximately 10 months (per the Financial Plan), though this transition will be affected by (1) the availability of a suitable replacement in Sydney, and (2) the pace of growth of the Perth business. Irrespective of these factors, a goal is set for at least 80% of OW’s time to be spent on Perth operations by 1 July 2022. This goal will serve as a benchmark for the Sydney and Perth teams to work towards.
[Oliver Walsh] and [Darren Flynn] have begun strategizing the management of NSW client relationships and project transitions. there is no single strategy to manage this, but a variety of customised strategies that are too numerous to address in this plan.”

The Perth Business Plan also mapped out a five-year trajectory in terms of organisational structure and staffing goals. It set out that in year one or year two, another Principal or Senior Civil Engineer would be recruited, as well as a Designer and a Drafter. By year five, the plan anticipated that the WA Civil Team would have 15-20 staff and the Structural Team would have 10-15 staff. By that point, Mr Walsh would be an Associate Director.

The Perth Business Plan was presented to the Indesco Board in November 2021 and subsequently approved at the November Indesco board meeting.[24]

To assist Mr Walsh’s capacity to implement the Perth Business Plan, his utilisation rate was dropped to 50%.

Mr Walsh moved to Perth in February 2022.

Issues with the Sydney Civil unit and delays to the Perth Business Plan

In March 2022, Mr Flynn resigned unexpectedly.

Mr Walsh’s evidence is that this placed considerable pressure on the Indesco Sydney Civil unit, as it meant they needed replace both Mr Walsh and Mr Flynn. To fill this gap, the duties of Mr Flynn’s role were shared across Mr Gorman, Mr Gordon Opacic (Senior Project Manager) and Mr Walsh. This included Mr Walsh taking on some of Mr Flynn’s management duties.[25]

Mr Walsh continued with these augmented duties until October 2022, when Mr Zollinger was hired to replace Mr Flynn. However, in November and December 2022, two Senior Project Managers for the Sydney Civil team left.

Mr Walsh’s evidence is that this again destabilised the Sydney Civil team. Further, it impacted on his ability to fulfil the Perth Business Plan, as he was required to take on project work for the Sydney Civil team.

There was significant dispute between Mr Walsh and Mr Gorman on what Indesco’s expectations of Mr Walsh were during this time. Mr Gorman’s evidence was that Mr Walsh had been derelict in his performance by not delivering the Perth Business Plan as originally planned, as there had been no change in expectations from Indesco.[26] Further, that Mr Walsh had failed to reduce his portfolio of Sydney Civil unit projects. Mr Gorman’s position was that there were options Mr Walsh should have looked into, such as re-allocating his workload to other Indesco employees or utilising sub-contractors.[27]

Mr Walsh strongly refuted this. Mr Walsh asserted that to ensure the viability of the Sydney Civil unit, he had to help with the project load. Mr Walsh’s evidence was that if he had not done this, Indesco would have lost a significant amount of money, as there were no other ways for the projects to be completed.

Mr Walsh’s evidence was corroborated by Mr Zollinger. During cross-examination, Mr Zollinger confirmed that if Mr Walsh had reduced his share of the Sydney Civil unit workload, Indesco would have struggled to deliver the projects and would most likely have lost a few clients.[28]

Mr Zollinger also confirmed during cross-examination that he and Mr Walsh had explored different options for meeting the workload demands. Those options included outsourcing Mr Walsh’s work to staff in other Indesco offices, such as Canberra and Sydney. However, there weren’t enough resources in other offices to take Mr Walsh’s workload.[29]

Mr Zollinger further explained that Indesco had employed subconsultants to assist with Mr Walsh’s workload, however even the subconsultants had capacity issues as well as a lack of the specific skills to complete the work. Mr Zollinger gave evidence that the only other avenue that could have been taken would be to end the client contracts and redistribute the work and clients to other companies. Mr Zollinger’s understandably did not see that as a desirable option as it would have meant losing the work and revenue for Indesco.[30]

The situation of the Sydney Civil unit during the end of 2022 and start of 2023 was summarised by Mr Zollinger as, “…it was a double focus on resourcing and trying to backfill those positions and in the meantime [Mr Walsh and I] were both of us holding our breath and trying to manage the projects that we had on the books”.

I set out this area of contention purely as background context of the events leading up to Mr Walsh’s termination. It is not necessary for me to make any conclusive determinations on whether Mr Walsh’s performance during this period was subpar, as it is not relevant to the jurisdictional objection.

The move away from the Perth Business Plan

In April or May 2023, Mr Walsh expressed to Mr Pickrell that his desire the drive the Perth Business Plan had waned and that he would rather focus on improving the profitability of the Sydney Civil unit.[31] Mr Pickrell’s evidence is that he informed Mr Walsh that his utilisation rate would need to be reviewed and increased.

This was discussed between Mr Gorman, Mr Pickrell and Mr Aaron Hazelton. Mr Aaron Hazelton is the current Indesco Managing Director. Mr Gorman’s evidence is that they collectively agreed or accepted that though Mr Walsh might have carriage of Perth-based project work, he would no longer be responsible for the fulfilment of the Perth Business Plan.[32] Further, Mr Walsh would remain firmly in the structure of the Sydney Civil unit, reporting to Mr Zollinger. In accordance with this, Mr Walsh’s utilisation rate was increased from 50% to 70% to reflect Mr Walsh’s status as Principal Civil Engineer without the Perth Business Plan responsibility.[33]

There were no other changes to Mr Walsh’s role or duties up until his dismissal on 30 June 2023.

What was Mr Walsh’s role at the time of his dismissal?

The parties largely agree on the duties that Mr Walsh performed at the time of his dismissal. Unsurprisingly, the parties place emphasis on different duties.

Mr Walsh provided a comprehensive list of his duties, which was not challenged by Indesco. Mr Walsh’s evidence is that most of his time was spent on the delivery of engineering projects and that he had a significant portfolio of projects. Mr Zollinger corroborated this during cross-examination and his re-examination;[34] he stated that for most of the time that he worked with Mr Walsh, Mr Walsh’s project workload was not sustainable.[35]

Mr Walsh provided a breakdown of what his role entailed with regards to project management. His evidence was that he supervised teams comprised of junior engineers, designers and drafters in the delivery of civil engineering design packages. This included verifying and certifying engineering deliverables, which requires a civil engineering degree and often requires Chartered Engineer accreditation. The deliverables included engineering reports, drawings, memoranda, letters, engineering calculations and models.[36]

Mr Walsh’s evidence was that this part of his work included planning, scoping, technical review and certification of deliverables. He would supervise the teams he had carriage of on the appropriate software to utilise, the performance of engineering calculations and the preparation of reports. Further, Mr Walsh would liaise with stakeholders such as clients, local governments, the state government, utility authorities and neighbouring landholders.[37]

Both parties agree that a significant part of Mr Walsh’s role was project management. However, as I will traverse later in this decision, the parties have different positions on how I should classify that project management work.

It is also uncontroversial between the parties that Mr Walsh’s role involved other duties, such as:

(a)invoicing for projects to meet monthly revenue targets;
(b)forecasting for cashflow targets;
(c)future financial analysis;
(d)debtor recoveries;
(e)contract management and reviews;
(f)growing the business through sourcing new projects; and
(g)business planning.

Mr Walsh submits that the above duties are tied to the discharge of his engineering duties. Further to this, the above duties only comprised a small amount of his working time. Indesco submits the above duties are managerial, in that they are functions tied to the management of the Indesco business.

Mr Walsh’s further evidence is that his role did not involve:

(a)Management of staff outside of a supervisory or project-related capacity. Mr Zollinger confirmed this; in cross-examination he confirmed that at the time of Mr Walsh’s dismissal, no staff reported to Mr Walsh.[38] Mr Zollinger also confirmed that Mr Walsh was only responsible for projects that he was directly managing. The exception to this were projects where Mr Walsh performed certification and technical reviews, which can only be performed by an engineer.[39]
(b)HR functions, such as the hiring and firing of staff, or the approval of leave. Mr Zollinger also confirmed this.[40]
(c)Approval of Indesco’s projects. Mr Zollinger’s evidence is that it was his responsibility to monitor the work coming into the Sydney Civil unit, and further, it was his responsibility to allocate and sign off on the work.[41]

Submissions

Mr Walsh’s case

Mr Walsh submits that he was covered by the PE Award, as his role was not principally managerial.

Mr Walsh’s factual case can be summarised as follows:

(a)His title was for Principal Civil Engineer. The essential qualifications, accreditations and experience for the position all pertain to engineering; none pertain to management experience or qualifications.

(b)Indesco expected him to spend 70% of his time on project-related work.

(c)His employment contract noted that he was covered by the PE Award, though he accepts that you cannot contract into an award.
(d)The role of Principal Civil Engineer at Indesco could progress into the managerial position of Associate Director or the more technical position of Technical Director.
(e)He reported to Matthew Zollinger, who is an Associate Director and had primary responsibility for the Sydney Civil unit.
(f)He did not manage any staff outside of a project or technical setting.

Perhaps unsurprisingly, for a matter involving engineers, Mr Walsh also provided a comprehensive breakdown of his position description where he categorised each responsibility as either ‘engineering’, ‘management’ or neutral in nature. Mr Walsh submits that of the responsibilities outlined in his position description, 18 are engineering, nine are management and four are neutral.

With regards to how the PE Award should be interpreted, Mr Walsh contends that engineering is an incredibly broad discipline. The PE Award is intended to cover the wide range of engineering fields.

Mr Walsh asserts that project management is an engineering task, not a managerial one. In support of this, Mr Walsh submits that project management is a recognised area of practice by Engineers Australia. Mr Walsh tendered a publicly available document from Engineers Australia that details the following about project management:

Project management
Area of Practice
Project management deals with the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria.

Some of the indicative activities that may be undertaken when practising project management are to:
·Understand the requirements of clients, wide ranging stakeholders and of society as a whole.
·Work to optimise social, environmental and economic outcomes over the full lifetime of the engineering project, program or process.
·Exercise high level business skills to identify cost, scope and time issues and develop an approach to ensure project delivery within the confines of the project constraints.
·Ensure that technical and non-technical considerations are properly integrated.
·Bring knowledge to bear from multiple sources to develop solutions to complex projects and inform project team members to apply those solutions effectively.
·Exercise the necessary leadership to ensure that the engineering contribution is properly integrated into the totality of the project.
·Interact effectively with other disciplines, professions and people.
·Interpret technological possibilities to society, business and government.
·Manage risk as well as sustainability issues in the delivery of projects.
·Understand clearly how new developments relate to established practice and experience and to other disciplines with which they may interact.

Indesco’s case

Indesco’s case is that the primary objectives of the Principal Civil Engineer role are managerial in nature.

Indesco factual case can be summarised as:

(a) Mr Walsh’s role required the performance of managerial functions, such as financial forecasting, invoicing and business planning.
(b) Mr Walsh was a senior leader in the Indesco team.
(c) Mr Walsh managed teams and staff in the delivery of projects.
(d) Mr Walsh and Mr Zollinger had responsibility for managing the Sydney Civil unit.
(e) Principals are responsible for managing business units whilst Associate Directors and Directors are responsibly for wider, whole of business managerial responsibilities.
(f) Mr Walsh participated business planning activities and strategies.
(g) Mr Walsh attended senior leadership training days.

Indesco’s case heavily emphasises the expectations of the role. Indesco submits that it expected Mr Walsh to perform in a senior position with managerial responsibilities; that those expectations were clearly articulated to Mr Walsh at the start of his employment; and that those expectations did not change over the course of Mr Walsh’s employment.

Indesco submits that the managerial expectations can be seen in Mr Walsh’s position description, the Shareholding Framework, the Skills Matrix and Mr Walsh’s KPIs.

Further, that Mr Walsh chose not to perform the managerial tasks associated with his position. In its written submissions Indesco states, “we argue that it is only the Applicant’s poor performance, which was characterised by the Applicant performing tasks at a Level 4 Professional level rather than managerial tasks expected of him under the Principal role, that provides the basis for the Applicant to seek coverage under the Award”.

Indesco presents Mr Gathercole – who is employed as a Principal Civil Engineer with the same position description as Mr Walsh – as ideally placed to provide his understanding of the managerial responsibilities of the role. Indesco submitted Mr Gathercole’s analysis of the position description, where Mr Gathercole categorised 20 of the responsibilities as wholly or predominantly ‘management’. This was taken as a submission rather than evidence.

Indesco contends that the requirement for Mr Walsh to attain Chartered Engineer status is not evidence that the role is not managerial. On the contrary, it enables the Principal Civil Engineer to fulfil the management expectations of the role – specifically, the management of the engineering team. Indesco further contends that the review and endorsement of engineering designs and documentation prepared by teams is a management responsibility.

With regards to the PE Award, Indesco submits that the PE award specifically excludes employees in managerial roles and that the responsibilities and wages of the Principal Civil engineer go beyond the highest classification of the PE Award.

Consideration

In coming to this decision, I have had regard to the relevant evidence and submissions of the parties, even if they have not been expressly referred to in this decision.

The relevant question for determination is whether Mr Walsh was covered by the PE Award. This is done by ascertaining the provisions of the PE Award and applying them to the objective facts. It is not decided by reference to the subjective intention or beliefs of the parties involved.

I find that Mr Walsh’s role clearly required the performance of professional engineering duties, and this is not contested by the parties. Mr Walsh’s role was clearly not wholly managerial.

The Macquarie Dictionary defines “principally” as “chiefly; mainly”. In determining whether Mr Walsh’s was covered by the PE Award, I must determine whether his role was principally, or mainly, managerial.

I accept that at the time of his dismissal, Mr Walsh’s was a senior employee at Indesco and his role as Principal Civil Engineer did involve functions that are managerial in nature, such as forecasting and planning for the Sydney Civil unit’s business strategy. However, I find that his role was not principally managerial, by definition, performance or even by expectation.

My conclusion is informed by the following observations:

Mr Walsh’s position description sets out as essential to the role: a minimum of 10 years’ experience in a relevant engineering field, tertiary degree admitting to Engineers Australia and Chartered Engineer status.
The position description sets out a series of responsibilities that are a mix of professional engineering and managerial in nature.
Mr Walsh was clearly a senior member of the Indesco team; however, seniority does not automatically translate to a role being managerial.

Mr Walsh did not manage any staff outside of a project management setting. He did not perform any HR functions such as the employment of staff, or approving leave.

Whilst strict adherence to Indesco’s utilisation rate wasn’t required, it clearly sets out the expectations of how much time is to be spent on project-related tasks. Mr Walsh’s target utilisation rate was 70%, which he met at the time of dismissal. This means that the majority of Mr Walsh’s time was expected to be spent on project work.

Indesco’s argument that the role of Principal Civil Engineer is expected to perform managerial functions and that Mr Walsh simply chose not to perform those duties cannot succeed. Mr Zollinger’s and Mr Gathercole’s evidence is that the time spent on project-related work would vary from month to month depending on the needs of the business, and on the needs of the specific business unit. Mr Gathercole gave evidence that his utilisation rate was 44% for July 2023 and 76% for August 2023.[42]

I asked Mr Gathercole whether it was expected in his role that he be flexible to deal with project demand, which he affirmed. He also affirmed that the work each Principal Civil Engineer does across Indesco’s different business units varies due to the circumstances of each business unit.[43] I accept this evidence.

I am satisfied that the high amount of project-related work that Mr Walsh performed was to meet the needs of the Sydney Civil unit. I am further satisfied that this is consistent with the Principal Civil Engineer position description.

There was much discussion during the proceedings over whether project management should be viewed as engineering or managerial in nature. The answer to this is not static and is fact dependent.

In Mr Walsh’s situation however, it is engineering. I have given significant weight to the fact that project management is an Engineers Australia recognised practice area, which Mr Walsh was accredited in. Engineers Australia is the peak body for engineers in Australia and is recognised in the PE Award.

Further, Mr Walsh oversaw the delivery and completion of engineering projects, which required engineering qualifications, technical skill and knowledge. An individual without engineering qualifications or experience could not do Mr Walsh’s job. That Mr Walsh had carriage of a large portfolio of projects should not be conflated with higher managerial function in this case.

Accordingly, I am satisfied that the project management duties Mr Walsh performed as a part of his role were of an engineering nature.

As I am satisfied that Mr Walsh performed professional engineering duties and his role was not principally managerial in nature, he is not excluded from the coverage of the PE Award.

Considering Mr Walsh’s duties and the classifications in the PE Award, I am further satisfied that the most appropriate classification is Level 4 – Professional.

I find that there may be some of Mr Walsh’s duties that do not fall neatly within the Level 4 classification. However, I am satisfied that all the criteria set out in Level 4 apply to Mr Walsh’s role.

Notably, a Level 4 employee, “makes decisions that are not usually subject to technical review, decides courses of actions necessary to expedite the successful accomplishment of assigned projects, and may make recommendations involving large sums or long range objectives.”[44]

Further, a Level 4 employee, “supervises a group or groups including professionals and other staff, or exercises authority and technical control over a group of professional staff. In both instances, the employee is engaged in complex professional engineering or professional technology applications”.[45] I find this to be an accurate depiction of Mr Walsh’s supervisory duties at Indesco at the time of his dismissal.

Conclusion

I am satisfied that at the time of his dismissal Mr Walsh performed professional engineering duties and his role was not principally managerial.

Accordingly, I find that he was covered by the PE Award and was protected from unfair dismissal pursuant to s 382 of the Act.

It follows that Indesco’s jurisdictional objection must be dismissed.

The merits of Mr Walsh’s Application will now be programmed for hearing and determination.

COMMISSIONER

Appearances:

O Walsh, Applicant

A Gorman for the Respondent

Hearing details:

2023.
Perth (via Microsoft Teams)
4 and 5 October

[1] Fair Work Commission, Professional Employees Award 2020, MA000065, clause 4.1.

[2] [2021] FWCFB 3478

[3] Ibid, at [58].

[4] Variation of Professional Employees Award 2020 on Commission’s own motion [2023] FWCFB 13.

[5] Witness statement of Angus Gorman, Exhibit R1, at [9]; Witness statement of Oliver Walsh, Exhibit A1, at [5].

[6] Transcript, 5 October 2023, PN991.

[7] Ibid, PN2046.

[8] Witness statement of Angus Gorman, Exhibit R1, at [10]-[13].

[9] Transcript, 5 October 2023, PN987.

[10] Witness statement of Angus Gorman, Exhibit R1, Attachment 6.

[11] Transcript, 5 October 2023, PN2168-PN2169.

[12] Witness statement of Angus Gorman, Exhibit R1, Attachment 7.

[13] Transcript, 5 October 2023, PN1026.

[14] Witness statement of Oliver Walsh, Exhibit A1, at [31].

[15] i.e. utilisation rate = project time/ (project time + non-project time).

[16] Transcript, 5 October 2023, PN1890.

[17] Ibid, PN2178.

[18] Witness statement of Anthony Pickrell, Exhibit R2, at [12].

[19] Witness statement of Oliver Walsh, Exhibit A1, Attachment F.

[20] Witness statement of Angus Gorman, Exhibit R1, Attachment 9.

[21] Transcript, 5 October 2023, PN1020.

[22] Ibid, PN1046.

[23] Witness statement of Angus Gorman, Exhibit R1, Attachment 4.

[24] Ibid, Attachment 11.

[25] Transcript, 4 October 2023, PN78-PN79.

[26] Transcript, 5 October 2023, PN1123-PN1151.

[27] Ibid, PN1109-PN1118.

[28] Ibid, PN2040.

[29] Ibid, PN2041.

[30] Ibid, PN2041-2044.

[31] Ibid, PN1873-1877.

[32] Ibid, PN1194, PN1197.

[33] Ibid.

[34] Ibid, PN2031-PN2032; PN2206.

[35] Ibid, PN2095.

[36] Witness statement of Oliver Walsh, Exhibit A1, at [48.a].

[37] Ibid.

[38] Transcript, 5 October 2023, PN2104.

[39] Ibid, PN2064-PN2065.

[40] Ibid, PN2121.

[41] Ibid, PN2184-PN2186.

[42] Transcript, 5 October 2023, PN2395.

[43] Ibid, PN2400-PN2407.

[44] PE Award, clause A.1.11(c)

[45] Ibid, clause A.1.11(e)

Printed by authority of the Commonwealth Government Printer

Actions

Download as PDF Download as Word Document

Citations

Oliver Walsh v Indesco Pty Limited [2023] FWC 2523

Cases Citing This Decision

0

Cases Cited

2

Statutory Material Cited

0

Zheng v Poten & Partners (Australia) Pty Ltd [2021] FWCFB 3478

Variation of Professional Employees Award 2020 on Commission’s own motion [2023] FWCFB 13