Robert Currie v SMA Super Pty Ltd

[2013] FWC 3225

[2013] FWC 3225

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Robert Currie
v
SMA Super Pty Ltd
(U2012/10022)

COMMISSIONER GREGORY MELBOURNE, 24 MAY 2013

Jurisdiction - whether covered by a modern award.

Introduction

[1] This matter concerns an application by Mr Robert Currie (the Applicant) under s.394 of the Fair Work Act 2009 (the Act) claiming he has been unfairly dismissed by SMA Super Pty Ltd (the Respondent). A jurisdictional objection has in turn been raised by the Respondent. This decision deals with that objection. The Applicant appeared on his own behalf. Mr R. Millar of Counsel was granted leave to appear on behalf of the Respondent.

The Issue to be Determined

[2] Section 382 of the Act establishes when a person is protected from unfair dismissal and able to pursue an unfair dismissal application. It states:

“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.” 1

[3] The Respondent submits that none of the circumstances in s.382(b) apply in the case of the Applicant and therefore he was not, at the time of his termination, a person protected from unfair dismissal. In this context it was agreed, firstly, that no enterprise agreement applied to the Applicant in relation to his employment. It was also agreed the Applicant’s earnings at the time of his dismissal exceeded the high income threshold. However, there was no agreement about whether the Applicant was covered by a modern award. Accordingly, the issue to be determined is whether a modern award covered the Applicant during his employment with the Respondent. If it is found that it did then the matter will be relisted to enable the unfair dismissal claim to be dealt with on its merits. However, if it is found that a modern award did not apply then the Applicant is not a person protected from unfair dismissal under the Act and his application must be dismissed.

The Submissions and Evidence

[4] The submissions of both parties proceeded on the basis that the only award that could possibly cover the Applicant’s employment was the Banking, Finance and Insurance Award 2010 2 (the Award). The Respondent’s submissions commenced by pointing to s.48 of the Act which provides:

“A modern award covers an employee .... if the award is expressed to cover the employee ...” 3

[5] It also pointed to the coverage of the Award set out in clause 4. Clause 4. 1 provides:

“This industry award covers employers throughout Australia who are engaged in the banking, finance and insurance industry in respect of work by their employees in a classification in this award and those employees to the exclusion of any other modern award.” 4

[6] Clause 4.2 continues to provide a more expansive description of the industry encompassed by the “Banking, Finance and Insurance Industry”. “Superannuation” is included within that list and the Respondent acknowledged it is engaged in the Industry described in clause 4.2 of the Award. However, the effect of clause 4.1 is that the Award only covers the employer in respect of work carried out by their employees in classifications contained in the Award. Those classifications are set out in Schedule B of the Award.

[7] The Respondent notes that the highest classification level in Schedule B is Level 6 which provides:

“Those employed at this level perform a middle managerial role primarily to control the conduct of a part of the employer's business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level.” 5

[8] The indicative job list set out under this classification level is:

“Indicative job list - branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.” 6

[9] The Respondent submitted:

“The Applicant’s role was not a ‘middle management role’, it involved senior managerial and executive duties well above a Level 6 classification employee. He reported directly to the CEO, and was involved in decisions on the strategy and direction of the Respondent. The principal purpose of the Applicant’s role was to perform executive level functions for the Respondent’s group of companies.” 7

[10] Mr Nigel Westoby is the Respondent’s Managing Director and Group Chief Executive Officer. The Respondent is a wholly-owned subsidiary of a privately owned Australian company operating under an Australian Financial Services Licence issued by the Australian Securities and Investment Commission. It provides services in regard to corporate superannuation, fund administration, financial planning, self managed superannuation funds, insurance, investment and tax services. He said the Applicant commenced in June 2010 in the position of Manager – Group Superannuation Services. However, his title was then changed to reflect his role as the person in charge of the master trust, Enterprise Super. In that role he was responsible for managing funds under administration, which are in the vicinity of $100 million and held on behalf of approximately 17,000 clients or contributors to the Fund. In this role the Applicant was performing executive level functions, as well as being responsible for the management of the Administration Services Department. Mr Westoby continued to indicate:

“One of the fundamental roles of the administration manager of - corporate superannuation services manager, the same thing, is to ensure the protection effectively of that $100 million and it be the standards in terms of the delivery of services to those people in accordance with the Superannuation Act is delivered appropriately in a protected manner. So that, effectively, the edict of the trustee upon whom we have to report, together with the government in terms of the manner in which they have superannuation funds, is applied appropriately. This comes down to very rigorous, and very severe, and every responsible, at the highest possible level, as you'd appreciate, in terms of the governance and management of the fund. Robert, Mr Currie, was at the pinnacle of that fund. He had that key responsibility to ensure that all the appropriate matters contained within the superannuation - SIS Act as it's described, were, in fact, fulfilled. It doesn't get any higher than that.” 8

[11] He said the Applicant reported to him and was at the next level of seniority in the organisation. The Applicant had six direct reports initially, but following a restructure in 2012 this was reduced to one. He had a key role in ensuring the efficient and profitable operation of the business and was a member of the Executive Board, which comprised the Managing Director and the various departmental heads. It convened monthly and in these meetings the investment performance of the superannuation funds was reviewed and benchmarked. It was also involved in considering the national strategic focus of the Group. It also convened on a weekly basis to review “work in progress” and the status of key corporate projects, milestones and deliverables. The Applicant was also required to compile monthly reports in relation to his Department. He was also a member of the Investment Committee and the Audit Committee (although the Applicant later denied he was ever a member of the Audit Committee). The Investment Committee had important responsibilities and was involved in reviewing fund investments and the performance of its investment managers. The Applicant was also responsible for decisions to engage employees within his Department.

[12] Mr Westoby said at the time of his dismissal the Applicant’s total remuneration package was $143,532, with a base salary of $131, 680.

[13] A copy of the Applicant’s position description was also attached to Mr Westoby’s witness statement. It indicated at the outset he was a direct report to the Group Chief Executive Officer and a member of both the Executive Committee and the Investment Committee. It noted that the following companies comprise the Group – SMA Consultants Pty Ltd, Endeavour Securities (Australia) Limited, Oz Wealth Management Pty Ltd, and SMA Tax Services Pty Ltd, and that the department, Administration Services, and position title, Manager Administration Services, may reside with the organisational structure of any or all of the companies comprising the Group. It continued under the heading, “Key Responsibilities” to list the following:

“1) Implement contemporary client master trust, risk and PIF administration management practices that comply with all relevant statutes, regulations, compliance issues and accounting standards.

2) Develop, implement and maintain the governance and compliance procedures to ensure consistent application of Department client master trust, risk and PIF administration management practices in a continuous improvement framework.

3) Exceed the expectation of clients by delivering products and services in full on time.

4) Manage the Department’s annual business cycle with particular responsibility for:

a) Budget development, recommendation and implementation.

5) Develop reporting processes that:

a) Properly inform the Group of the real state of the Department’s position, operations, activities and results

b) Ensure that other Group Department Managers have relevant information to properly and more accountably manage their functions

c) Meet the requirements of relevant statutory bodies.

6) Review, develop, manage, lead and nurture of Department’s personnel resources and ensure their adherence to all Group operational and human relations policies.

7) Provide and recommend policy advice on fiscally sound strategies for the short, medium and long term management and development of the Department’s products and services together with attendant asset and manpower resourcing.” 9

[14] The Respondent also made reference to the decision of Commissioner Lee in Faulder v Lanteri Partners Financial Management Pty Ltd t/as Lanteri Partners Group 10(Lanteri), which also considered whether a person was covered by the Banking, Finance and Insurance Award 2010. It pointed to the Commissioner’s conclusion that the Applicant employed in the position of Manager, Portfolio and Funds Management “was operating at a highly professional level and operating at a very high level in the organisation,”11 and was not a person covered by the modern award. According to the Respondent a similar conclusion should be reached in this matter.

[15] The Respondent also referred to s.143(7) of the Act which provides:

“(7) A modern award must not be expressed to cover classes of employees:

(a) who, because of the nature or seniority of their role, have traditionally not been covered by awards (whether made under laws of the Commonwealth or the States); or

(b) who perform work that is not of a similar nature to work that has traditionally been regulated by such awards.” 12

[16] It also referred to the Award Modernisation Decision in support of its submission that the creation of modern awards was not intended to spread award coverage to areas of employment or occupations that have traditionally been award free. 13 In addition, the fact the Applicant as part of his role may have performed some duties that fell within the coverage of the Award was not to the point in the determination of this matter. The test to be applied instead was, ‘What was the principal purpose for which he was employed?’

[17] The Applicant in his submissions also made reference to clause 4 of the Award and the classifications contained in Schedule B. The Applicant submits he was a person covered by the Award and performing work that fell within the Level 6 classification.

[18] The Applicant stated he was:

“...employed as the Manager of Group Superannuation Services, Melbourne. He reported directly to the CEO/MD and held positions on the Executive Management Board and the Investment Committee for superannuation products.” 14

[19] He was:

“...the manager and the spokesperson of the Group’s Melbourne-based superannuation service”. 15

[20] The Department was responsible for the management, promotion, and service delivery of the Group’s superannuation products. The Applicant was responsible to lead and manage the Department’s employees. He provided policy advice on product strategies, and monitored and maintained the Department’s budget and business cycle. The Applicant said he performed a middle managerial role in this position and was one of eight employees altogether who reported directly to the CEO.

[21] The Applicant said the business had a flat management structure. Each of the direct reports to the CEO had equal representation on the Executive Management Board, however, the CEO had the deciding vote on all Board decisions. In his submission:

“This should help dispel any suggestion that the Applicant’s role was above a Level 6 classification employee.” 16

[22] He also said that 21% of all employees were involved at this level and, accordingly, it did not involve just a small group of senior employees.

[23] The Applicant also sought to place reliance on an “Australian Banking and Finance Industries Remuneration Report” 17 published by a remuneration consulting firm. It contained a “Career Levels” section that indicated it:

“...provides separate remuneration tables for each Job Family which can be used to enhance job matching, or as an alternative source of data for non–standard positions.” 18

[24] In the Applicant’s submission the reference to a “Divisional Manager – Other” position description at “Career Level 6” in the Report suggested the position description could be equated to the Level 6 classification in the Award. In its closing submissions the Respondent made two comments in response to this submission. Firstly, the Career Level 6 “Divisional Manager – Other” position description referred to in the Report clearly described an “executive level role.” 19 This assessment could be made by looking at various aspects of the generic job description. For example, under the heading “Other Comments” it indicated “Alternative Title: General Manager.” Secondly, it was simply a survey of remuneration levels in the finance industry and there was nothing to suggest it:

“...ties into anything in the Award. It seems to be an entirely different classification system.” 20

[25] The Applicant indicated in cross-examination that whilst he was a member of both the Investment Committee and the Executive Management Board he had no actual control, as the CEO had the final say on all decisions. However, he was involved in strategic decisions in regards to the superannuation fund he was responsible for. It was a pooled investment fund with a value of approximately $100 million and managed on behalf of approximately 17,000 members. He also indicated that the members of the Investment Committee were the Managing Director, the Chief Compliance Officer, the Manager, Corporate Investment Services, together with representatives from the fund managers engaged by the Respondent. The Investment Committee was responsible for due diligence activities associated with investment disclosure obligations and other compliance requirements. It was also involved in making comparisons between the performance of the fund and relevant industry benchmarks. The Applicant said he had also been involved in decisions to change the fund manager in order to better manage cash flows and achieve a more competitive outcome, and involved in reviewing and making recommendations about member pricing strategies. He also participated in corporate planning and review exercises.

Consideration

[26] The Respondent has properly acknowledged that the Award has coverage of its business. That is not at issue. What is to be determined is whether the Award had coverage of the Applicant when he was employed by the Respondent, given his role and responsibilities.

[27] The Respondent’s submissions referred to the decision of Commissioner Lee in Lanteri, which was referred to earlier, and to the Full Bench decision in McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting 21 (McMenemy) in support of its contention that the “principal purpose” test is the test to be applied in the determination of this matter. In Lanteri Commissioner Lee made reference to an earlier decision of Commissioner Cloghan in Hehir v Schweitzer Engineering Laboratories Pty Ltd22. In that matter the Commissioner was also required to consider whether an employee was covered by a classification in a modern award and determined this required application of a “principal purpose test.” At paragraph 34 of his decision he detailed what the application of this test required in the following terms:

“To determine whether an employee is employed in a classification in the Modern Award, it is necessary to apply the “principal purpose” test. The “principal purpose” test can be addressed by determining what was the most important intention of the employer in requiring the functions of the position to be carried out by the employee. In answering such a question, it is appropriate to examine the job description, the nature of the work performed and any relevant circumstances surrounding the performance of the duties by the employee.” 23

[28] Commissioner Lee also found it was appropriate to apply the principal purpose test in determining the matter before him. In dismissing the application he stated:

“In terms of the ultimate consideration one must consider the “principal purpose test” and, as I alluded to at the outset of this decision, I indicated that I agree that it was appropriate to apply that test as part of the consideration. It is not disputed by the Applicant that the principal purpose of the role was, as was put by the Respondent in their closing submissions, to make money autonomously. He did this by making decisions about investing substantial quantities of money, buying and selling shares on a daily basis. As such the Applicant was operating at a highly professional level and operating at a very high level in the organisation.

He directly reported to the Managing Director. He met with clients at any time and at any place. It was uncontested that when the Managing Director was overseas the applicant reported to no one, and on his own admission he was the second most important person in the business. This was put as the principal purpose of the role and cannot be overlooked in a consideration as to whether or not the modern award applies. The principal purpose in my view does not at all find a place within the classification structure of the modern award, particularly when one considers the history of the development of that award that I have alluded to.” 24

[29] The Respondent also referred to the decision in McMenemy in support of the submission the relevant test was whether the principal purpose for which the Applicant was employed was to perform functions within the coverage of the Award. That decision also made reference to two earlier Full Bench decisions. In the matter of Brand v APIR Systems Limited 25, dealing on appeal with an issue about whether the employee was covered by the Information Technology Industry (Professional Employees) Award 2001 the Full Bench stated (footnotes omitted):

“We note that the Commissioner adopted and applied a test based on the principal purpose for which the applicant was employed. She relied upon the Full Bench decision in Carpenter v Corona Manufacturing Pty Ltd in that respect. An analysis of the authorities referred to in that case shows that industrial courts and tribunals have at different times adopted different formulations of the test to be applied in determining whether the work of an employee or group of employees is within a particular occupation or classification. One formulation requires that the question should be decided by reference to the major and substantial employment of the employee. Another formulation requires that the principal purpose or purposes of the employment be identified. In some cases the formulations have both been referred to. In one case a Full Bench of the Commission held that the principal purpose formulation was a refinement of the major and substantial employment formulation. A Full Court of the Federal Court of Australia, without reference to other authorities, adopted a test based on whether the employees were "engaged substantially" in the duties of the relevant occupation.

In this appeal both parties accepted that the "principal purpose" formulation as stated in Carpenter v Corona Manufacturing Pty Ltd should be applied. We are content to decide this application on that basis. We should add, however, that we are satisfied that whichever of the formulations referred to might be applied, in this case the result would be the same.” 26

[30] In the matter of Carpenter v Corona Manufacturing Pty Ltd 27 the Commission again considered on appeal whether an employee was employed under the provisions of an award. In considering how the matter should be determined the Full Bench stated (footnotes omitted):

“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.” 28

[31] It is clear from these authorities that the principal purpose test should be applied to determine this matter. It is also clear from those authorities that this requires an examination of the nature of the work and the circumstances in which the Applicant was employed. A comparison is then required to be made with the classification description at Level 6 in the Award and the indicative job list associated with that classification level.

[32] The Applicant in the present matter was clearly in a senior role. The Managing Director’s evidence was that he was originally employed in the position of “Manager - Group Superannuation Services”, but this was changed to “Administration Manager” to better reflect his role in having, in the Applicant’s own words, principal responsibility for managing around $100 million in funds under administration, and held on behalf of approximately 17,000 client investors or contributors to the fund. The seniority and significance of his role as an Administration Manager can be contrasted with other similarly titled roles, where the administration task is of a much lesser order of magnitude. The evidence indicates the Applicant’s role clearly involved important compliance, governance and management responsibilities in regard to the Fund, as well as liaison and management of the relationship with the consultant fund managers.

[33] The Applicant reported to the Managing Director and was a member of the Executive Board. He was a member of the Investment Committee. Whilst there was some dispute about who else was involved in this Committee it clearly involved senior members of the organisation, including the Managing Director, and exercised important strategic, compliance and senior management functions within the organisation. The Applicant sought to downplay his involvement as a participant at this level by indicating, on the one hand, around 21 per cent of the total number of employees in the organisation were also involved, and although he was involved he had no control as a participant. These submissions were directed, in particular, at the management style of the Managing Director, Mr Westoby. The Applicant stated Mr Westoby “had the final say on all decisions” 29 and “called the shots. So I had no control.”30

[34] However, I am satisfied the relatively small size of the organisation in terms of employee numbers, and the nature of the Managing Director’s management style, do not of themselves change the fact the principal purpose of the Applicant’s role was employment in a senior role at a senior level within the organisation.

[35] The Applicant’s job description was also tendered by the Respondent. The “Key Responsibilities” listed in that document were set out at an earlier point in this decision and are not restated. However, they involve compliance and continuous improvement obligations in a relatively complex regulatory environment. They refer to reporting and information sharing obligations at a Group Department Manager level and the provision of policy advice on strategies for the short, medium and long-term management of the Department.

[36] The Applicant’s submissions also made reference to the Australian Banking and Finance Industries Remuneration Report published by a remuneration consulting firm and sought to link the Career Level 6 “Divisional Manager – Other” position description in the Report with the Level 6 classification in the Award. However, I am not satisfied the reference in each case to Level 6 and to a Divisional Manager position means there is therefore a link or relationship that bears on the determination of this matter.Indeed,the description of Divisional Manager in the Report, being someone responsible for “Managing and ensuring the profitability of a division or major operating unit and profit centre” and “a person who reports to the Chief Executive Officer/Managing Director” with the “Alternative title: General Manager,” does little to suggest that role is likely to be one encompassed at the Level 6 classification in the Award. 31

[37] The Applicant was also in receipt of a salary approximately three times the highest level provided for in the Award. This is not by any means determinative of itself, but does add emphasis to the fact the purpose of his role was associated with the exercise of senior responsibilities within an organisation, in contrast to the middle management roles encompassed within the classification description at the Level 6 classification in the Award.

[38] As indicated, the Applicant submits his role and responsibilities fall within the Level 6 classification in the Award. That classification description, firstly, describes a person in:

“...a middle managerial role”. 32

[39] Their primary task is then described as being to:

“...control the conduct of a part of the employer’s business”. 33

[40] As part of that role it anticipates that:

“...decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business.” 34

[41] There is then reference to a definitive circumstance which requires a person to be classified at this level, being when the person is responsible for managing more than 10 employees. That is not relevant in the present matter. The indicative job list at the Level 6 classification includes Branch Manager and Divisional Manager, but also others in specialist roles without specific management responsibility, for example, financial planners, information technology specialists and senior analysts. These are all important roles in an organisation and involve day-to-day decision making and acceptance of responsibility for the administration and conduct of that part of the business they are involved in.

[42] However, I am also satisfied a person in a role classified at Level 6 in the Award is employed for a “principal purpose” that is distinctly different from what the Applicant was employed to do. A number of particular factors can be highlighted. An employee in a middle management Level 6 classification role is most unlikely to report directly to the CEO or Managing Director. They are almost certainly not a member of the organisation’s Executive Management Board or the Investment Committee, or indeed anything with a similar level of seniority and responsibility. There is nothing in the classification description in the Award to suggest they have responsibility for important compliance issues in a complicated and changing regulatory environment. There is nothing that indicates an intent for the employee to be responsible for strategic and policy responsibilities at a corporate level. Finally, “a middle managerial role primarily to control the conduct of a part of the employer’s business,” 35 as described in the Award, would not seem to anticipate or encompass responsibility for the management of around $100 million in funds under administration, held on behalf of 17,000 clients, and the associated responsibilities involved in dealing with fund managers acting as consultants to the fund.

[43] Based on the application of the principal purpose test I am satisfied that the Applicant’s role and responsibilities existed at a senior management level and, in all the circumstances, cannot be said to fall within the Level 6 classification description contained in the Award. Therefore, the Applicant is not covered by a modern award and not a protected person for the purposes of s.394 of the Act. It follows that the Commission does not have jurisdiction to deal with his unfair dismissal application. The application is accordingly dismissed.

COMMISSIONER

Appearances:

The Applicant appeared on his own behalf.

Mr R. Millar of counsel for SMA Super Pty Ltd

Hearing details:

2013.

Melbourne:

22 March.

 1   Fair Work Act 2009 (Cth) s.382

 2   MA000019

 3   Fair Work Act 2009 (Cth) s.48

 4   Banking, Finance and Insurance Award 2010 at cl.10

 5   Ibid at Schedule B

 6   Ibid

 7   Respondent’s Outline of Submissions at para 9.

 8   Transcript at PN50

 9   Exhibit M1 at attachment B

 10   [2012] FWA 4801

 11   Ibid at [40]

 12   Fair Work Act 2009 (Cth) at s.143(7)

 13   [2009] AIRCFB 50

 14   Exhibit C1 at para 10

 15   Ibid at para 14

 16   Ibid at para 22

 17   Ibid at attachments B and C

 18   Aon Hewitt, Australian Banking and Finance Industries Remuneration Report, (21 March 2013) <   Transcript at PN372

 20   Transcript at PN374

 21   [2012] FWAFB 7184

 22   [2011] FWA 3763

 23   Ibid at para 34

 24   [2012] FWA 4801 at [40] - [41]

 25   (Unreported, AIRCFB, Giudice J, Marsh SDP, Thatcher C, 16 September 2003) PR938031.

 26   Ibid at [13]-[14]

 27   (Unreported, AIRCFB, Williams SDP, Lacy SDP, Tolley C, 17 December 2002) PR925731.

 28   Ibid at [9]

 29   Transcript at PN108

 30   Ibid

 31   Above n. xviii

 32   MA000019 at cl.B.6

 33   Ibid

 34   Ibid

 35   Ibid

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