Roberts and Secretary, Attorney-General's Department
[2020] AATA 1494
•26 May 2020
Roberts and Secretary, Attorney-General's Department [2020] AATA 1494 (26 May 2020)
Division:GENERAL DIVISION
File Number: 2019/5320
Re:Phillip Raymond Roberts
APPLICANT
AndSecretary, Attorney-General's Department
RESPONDENT
DECISION
Tribunal:Member D K Grigg
Date:26 May 2020
Place:Brisbane
The Tribunal affirms the decision under review.
.................................[SGD]..................................
Member D K Grigg
CATCHWORDS
FAIR ENTITLEMENTS GUARANTEE – whether applicant entitled to an advance for unpaid commissions, overtime annual leave loading and redundancy payments – consideration of the applicable “governing instrument” – contract interpretation - decision under review affirmed.
LEGISLATION
Fair Entitlements Guarantee Act 2012 (Cth)
Fair Work Act 2009 (Cth)
SECONDARY MATERIALS
Australian and New Zealand Standard Classification of Occupations First Edition, Revision 1
Building and Construction General On-site Industry Award 2010
Miscellaneous Award 2010
CASES
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544
Jarnet v Esri-Australia Pty Ltd T/A ESRI Australia [2016] FWC 2923
Soueid v Secretary, Department of Employment [2015] AATA 320
United Voice v Gold Coast Kennels Discretionary Trust t/a AAA Pet Resort [2018] FWCFB 128Veolia Transport Sydney Pty Ltd v Mifsud [2012] FCA 1472
REASONS FOR DECISION
Member D K Grigg
26 May 2020
BACKGROUND AND CLAIM HISTORY
On 2 March 2015 Mr Roberts entered into a contract with a construction company called Ignite Homes Pty Ltd (“Ignite Homes”).[1] Pursuant to the contract Mr Roberts was engaged full-time by Ignite Homes to provide the services of “business development manager” (“the First Contract”).[2] Mr Roberts role involved managing selling agents, manning display homes and direct sales.
[1] Exhibit 1, T Documents, T3, pages 35 – 41, the First Contract dated 2 March 2015.
[2] Exhibit 1, T Documents, T3, pages 35 – 41, the First Contract dated 2 March 2015.
The First Contract provided, among other things, that: [3]
·the relationship between Mr Roberts and Ignite Homes was “that of independent Contractor” (clause 7);[4]
·“Nothing stated in this Agreement must be construed as constituting the Contractor and the Company as partners, or as creating the relationship of employer and employee, master and servant or principal and agent between the parties” (clause 7);[5]
·Mr Roberts’ was to be paid $1,000 inclusive of GST per week on the condition that Mr Roberts provided Ignite Homes with an invoice each week (Schedule 1);[6]
·Commissions payable, for the referral or sale of a house and land contract, would be paid to Mr Roberts by Mastery Investments Pty Ltd (Schedule 5). Payment will be made on the 2nd Friday of the said month or upon receipt of the slab payment from the build contract (Schedule 5).[7]
[3] Exhibit 1, T Documents, T3, pages 35 – 41, the First Contract dated 2 March 2015.
[4] Exhibit 1, T Documents, T3, page 37, the First Contract dated 2 March 2015, clause 7.
[5] Exhibit 1, T Documents, T3, page 37, the First Contract dated 2 March 2015, clause 7.
[6] Exhibit 1, T Documents, T3, page 39, the First Contract dated 2 March 2015, Schedule 5.
[7] Exhibit 1, T Documents, T3, page 39, the First Contract dated 2 March 2015, Schedule 5.
In March 2016 Mr Roberts and Ignite Homes entered into a second contract (“the Second Contract”) which provided, among other things, that:[8]
·it “supersedes all previous contracts issued” (clause 2(3));[9]
·Mr Roberts would be paid a service fee of $2,400 excluding GST per fortnight on the condition that Mr Roberts provide Ignite Homes with a fortnightly tax (Schedule 1);[10] and
·Ignite Homes would pay any commission payments. The Company will pay the Contractor within 7 days of receipt of cleared funds from the Building Contract 5% deposit (Schedule 5).[11]
[8] Exhibit 1, T Documents, T3, pages 42-48, the Second Contract dated 18 March 2016 and signed by the Company on 1 April 2016 and on 19 March 2016 by the Applicant.
[9] Exhibit 1, T Documents, T3, page 43, the Second Conract dated 18 March 2016, clause 2(3).
[10] Exhibit 1, T Documents, T3, page 46, , the Second Conract dated 18 March 2016, Schedule 1.
[11] Exhibit 1, T Documents, T3, page 47, the , the Second Conract dated 18 March 2016, Schedule 5.
On 22 March 2017 Ignite Homes terminated its arrangement with Mr Roberts on the grounds that he was in breach of contract “by directing clients to competitor builders”.[12]
[12] Exhibit 1, T Documents, T3 page 12, FEG Claim Form of Phillip Raymond Roberts dated 28 September 2017.
On 19 May 2017 Ignite Homes went into Administration and subsequently liquidation on 23 June 2017.[13]
[13] Exhibit 1, T Documents, T3, pages 22 - 34, SV Partners, Statutory Report by Liquidator, dated 22 September 2017.
On 3 October 2017 a claim ("the FEG Claim") was received by the Department of Employment ("the Department") from Mr Roberts for fair entitlements guarantee assistance pursuant to the Fair Entitlements Guarantee Act 2012 (Cth) (“the FEG Act”) which is “an Act to provide for financial assistance for workers who have not been fully paid for work done for insolvents or bankrupts, and for related purposes”. The main object of the FEG Act (set out in section 3) is “to provide for the Commonwealth to pay advances on account of unpaid employment entitlements of former employees of employers”.[14] Mr Roberts claimed that Ignite Homes owed him unpaid wages, unpaid sale commissions[15], annual leave entitlements and termination payment (in lieu of notice).[16] Prior to lodging his FEG claim, Mr Roberts had attempted to recoup his unpaid entitlements through the lodgement of a claim with the Queensland Civil Administration Tribunal[17] and the lodgement of complaints with Queensland Building and Construction Commission (“QBCC”)[18] and the Australian Tax Office.[19]
[14] Exhibit 1, T Documents, T3, pages 7 – 17, FEG Claim Form of Phillip Raymond Roberts, dated 28 September 2017.
[15] Mr Roberts claims he is owed three commission payments - Invoice 195R dated 30 August 2016 (Exhibit 1, T Documents, T3, page 54; T9, page 101; T17, page 169), Invoice 179R dated 20 March 2017 (Exhibit 1, T Documents, T3, page 52; T9, page 102; T17, page 170), and Invoice 214R dated 20 March 2017 (Exhibit 1, T Documents, T3, page 53; T9, page 103; T17, page 171).
[16] Exhibit 1, T Documents, T3, pages 19 – 20, Letter from Phillip Roberts to Department of Employment, dated 29 September 2017.
[17] Exhibit 1, T Documents, T3, pages 62-65, Queensland Civil and Administrative Tribunal Application for Minor Civil Dispute dated 5 April 2017.
[18] Exhibit 1, T Documents, T3, pages 59-61, Letter from Rachel Cooke (QBCC) to Phillip Roberts, dated 31 March 2017.
[19] Exhibit 1, T Dcouemtns, T3, page 58, Australia Taxation Office Tax Evasion Reporting form, undated.
Mr Roberts submitted to the Department of Employment that he should be deemed to be an employee because:[20]
1. I was hired to perform the duties of Business Development Manager
2. The tasks I performed could not be subcontracted or performed by anyone else
3. I was required to work specific days and times
4. I was required to work from a sales office, being a display home
5. I could not expand my business by contracting my services to other parties
6. The company had control over the direction of the work
7. I was not permitted to operate independently of the business
8. Most of the equipment required to perform the tasks were provided by the company
[20] Exhibit 1, T Documents, T3, page 19, Letter from Philip Roberts to the Department of Employment, dated 27 September 2017.
On 9 November 2017 the Fair Entitlements Guarantee Branch decided that Mr Roberts was not entitled to FEG assistance because contractors are not eligible under the FEG Act.[21] Only employees are potentially eligible for FEG assistance.[22] Mr Roberts request a review of the decision.
[21] Exhibit 1, T Documents, T6, pages 89-90, Letter from FEG Branch to Philip Roberts, dated 9 November 2017.
[22] See section 10, FEG Act.
On 8 June 2018 a delegate of the Fair Entitlements Guarantee Branch assessed Mr Roberts’ request for a review.[23] The delegate decided to affirm the decision of 9 November 2017 on the ground that Mr Roberts was not an “employee” as required by the Act.[24]
[23] The delegate has authority to make internal review decisions under section 39(1) of
the FEG Act.
[24] Exhibit 1, T Documents, T12, pages 119-130, Letter from FEG Branch to Phillip Roberts, dated 8 June 2018.
Mr Roberts appealed the delegate’s decision to the Administrative Appeals Tribunal (“the AAT”). On 22 January 2019 Senior Member D R Davies found that Mr Roberts was an “employee” and remitted the application to the Secretary, Department of Jobs and Small Business (“the Secretary”) to calculate the amount of advance payable under the FEG Act.[25]
[25] Exhibit 1, T Documents, T13, pages 131 - 153, AAT Decision and Reasons for Decision, dated 22 January 2019.
Following the AAT decision Mr Robert was contacted by Ms Kerrie Jones, from the Reviews and External Liaison Team of the Fair Entitlements Guarantee Branch, on 25 February 2019. Ms Jones requested further information regarding the number of overtime hours he worked between 21 December 2016 and 22 March 2017.[26] Ms Jones noted that:[27]
(a)Mr Robert’s hours of work were not specified in the Contracts, or the tax invoices Mr Robert’s issued to Ignite Homes;
(b)In the initial claim form Mr Roberts stated he worked 40 hours per week yet in Mr Roberts email to Ms Jones of 23 February 2019 Mr Roberts stated he worked 60 hours per week. In another email to the ATO dated 26 August 2018, Mr Roberts stated he either worked or was on call 12 hours a day, seven days a week (84 hours); and
(c)The Second Contract provides that Mr Roberts was to work out of the display home office six days per fortnight but in an email to the ATO Mr Roberts stated he worked at the display home four days a week from 10:00am to 5:00pm.
[26] Exhibit 1, T Documents, T14, page 155, Email from Kerrie Jones (FEG) to Phil Roberts, dated 25 February 2020.
[27] Exhibit 1, T Documents, T14, pages 155 – 162, Email chain ending in email from Kerrie Jones (FEG) to Phillip Roberts.
Ms Jones requested Mr Roberts provide information to substantiate:[28]
(a)that he was required to work 40 hours per week;
(b)how many days during the wage entitlement period (“WEP”) he worked at the display home office and what hours that involved;
(c)what days was he on call;
(d)if he received an on‐call allowance; and
(e)whether he was directed to be on call or volunteered to be on call.
[28] Exhibit 1, T Documents, T14, pages 155 – 162, Email chain ending in email from Kerrie Jones (FEG) to Phillip Roberts.
On 12 April 2019 a delegate of the Secretary determined that based on the AAT’s findings, Mr Roberts was entitled to a total advance of $18,720 (before tax) with respect to unpaid wages, annual leave and payment in lieu of notice (“PILN”) entitlements.[29] The delegate determined that Mr Roberts was not entitled to an advance on account of unpaid overtime and unpaid commissions. The delegate explained in the decision that:[30]
(a)Pursuant to section 6(6) of the FEG Act, a person’s wages entitlement is the amount of wages the person is entitled to under the governing instrument from the employer for work done, or paid leave taken, in the wages entitlement period;
(b)governing instrument is defined as including contracts of employment in section 5 of the FEG Act;
(c)“wages entitlement period” (the “WEP”) is defined in section 5 of the FEG Act to mean the 13 weeks ending at either the time the person’s employment ended or the first time the insolvency practitioner has power to control or manage employment by the employer, whichever occurs first;
(d)A liquidator was appointed to control Ignite Homes on 23 June 2017, which was after Mr Roberts’ employment ceased on 22 March 2017, therefore, the wages entitlement period applicable to Mr Roberts’ claim was from 21 December 2016 to 22 March 2017;
(e)Mr Roberts’ work was not covered by an award, and therefore his entitlement to overtime payments are to be assessed against the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (“FWA”);
(f)The FWA does not entitle award free employees to overtime for working in excess of ordinary hours (which according to the NES is a maximum of 38 hours per week) unless the employer has required the employee to work reasonable additional hours. A failure to compensate an employee for working additional hours may make the requirement to work additional hours unreasonable for the purposes of the NES. As a result Mr Roberts had no entitlement to a FEG advance with respect to overtime payments;
(g)Mr Roberts claimed he was owed three commission payments - Invoice 195R dated 30 August 2016, Invoice 179R dated 20 March 2017, and Invoice 214R dated 20 March 2017. Pursuant to the Contracts Mr Roberts was paid commissions on the date a property settled. The settlement dates of the unpaid commissions are the dates by which Mr Roberts eligibility is to be assessed. To be eligible for a FEG advance in relation to the payments, the settlement dates of the commissions must have fallen within the WEP;
(h)The settlement dates for the unpaid commissions are:
[29] Exhibit 1, T Docuents, T21, pages 193 - 202, Letter from FEG Branch to Phillip Roberts, dated 12 April 2019.
[30] Exhibit 1, T Documents, T21, pages 193-202, Letter from FEG Branch to Phillip Roberts, dated 12 April 2019.
Invoice No
Date of Invoice
Commission Payable
Property
Settlement Date
195R
30.08.16[31]
$2,200
Lot 512 Hans Street in Upper Coomera
30 November 2016
179R
20.03.17[32]
$2,750
Lot 1/2 Nightshade Crescent, Pimpama
9 May 2017[33]
214R
20.03.17[34]
$2,200
Unit 2, Lot 29 Oakwood Rise, Pimpama
23 May 2017[35]
[31] Exhibit 1, T Documents, T3, page 54; T9, page 101; T17, page 169.
[32] Exhibit 1, T Documents, T3, page 52; T9, page 102; T17, page 170.
[33] Exhibit 1, T Documents, T19, page 177, Settlement Statement for sale of Lot 1, 2 Nightshade Crescent, Pimpama QLD 4209.
[34] Exhibit 1, T Documents, T3, page 53; T9, page 103; T17, page 171.
[35] Exhibit 1, T Documents, T19, page 178, Email from Naomi Patch (Aussie) to Paris Hayman, Andrew Ward (Aussie) and Bert Pulman, dated 23 March 2017.
(i)All the commission settlement dates fall outside the WEP. The liquidator of Ignite Homes informed the Department that they have no books or records to evidence that Mr Roberts has outstanding commissions that fall within the wages entitlement period, therefore Mr Roberts is ineligible to be paid the claimed outstanding commissions; and
(j)Mr Roberts was entitled to annual leave and PILN entitlements.
On 23 April 2019 Mr Roberts requested a review of the 31 July 2019 decision in relation to his claim for unpaid commissions and overtime payments.[36] Mr Roberts contended that:
(a)The Contract provided for commissions. The First Contract specifies that commissions are to be paid upon a house and land contract becoming unconditional. The Second Contract states that commissions will be paid within 7 days of receipt of the build deposit;
(b)Commissions are not “wages” and are therefore not subject to the WEP rule. His commissions were irregular and therefore should not be treated as wages (see s 7(1)(e)) but as entitlements;
(c)The work he performed falls within the Miscellaneous Award 2010 (“Miscellaneous Award”) pursuant to which he is “entitled to be paid overtime based upon the minimum wage rate for hours worked in excess of 38 hours per week. Overtime hours for the first 3 hours are to be calculated at 1.5 times the minimum hourly rate and for hours worked in excess of 3, then the rate is 2.0 times the hourly rate. FWA consider my classification to be Level 2 under the award which attracts a minimum hourly rate of $20.02.On the basis that I worked 60 hours per week conservatively i.e. 22 overtime hours, my weekly overtime entitlement is $859.35 and in total $ 11,171.55 for the Wages Entitlement Period of 13 weeks”;
(d)“Because the company did not recognise me as an employee I was not required to submit my working hours to substantiate payment and therefore I do not have records of actual hours worked”.[37]
[36] Exhibit 1, T Documents, T22, pages 203 – 205, Email from Phillip Roberts to ‘Jobs – FEG Reviews’, dated 23 April 2020.
[37] Exhibit 1, T Documents, T23, page 207, Email from Phillip Roberts to Meagan Downes (FEG), dated 2 June 2019.
On 31 July 2019 a delegate of the Secretary advised that it had reviewed Mr Roberts’ entitlements to overtime and commission payments and recommended that the decision of 12 April 2019 be affirmed.[38]
[38] Exhibit 1, T Documents, T24, pages 219 – 224, FEG Section 38 Decision background; T25, pages 225 – 236, Letter from FEG Branch to Phillip Roberts, dated 31 July 2019.
On 9 August 2019 Mr Roberts applied to this Tribunal for review of the Secretary’s decision.[39]
[39] Exhibit 1, T Documents, T1, pages 1 -3, Application for review dated 9 August 2019.
The Tribunal has jurisdiction to review this decision pursuant to section 25 of the Administrative Appeals Tribunal Act 1975 (Cth) and section 40 of the FEG Act.
ISSUE FOR THE TRIBUNAL
The issues for determination by the Tribunal are whether Mr Roberts is entitled to a FEG advance for:
(a)annual leave loading;
(b)unpaid overtime;
(c)unpaid commission; and
(d)redundancy;
arising out of his former employment with Ignite Homes.
RELEVANT PROVISIONS FROM THE FEG ACT
Section 10 of the FEG Act sets out when a person will be eligible for advance. It provides relevantly that:
(1) A person is eligible for an advance if the Secretary is satisfied of all of the following:
(a) the person’s employment by a particular employer has ended;
(b) after the commencement of this section, an insolvency event happened to the employer;
(c) the end of the employment:
(i) was due to the insolvency of the employer; or
(ii) occurred less than 6 months before the appointment of an insolvency practitioner for the employer; or
(iii) occurred on or after the appointment of an insolvency practitioner for the employer;
(d) the person is (or would, apart from the discharge of the bankruptcy of the employer, be) owed one or more debts wholly or partly attributable to all or part of one or more employment entitlements;
(e) the person has taken steps, so far as reasonable, to prove those debts in the winding up or bankruptcy of the employer;
(f) if the person was owed any of those debts before the insolvency event happened, the person took reasonable steps before that event to be paid those debts
…
(emphasis added)
There is no dispute that Mr Roberts satisfied section 10 of the FEG Act.
To be entitled to a FEG advance an employee’s entitlements must fall within one of the following categories set out in section 6:
·Annual leave
·Long service leave
·PILN
·Redundancy pay
·Wages
Section 6(2) of the FEG Act explains that a person’s “annual leave entitlement” is:
the amount the person is entitled to under the governing instrument from the employer for paid annual leave that the person:
(a) had accrued at the end of the employment; and
(b) had not taken by then.
(emphasis added)
Section 6(5) of the FEG Act explains that a person’s “redundancy pay entitlement” is:
the amount of redundancy pay the person is entitled to under the governing instrument from the employer for termination of the employment.
(emphasis added)
Section 6(6) of the FEG Act explains that a person’s “wages entitlement” is:
the amount of wages the person is entitled to under the governing instrument from the employer for work done, or paid leave taken, in the wages entitlement period.
“Wages” is defined in section 7 of the FEG Act to mean:
(1) Wages includes the following:
(a) allowances;
(b) loadings;
(c) amounts payable for overtime;
(d) amounts payable at penalty rates;
(e) other amounts that the governing instrument for the relevant employment
identifies separately and makes payable regularly.
(2) However, the following are not wages:
(a) discretionary payments (such as bonuses);
(b) reimbursements;
(c) payments of expenses relating to travel or relocation.
(3) Amounts that are not payable on an ongoing basis are not wages, unless they are amounts described in subsection (1).
(emphasis added)
As can be seen from the definitions set out above, the entitlement of a person to wages, redundancy pay and annual leave payments, comes from the “governing instrument”. The answer to whether Mr Roberts is entitled to the payments he seeks will be derived from the relevant “government instrument” applicable to his situation.
“Governing instrument” is defined in section 5 of the FEG Act as follows:
governing instrument for employment means any of the following that governs the employment:
(a) a written law of the Commonwealth, a State or a Territory;
(b) an award, determination or order that is made or recorded in writing;
(c) a written instrument;
(d) an agreement (whether a contract or not).
(emphasis added)
WHAT IS THE APPLICABLE GOVERNING INSTRUMENT?
The parties disagree on the applicable governing instrument.
Mr Roberts submits that he is entitled to annual leave loading, redundancy payments and overtime on the basis that he is covered by the Miscellaneous Award. The Secretary contends that the relevant governing instruments for determining the extent of Mr Roberts’ entitlements are the First and Second Contracts and the National Employment Standards set out in the Fair Work Act 2009 (Cth) (“FWA”). The National Employment Standards set out minimum employment standards.
Before considering Mr Roberts’ claims, the Tribunal must first identify the relevant governing instruments.
Is Mr Roberts covered by the Miscellaneous Award?
Mr Roberts told the Tribunal that the Fair Work Ombudsman had informed him in April 2019 that he was covered by the Miscellaneous Award as a level 2 classification. Mr Roberts may have been told this, but it is not binding on the Tribunal.
Clause 4 of the Miscellaneous Award sets out which employees are covered by the Award and which employees are not.
Clause 4.1 provides:
4.1 Subject to clauses 4.2, 4.3, 4.4, 4.5 and 4.6 this award covers employers throughout Australia and their employees in the classifications listed in clause 14—Minimum wages who are not covered by any other modern award.
(emphasis added)
It is clear from clause 4.1 that employees that fall within clause 14 classifications are covered unless those employees fall within exceptions set out in clauses 4.2, 4.3, 4.4, 4.5 or 4.6.
The classification of employees that the Miscellaneous Award covers are set in Schedule B which provides:
Schedule B—Classification Structure and Definitions
Level 1
An employee at this level has been employed for a period of less than three months and is not carrying out the duties of a level 3 or level 4 employee.
Level 2
An employee at this level has been employed for more than three months and is not carrying out the duties of a level 3 or level 4 employee.
Level 3
An employee at this level has a trade qualification or equivalent and is carrying out duties requiring such qualifications.
Level 4
An employee at this level has advanced trade qualifications and is carrying out duties requiring such qualifications or is a sub-professional employee.
Mr Roberts contends that he is a level 2 classified employee.
Level 1 is not applicable here because Mr Roberts was employed by Ignite Homes for more than three months. Level 3 is not applicable here because Mr Roberts does not have a trade qualification. Therefore, for class level 2 to apply Mr Roberts must not have been carrying out his employment duties as a “sub-professional employee”.
The Full Bench of the Fair Work Commission explained the application of the classification levels in the Miscellaneous Award in United Voice v Gold Coast Kennels Discretionary Trust t/a Pet Resort [2018] FWCFB 128 (at [36]) as follows:
·classification levels 1 and 2 of the Award were to apply to low skilled employees with no particular work qualifications.
·no classification applies to persons with a professional qualification or managerial responsibilities
·Levels 3 and 4 were to apply to trade qualified employee.
The FWC held that “it may be inferred that the award was not intended to cover professional or managerial employees, and that it was intended to cover low skilled employees as well as trade-qualified employees not covered by any other award. In respect of low-skilled employees, the low minimum rates of pay prescribed also tend to suggest that the award was intended to capture low paid workers not covered by another award”.[40]
[40] [2018] FWCFB 128 [36].
Given Mr Roberts pay entitlements under the First and Second Contract, he could hardly be considered to be a “low paid worker”.
Even if Mr Roberts was considered to be a lowly paid worker, the issue still remains whether Mr Roberts is a “sub-professional employee”. “Sub-professional employee” is not defined in the Award. In Jarnet v Esri-Australia Pty Ltd T/A ESRI Australia [2016] FWC 2923 the Fair Work Commission determined the issue of whether someone was a “sub-professional employee” by considering the Australian and New Zealand Standard Classification of Occupations (“ANZSCO”).
Ms Cooke, on behalf of the Secretary, contended that given Mr Roberts’ role and duties at Ignite Homes, Mr Roberts is not a “sub-professional” employee and “he should be classified as either a marketing specialist, which falls under the sales, marketing and public relations professional classification, which is a level 1 professional employee, or alternatively a sales and marketing manager under the specialist managers, advertising, public relations and sales managers classification, which is also a level 1 professional employee”.[41]
[41] Transcript of Proceedings, page 12, lines 5 - 10.
ANZSCO sets out that MINOR GROUP 225 SALES, MARKETING AND PUBLIC RELATIONS PROFESSIONALS perform the following roles:
SALES, MARKETING AND PUBLIC RELATIONS PROFESSIONALS plan, develop, coordinate and implement programs of information dissemination to promote organisations, goods and services, and represent companies in selling a range of technical, industrial, medical, pharmaceutical and ICT goods and services.
Indicative Skill Level:
In Australia and New Zealand:
Most occupations in this minor group have a level of skill commensurate with a bachelor degree or higher qualification. At least five years of relevant experience may substitute for the formal qualification. In some instances relevant experience and/or on-the-job training may be required in addition to the formal qualification (ANZSCO Skill Level 1).
Tasks Include:
·commissioning and undertaking market research, analysing the findings, and planning advertising, marketing and public relations activities
·supporting business growth and development through the preparation and execution of marketing objectives, policies and programs planning and organising publicity campaigns
·appraising and selecting material submitted by writers, Photographers, Illustrators and others to create favourable publicity
·acquiring and updating knowledge of employers' and competitors' goods and services, and market conditions
·assessing customers' needs and explaining and demonstrating goods and services to them
·visiting regular and prospective client businesses to establish and act on marketing opportunities
·quoting and negotiating prices and credit terms, and completing contracts
ANZSCO sets out that UNIT GROUP 2251 ADVERTISING AND MARKETING PROFESSIONALS perform the following roles:
ADVERTISING AND MARKETING PROFESSIONALS develop and coordinate advertising strategies and campaigns, determine the market for new goods and services, and identify and develop market opportunities for new and existing goods and services.
Indicative Skill Level:
In Australia and New Zealand:
Most occupations in this unit group have a level of skill commensurate with a bachelor degree or higher qualification. At least five years of relevant experience may substitute for the formal qualification. In some instances relevant experience and/or on-the-job training may be required in addition to the formal qualification (ANZSCO Skill Level 1).
Tasks Include:
·planning, developing and organising advertising policies and campaigns to support sales
·objectives
·advising executives and clients on advertising strategies and campaigns to reach target markets, creating consumer awareness and effectively promoting the attributes of goods and services
·coordinating production of advertising campaigns involving specialised activities, such
·as artwork, copywriting, media scripting, television and film production and media
·placement, within time and budget constraints
·analysing data regarding consumer patterns and preferences
·interpreting and predicting current and future consumer trends
·researching potential demand and market characteristics for new goods and services and collecting and analysing data and other statistical information
·supporting business growth and development through the preparation and execution of marketing objectives, policies and programs
·commissioning and undertaking market research to identify market opportunities for new and existing goods and services
·advising on all elements of marketing such as product mix, pricing, advertising and sales promotion, selling, and distribution channels
Ignite Homes was a residential construction company. According to the Contracts Mr Roberts’ was engaged as a business development manager to provide the following services (Schedule 3):[42]
[42] Exhibit 1, T Documents, T3, page 46, the Second Contract, Schedule 3.
1. Maintain regular contact with marketers and reporting outcome on Base CRM
2. Create service Agreements and send out to new Marketing Contracts. All Service Agreements are to be countersigned by the Manager Brendon Ferns
3. Assist with issuing and chasing up contract signing
4. Present the Company’s Stockist House and Land Packages to marketing contracts for the purposes of closing investment property sales
5. Maintain relationships and make regular contacts with Developers and Land Owners to actively source land for the stock list
6. Work out of the display home 6 days a fortnight on a rotational basis with another yet to be decided staff member. i.e. Monday/Tuesday, Saturday/Sunday, Wednesday/Thursday, then repeat.
7. Handout Ignite Homes advertising details and show what land and house designs are available.
8. Communicate with Ignite internal staff of potential clients and assist with closing deals through to signing of land and build contracts
9. Oversee assistant sales staff and report back to management
10. Maintain an ongoing relationship with new and past clients and record all activities with clients onto Base CRM
The Tribunal noted in the earlier hearing that Mr Roberts’ gave evidence that he had three main roles at Ignite Homes:[43]
1) To sell houses to clients who visited Ignite’s display homes;
2) To manage and expand a team of selling agents who sold houses mainly to investors;
3) He was responsible for acquiring land on behalf of Ignite
[43] Exhibit 1, T Documents, T13, page 142, paragraph 38, AAT Decision and Reasons for Decision, dated 22 January 2019.
Mr Roberts accepts this was an accurate reflection of his evidence at the earlier hearing.[44]
[44] Transcript of Proceedings, page 17, lines 8 – 24.
At the hearing Mr Roberts told the Tribunal that despite his “manager” title he “was a salesman”. He said:
“…95 per cent of my time I was selling houses either directly or through a team of selling agents. I mean that effectively was my job. I was doing other things, acquiring land sometimes.
…probably more than 80 per cent of my time all I was basically a glorified salesman and given a title of business development manager, which I think helped the company externally, help me externally to present myself as a manager merely not just as a salesman.
The staff were - there were only two ladies who I worked with from time to time and at one stage they were both together. They were company employees and I had a bit of like a supervisory role”.[45]
[45] Transcript of Proceedins, page 16, lines 12 - 30.
In light of the evidence, and guided by ANZSCO, the Tribunal finds that Mr Roberts’ role was more akin to that of a sub-professional employee. While Mr Roberts was involved in sales, there is no evidence of his performing the level of the tasks described in the ANSCO classifications set out above. The Tribunal finds that Mr Roberts is a classified level 4 employee under the Miscellaneous Award.
However, the Tribunal finds that the Miscellaneous Award does not apply to Mr Roberts on the ground that he was still excluded pursuant to clause 4.3 which provides:
4.3 The award does not cover employees
(a) in an industry covered by a modern award who are not within a classification in that modern award; or
(b) in a class exempted by a modern award from its operation,
or employers in relation to those employees
(emphasis added)
Ignite Homes operated a building and construction business[46] in the onsite building industry and would have been covered by the Building and Construction General Onsite Industry Award 2010 (“Building and Construction Award”). Pursuant to clause 4.2 of the Building and Construction Award, it:
covers employers throughout Australia in the on-site building, engineering and civil construction industry and their employees in the classifications within Schedule B—Classification Definitions to the exclusion of any other modern award.
[46] Exhibit 1, T Documents, T3, page 24, SV Partners, Statutory Report by Liquidator, dated 22 September 2017.
Pursuant to clauses 4.9 and 4.10 of the Building and Construction Award:
4.9 (1) …onsite building, engineering and civil construction industry means the industry of general building and construction, civil construction and metal and engineering construction in all cases undertaken onsite.
4.10 (a) General building and construction means:
(i) the construction alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form or are to form a part of land…
Ignite Homes, as an onsite builder, would have been covered by the Building and Construction Award. The next question is whether Mr Roberts, as an employee of Ignite Homes, was also covered by the Building and Construction Award. Schedule B sets out that the type of employees that will be covered are construction and engineering workers. Mr Roberts does not fall within these classifications in Schedule B, therefore he was not covered by the Building and Construction Award. As a result, pursuant to clause 4.3 of the Miscellaneous Award, Mr Roberts is not covered by the Miscellaneous Award.
At the hearing Mr Roberts agreed that “it seems to be the case” that, despite the advice he says he obtained from the Fair Work Ombudsman, the Miscellaneous Award does not apply to him.[47]
[47] Transcript of Proceedings, page 20, line 24.
The Tribunal is not aware of any other award which may be relevant to Mr Roberts’ situation.
What is the governing instrument?
Although no award appears to apply to Mr Roberts he is still covered by the FWA and the Contracts with Ignite Homes. The FWA and the Contracts are the governing instruments that apply to Mr Roberts situation and will determine his entitlements.
MR ROBERTS’ CLAIM FOR ANNUAL LEAVE LOADING
Mr Roberts contends that he is covered by the Miscellaneous Award which provides that annual leave loading is to be calculated at 17.5% pursuant to clause 23.3.[48]
[48] Exhibit 2, Submissions of Mr Robert dated 7 November 2019, page 1.
Given the Tribunal has found that the Miscellaneous Award does not apply, the question becomes whether Mr Roberts is entitled to annual leave loading under the FWA or the Contracts (section 6(2), FEG Act).
Under the FWA, section 87(1)(a) provides that an employee, such as Mr Roberts, is entitled to 4 weeks of paid annual leave for each year of service. There is no entitlement in the FWA to annual leave loading.
The Contracts make no provision for annual leave loading.
Given the above, the Tribunal finds that Mr Roberts is not entitled to annual leave loading and this part of his claim fails.
Mr Roberts accepted at the hearing that if the Miscellaneous Award did not apply that he had no entitlement to annual leave loading.[49]
[49] Transcript of Proceedings, page 26, lines 4 – 7 .
MR ROBERTS’ CLAIM FOR REDUNDANCY
Mr Roberts contends that he is covered by the Miscellaneous Award which provides in clause 12 that a redundancy payment (of 6 weeks wages) upon termination is payable where there has been continuous service of between 2 and 3 years.[50]
[50] Exhibit 2, Submissions of Mr Robert dated 7 November 2019, pages 1 – 2.
Mr Roberts says Senior Member Davies decided he was not in breach of Contract as Ignite Homes had alleged and therefore Ignite Homes’ purported termination was invalid. Given that Ignite Homes went into administration shortly after purporting to terminate his contract, Mr Roberts says this can be taken as a redundancy.
Given that the Miscellaneous Award does not apply, the question becomes whether Mr Roberts is entitled to redundancy under the FWA or the Contracts.
Section 119(1) of the FWA sets out an employee’s entitlement to redundancy pay. It provides
Entitlement to redundancy pay
(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
The amount of redundancy pay is determined in accordance with section 119(2) of the FWA as follows:
(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work.
For a continuous period of service of at least two years but less than three years the redundancy pay period is 6 weeks.
An employee is not entitled to redundancy pay if their employment is terminated because of serious misconduct: s 123(1)(b), FWA.
There are only two bases upon which Mr Roberts would be entitled to be paid redundancy. The first basis is where Ignite Homes terminated his employment because it no longer required his job to be done by anybody. The second basis is where Ignite Homes terminated Mr Roberts’ employment because it was insolvent. If the termination was for some other reason Mr Roberts will not be entitled to redundancy pay. Ms Cooke referred the Tribunal to the decision of Flick J in Veolia Transport Sydney Pty Ltd v Mifsud [2012] FCA 1472, at [27], where he clearly stated that a redundancy “does not extend to the dismissal of an employee for cause”.
In his FEG claim form Mr Roberts stated that Ignite Homes terminated its arrangement with him on the grounds that he was in breach of contract “by directing clients to competitor builders”.[51]
[51] Exhibit 1, T Documents, T3, page 12, FEG Claim Form of Phillip Raymond Roberts, dated 28 September 2017.
Mr Roberts contends that the termination of the Second Contract was invalid. He told the Tribunal that Ignite Homes had “made up [its] mind to get rid of [him] some time prior, and the reason being that they couldn’t afford to pay me”.[52]
[52] Transcript of Proceedings, page 33, lines 32 – 34.
Pursuant to clause 4 of the Second Contract the agreement could be terminated if Mr Roberts committed a breach or was in default of any warranty. Pursuant to clause 5 of the Second Contract Mr Roberts warranted to Ignite that he would provide his services “in a proper and workmanlike manner and in compliance with the reasonable direction of the Company and any applicable Company standards”. Pursuant to clause 6 of the Second Contract Mr Roberts agreed that he would not disclose the Company’s “confidential information” to another person without authorisation and would not use any Confidential Information for any purpose other than for the benefit of the Company. “Confidential Information” is defined in clause 1 of the Second Contract to include, among other things:
Methods for contacting clients and sales strategies, stock lists and future stock opportunities…customer, client and stock lists…cost and selling price information
Senior Member Davies found at the earlier hearing that:[53]
58.Mr Roberts said that during his initial interview it was made clear to him by Mr Ferns that existing arrangements which he had with two builders were to cease and that all referrals were to be directed to Ignite. He said that he did not undertake any work for anyone other than Ignite until early 2017 when he referred the son of a friend to Toro Homes which was operated by his niece and nephew. He also assisted Toro Homes with contacts with land developers. He received a commission payment of $4,000.00 from Toro Homes for that referral. He had an email address at Toro Homes and an email signoff as “Phil Roberts – Business Development”. He said that he did that because he had decided to leave Ignite because he had not been paid outstanding commissions and he felt Ignite was in financial difficulty. Subsequently, he was terminated by Ignite because it considered that his dealing with Toro Homes was a breach of the Second Agreement. I am satisfied that apart from the matters involving Toro Homes in early 2017 which was shortly before he was terminated in March 2017, Mr Roberts did not undertake any actual work for any other party during the two years that he was engaged by Ignite. I am also satisfied that he did not have an entitlement to work for others and that this is evidenced by the instruction given to him by Mr Ferns in the initial interview to cease relationships with other builders and by Ignite terminating the Second Agreement when it became aware of what happened with Toro Homes. I consider that those matters suggest an employee relationship.
[53] Exhibit 1, T Documents, T13, page 147, paragraph 58, AAT Decision and Reasons for Decision, dated 22 January 2019.
Mr Roberts submitted that Senior Member Davies found that he had not breached the Contract, but that is an incorrect interpretation of the decision.[54] The fact that Mr Roberts was not entitled to work for others and that Ignite Homes terminated Mr Roberts for alleged cause was one of the factors Senior Member Davies found supported a finding that Mr Roberts was an employee not an independent contractor.
The material available to the Tribunal indicates that:
(a)(a) Mr Roberts was not to work for any other party while employed by Ignite Homes (as Mr Roberts submitted to the Department in September 2017;[55]
(b)In March 2017 Mr Roberts had recommended that a potential customer of Ignite consider the house plans of a competitor, Toro Homes;[56]
(c)Mr Roberts had provided a potential customer of Ignite with Toro Homes’ house plans and described himself to that potential customer as a being involved with Toro Homes;[57]
(d)Mr Roberts referred a family member who worked for Toro Homes to land developers;[58]
(e)Mr Roberts referred a marketer to Toro Homes in return for which Toro Homes paid Mr Roberts $4,000.[59]
[54] Transcript of Proceedings, page 5, line 22.
[55] Exhibit 1, T Documents, T3 , pages 19 - 20, Letter from Phillip Roberts to Department of Employment, dated 29 September 2017.
[56] Exhibit 1, Supplementary T Documents, ST1, page 261, see email exchanges between Mr Roberts and Mr Sirano.
[57] Exhibit 1, Supplementary T Documents, ST1, page 263, Email from Phillip Roberts to a potential customer, dated 3 March 2017.
[58] Exhibit 1, Supplementary T Documents, ST1, page 268, Email from Adrian Edwards to Phillip Roberts, dated 23 March 2020.
[59] Exhibit 1, T Documents, T3, page 71, NAB Bank Account Statement for account held by Phillip Raymond Roberts for the period between 24 February 2017 and 21 March 2017.
On 5 May 2017 Ignite Homes’ solicitors wrote to the QBCC in response to Mr Roberts’ claim and explained the reason for his termination as follows:[60]
[60] Exhibit 1, Supplementary T Documents, ST1, pages 252-255, Letter from Adrian Edwards (Rostron Carlyle Lawyers) to Rachel Cooke (QBCC), dated 5 May 2017.
During 2016, the Company noticed dwindling sales while the Creditor was supposed to be promoting the business of the Company. Whilst the Creditor only commenced with the business in March it was decided to grant him the time to settle into the business. This did not occur and in early 2017 suspicions were aroused about that he was conducting business development work for someone else. The Companies suspicions were further aroused when staff members informed them that they had overheard the creditor in the premises of the Company answer the phone as “Phil Roberts, Toro Homes”.
Coupled with this the sales figures dwindled to an almost stop. As the Company was suspicious about the decline in sales they requested a counterpart to attend to the sales office (display home) and ascertain whether the complainant was indeed moonlighting for another business.
On the 2 March 2017, Ian Sorano attended to the display home. See Annexure B a copy of an email that followed the visit. The Creditor then responded from a Company email with the attached email as Annexure C. This was the first that the Company became aware of any dealings that the Creditor was having with Toro Homes. What was clear to the Company that its clients that were covered by the confidentiality and ownership provision of the agreement was been eroded and sent elsewhere.
This was conformed on the 3 March 2017 when Ian Sorano received an email from the Creditor providing Toro Homes design and plans. Of interest is that the footer indicates that the Creditor is the “Business Development” (sic) of Toro Homes. Incidentally the exact same position as for the Company. See attached as Annexure D.
On the 22 March 2017, the Creditor was confronted in a disciplinary hearing in relation to the allegation that he was involved with Toro Homes, while under contract with Ignite. In a formal manner and while being offered the opportunity to explain any links, he confirmed that he had introduced a family member at Toro Homes to land developers but that he had not engaged in any other activity.
Following the notification, the contract with Ignite was terminated, for cause, as contained in clause 2 and 4 of the agreement.
This reason for the termination was that the Creditor had breached the agreement as he during the course of the agreement also acted as business developer (business development) for Toro Homes and referred clients during the agreement to Toro Homes that he had met at the sales office of the Company.
While subject to the terms of the agreement he referred clients and customers, by passing their information to Toro Homes and he made recommendations to inter alia, use Toro Homes instead of the Company.
The agreement is clear that client details (or proposed client details), information and other material was defined as confidential material. In addition, the Creditor misled the Company about the nature and extent of his involvement with Toro Homes, when he was offered the opportunity to clarify the position.
Even if Ignite Homes terminated the Contract based on a misunderstanding of Mr Roberts’ conduct, and such a misunderstanding is not demonstrated on the material available, there is no indication that it terminated the Second Contract for financial reasons. Although Ignite Homes went into liquidation several months after the termination and Mr Roberts was not replaced, this is not determinative.[61] The primary cause for his termination was due to Ignite Homes’ belief that Mr Roberts had acted in breach of the Second Contract.
[61] Klemm and Secretary, Department of Employment [2017] AATA 507.
Mr Roberts conduct in relation to Toro Homes arguably constitutes a breach of his contractual obligations to Ignite Homes. Mr Roberts did not dispute that he engaged in that conduct.
The following exchange occurred at the hearing:[62]
[62] Transcript of Proceedings, page 39, lines 23 - 46; page 40, lines 1 - 43.
MR ROBERTS: The reason I was terminated was because of my involvement with Toro Homes, and when I refused to elaborate at that meeting when I was dismissed, I was dismissed instantly and they just said, you know - and then they changed the reasons for my dismissal in an email the next day. And then I get this letter that - to the QBCC which is again completely different, there’s stuff in there that was never divulged to me or given as reasons for my dismissal.
MEMBER: Are you saying that at the time you were dismissed the issue of confidentiality was not raised?
MR ROBERTS: Correct. Yes, correct. It was simply because of my involvement with the builder, with another builder and I think they’ve had a think about it and then decided they’d better formally put that in writing as the reasons for my dismissal, that was done the next day.
MEMBER: But were you - are you of the understanding that you should not have been having dealings with other builders?
MR ROBERTS: I wasn’t - as I explained it wasn’t dealings. I have never at any time - they’re alleging that I was directing business away from my employer to other builders. Never at any time did that happen, never.
MEMBER: Right.
MR ROBERTS: So I completely denied their allegations at that time. They were the allegations.
MEMBER: I see, so what you’re saying - and that’s why you’re referring me to the Senior Member’s decision, but you had not engaged in work for other parties. That’s what you’re saying to me, that he had made that finding, which is what you’re saying and you’re saying at the time that you were terminated there was no mention until the lawyers got involved that the basis - the basis for the termination was breach of confidential obligations under the contract.
MR ROBERTS: Absolutely correct, Member, that’s right.
MEMBER: So you’re saying that because that was raised later they were just coming up with reasons to get rid of you when the real reason was because they couldn’t afford to keep paying you?
MR ROBERTS: That’s my belief and that’s my submission, yes.
MEMBER: So when they’ve outlined that the reason they started to become suspicious of you, one of the reasons they say was because your sales had been declining and you say that’s not true.
MR ROBERTS: They hadn’t declined at all.
MEMBER: You’re saying that the foundation for which they initially investigated weren’t correct.
MR ROBERTS: Absolutely, yes. Yes.
(emphasis added)
Mr Roberts accepts that he engaged in the conduct but says because they did not raise the issue of confidentiality with him at the time of his termination, an inference can be drawn that it was not a valid termination. The Tribunal does not accept that contention. Mr Roberts’ alleged conduct, which is the main reason given by Ignite Homes for the termination, inevitably relates to the use of confidential information. Perhaps Mr Roberts did not fully comprehend that at the time. The Tribunal considers that the conduct and the obligations to maintain Ignite Homes’ confidence are inextricably linked and are cogent reasons which would be of concern to any employer. They are not unreasonable or fanciful concerns. It is not a new basis for the termination. The Tribunal acknowledges that Mr Roberts says his sales had not been declining, as asserted by Ignite Homes to the QBCC, but there is no evidence before the Tribunal to determine that contention. In any event, whatever the reason was that gave rise to Ignite Homes investigating his conduct, the fact is that his conduct was investigated and the result of that investigation was Mr Roberts’ termination.
Even if the Tribunal found that Ignite Homes did not have cause to terminate the Contract, it does not necessarily follow that Mr Roberts is entitled to redundancy pay because under section 119 of the FWA Act the termination has to be for the reasons set out in either (a) or (b) in order to be entitled to redundancy payment.
Despite Mr Roberts’ assertions that the termination was invalid, he did not commence unfair dismissal proceedings.
In terms of Ignite Homes’ solvency, the liquidator’s report provides that their investigations concluded that Ignite Homes may have been trading whilst insolvent since 30 June 2016.[63] The question is whether that was the reason Mr Roberts was terminated.
[63] Exhibit 1, T Documents, T3, page 29, SV Partners, Statutory Report by Liquidator, dated 22 September 2017.
Mr Roberts told the Tribunal Ignite Homes had failed to pay one of his commissions on time. Mr Roberts was informed by an administration employee of Ignite Homes in February 2017 that:[64]
“…cash flow has been tight before Christmas, I [will] make sure a[t] least that I pay your fortnightly invoice on time. Your invoice is dated 30/08/16 but Lot 512 didn’t settle until 30/11/16. I will pay as soon as I can. I don’t get paid for all the work I do for Ignite Homes.”
[64] Exhibit 1, T Documents, T3, page 55, Email from Sonja Whettam to Phillip Roberts, dated 6 February 2017.
Mr Roberts’ invoice for a commission of $2,200 due in 2016[65] was four months overdue by the time he was terminated. Mr Roberts says an inference can be drawn from this that the real reason he was terminated was because they could not pay what they owed him[66] and they were using the allegations regarding his conduct as a “cloak to avoid the entitlements to redundancy payment”.[67]
[65] Exhibit 1, T Documents, T3, page 54; T9, page 101; T17, page 169.
[66] Transcript of Proceedings, page 33, lines 33 - 34; page 40, lines 14 - 18.
[67] Veolia Transport Sydney Pty Ltd v Mifsud [2012] FCA 1472, at [21].
It is apparent that Ignite Homes were having financial difficulties at the time Mr Roberts was terminated. The Tribunal is not in the position to determine whether they were in fact insolvent at that time. The liquidator did not form a conclusive view on this issue. The FEG Act defines an “insolvency event” relevantly as “when a liquidator of the employer is appointed (provisionally or otherwise) under the Corporations Act 2001”.[68] The insolvency event occurred here on 23 June 2017 when the liquidators were appointed.[69] Mr Roberts was not entitled to any advances under the FEG Act until that insolvency event occurred (see section 10, FEG Act).
[68] FEG Act, section 5.
[69] Exhibit 1, T Documents, T3, page 22, SV Partners, Statutory Report by Liquidator, dated 22 September 2017.
Ignite Homes had not gone into administration or liquidation at the time of the termination, and the reasons Ignite Homes gave to the QBCC for the termination were detailed and substantial. The Tribunal is not persuaded on the available evidence that the real reason for the termination was because Ignite Homes was insolvent. As a result, Mr Roberts is not entitled to redundancy pay.
MR ROBERTS’ CLAIM FOR OVERTIME
Mr Roberts contends that he is covered by the Miscellaneous Award which provides in clause 22.1 that overtime payments be paid at the rate of 1.5 times the hourly rate. [70]
[70] Exhibit 2, Submissions of Mr Roberts dated 7 November 2019, page 2.
In the WEP, Mr Roberts says he worked:[71]
(a)6 days for 12 weeks and then 5 days in the Christmas week;
(b)He kept no records but a “conservative” estimate of the unpaid overtime is 22 hours per week based upon a total working week of 60 hours:
“I worked from a display home sales office from 7.00 am to 5.00 pm each day which included manning the display home from 10.00 am to 4.00 pm on a roster system and then working from my home office from around 6.00 pm to 8.00 pm communicating with clients and sales agents. Contact with home buyers, generally young couples, occurred after normal working hours and when both parties were available together and had time to chat”.[72]
[71] Exhibit 2 Annexure 2, Statutory Declaration of Mr Roberts, dated 14 November 2019.
[72] Exhibit 2, Submissons of Mr Roberts dated 7 November 2019, page 2.
Given that the Miscellaneous Award does not apply, the question becomes whether Mr Roberts is entitled to overtime payments under the FWA or the Contracts.
“Overtime” payments are included in the definitions of “wages” section 7(1)(c) of the FEG Act and are therefore prima facie recoverable.
The issue is what evidence is available to substantiate Mr Roberts’ claim. The Contracts are silent on the number of hours Mr Roberts was required to work and whether overtime was permitted or expected. Mr Roberts acknowledged that he kept no records of the overtime hours and can only give an estimate.
As set out in paragraph 11 above, Mr Roberts has given different estimates of his working hours at different times.
According to section 62(1)(a) of the FWA, an employer is not permitted to request or require an employee to work more than 38 hours in a week unless those additional hours are “reasonable”. Whether any additional hours are “reasonable” depends on a number of factors such as whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours.[73] An employee is entitled to refuse to work unreasonable overtime hours.[74]
[73] Section 62(3), FWA.
[74] Section 62(2), FWA.
The FWA does not entitle employees to overtime pay, it merely provides for when overtime hours may be reasonable or unreasonable. Any entitlement to overtime pay involves an assessment of the employment terms. There is no entitlement in the Contracts to overtime pay.
Given that the Contracts are silent on the issue of overtime and working hours, and there are no substantiating records or corroborating evidence available, the Tribunal is not in a position to determine whether Mr Roberts worked in excess of ordinary hours and whether, if he did, that was reasonable (as required by the FWA). As an “employee” any FEG advance for overtime would be only payable on the actual number of overtime hours worked. There are no substantiating materials to confirm what hours were worked and which of those hours constituted overtime. Mr Roberts has acknowledged that he has no records. As a result, the Tribunal finds that Mr Roberts is not entitled to any entitlements for overtime hours worked.
MR ROBERTS’ CLAIM FOR COMMISSIONS
Was Mr Roberts “entitled to” the unpaid commissions “in the wages entitlement period”?
To be entitled to compensation under the FEG Act for unpaid commissions, the commissions must be considered as “wages” as they clearly to do not fall within the remaining employment entitlement categories set out in section 6 of the FEG Act (see paragraph 21 above). Further, Mr Roberts must have been entitled to those commissions in the WEP.
At one stage Mr Roberts had sought to argue that the commissions were not “wages”
The Tribunal finds that the commissions were wages because they were clearly meant to form a part of Mr Roberts regular earnings from the work done for Ignite Homes (see section 7, FEG Act). This is not disputed by the Secretary.
If the commissions were not wages, Mr Roberts would have no entitlement to an advance under the FEG Act.
The issue here is whether the unpaid commissions were “for work done…in the wages entitlement period” as required by section 6(6) of the FEG Act.
The relevant facts (which are not in dispute) in relation to each unpaid commission are as follows:
Lot 1 Pimpama property (“Lot 1”)[75]
[75] Proposed lot 1, '2 Nightshade Crescent', Pimpama QLD 4209 as described in Exhibit 1, Supplementary T Documents, ST5, page 332, Contract of Sale for Lot 1.
·Ignite Homes entered into a contract for the sale of Lot 1 on 5 February 2016[76]
[76] Exhibit 1, Supplementary T Documents, ST5, pages 331 – 348, Contract of Sale for Lot 1, dated 5 February 2016.
·In early 2016 Mr Roberts issued an invoice no. 179R for a referral fee in the amount of $2,750
·On 2 September 2016, Mr Roberts was advised by Ignite Homes’ administration manager, that he would not be paid commission for Lot 1 until the sale of each unit happens and he was advised to submit his invoice then.[77]
[77] Exhibit 1, T Documents, T11, page 117, Email from Sonja Whettam to Phillip Roberts, dated 2 September 2017.
·On 20 March 2017, Mr Roberts re-issued tax invoice no. 179R.[78]
[78] Exhibit 1, T Documents, T3, page 52; T9, page 102; T17, page 170. The property is described in the invoice as "Unit 1, Lot 29 Oakwood Rise Pimpama."
·On 9 May 2017 the settlement of that property sale was effected.[79]
[79] Exhibit 1, T Documents, T19, 177, Settlement Statement for sale of Lot 1, undated.
Lot 512 Upper Coomera property (“Lot 512”)[80]
[80] Lot 512 Hans St Upper Coomera as described in Exhibit 1, T Documents, T3, page 54; T9, page 101; T17, page 169.
·Ignite Homes entered into a contract for the sale of that property on a date prior to August 2016.
·On 30 August 2016 Mr Roberts issued an invoice no. 195R for a referral fee in the amount of $2,200.[81]
·On 30 November 2016 the settlement of Lot 512 was effected.[82]
Lot 2 Pimpama property (“Lot 2”)[83]
·On 2 September 2016, Mr Roberts was advised by Ignite Homes’ administration manager, that he would not be paid commission for the Lot 2 until the sale of each unit happens and he was advised to submit his invoice then.[84]
·Ignite Homes entered into a contract for the sale of Lot 2 on 27 March 2017.[85] Mr Roberts disputes whether the contract was entered into on that date and raises the issues that someone changed the dates. But there is no evidence in support of this suspicion.[86]
·On 20 March 2017 Mr Roberts issued an invoice no. 214R for a referral fee in the amount of $2,200.[87]
·On 23 May 2017 the settlement of that property sale was effected.[88]
[81] Exhibit 1, T Documents, T3, page 54; T9, page 101; T17, page 169.
[82] Exhibt 1, T Douments, T3, page 55, Email from Sonja Whettam to Phillip Roberts, dated 6 Februry 2020.
[83] Proposed Lot 2, '2 Nightshade Crescent' Pimpama QLD 4209 as described in Exhibit 1, Supplementary T Documents, ST4, page 287, Contract of Sale for Lot 2.
[84] Exhibit 1, T Documents, T11, page 117, Email from Sonja Whettam to Phillip Roberts, dated 2 September 2017.
[85] Exhibit 1, Supplementary T Documents, ST4, pages 286 – 326, Contract of sale for Lot 2, dated 27 March 2017.
[86] Transcript of Proceedings, page 69, lines 18 -19.
[87] Exhibit 1, T Documents, T3, page 53; T9, page 103; T17, page 171.
[88] Exhibit 1, T Documents, T19, page 178, Email from Naomi Patch (Aussie) to Paris Hayman, Andrew Ward (Aussie) and Bert Pulman, dated 23 May 2017.
The relevant contract in force at the time of the issue of invoices that are outstanding was the Second Contract. The Second Contract provides the following with respect to the payment of commissions:
Clause 3:
(2) the contractor may also be entitled to a commission as detailed in schedule 5
Schedule 5:
The Commission payment is $2,000 excluding GST and will be paid on receipt of a tax invoice.
The Company will pay the Contractor within 7 days of receipt of cleared funds from the Building Contract 5% deposit.
How a commercial contract should be interpreted was outlined by the High Court in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 Kiefel, Bell and Gordon JJ (at 551) explained:
“It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35]. In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35]).”
The Respondent contends that Mr Roberts was not entitled to any commission other than in relation to building contracts.[89] That is, he was not entitled to commissions on completed residences. The unpaid commissions all relate to completed residences.
[89] Exhibit 4, Respondent's Statement of Issues, Facts and Contentions, page 26, paragraph 117, datd 21 January 2020.
The Tribunal agrees with the Respondent that there is no specified commission payable on completed residences. The primary business of Ignite was to sell and build construction packages. Mr Roberts confirmed that during his employment with Ignite Homes the three unpaid commissions are the only commissions he ever claimed for completed residences. The residences were in fact display homes. Mr Roberts also accepts and has previously stated the following:[90]
“Exactly when commissions were due is not clear, because under the terms of both contractor agreements entered into, there is no provision for commissions for sales of completed residences”
(emphasis added)
[90] Exhibit 1, T Documents, T17, page 167, Email from Phillip Roberts to Kerrie Jones (FEG), dated 27 Mach 2019.
The Respondent also pointed out that the deposits paid by the purchasers of the completed residences was 10% of the purchase price, whereas the Contract only refers to a 5% deposit, which was the deposit amount payable on building contracts.[91] This fact supports the Respondent’s contention that the Contract was silent on the issue of commissions for competed residences.
[91] Exhibit 4, Respondent's Statement of Issues, Facts and Contentions, page 26, paragraph 117(c), datd 21 January 2020.
Mr Roberts submits:[92]
[92] Exhibit 2, Submissions of Mr Robert dated 7 November 2019.
·It was understood by both parties that commission for sales other than a building contract would be paid upon receipt of a tax invoice not upon settlement as advised by the company's Accounts Payable lady Sonja Whettam.
·Sonja Whettam was in the habit of paying selling agents commissions upon settlement. However I believe Sonja was unaware of the payment terms in my agreement which differed from normal
·…invoices 179R and 214R were submitted prior to termination and within the WEP.
·Invoice 195R is unpaid commission for a display home sale. The company advised it could not pay me as cash flow was tight and would pay me as soon as it could. That advice was received by email on 6th February, 2017 within the WEP.
·I submit therefore FEG should allow these unpaid commissions as they were due to be paid prior to termination and within the WEP
·Invoice 214R relates to a commission for the sale of a unit:[93]
oThe contract was dated 27/3/2017 being about 5 weeks after the purchaser signed the contract.
oThat delay I submit is most unusual. In my experience with the company it always expedited contracts promptly to secure the sale.
oOn 3/2/ 2017 the agent sent another email to the manager Brendon Ferns complaining about the lack of communication and seeking an explanation as to the delay in having the contract countersigned by the company (Attachment 2).
oA close examination of the handwritten date on the contract indicates that the numeral 2 representing February has been altered to a numeral 3 representing March.
oI allege that the company deliberately delayed the countersigning until after my termination on 22/3/2017 to avoid paying my commission
[93] Exhibit 3, Submissions of Mr Robert dated 24 March 2020.
There is no history of Ignite Homes ever paying mr Roberts a commission on a completed residence. Mr Roberts has provided no evidence to substantiate that Ignite Homes had agreed, outside the terms of the Second Contract, to pay commissions on completed residences upon receipt of his invoice. The conduct of Ignite refutes that understanding, as can be seen from the email correspondence from Ignite Homes’ administrator to Mr Roberts telling him that the commissions would not be paid until the properties had settled. On 2 September 2016, Mr Roberts was advised by Ignite's Administration Manager, Ms Sonja Whettam, that he would not be paid commissions for the Lot 1 and Lot 2 Pimpama properties “until the sale of each unit happens. So only submit your invoice then”.[94] In an email to Mr Roberts dated 6 February 2017, Sonja Whettam of Ignite Homes Pty Ltd stated that he was not entitled to payment of commission until after the settlement of a property.[95] There is no correspondence from Mr Roberts disputing that arrangement.
[94] Exhibit 1, T Documents, T11, page 117, Email from Sonja Whettam to Phillip Roberts, dated 2 September 2017.
[95] Exhibit 1, T Documents, T10, page 108, Email from Sonja Whettam to Phillip Robrts, dated 6 February 2017.
The contract has been very poorly drafted. It is not clear what is meant by “cleared funds”.[96] Does it mean when the funds have been cleared by the bank or does it mean when the contract becomes unconditional, such as if it was subject to finance, because at that point a purchaser is not usually entitled to a return of the deposit and the deposit is in a sense “clear”.
[96] Exhibit 1, T Documents, T3, page 47, the Second Contract dated 18 March 2020, Schedule 5.
In relation to Lot 1 Pimpama the contract became unconditional on 26 February 2016. In relation to Lot 2 Pimpama the contract became unconditional on 25 April 2017. The parties have not been able to locate a copy of the Upper Commera Property contract but we know the property settled before the commencement of the WEP.
Even if the Contract was interpreted to mean commissions were payable when the contracts became unconditional, any entitlement to the commissions still falls outside the WEP.
Mr Roberts gave the following evidence at the hearing:[97]
[97] Transcript of Proceedings, page 66, lines 41 - 66; page 67, lines 1 - 45; page 68, lines 8 - 20.
MEMBER: Well, let me ask you this: what was the commission for?
MR ROBERTS: It’s for a sale of the - completion of sale of a - sale of a property.
MEMBER: What do you mean by completion of sale?
MR ROBERTS: Well, could I just - that’s the vexing question. Can I make some points? Look, Katherine is right. There was no written agreement as to the terms of payment for completed residences.
MEMBER: Yes.
MR ROBERTS: Generally, generally the commissions crystallised, and I’m talking about land and bill contracts who were here, separate land and then a building contract. They generally crystallise upon those contracts becoming unconditional, I mean that was part of the first agreement, or on receipt of deposits which was under the terms of the second contract. And there was never any agreement between us to vary those rules.
I did agree to an extension of payment on one commission. That was for invoice 195R, to be paid after settlement because the company had cash flow problems, which they’d advised me by email. And then payment for those other two invoices, I believe, crystallise in February but when I was advised the deposits were paid, however, what Ms Cooke was saying is that is probably not the case. But so my invoices, accordingly, were submitted as per the terms of those arrangements and within the work in the WEP period.
But no time did I ever agree to commissions being paid upon settlement as a standard arrangement, and generally those commissions were due well before settlement, which could occur weeks after - as you’ve already mentioned, Member - weeks after a contract’s become unconditional or deposit has been paid.
MEMBER: So what I think you’ve said to me is that there was no written agreement about the payment of commissions for completed residences.
MR ROBERTS: That’s correct. That’s correct, Member. Because I don’t think they foresee that as being a possibility when I first joined them, yes. So just normally (indistinct) built the contracts, but it so happened that there are opportunities for them to build on land that was virtually given to them, so they built a number of duplexes and we sold those in one line as a completed package.
MEMBER: So the question then becomes, this is a separate agreement to - what you really have to argue then, is that there is a separate agreement that concerns the payment of commissions for completed residences, and then you have to establish for me what the terms of that agreement were.
MR ROBERTS: Yes, yes. Well, generally I expected to be paid when deposits were paid, and/or the contracts were unconditional. Because you know, I understand the cash flow issues that I would be paid out of deposits.
…
MEMBER: As it turns out, just on that point, what you’re saying to me is the expectation was - and that’s different to whether or not that’s what was actually agreed, we’ll just start with that. The expectation was that you would be paid when the deposits were paid or the contracts became unconditional. And as we’ve just seen, the deposits were paid on the same day that the contracts became unconditional.
MR ROBERTS: Yes.
MEMBER: And that in all of those occasions, that occurred outside the WEP period.
MR ROBERTS: It appears so.
In those circumstances the Tribunal accepts that despite the Second Contract being silent on the payment of these commissions, Ignite Homes’ acknowledgement of these invoices and its obligations to pay, give rise to a separate agreement. The issue is when did Mr Roberts become entitled to those commissions? The emails from Ignite Homes makes it clear that there is no entitlement to a commission until the property has settled. Again, this was not disputed by Mr Roberts at the time. Further, that is not uncommon practice in this industry. The Secretary referred the Tribunal to the matter of Soueid v Secretary, Department of Employment [2015] AATA 320 as analogous to Mr Roberts’ situation. Mr Soueid was a real estate agent employed as a commission commission-only sales representative. After his employer went into liquidation, Mr Soueid applied for an advance under the FEG Act for unpaid commissions. The majority of the properties for which Mr Soueid claimed commission settled either before the WEP or after the WEP. Mr Soueid argued that although the commissions were not payable until settlement, the work was performed during the WEP. The Tribunal held that Mr Soueid’s work was not done until he became entitled to the commission payment, which, in his case, was outside the WEP.
Even if it was accepted that Mr Roberts should have been paid when the sale contracts became unconditional, that is when Ignite Homes became entitled to the deposit monies, it turns out that they became unconditional on the settlement date.
Therefore, there was no entitlement to the commissions during the WEP. As a result, the Tribunal finds that Mr Roberts is not entitled to an advance for unpaid commissions under the FEG Act.
DECISION
For the reasons set out above, the decision under review is affirmed.
I certify that the preceding 118 (one hundred and eighteen) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg
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Associate
Dated: 26 May 2020
Date of hearing: 20 April 2020 Applicant: By telephone Advocate for the Respondent: Ms K Cooke (by telephone)
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