Simon Finlay v Drug and Alcohol Services Association Alice Springs Inc T/A DASA

[2013] FWC 7349

[2013] FWC 7349

FAIR WORK COMMISSION

PRELIMINARY DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Simon Finlay
v
Drug And Alcohol Services Association Alice Springs Inc T/A DASA
(U2013/10745)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 24 SEPTEMBER 2013

Application for unfair dismissal remedy - conduct of proceedings - initial matters - application of agreement - high income threshold.

[1] On 21 June 2013 Mr Finlay lodged an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (the FW Act), with respect to the termination of his employment by Drug and Alcohol Services Association Alice Springs Inc T/A DASA (DASA). The application was not resolved through the Fair Work Commission (FWC) conciliation process and was referred to me for determination.

[2] In its response to the application DASA asserted that Mr Finlay was not able to pursue his application as he had signed a Deed of Settlement on the day of his dismissal. DASA also asserted that Mr Finlay was excluded from making an application because he was on a salary above the high income threshold.

[3] A hearing by video link between Adelaide and Alice Springs was convened on 12 September 2013. The purpose of this hearing was to consider the respondent’s objection that Mr Finlay was not protected from unfair dismissal because the sum of his annual rate of earnings was above the high income threshold specified in s.382 of the Act and secondly that he is estopped from pursing his application because of the Deed of Settlement. At this hearing Mr Finlay was represented by Ms Collier of counsel and DASA by Mr Cozens of counsel.

[4] It is appropriate that I initially comment on that representation and the manner in which this matter was argued to me.

[5] At a directions conference I convened on 23 August 2013 both parties advised that they sought to be legally represented. Both parties also advised that evidence would be provided without the requirement for cross-examination.

[6] Statutory declarations and supporting documentation were filed in the Commission. This material was filed within the specified time by DASA but a final version of Mr Finlay’s material was not received until just prior to the hearing.

[7] At the hearing on 9 September 2013 I granted permission to both parties to be represented pursuant to s.596(2)(c). Mr Cozens advised at the outset that DASA was no longer pursuing its position that Mr Finlay was not a person protected from unfair dismissal because of his remuneration level, as it reluctantly conceded that Mr Finlay was covered by the Drug and Alcohol Services Association Alice Springs Inc Enterprise Agreement 2010 (the Agreement) because that Agreement covered employees of DASA within the Agreement classifications, and the classification structure included an “Employee not elsewhere classified”. I expressed some concern over this approach given Mr Finlay was the Director of DASA and had signed the Agreement as the employer representative.

[8] Both parties provided evidence by way of statutory declarations. The manner in which that evidence was put to me did not provide an adequate basis for the determination of the competing propositions about whether the Deed signed by Mr Finlay at the time of the termination of his employment meant that he was estopped from pursuing the application or, in the alternative, whether it meant that the application should be dismissed because of that Deed on the grounds that it was frivolous, vexatious or without reasonable prospect of success pursuant to s.587 of the FW Act.

[9] During the hearing I sought advice about issues not addressed in the statutory declarations or matters where there was a conflict in the material before me and I offered the parties the opportunity to reconvene the hearing at a later time and provide sworn evidence. Both parties advised that they wanted the matter determined on the evidence before me on that day.

[10] The approach adopted by the representatives has left important issues relative to the circumstances under which the Deed was agreed and the effect of that Deed, uncertain.

[11] For the reasons set out later in this decision I have not found it necessary, as yet to determine the standing of the Deed.

The Initial Issues

[12] Section 396 states:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[13] I am satisfied that the application was made within the statutory time limit, that the Small Business Fair Dismissal Code does not have application and that the termination of Mr Finlay’s employment was not a case of genuine redundancy.

[14] I have considered whether I can be satisfied that Mr Finlay was a person protected from unfair dismissal on the basis of the material before me. It seems to me that the requirements of s.396 dictate that this issue be addressed prior to consideration of the standing and effect of the Deed.

[15] The material before me can be briefly summarised. Mr Finlay was the Director of DASA. I understand this position to be that of Chief Executive Officer. Mr Finlay was engaged under an employment contract which described his functions and the extent to which he reported to the DASA Board. Clause 3 of that contract states:

“DUTIES

3 For the duration of this agreement the employee shall undertake those duties as set out below.

Direct and supervise the SASA programs and staff, including the provisions of appropriate training.

Maintain an accurate up to date record keeping system as part of the ongoing evaluation and effective management of DASA programs and ongoing reporting to the board of management.

Ensure adequate reporting, estimates and budgets are maintained. Maintain all DASA’s property and supplies.

Develop and maintain links between DASA, community groups and individuals.”

[16] This contract specified an annual level of remuneration of $123,743 plus superannuation, as at 10 October 2011. 1 Mr Cozens written submissions assert that this remuneration had increased to $131,279.05 plus superannuation plus other, unspecified benefits. Mr Finlay’s employment contract operated for four years.2 It detailed remuneration and leave arrangements and was subject to the laws applicable in the Northern Territory.

[17] In the material filed on behalf of Mr Finlay, Ms Collier asserted that there was a discrepancy in the amounts payable to Mr Finlay under his contract and the amounts that were subsequently recorded on his Group Certificate. Mr Cozens asserted that this was due to the implementation of an agreed salary sacrifice arrangement. Evidence dealing with these issues has not been provided to me.

[18] The Agreement applies to “.... the employees of DASA employed within the classification set out in this Agreement and carry out their employment at the premises of DASA ....”. 3 The Agreement has not yet reached its nominal expiry date. Clause 13 of the Agreement refers to the classifications set out in Appendix A which establishes three adult classifications. The Level 1 classification description states:

“An Employee at this level may include some of the following inputs or those of a similar value;

a) Resident contact and interaction including attending to their personal care or undertaking generic domestic duties under direct or routine supervision and either individually or as part of a team; or

b) Preparation of a full range of domestic duties including cleaning, and food service, assistance to residents in carrying out personal care tasks under general supervision either individually or as part of a team; or

c) Implementing client skills and activities programs of personal care services to residents under limited supervision; or

d) Providing a wide range of personal care services to residents under limited supervision.”

[19] This classification definition clearly does not equate with the Director function undertaken by Mr Finlay.

[20] The Level 2 classification description states:

“An employee at this level may include some of the following inputs or those of a similar value;

a) Processing an appropriate qualification (as identified by the Employer) at the level of certificate 4 or above or supervising the work of others (including work allocation, rostering and providing guidance); and

b) Supervising a wide range of personal services to residents and staff

c) Deliver training or present programs.”

[21] Again, this classification definition does not equate with the Director function undertaken by Mr Finlay.

[22] The classification of “Employees not elsewhere classified” is the lowest paid of the three classifications. There is no further description of this level in the Agreement. At the time of approval, the Agreement provided for $19 per hour for a weekly hire employee.

[23] Clause 6 of the Agreement provides that employees will be engaged on fixed term contracts which expire on 30 June each year. This clause then sets out the factors which may lead to the non-renewal of a contract.

[24] Finally, Mr Finlay signed the Agreement as the Authorised Officer of DASA.

[25] I note that the Employer’s Declaration in support of the application for approval of the Agreement (Form F17) was made out by a Ms Tether, a Workplace Relations Adviser, based in Darwin. Ms Tether has not given any evidence in this matter. Notwithstanding that, her Statutory Declaration advised that the Agreement covered all DASA employees. 4 That same Statutory Declaration asserts that the “Employee not elsewhere classified” classification corresponds with the Social, Community, Home Care and Disability Service Industry Award 2010 classification of Social and Community Services Employee Level 1 Pay Point 3 for the purposes of the comparison required as part of the comparison required for the better off overall test. That particular Award classification definition states:

“B.1 Social and community services employee level 1

B.1.1 Characteristics of the level

(a) A person employed as a Social and community services employee level 1 works under close direction and undertakes routine activities which require the practical application of basic skills and techniques. They may include the initial recruit who may have limited relevant experience.

(b) General features of work in this level consist of performing clearly defined activities with outcomes being readily attainable. Employees’ duties at this level will be closely monitored with instruction and assistance being readily available.

(c) Freedom to act is limited by standards and procedures. However, with experience, employees at this level may have sufficient freedom to exercise judgment in the planning of their own work within those confines.

(d) Positions at this level will involve employees in extensive on-the-job training including familiarisation with the goals and objectives of the workplace.

(e) Employees will be responsible for the time management of their work and required to use basic numeracy, written and verbal communication skills, and where relevant, skills required to assist with personal care and lifestyle support.

(f) Supervision of other staff or volunteers is not a feature at this level. However, an experienced employee may have technical oversight of a minor work activity.

(g) At this level, employers are expected to offer substantial internal and/or external training.

B.1.2 Responsibilities

A position at this level may include some of the following inputs or those of a similar value:

(a) undertake routine activities of a clerical and/or support nature;

(b) undertake straightforward operation of keyboard equipment including data input and word processing at a basic level;

(c) provide routine information including general reception and telephonist duties;

(d) provide general stenographic duties;

(e) apply established practices and procedures;

(f) undertake routine office duties involving filing, recording, checking and batching of accounts, invoices, orders, stores requisitions and maintenance of an existing records system;

(g) resident contact and interaction including attending to their personal care or undertaking generic domestic duties under direct or routine supervision and either individually or as part of a team as part of the delivery of disability services;

(h) preparation of the full range of domestic duties including cleaning and food service, assistance to residents in carrying out personal care tasks under general supervision either individually or as part of a team as part of the delivery of disability services.

The minimum rate of pay for employees engaged in responsibilities which are prescribed by B.1.2(h) is pay point 2.

B.1.3 Requirements of the position

Some or all of the following are needed to perform work at this level:

(a) Skills, knowledge, experience, qualifications and/or training

(i) developing knowledge of the workplace function and operation;

(ii) basic knowledge of administrative practices and procedures relevant to the workplace;

(iii) a developing knowledge of work practices and policies of the relevant work area;

(iv) basic numeracy, written and verbal communication skills relevant to the work area;

(v) at this level employers are required to offer substantial on-the-job training.

(b) Organisational relationships

Work under direct supervision.

(c) Extent of authority

(i) Work outcomes are clearly monitored.

(ii) Freedom to act is limited by standards and procedures.

(iii) Solutions to problems are found in established procedures and instructions with assistance readily available.

(iv) Project completion according to instructions and established procedures.

(v) No scope for interpretation.

(d) Progression

An employee primarily engaged in responsibilities which are prescribed by B.1.2(g) will, if full-time, progress to pay point 2 on completion of 12 months’ industry experience, or if part-time, on completion of 1976 hours of industry experience. Industry experience means 12 months of relevant experience gained over the previous 3 years.”

[26] Section 382 states:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Note: High income threshold indexed to $129,300 from 1 July 2013”

[27] The high income threshold applicable at the time of the termination of Mr Finlay’s employment was $123,300.

[28] The question of whether Mr Finlay was a person protected from unfair dismissal is a jurisdictional fact about which I am required to reach a conclusion. 5 Section 396 effectively requires that, as a precursor to the exercise of the jurisdiction to determine an unfair dismissal application, I need to firstly be satisfied about these specified jurisdictional or initial matters. Absent that satisfaction I am unable to exercise that jurisdiction. The general approach is that the onus is on a party asserting an absence of jurisdiction to substantiate that position. A Full Bench in Jervis v Coffey Engineering Group Pty Ltd6 stated:

“[12] It is the responsibility of parties to put the whole of their case properly, and to call all relevant evidence, at first instance. The process in the Commission is not inquisitorial. As a result, failure to call all relevant evidence may not be sufficient to justify the granting of leave to appeal (see: Ross VP, Drake DP and Palmer C in Uink v. Department of Social Security, Print P7680, 24 December 1997; and Polites SDP, Watson SDP and Gay C in Parker v. Office Interiors Pty Ltd, Print Q5712, 2 September 1998).

[29] The jurisdictional facts on the material before me appear inconsistent with the submissions of both representatives. In this situation I consider that the decisions in Pawel, 7 Sammartino8 and Miller9 all require that I not simply ignore the material provided to me in favour of submissions about which I have significant reservations. To continue to consider the application without consideration of whether the necessary jurisdiction exists would, in my view, constitute an erroneous approach inconsistent with s.396. On this basis I have considered the evidence before me.

[30] I have formed a preliminary view that Mr Finlay was not covered by the Agreement. I am unable to reconcile the remuneration applicable to Mr Finlay with the rate established under the Agreement for an “Employee not elsewhere classified”. To the extent that the “Employee not elsewhere classified” classification is comparable with the Award Level I classification, it is also fundamentally inconsistent with the role and the function of Mr Finlay as the Director of DASA.

[31] I am unable to reconcile Mr Finlay’s four-year contract with the one-year employment contracts established by clause 6 of the Agreement.

[32] I have noted that the Employers Declaration (Form F17) lodged with the application was not signed by Mr Finlay but that the Agreement was signed by him as the representative of DASA.

[33] Consequently, it appears to me, on the evidence currently before me, that Mr Finlay has, at all relevant times, been regarded as the representative of DASA and that he was neither intended to be covered, nor in fact was, covered by the Agreement.

[34] It follows that his capacity to make an application pursuant to s.394 is dependent upon his annual rate of earnings being less than $123,300 (consistent with s.332 and Regulation 3.05). On the limited information before me it appears that his remuneration was above this high income threshold.

Conclusion

[35] This decision has been issued on the basis that, as a matter of procedural fairness it may be that the parties wish to make further submissions or to provide further evidence relative to this particular issue. If I am advised of such a request by 8 October 2013, the matter will be relisted and my conclusion relative to the issues covered in this decision may be reviewed. In the event that the matter is relisted, I also put the parties on notice that I would expect to have witnesses available to give evidence about the issues addressed in this decision and the standing and effect of the Deed which I have not yet had to consider given my preliminary conclusion.

[36] Absent any such request for a further hearing by 8 October 2013, an Order dismissing Mr Finlay’s application consistent with these reasons will be issued shortly after that date.

Appearances:

N Collier counsel for the applicant.

P Cozens counsel for the respondent.

Hearing details:

2013.

Adelaide:

September 12.

 1   Contract, clause 4

 2   Ibid, clause 2

 3   The Agreement, clause 1

 4   Form F17, para 2.8

 5   See Abdulla v Viewdaze Pty Ltd T/as Malta Travel PR927979, paras 12-15

 6   PR927201

 7 1999 94 FCR 231

 8 1999 93 IR 52

 9   2001 FCA 486

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