Does an award apply to your employment?

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There are various circumstances in which it is necessary to determine whether a modern award applies to employment. Self-evidently that is the case when seeking to check entitlements and it is also critical for employees whose earnings exceed  the high income threshold but need to know whether they are protected from unfair dismissal. Here is an extract from a case which shows how the question is answered.

“In this instance, the determination of the question of Modern Award coverage for the purposes of s.382 (b) of the Act has involved application of what is described as the principal purpose test. Further, it would appear that the analysis as understood by the principal purpose test, would be necessary in order to satisfy s.48 (5) of the Act.

The principal purpose test involves an analysis that has often been adopted as the basis for determination of the question of Award or other industrial instrument coverage. Various decided cases which have applied the principal purpose test can be referred to including; Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387; Brand v APIR Systems Ltd (2003) (PR 938031); City of Wallaroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426; Kingmill Australia Pty Ltd T/as Thrifty Car Rental v Federated Clerks’ Union of Australia, New South Wales Branch (2001) 106 IR 217; and Halasagi v George Weston Foods Ltd [2010] FWA 6503; Kaufman v Jones Lang LaSalle (Vic) Pty Ltd T/A JLL [2017] FWC 2623.

Consequently, the approach to the question of Award coverage in this instance has involved, firstly, an examination of the evidence of the duties performed and responsibilities held by the applicant. Secondly, the evidence of the duties performed and the responsibilities held by the applicant has been assessed so as to determine the principal purpose for which the applicant was employed. Thirdly, the principal purpose of the applicant’s employment has been examined so as to determine whether that principal purpose aligned with the coverage terms of the Award.

It is relevant to note that the principal purpose assessment should include consideration of a variety of factors, none of which are singularly determinative of the outcome. Thus, the principal purpose test can be distinguished from the concept of the substantive role or function of an individual which involves an examination of the actual time that an individual may have occupied performing different tasks, and which ultimately arrives at a determination of the nature of the work based upon that aspect which is performed for the largest proportion of time worked.

here are notable factors which are often relevant to the principal purpose assessment. These factors are not universally applicable but in most cases have some level of significance. Some of the factors which appear to regularly contribute to the determination of the principal purpose for which an employee was engaged include:

  • the contents of any job description, person specification or job advertisement
    ● the level of remuneration assessed against Award levels of remuneration and also considered in the context of remuneration levels within the employing organisation
    ● the actual time occupied in different duties (a substantive role/function analysis)
    ● the status and level of the position occupied within the organisational structure
    ● possession or absence of particular qualifications and whether such qualifications are necessary for the exercise of the primary functions that are performed
    ● the exercise of authority and direction over others including in particular, the extent of such authority
    ● the level of importance and relevance of particular duties in the context of the employing organisation’s overall purpose
    ● the level of decision-making capacity in the context of the employing organisation’s overall operation
    ● the nature and extent of any role as representative of the employing organisation to third parties

…………

The applicant occupied a position of some significance within the employer’s operation and was broadly responsible for the overall delivery of a wide range of aspects of the site development. At times the applicant exercised a role as representative of the employer in negotiations and other communications with third parties.

The duties performed and responsibilities held by the applicant have been assessed against the relevant coverage terms of the Award. The relevant coverage terms of the Award involve a combination of clause 4.1, and the definition provided for “clerical work” found in clause 3 of the Award. The relevant Award provisions are set out as follows:

“4.1 Coverage

This award covers employers in the private sector throughout Australia with respect to their employees engaged wholly or principally in clerical work, including administrative duties of a clerical nature, and to those employees. However, the award does not cover:”

and

“3. Definitions and interpretation

“clerical work includes recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard and attending a reception desk”

Having regard for the uncontested evidence of the duties and responsibilities of the work performed by the applicant, the extent to which the applicant engaged in any clerical work as defined in the Award, was, at best, minor or incidental. The position that was advanced by Specialist HR on behalf of the applicant appeared to have mistakenly attempted to translate the reference to a particular term of the Award in the Employment Agreement to represent coverage of the Award.

The primary purpose of the applicant’s role was that of a Construction and Building Industry Site Manager. Following analysis of the evidence of the particular work performed and responsibilities held by the applicant, and by way of application of the principal purpose test, the employment of the applicant was not covered by the Award. Although some aspect of the employment of the applicant was derived from a term of the Award by virtue of terms contained in the Employment Agreement, the application of particular terms of the Award does not establish that the Award covered the employment of the applicant.

Consequently, the applicant was not covered by the Award. It was not suggested that any other Modern Award covered the applicant. Further, an enterprise agreement did not apply to the applicant, and his annual rate of earnings exceeded the high income threshold. Therefore, the applicant was not a person protected from unfair dismissal. The s.382 (b) objection raised by the employer must be upheld, and the application for unfair dismissal remedy must be dismissed.

An Order dismissing the application in accordance with this Decision shall be issued separately.”

Saad v Kelly Management Group PTY LTD (2017) FWC delivered 28 November 2017 per Cambridge C