Cover me: Dismissed department Head fails in bid to be covered by modern award

The unfair dismissal provisions of the Fair Work Act 2009 (Cth) (FW Act) provide a mechanism by which employees who have been unfairly dismissed can seek a remedy through the Fair Work Commission (FWC). However, not all employees will be protected from unfair dismissal and able to make a claim.

For an employee to have access to the jurisdiction (and for the FWC to make an order for a remedy), the employee must have completed the minimum employment period, and:
  • Earn less than the high income threshold (currently set at $148,700 per year); or
  • Be covered by a modern award; or
  • Have an enterprise agreement that applies to their employment.

In Tang v Metro Trains Melbourne Pty Ltd [2020] FWC 2166, the FWC had to determine whether an employee who earned above the high income threshold was nevertheless protected from unfair dismissal because he was covered by a modern award.

The employee held the position of Head of Estimating and Project Controls and earned $238,760.05 per annum (gross and inclusive of superannuation).

Despite earning above the high income threshold, the employee claimed that he was entitled to make a claim for unfair dismissal because his position was covered by the Rail Industry Award 2010 (the Award) and fell under the level 9 classification in the Clerical, Administration and Professional stream of the Award. The descriptor for a level 9 employee provided:

"The employee will provide guidance and direction to staff supervising others. The employee will have high level specialised skills."

The FWC was required to consider the nature of the work performed by the employee and determine whether it fell within the classification of the Award. The FWC heard that the employee was responsible for undertaking strategic analysis of the employer’s estimating and cost control capacity and establishing and implementing an estimating and cost control system for the business. In the organisation structure, the employee was three steps removed from the Chief Executive Officer and had two direct reports.

The FWC held that the employee’s role was not a clerical or administrative function and was more than a professional estimating or cost controlling role. The FWC found that the employee was required to take ownership of and responsibility for the employer’s estimating and cost control function, which was more than having supervision over other employees. The FWC also held that the employee did not fall under the level 9 classification as he did not provide direction and guidance to staff who supervised others as his direct reports had no supervisory functions.

The FWC also found that the employee held a senior role and was part of the employer’s senior management and leadership team:

“Rather than liaise with senior managers, he was the senior manager that employees across the business were required to liaise with in connection with estimating or cost control functions…”

The FWC concluded that the employee was not covered by the Award and accordingly was not protected from unfair dismissal. His application was dismissed.

Lessons for employers

Determining whether a position is covered by a modern award is a fundamental step when engaging an employee. A modern award will determine the terms and conditions of the employee’s employment, and may be significant in determining whether the employee is protected from unfair dismissal.

Employers will need to consider whether an industry or occupational award applies and if so, whether the employee falls within the classification of the award – often this is not an easy exercise, particularly for senior employees.

Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law. Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog.

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