“Professional” modern awards coverage

This extract from a recent appeal decision of the Fair Work Commission is an excellent summary of the way in which the Commission determines the issue of “professional” award coverage, in this case the Professional Engineers (Modern) Award. It is apt to apply it to other disputes about award coverage in the various “professional” awards.

Consideration

[33] This appeal is one to which s 400(1) of the FW Act applies. Accordingly, we must be satisfied that the grant of permission to appeal would be in the public interest, otherwise, we are required to refuse permission. The s 400(1) test is a stringent one, 19 and it would rarely be satisfied unless an arguable case of appealable error is demonstrated,20 although this may not by itself be a sufficient basis for the grant of permission to appeal.21 The public interest may be attracted where the appeal raises issues of importance and general application, or where there is a diversity of decisions at first instance so that appellate guidance is required, or the decision under appeal manifests an injustice, provides for a counter-intuitive outcome, or applies legal principles that appear disharmonious compared to other recent decisions dealing with similar matters.22 The public interest will rarely be attracted in respect of an interlocutory procedural decision23 or in circumstances where the appeal lacks practical utility.24

[34] We are not satisfied that grant of permission in respect of ground 1 of Ms Zheng’s appeal would be in the public interest because it is lacking in merit and utility. Although the Deputy President applied the terms of the 2010 version of the PE Award in determining the jurisdictional issue before her rather than the terms of the 2020 version of the PE Award which was in effect at the time of Ms Zheng’s dismissal, there is no substantive difference in the coverage provisions of the two versions of the PE Award which could have made any difference to the outcome. In particular, the outcome of the matter turned upon the Deputy President’s interpretation and application of the Level 3 classification descriptor, which is expressed in precisely the same terms in both versions of the PE Award. We are also not satisfied that ground 4 of the appeal, insofar as it challenges the Deputy President’s refusal to issue an order for production sought by Ms Zheng, attracts the public interest such as to permit the grant of permission to appeal. Ms Zheng challenges this interlocutory ruling only to the extent that one of the documents which she sought to be produced was the job advertisement for her position. However, the text of this job advertisement was independently obtained and put into evidence by Ms Zheng and, as we have earlier set out, formed an important part of the Deputy President’s consideration. For this reason, there is no utility in revisiting this issue on appeal.

[35] In respect of the remainder of the grounds of appeal, we consider that they raise issues of significance and general application concerning the coverage of the PE Award and, for that reason, we are satisfied that the grant of permission in respect of those grounds would be in the public interest.

[36] As earlier set out, the Deputy President applied the principles stated by a single member of Fair Work Australia in Halasagi in determining the issue of whether the PE Award covered Ms Zheng at the time of her dismissal. Halasagi likewise concerned the question of whether an applicant for an unfair dismissal remedy was covered by the PE Award (2010 version). However, unlike this appeal, the focus in Halasagi was upon whether the applicant performed “professional engineering duties”, it not being in dispute that the applicant was covered by a classification in the PE Award. 25 For that reason, there is an extensive analysis in Halasagi as to the historical development and proper interpretation of the definition of the expression “professional engineering duties” – in particular, that aspect of the definition requiring an engineering qualification for the adequate discharge of any portion of the relevant employee’s duties. In this respect, the following principles were stated in Halasagi:

“[23] ….

  • Particular duties will not be ‘professional engineering duties’ as defined unless it is almost invariably the case that a qualification of the sort referred to in the definition is needed for the adequate discharge of some portion of those duties.
  • The qualification must relate directly to the duties in question. That is, it is not enough that an employee holds a qualification as (or at least equal to those of) a graduate member of Engineers Australia, the qualification must be a qualification of the sort that is almost invariably needed to perform duties of the sort that are said to be the ‘professional engineering duties’ of the employee. In other words, an employee would generally not be able to rely upon, say, a degree in mechanical engineering to claim coverage by the Professional Employees Award 2010 in a position that involves duties in the field of chemical engineering.
  • If the advertisement for an employee’s position identifies a relevant qualification as required this would be prima facie evidence that the position involved “professional engineering duties” for an employee who held that qualification.
  • The reference in the definition to ‘the adequate discharge of any portion of’ the relevant duties is intended to ensure that engineers who advance in their career and assume an increasing load of administrative duties remain covered if they still perform some engineering duties, the adequate discharge of which requires the relevant qualification and the definition should be construed accordingly.”

[37] The above analysis was endorsed by a Full Bench of the Commission in Bateman v Communications Design & Management Pty Limited. 26 This analysis does not arise for any reconsideration in this appeal because, as earlier stated, the Deputy President found in Ms Zheng’s favour that she was performing “professional engineering duties” as defined, and there was no cross-appeal or notice of contention in respect of this finding. However, the last paragraph in the above analysis is noteworthy, since it confirms that it is only necessary for the employee to perform “some engineering duties” requiring the requisite engineering qualification while otherwise performing non-engineering duties in order to fall within the definition.

[38] Halasagi went on to say:

“[24] Of course, an applicant who seeks to establish that they are protected from unfair dismissal by virtue of being covered by a modern award needs to establish not only they are within the coverage clause of that modern award (the issue with which I am presently concerned), but also that they are employed in a classification in the award (Brand v APIR Systems Ltd [2003] AIRC 1161 esp at [11]). That later question is determined by reference to the “principal purpose” test (Ibid at [10]-[11]).  I would note that, in relation to the Professional Employees Award 2010, care must be taken not to confuse these two questions because the definition of ‘professional engineering duties’ can be satisfied by reference to ‘any portion’ of the employee’s duties and does not require that the duties falling within that definition are the ‘principal purpose’ for which the employee is employed.” (footnotes inserted in text, underlining added)

[39] Because, as stated above, it was not in dispute in Halasagi that the relevant employee was covered by a classification in the PE Award, and also because it was determined that the employee did not perform “professional engineering duties” as defined, what might be described as “the second step” in the analysis – determining whether a classification in the PE Award applies – did not arise for further consideration. In particular, there was no discussion in Halasagi as to how the “principal purpose” test would be applied to that second step in the analysis. As the above passage discloses, the proposition that this is the applicable test was derived from Brand v APIR Systems Ltd 27 (Brand), a decision of a Full Bench of the Australian Industrial Relations Commission (AIRC).

[40] Brand concerned an appeal from a decision of a single member of the AIRC in which it was determined that an unfair dismissal application made by an employee under s 170CE of the Workplace Relations Act 1996 was beyond jurisdiction because the employee’s rate of remuneration exceeded the prescribed rate and he was not employed “under award conditions”. This last expression was defined by s 170CD(3) to mean: “…an employee is taken to be employed under award conditions if both wages and conditions of employment of the employee are regulated by awards, certified agreements or AWAs, that bind the employer of the employee.” In the latter respect, the employee had contended that his wages and conditions were regulated by the Information Technology Industry (Professional Employees) Award 2001 (IT Award). The nature of the relevant statutory requirement meant that he had to demonstrate that he fell within the incidence of the IT Award and that a classification applied to him (because if no classification applied to him, it could not be said that the IT Award regulated his wages). In its decision, the Full Bench characterised the questions to be determined in the following way:

“[8] There were two separate questions before the Commissioner. The first was whether Mr Brand’s employment was within the incidence of the award. The second was whether he was engaged in one of the classifications set out in the award. In order to be employed under award conditions it is necessary that both the employee’s wages and conditions be regulated by (relevantly) an award: s.170CD(3). Since the award prescribes wages only for employees in one of the award classifications, in order for Mr Brand to succeed it would be necessary to show that he was engaged in one of those classifications. It was therefore not sufficient to demonstrate that his employment was within the incidence of the award. For our purposes it is only necessary to deal with the second of the two questions we have identified which were before the Commissioner, that is, whether Mr Brand was engaged in one of the award classifications.” (footnote omitted)

[41] Clause 6.1 of the IT Award provided that it applied to Professional Engineers (as defined) and Professional Information Technology Employees (as defined) employed by respondent employers performing professional engineering duties (as defined) or Professional Information Technology duties (as defined) in the Information Technology Industry (as defined). The Information Technology Industry was defined in clause 6.2 of the IT Award. The expression “professional engineering duties” was defined in a way which, in substance and for relevant purposes, was the same as in the PE Award. The expression “professional information technology duties” was defined in an analogous way – that is, to mean duties carried out by a person in any particular employment the adequate discharge of any portion of which duties required a person to have specified IT qualifications. The classification structure in the IT Award was also highly similar to that now found in the PE Award. It contained classifications for Level 1, 2, 3 and 4 Engineers and Information Technology Employees which are essentially the same as those for Level 1, 2, 3 and 4 for Engineers, Information Technology Employees and Scientists under the PE Award. The employee in Brand claimed that Level 4 of the IT Award applied to him.

[42] The Full Bench set out in its decision an extract from the decision under appeal in which the member referred to the AIRC Full Bench decision in Carpenter v Corona Manufacturing Pty Ltd 28 (Carpenter) which applied the “principal purpose” test and then said:

“[47] Applying this approach to the work performed by the applicant it is clear, on the evidence, that he was principally engaged, at the time he was given notice that his employment would terminate, in the preparation of applications for funding relating to concessional loans or grants. He may have utilised technical expertise in the performance of this task but I accept the evidence of the witnesses for the respondent that technical input to the task was provided by another staff member. I have no doubt that the applicant possessed the necessary skills and experience to provide much of the technical input required but I find that the duties of his principal task (that is, preparation of applications for funding and general corporate planning and business development) could have been adequately discharged without the possession of the qualifications and experience referred to in the definition of ‘professional information technology duties’ on examination of Clause 4.3.1(b) of the award.

[48] Having considered the definition of the classification of Professional Information Technology Employee – Level 4 at clause 4.4.4 of the award I have reached the conclusion that the position responsibilities of the role performed by the applicant were of a less ‘hands-on’ technical nature than those of a Level 4 employee. I accept the evidence of Mr Hutchings Brosco that the role taken on by the applicant from August 2002 was ‘a corporate or business development role’ and not ‘a technical role’. I also accept the evidence that the applicant was still performing this role at 20 December 2002.

[49] I accept the applicant’s evidence that he performed a ‘technology transfer’ function post August 2002 passing on his technical knowledge of the system he had been involved in developing to the staff who continued to work on it. I also accept that this role intensified immediately prior to his leaving his employment, at the request of his employer. I do not, however, find that this technology transfer function was the principal purpose for which the applicant was employed at the time notice was given of his termination. The applicant’s principal purpose was the development of the business of the company including business planning marketing and sales planning. The applicant’s role also was one that went far beyond the responsibilities of a Professional Information Technology Employee Level 4. It was his evidence that from August 2002 he was to be part of a four member executive committee for the company – although that committee never met.

[50] It was also his evidence that his duties included promotion of information technology (already developed) to other markets and development of business plans. The applicant’s role, as described by all three witnesses, does not fall within the classification definition of a Level 4 employee (or any other classification) in the award, as claimed on the applicant’s behalf.” 29 (footnotes omitted)

[43] It is apparent that the member at first instance considered that the employee in question neither performed “professional information technology duties” as defined such as to fall within the incidence of the IT Award nor fell within the Level 4 classification, or any classification, in that award. The Full Bench in Brand said this in respect of the disposition of the appeal:

“[11] Having heard all of the submissions on the appeal and having considered the evidence and material to which we have been referred we do not think this is a case in which we should grant leave to appeal. The Commissioner’s conclusion that Mr Brand was not engaged in the classification of Professional Information Technology Employee – Level 4 was correct for the reasons she gave. On the material and evidence before her the Commissioner was right to conclude that Mr Brand was not employed in that classification. It was not suggested that he was employed in any other classification provided for in the award.

[12] Much of the argument advanced on Mr Brand’s behalf in the appeal was directed at whether his employment was within the incidence of the award. As we have indicated above, even if his employment was within the incidence of the award, his application was not within jurisdiction unless he was employed in one of the award classifications.

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

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

[44] The “principal purpose” test as stated in Carpenter was as follows:

“[9] In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed. In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not ‘employed in the process, trade, business or occupation of … soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials’ and was not, therefore, covered by the Award.” (footnote omitted)

[45] It is to be noted that the “principal purpose” test was utilised in Carpenter to determine whether the employee in question fell within the incidence of the relevant award, which was described in terms of the specific work function of the employee, and not to determine whether the employee fell within a particular classification in the award. It appears to us, however, that the “principal purpose” test is singularly ill-suited to determine whether a person falls within one of the classifications in the PE Award (or indeed the IT Award). That is because the classifications, including but not limited to the Level 3 classification considered in Ms Zheng’s case, are expressed in highly generic terms and do not describe with any specificity the job functions required to be performed at each level. It appears to us that the classification descriptors have been drafted primarily in order to determine, by reference to the degree of skill and responsibility being exercised, in which classification a person otherwise covered by the award will fall, rather than to identify whether a person is covered by the award at all. In respect of Level 3, for example, the classification descriptor begins by referring to “An employee at this level…”, and the subsequent criteria do not describe any function particular to the job of an engineer, IT specialist or scientist but merely uses broad expressions such as “mature professional knowledge”, “scope for individual accomplishment”, “coordination of more difficult assignments” and “modify established guides and devise new approaches”. The only language which appears to attach to work which might be performed by an engineer, IT specialist or scientist are the words “professional” and “technical”, but these are used only in the most general way. We consider that the main function of the Level 3 descriptor is to distinguish that classification from the other classifications above and below it. Identifying the “principal purpose” of an employee’s employment and then attempting to determine whether that purpose fits within such a generically defined classification descriptor seems to us to be an inchoate task likely to produce difficulty in rendering a clear answer.

[46] However, Ms Zheng did not submit that Brand, as applied to the PE Award by Halasagi, was wrongly decided and, in any event, we consider that the Brand/Halasagi approach is now too well entrenched to alter. Numerous first instance decisions have applied that approach, 30 and it has been confirmed in Full Bench decisions31 including in the relatively recent Full Bench decision in McFarlane v SRG Civil Pty Ltd32 (McFarlane). It would destabilise the operation of the PE Award if we enunciated a different approach now.

[47] It remains necessary to consider what the application of the “principal purpose” test requires. As was stated in Carpenter, the test requires an examination of the nature of the work of the employee in question and the circumstances in which the employee is employed to do the work for the purpose of ascertaining the principal purpose for which the employee is employed. This is a question of fact. Once that is done, the principal purpose as identified must be compared to the classification descriptor in order to determine whether it falls within the scope of that descriptor. Thus, in Brand, the approach taken by the member at first instance and endorsed by the Full Bench on appeal was to identify the principal purpose of the relevant employee’s employment as being that of “the development of the business of the company including business planning marketing and sales planning manager”, and then to determine that this did not fit within the Level 4 classification descriptor. MacFarlane confirmed that, in determining coverage under the PE Award, this two-step process was necessary:

“[21] It was necessary for the Commissioner to apply the principal purpose test in this case to decide whether Mr McFarlane was covered by one of the classifications in Schedule B to the Award.

[22] The Commissioner set out the relevant legal principles and proceeded to inquire as to the nature of Mr McFarlane’s role. At paragraphs [32] and [33] he made findings about what he considered to be the principal tasks of Mr McFarlane’s role, including that the principal purpose of the role was not one of “engineer”. In doing so, the Commissioner had regard to previous decisions of the Commission including those dealing with whether particular project managers were covered by the Award. He considered the extent to which actual engineering work was part of Mr McFarlane’s role. He dealt, at paragraph [35], with the nature and extent of Mr McFarlane’s responsibility for engineering design work including in relation to the anchor works and his accountability for design and technical issues. We discern no arguable case of appealable error in the Commissioner’s analysis of the nature of Mr McFarlane’s role and circumstances.

[23] However, the principal purpose test also directs attention to the nature of work covered by the Award. Only once that is understood can the purpose of an employee’s role be properly assessed through the lens of whether it is of the same or a different character or quality to the type of work covered by the Award.”

[48] We do not consider that the Deputy President applied the “principal purpose” test in accordance with the correct approach described above. The Deputy President did not make a finding concerning what she considered to be the principal purpose of Ms Zheng’s employment and then seek to relate that to the Level 3 classification descriptor. Rather, a fair reading of the decision (particularly paragraphs [76], [83] and [86]) discloses that she approached the task on the basis of whether, by reference to each of the five paragraphs in the Level 3 classification descriptor, professional engineering duties constituted the principal purpose of Ms Zheng’s employment or a majority of her duties. However, neither Level 3 nor any other classification contains any requirement that “professional engineering duties” as defined must in some sense constitute the principal purpose of the relevant employee’s employment or a majority of the duties. As we have adverted to earlier, Halasagi makes clear that the definition of “professional engineering duties” (now contained in clause 2.2) does not require that the performance of such duties constitute the principal purpose of the employee’s employment, and the attachment of such a requirement to the Level 3 classification descriptor is not only not supported by the text but would subvert and render otiose the definition in clause 2.2. Further, a “majoritarian” approach is precisely what is deprecated in the articulation of the “principal purpose” test in Carpenter.

[49] This point may be illustrated in two ways. First, in respect of the Level 3 criterion in clause A.1.9(c) of Schedule A, the Deputy President found that Ms Zheng’s duties incorporated the work described, but she did not accept Ms Zheng’s estimate that such duties constituted 80% of her work and said that she was “hesitant to conclude that the work in question principally involved professional engineering duties.” 33 However, the criterion in clause A.1.9(c) does not require any conclusion of this nature to be made. We have earlier set out the provision; it contains three elements:

(1) Recommendations may be reviewed for soundness of judgment but are usually regarded as technically accurate and feasible.

(2) The employee makes responsible decisions on matters assigned, including the establishment of professional standards and procedures.

(3) The employee consults, recommends and advises in specialty areas.

[50] It may be accepted, as we have stated above, that the terms “technically” and “professional” relate, in respect of an employee who performs “professional engineering duties”, to those duties. However, those terms are far from definitive about the nature of the work falling within clause A.1.9(c). The first element only conveys that any technical content in the employee’s “recommendations” will generally not be the subject of any further review, but it does not require that all or most of such recommendations be technical in nature. The second element indicates that “responsible decisions” may include the establishment of professional standards and procedures, but does not require that they must always or mostly do so. The third element makes no specific reference to the performance of professional duties at all.

[51] Second, reference to the Level 2 classification descriptor in clause A.1.7 of Schedule A is instructive. It provides:

A.1.7 Level 2—Experienced engineer, Experienced information technology employee and Experienced scientist

Following development, the Experienced engineer, Experienced information technology employee and Experienced scientist plans and conducts professional work without detailed supervision but with guidance on unusual features and is usually engaged on more responsible assignments requiring substantial professional experience.

[52] For relevant purposes, a Level 2 employee must be an “Experienced engineer” as defined. We have set out the definition of this expression in clause 2.2 of the PE Award above. Similar to the definition of “professional engineering duties”, this definition provides that an employee with the prescribed engineering qualifications and experience need only be engaged in employment “where the adequate discharge of any portion of the duties” requires those qualifications. The requirements of the descriptor must be construed in the context, so that references to the conduct of “professional work without detailed supervision…” and usual engagement on “more responsible assignments requiring substantial professional experience” must be understood as relating to the “portion of the duties” for which the prescribed qualifications and experience are required. Any different approach would render irrelevant and inutile the carefully-formulated definition of “Experienced engineer”.

[53] The correct approach which should have been taken was to determine the principal purpose of Ms Zheng’s employment based on the nature and circumstances of her work, and then analyse whether the identified principal purpose bore a meaningful relationship with the classification criteria in clause A.1.9 of Schedule A, without that analysis being conducted through the lens of any requirement that “professional engineering duties” constitute the principal purpose of the employment or a majority of the duties being performed. This did not occur. Although Ms Zheng, being self-represented, did not postulate appealable error in precisely these terms, we consider that it is adequately encompassed by appeal ground 3.

[54] The question next requiring consideration is whether the error in approach taken by the Deputy President may have made any difference to the outcome. We note that in the McFarlane decision, the Full Bench ultimately refused permission to appeal despite the fact that it accepted that there was an arguable case of appealable error on the following basis:

“[29] In each of the identified cases where the same question of whether a particular Manager was covered by the Award has arisen, the outcome was as it is here. Acknowledging of course that each case depends on its own facts, this circumstance tends against there being utility in granting permission to appeal because even if the arguable appealable errors are made out and corrected, it seems to us more likely than not that the result will again be that Mr McFarlane is not covered by the Award. The material and evidence that was before the Commissioner tends to support the conclusion that the principal purpose for which Mr McFarlane was employed was as a Project Manager, rather than under the Award classification of a Level 3 – Professional.”

[55] There are two matters which persuade us that, on an application of the correct approach, a different result may have pertained here. The first is that the Deputy President herself acknowledged that this was a case where there was a “narrow line” as to whether Ms Zheng was, or was not, covered by the PE Award. 34 The second is that the description in the job advertisement of the role which Ms Zheng filled (set out in paragraph [12] above), which seems to identify the core component of the role as being “responsible for technical support of consulting studies in areas such as development of LNG export and import facilities, LNG project technical due diligence, LNG economic analysis and project costs”, if it constitutes an accurate description of Ms Zheng’s core work responsibilities, would almost certainly fall within Level 3. However, we note that the job responsibilities set out in Ms Zheng’s contract of employment (set out in paragraph [13] above) are arguably described in a substantially different way.

[56] For the reasons stated above, we uphold ground 3 of the appeal. It is not necessary in the circumstances to deal to finality with the other grounds of appeal in relation to which we have granted permission to appeal. It is sufficient to say, in relation to ground 2, that we are not satisfied that there is any significant error of fact in the decision and, in relation to ground 5, that the matter raised is relevant only to the question of whether Ms Zheng performed “professional engineering duties” – a question which the Deputy President answered in Ms Zheng’s favour.

[57] We have decided to re-determine ourselves the question of whether Ms Zheng is covered by a classification in the PE Award having regard to the evidence that was adduced before the Deputy President. Although, on one view, it would be open to for us to determine that question as part of this decision, we consider that the better course is to provide the parties with a further opportunity to make additional written submissions concerning this question in light of our reasons for decision above. In such submissions, the parties may address whether, on a proper application of the “principal purpose” test, Level 2 or any other classification applies to Ms Zheng if Level 3 does not. The Deputy President’s conclusion that Ms Zheng’s role is too senior for Level 2 or Level 1 if it is found she does not fall within Level 3 seems to us to be, with respect, a non sequitur. 35

[58] We make one final observation. There appears to have been excessive litigation as to whether unfair dismissal applicants are covered by the PE Award. This arises, we consider, largely as a result of the matters discussed in paragraph [45] above. Interested parties to the PE Award may wish to consider whether the coverage provisions of the award should be reviewed so that the scope of its coverage is expressed with greater certainty and so questions about whether it covers particular employees can be determined more readily and with greater consistency.

Orders

[59] We order as follows:

(1) Permission to appeal is granted except with respect to appeal ground 1 and, insofar as it relates to the refusal to issue orders for production of documents, appeal ground 4.

(2) Appeal ground 3 is upheld and the decision ([2021] FWC 1023) and order (PR726284) are quashed.

(3) The parties may file further written submissions concerning whether Ms Zheng is covered by a classification in the Professional Employees Award 2020 within 14 days of the date of this decision.”

Extract from Zheng v Poten & Partners (Australia) Pty Ltd (2021) FWCFB 3478 delivered 22 June 2021 per Hatcher VP, Cross DP and Lee C