Unfair dismissal and the Building and Construction Award 2010

Where an employee’s annual rate of earnings exceeds the high income threshold under the Fair Work Act he or she will nevertheless be protected from unfair dismissal if employed by a national system employer if his or her employment is covered by a modern award or enterprise agreement.

In this case, an extract of which is published below, the Fair Work Commission was required to determine whether a dismissed employee’s employment was covered by the Building and Construction (Modern) Award 2021 and the legal principles which apply to a determination of this issue are identified.

“Application for relief from unfair dismissal – jurisdictional objection – was the applicant covered by an award? – no award coverage – application dismissed.

[1] Mr Dean Luland (Dean) was employed in a business owned by his father, Kelvin Luland (Kelvin), through a corporate entity known as Period Home Brick Restorations and Construction Pty Ltd (Period Home). Dean was dismissed by Period Home in late June or July 2021. Dean contends that his dismissal was harsh, unjust and unreasonable. Period Home denies those allegations and contends that the Fair Work Commission (Commission) does not have jurisdiction in relation to Dean’s unfair dismissal claim because he was not covered by a modern award or an enterprise agreement and the sum of his annual rate of earnings was more than the high income threshold. 1

[2] Dean accepts that his annual rate of earnings exceeded the high income threshold and does not contend that an enterprise agreement applied to him in relation to his employment with Period Home. Dean submits that he was covered by the Building and Construction General On-Site Award 2020 (Building and Construction Award) at the time of his dismissal.

[3] I conducted a hearing, by telephone, on 24 September 2021 in relation to Period Home’s jurisdictional objection.

Legal principles – award coverage

[4] Section 382(b) of the Fair Work Act 2009 (Act) provides that “A person is protected from unfair dismissal at a time if, at that time: (b) one or more of the following apply: (i) a modern award covers the person”.

[5] The ‘principal purpose test’ is relevant to whether an employee is covered by an industrial instrument such as the Building and Construction Award. The test was summarised in Carpenter v Corona Manufacturing 2 as follows:

“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.”

[6] A Full Bench of the Commission explained various features of the ‘principal purpose test’ in Broadspectrum Limited v United Voice 3:

“… the required analysis of the principal purpose is to be conducted by reference to the work performed by the employee. The test enunciated is primarily of utility where an employee performs a mixture of duties some of which fall, prima facie, within the coverage of the award or classification under consideration and some of which do not. However the test cannot be used to bring an employee within the coverage of an award or classification where the employee does not perform any of the prescribed work duties.”

Building and Construction Award

[7] Dean contends that he fell within the construction worker 3 (CW3) classification in the Building and Construction Award. The CW3 classification is defined as follows in schedule A of the Building and Construction Award:

“A.2.3 Construction worker level 3/Engineering construction worker level 3 (Engineering construction tradesperson level 1) (CW/ECW 3)

(a) A CW/ECW 3 works individually or in a team environment in one or more skill streams contained within this award. A CW/ECW 3 will:

(i) have successfully completed a relevant trade apprenticeship or its AQF equivalent; or

(ii) have successfully completed, in accordance with RPL principles, a Construction Skills Test for this level; or

(iii) have successfully completed the required competency standards; or

(iv) have successfully completed an Engineering Construction Industry Certificate Level 3 consisting of a total of 24 appropriate modules or formally recognised equivalent accredited training so as to enable the employee to perform work within the scope of this level; or

(v) obtained skills equivalent to the above gained through work experience subject to competency testing to the prescribed standard,

any one of which will qualify the employee as a CW/ECW 3.

(b) Skills and duties

(i) An employee at this level performs work to the extent of their skills, competence and training. Employees will acquire skills both formal and informal over time and with experience, and will undertake indicative tasks and duties within the scope of skills they possess.

(ii) An employee at this level may be responsible for the supervision of one or more employees working at CW/ECW 1 or CW/ECW 2 level.

(iii) An employee at this level:

  • understands and applies quality control techniques;
  • exercises good interpersonal and communication skills;
  • exercises measuring and calculation skills at a higher level than CW/ECW 2;
  • exercises discretion within the scope of this grade;
  • performs work of a trades or non-trades nature which is incidental or peripheral to the employee’s main function and facilitates the completion of the whole task;
  • is able to inspect products and/or materials for conformity with established operational standards;
  • assists in the provision of on-the-job training;
  • understands and applies quality control techniques;
  • exercises good interpersonal communication skills;
  • exercises discretion within the scope of this grade;
  • performs work under limited supervision either individually or in a team environment.

(c) Indicative tasks which an employee may perform at this level include the following:

  • allocates functions within a WAT;
  • production sequencing and materials handling of a level more advanced than CW/ECW 2;
  • trade skills associated with certificated trades within the scope of this award;
  • has a sound understanding of the construction process;
  • specialised materials handling;
  • operates machinery and equipment requiring the exercise of skill and knowledge beyond that of an employee at CW/ECW 2;
  • performs work which is incidental or peripheral to the primary tasks and facilitates the completion of the whole task;
  • sheetmetal fabrication;
  • system assembly;
  • welding and cutting;
  • mechanical installation.

(d) The CW/ECW 3 classification incorporates the following broadbanded award classifications:

  • Air compressor operator
  • Air-conditioning tradesperson
  • All winch driver
  • Artificial stoneworker
  • Battery fitter
  • sprayer
  • Boilermaker and/or structural steel tradesperson
  • Bricklayer
  • Bridge and wharf carpenter
  • Carpenter
  • Caster
  • Concrete finisher, powered
  • Concrete spreader, powered
  • Crawler tractor with power operated attachments (up to and including 2000kg shipping mass)
  • Crusher operator aggregate (dimension stone quarries)
  • Drainer
  • Dumper, rear and bottom (up to and including 2 cubic metres struck capacity)
  • Electric motor attendant
  • Electrical fitter
  • Electrical mechanic
  • Fitter
  • Fixer
  • Floor layer specialist
  • Floorsander
  • Forklift driver
  • Form setter
  • Gardener
  • Geotextile/geomembrane worker level 3
  • Glazier
  • Hand sprayer, lance type
  • Joiner
  • Locksmith
  • Machinist
  • Marble and slateworker
  • Marker off
  • Mobile concrete line pump operator
  • Mobile hydraulic platform operator
  • Motor mechanic
  • Operator, drilling machine, up to and including 155 mm diameter
  • Operator, pneumatic tyred tractor with power operated attachments (up to and including 15 kW net engine power)
  • Operators of other cranes up to and including 5 ton
  • Painter (including Artworker, Spraypainter, Shotblaster and Sandblaster)
  • Paviour (including segmental paving)
  • Pipe layer (any kind of pipes)
  • Plant mechanic
  • Plasterer
  • Prefab tradesperson
  • Qualified/trade cook
  • Quarryworker (dimension stone quarries)
  • Refrigeration mechanic
  • Renderer in pipes, tunnels or covered drains
  • Rigger
  • Dogger
  • Roller, vibrating (under 4 ton)
  • Roof fixer
  • Rooftiler (including Roof Slater)
  • Second driver—Navvy and dragline or dredge-type excavator
  • Serviceperson
  • Sheetmetal worker 1st class
  • Shophand
  • Slate ridge or roof fixer
  • Stonemason
  • Tilelayer
  • Timberperson
  • Tradesperson (radio)
  • Tradesperson (precast concrete manufacture)
  • Tradesperson landscaper
  • Trenching machine (small Ditch-Witch type)
  • Welder 1st class
  • Welder special class

(e) An employee at this level may be undergoing training so as to qualify as a CW/ECW 4.”

Evidence

[8] Dean gave evidence in his witness statement that:

(a) he is a licenced bricklayer, having obtained his licence after completing a bricklaying apprenticeship in 2015;

(b) clause 2.3(d) of schedule A of the Building and Construction Award identifies a bricklayer as one of the relevant classifications covered as a CW/ECW 3 employee;

(c) as a licenced bricklayer who had successfully completed an apprenticeship as a bricklayer, he was an employee covered by the Building and Construction Award at the CW/ECW 3 classification; and

(d) clause 4.3 of the Building and Construction Award defines general building and construction work to mean, among other things, the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land. This is the type of work that Period Home provides to its clients, and which Dean provided during his employment with Period Home.

[9] Dean gave oral evidence to the following effect:

(a) he used a business card with the title “Managing Director” from about 2017 until about 2018;

(b) he was appointed as a manager of Period Home by Kelvin in about 2016 or 2017;

(c) he resigned as a director of Period Home in early February 2021. At that time Kelvin thought Dean was doing a poor job;

(d) after he ceased to be a director of Period Home in early February 2021 he was no longer a manager of Period Home;

(e) in the period from early February 2021 until the cessation of his employment with Period Home, Dean’s duties included preparing quotes, working in the office and undertaking site based tasks including cleaning bricks and changing lintels. Dean did not have a particular job title, a position description or defined tasks; he just did what he thought needed to be done, including giving instructions and directions to other employees;

(f) in the period from early February 2021 until the cessation of his employment with Period Home, Dean commenced work each weekday at about 5am each morning and worked until between 5pm and 7pm in the evening. He attended Period Home’s factory first thing in the morning and told the employees which sites they were to attend and what work they were to do. Later in the day Dean would attend sites, speaking to clients, preparing quotes, inspecting work, teaching employees how to undertake particular tasks, and undertaking manual work assisting workers on the job and carrying out remedial works. Dean would then either attend other sites or leave site and return to Period Home’s factory and office, where he would plan work for the following days. Dean says that during this period of time he spent about 10 to 15 hours per week undertaking manual work on sites;

(g) the main focus or purpose of his employment with Period Home after February 2021 was his trade knowledge and to be the point of contact between Kelvin as the director of Period Home and the employees of Period Home.

[10] Kelvin gave the following evidence in his witness statement:

(a) he is the sole director of Period Home;

(b) Dean resigned as a director of Period Home in February 2021 of his own volition due to his purchase of a $2,000,000 home and not wishing to risk any personal liability as a director of Period Home that could impact on his property.

(c) Dean was from at least 2017 until 30 June 2021 the general manager of Period Home;

(d) Dean exercised day to day control of Period Home including tendering for work, hiring and firing staff, making purchases and operating the business’s bank account.

(e) as general manager, Dead did not do any regular bricklaying or other physical work on Period Home’s work sites. Period Home’s staff includes seven bricklayers who do all the bricklaying work;

(f) Dean had no regular work hours. He was not required to start at 5am as were all

other staff apart from Kelvin; and

(g) Dean was not covered by an award and did not work in any manner similar to award covered employees; he was management.

[11] Kelvin gave oral evidence that Dean came out of the army and commenced work for Period Home. He undertook a two year apprenticeship as a mature aged worker and thereafter worked in the office managing the business, preparing quotes, directing employees and visiting sites to talk to clients and inspect work, but did not undertake manual work after completing his apprenticeship. The basis of Kelvin’s knowledge of what Dean did, and did not do, on sites is based on what other employees told him. Kelvin is back “running the show” with the help of an assistant manager now that Dean no longer works in the business.

[12] Mr Michael Hayward was employed by Period Home for a period of about 12 months leading up to about June 2021. He was not given a job title but was responsible for the day to day running of various sites for Period Home in the Sydney and Newcastle areas. Mr Hayward reported directly to Dean, who he considered to be in the position of General Manager. Mr Hayward gave evidence that Dean attended sites from time to time to inspect work and speak to him about the progress of work on site. Mr Hayward only recalls seeing Dean undertake manual work on a site on about three occasions, helping clean or “cut off mud” from brickwork for no more than two hours on each occasion. Mr Hayward gave evidence that when Dean attended sites at which he worked “99% of the time Dean would have a look around and then bugger off”.

[13] Mr Shane Connell commenced employment with Period Home in about March or April 2019 in the role of bricklayer. He gave evidence that he was later promoted to the position of Leading Hand. Mr Connell also gave evidence that he would call Dean by telephone if he needed to speak to him about a job, Dean attended sites occasionally to speak to a client or builder, and Dean never undertook manual work with Mr Connell on a site.

[14] Mr Alexandre Gariano commenced employment with Period Home in about August 2020 in the role of bricklayer. He was interviewed by Dean, who introduced himself as the director of Period Home. Mr Gariano gave evidence that on several mornings per week Dean instructed him which sites to attend and what the work at those sites involved. Mr Gariano also gave evidence that Dean rarely attended the sites at which he worked and when he did so he was there to see how work was going but never undertook manual work. Mr Gariano understood Dean’ s primary role to involve him working from the office, liaising with clients, preparing quotes and coordinating jobs for the workers to attend. If Mr Gariano had any concerns while working for Period Home he was directed by Dean to bring them to his attention.

[15] Unlike Period Home’s other witnesses, Mr Hamish Wallace was not required for cross examination. He gave evidence in his letter dated 22 September 2021, which was tendered without objection, that he has been employed by Period Home since February 2020, he performed all tasks as instructed by Dean up until him leaving the company, and if he had any queries on jobs then he could contact Dean in the office as Dean was never on the tools on site. Mr Wallace’s role in Period Home is as a Leading Hand to a crew of 1-5 at any given time.

Consideration

[16] Clause 4.1 of the Building and Construction Award provides that it “covers employers throughout Australia in the on-site building, engineering and civil construction industry and their employees in the classifications within Schedule A—Classification Definitions to the exclusion of any other modern award”. Clause 4.2 of the Building and Construction Award defines the on-site building, engineering and civil construction industry to include the industry of general building and construction. Clause 4.3 of the Building and Construction Award defines general building and construction work to mean, among other things, the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land. I accept on the evidence that this is the type of work that Period Home provides to its clients. Accordingly, Period Home is covered by the Building and Construction Award.

[17] The question is whether Dean was employed by Period Home in the CW3 classification, or any other classification, in schedule A to the Building and Construction Award. There is no doubt that Dean has the necessary qualifications to work in the CW3 classification, because he has successfully completed a relevant trade apprenticeship. There is also no doubt that one of the “broadbanded award classifications” that fits within the CW3 classification is “bricklayer” and Dean has the qualifications, skills, competence and training to work as a bricklayer. That is not, however, the end of the analysis. For example, a Chief Executive Officer of a company may have trade qualifications which qualifies him or her to work in a role covered by a modern award, but it is the role in which the employee works for the employer that determines whether or not the award covers the employee in relation to their employment with that employer. The role of Chief Executive Officer is not covered by an award such as the Building and Construction Award.

[18] In the period from February 2021 until the cessation of his employment with Period Home, I accept on the evidence that Dean undertook some of the indicative tasks that an employee in a CW3 classification may perform, including “allocated functions within a WAT” and “has a sound understanding of the construction process”. I also accept on the evidence that in the period from February 2021 Dean satisfied a number of the elements of the skills and duties identified in clause A.2.3(b)(iii) of schedule A of the Building and Construction Award, namely, “understands and applies quality control techniques”, “exercises good interpersonal and communication skills”, “assists in the provision of on-the-job training”, and “performs work under limited supervision either individually or in a team environment”.

[19] However, the principal purpose of Dean’s role with Period Home after 2021 was not to undertake the role of a bricklayer or any other task or duty that needed to be performed on a job site. The principal purpose of Dean’s role in the period from February 2021 until the termination of his employment with Period Home was to work in the management, organisation and running of Period Home’s business in the construction industry. Although Dean did not have a job title, the essential features of his role involved preparing quotes, organising employees and materials for the performance of work, inspecting work, and communicating with clients and builders. Such a role is not covered by the CW3 classification or any other classification within the scope of coverage of the Building and Construction Award.

[20] I do not accept Dean’s evidence that he spent between 10 to 15 hours per week undertaking manual work on site. His evidence in that regard is not consistent with the evidence given by a range of current and former employees of Period Home, who gave broadly consistent evidence that Dean did not attend work sites very often, and when he did he mostly inspected works and spoke to employees and clients about the work that was being undertaken. I accept that individual employees could not have knowledge of what Dean was doing on sites on which they were not working. Similarly, Kelvin did not have direct knowledge of what Dean was doing on sites. However, the clear impression one has from the evidence taken as a whole from the employees who worked on those sites is that Dean undertook very limited manual work on sites. I accept that he did, from time to time, train employees and undertake, for limited periods of time, manual tasks such as “cutting off mud” from bricks or cleaning up on a site, but such activities were infrequent and were not the principal purpose of his role with Period Home.

[21] In any event, even if I had accepted Dean’s evidence that he spent between 10 to 15 hours per week undertaking manual work on site, that would not persuade me that he was covered by the CW3 classification or any other classification within the scope of the Building and Construction Award. The principal purpose for which Dean was employed by Period Home from February 2021 was to work in the management, organisation and running of Period Home’s business in the construction industry; he was a manager, albeit not a director and not the most senior manager of the business. During that time Kelvin was the most senior manager of the business and Dean worked in a structure beneath Kelvin and above the employees who were principally responsible for undertaking the manual construction work on site.

Conclusion

[22] For the reasons stated, Dean was not covered by a modern award at the time of his dismissal by Period Home. It follows that Dean was not protected from unfair dismissal within the meaning of s 382(b) of the Act. Dean’s unfair dismissal application must therefore be dismissed.”

Luland v Period Home Brick Restoration and Construction Pty Ltd (2021) FWC 6000 delivered 28 September 2021 per Saunders DP