Whether modern award covers employment

This extract from an unfair dismissal case in the Fair Work Commmssion sets out the legal principles which are involved in determining whether a modern award or an enterprise agreement covers the employment of an employee.

“Principal Purpose Test

[8] In deciding whether a modern award covers an employee’s employment the Commission applies a ‘principal purpose test.’ In Zheng v Poten & Partners (Australia) Pty Ltd [2021] FWCFB 3478 at [47], (2021) 307 IR 339 at 359 (Zheng) the Full bench summarised the test as follows:

“It remains necessary to consider what the application of the “principal purpose” test requires. As was stated in [Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387], 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 v APIR Systems Ltd (unreported, AIRC (FB), PR938031, 16 September 2003)] 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.

[9] In Carpenter v Corona Manufacturing Pty Ltd (2002) 122 IR 387 (Carpenter) the appellant was employed as the National Sales Manager. The Full Bench found that the appellant’s duties were principally managerial in nature and that sales activities formed only a minor part of the work he was required to perform. The Full Bench said at [9]:

“[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.”

[10] It is helpful to also note that in determining award coverage it is the duties performed by an employee that are significant, rather than the title of their position. As Deputy President Gostencnik said in Kaufmann v Jones Lang LaSalle (Vic) Pty Ltd [2017] FWC 2623 (Kaufmann):

“[45] I agree with the Applicant’s submission that put simply, the principal purpose of the Applicant’s position was to sell real estate. Some of the transactions involved were of higher value and greater complexity than those involved in, say a suburban residential real estate agency, but the true nature of the work being performed is much the same. The Applicant had little role in the strategy and management of the Respondent. He had no direct reports. His title, of Regional Director, was effectively a rank or accolade accorded by the Respondent, but the question of award coverage is not determined by the person’s title – it is the duties performed that will be of significance.”

[11] Deputy President Gostencnik’s reasoning was endorsed by the Full Bench in BHP Coal Pty Ltd v CFMMEU [2021] FWCFB 197 at [31].

Evidentiary Onus

[12] During closing submissions it became apparent that the parties did not agree about who carried the evidentiary onus in relation to Converge’s jurisdictional objection. As a result the parties provided supplementary written submissions after the conclusion of the hearing.

[13] The Full Bench in Teterin v Resource Pacific Pty Ltd [2014] FWCFB 4125 at [23]-[29], (2014) 244 IR 252 at 261-263 explored the question of onus in some detail. The Full Bench accepted that the notion of an onus of proof imports legal doctrines that should have no part in the Commission’s procedural or decisional process (at [23]). The Full Bench noted that the evidentiary onus, being “the burden of adducing or pointing to sufficient evidence to raise an issue for determination by the court”, is borne by the party bearing the risk of non-persuasion as to the fact in issue (at [25]-[29]).

[14] Mr Hughes submitted that a party asserting a certain outcome carries the onus of proving that on the balance of probabilities, citing Dickinson v Minister of Pensions (1953) 1 QB 228 at 232. Mr Hughes submitted that Converge carries the evidentiary onus to “adduce evidence to make a s.382 objection a live issue”, referring to the High Court’s observation in Sidhu v Van Dyke [2014] HCA 19 at [63], (2014) 251 CLR 505 at 524.

[15] Converge argued that the outcome of the jurisdictional objection can be fatal for Mr Hughes but not for Converge, and so Mr Hughes bears the risk of failure and therefore the evidentiary onus. Converge argued that because Mr Hughes earned more than the high income threshold he “would usually be barred from bringing an unfair dismissal claim” and that Mr Hughes has “the benefit of the exception to this rule by virtue of being Award covered.”

[16] In my view applicants carry the evidentiary onus to provide a sufficient basis upon which the Commission can be satisfied that they are “a person [who] is protected from unfair dismissal”.

Hughes v Converge International Pty Ltd (2023) FWC 2985 delivered 14 November 2023 per Easton DP