[2012] FWAFB 7184

Download Word Document


FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Mr Nicholas McMenemy
v
Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting
(C2012/4605)

SENIOR DEPUTY PRESIDENT RICHARDS
DEPUTY PRESIDENT HARRISON
COMMISSIONER CAMBRIDGE

BRISBANE, 28 AUGUST 2012

Appeal against decision [2012] FWA 4955 of Senior Deputy President Drake at Sydney on 26 June 2012 in matter number U2012/5289.

[1] This matter concerns an application by Mr Nicholas McMenemy (“the Appellant”) for permission to appeal and, if permission is granted, an appeal against a decision of Senior Deputy President Drake on 26 June 2012. Her Honour’s decision, in effect, was to dismiss, on grounds of an absence of jurisdiction, the Appellant’s application for an unfair dismissal remedy (made under s.394 of the Fair Work Act 2009 (“the Act”)).

[2] The appeal application was lodged on 17 July 2012.

SECTIONS 400 AND 604 OF THE ACT

[3] Section 604 of the Act provides that:

[4] Section 400 of the Act provides that:

[5] The appeal, in essence, challenges the conclusion reached by the Senior Deputy President that there was no modern award coverage of the Appellant’s position at the date of the termination of his employment by Thomas Duryea Consulting Ltd t\a Thomas Duryea Consulting (“the Respondent”), 1 and therefore the Appellant was not a person protected from unfair dismissal for the purposes of s.382 of the Act. For purposes of background, we note that the Respondent is an information technology consulting company. At the time of his dismissal, the Appellant was employed as the Respondent’s New South Wales Manager and National Practice Manager for Cloud Solutions.

[6] Section 382 of the Act provides as follows:

[7] We note there is no contest between the parties that s.382(a) of the Act has no application to the Appellant. Nor is there a contest that s.382(b)(ii) of the Act and s.382(b)(iii) of the Act apply to the Appellant. That is, it was agreed that no enterprise agreement applied to the Appellant’s employment, and that the sum of the Appellant’s annual rate of earnings exceeded the high income threshold.

[8] However, the contest lies now, as it did before her Honour, in respect of the application of s.382(b)(i) of the Act. Specifically, the Appellant claims that he is covered by the Professional Employees Award 2010 (“the Award”). The coverage provisions of the Award are set out at subclause 4.1 and read as follows:

[9] Her Honour set about determining whether or not the Appellant performed work, which was the principal purpose for which he was employed, within the scope of Schedule B of the Award. Specifically, this determination was in the context of whether or not the Appellant was employed within the scope of a Level 4 - Professional Employee classification. 2

[10] Schedule B to the Award relevantly read as follows:

[11] As already suggested above, her Honour approached the determination on the basis of whether or not the Appellant was employed in the above classification by reference to the principal purpose test as articulated in the Full Bench decision of the Australian Industrial Relations Commission (as it then was) in R Brand v APIR Systems Limited. 3 That decision, in turn, cited the decision of the Full Bench of the Australian Industrial Relations Commission (as it then was) in Carpenter v Corona Manufacturing Pty Ltd,4 which stated relevantly as follows:

[12] Her Honour then proceeded to set out the evidence of the Respondent, which was provided through Mr Thomas who was the Chief Executive Officer (“CEO”) and co-founder of the Respondent. That evidence, in summary, was that:

[13] Following this summary, her Honour set about outlining the evidence as she saw it of the Appellant, Mr McMenemy.

[14] Her Honour commenced by noting that in or about August 2010 the Appellant was engaged by the Respondent as a Senior Specialist - Technical and Commercial Consulting Resource on an ongoing basis, only one month later to be engaged as a subject matter expert in relation to Cloud Solutions.

[15] Her Honour then indicated that in early June 2011 the Appellant accepted a position offered to him by Mr Thomas as New South Wales Manager. While the Appellant did not give up his responsibilities for matters relating to cloud computing his role in that regard was subject to review within six months.

[16] The relevant employment documents generated by the Human Resources Manager indicated that the Appellant was employed in relation to level 4 of the Award. The Appellant believed his role and responsibilities fell within that classification, for reason that he was engaged for his technical and product specific competency and his ability to apply that to commercial matters. Her Honour, however, subsequently observed that the Appellant indicated he had little understanding of the Award as he had principally worked overseas and that such terminology had been “alien” to him.

[17] The Appellant contended that his responsibilities as Manager of the New South Wales office took about 30% of his time, while 70% comprised his continuing duties in relation to cloud computing.

[18] The Appellant’s evidence - as set out by her Honour - largely was that he was employed for reasons of his technical background and that his role and responsibilities were dependent on those technical skills. Her Honour indicated that the Appellant said that his role was never intended to be “hands - on”, yet also rejected claims that he was engaged to provide strategic planning services for the cloud project.

[19] Her Honour indicated that the Appellant’s evidence was that he agreed that he was engaged for his ideas, know-how and what he could bring to the Respondent’s consulting business and that his duties involved a degree of strategy and planning. But it appears that the Appellant believed he did so by delivering commercially driven services on the basis of his technical knowledge.

[20] Her Honour pointed out that the Appellant accepted that one of his roles was seeking to obtain a possible capital investment into the Respondent by another company, and if successful the Appellant would attract an ‘investment bonus’ of $25,000.

[21] Her Honour also stated that the Appellant was subject to key performance indicators (“KPI’s”) which if delivered would generate a bonus of $100,200. The Appellant accepted that the KPI's concerned strategy, people, profit target, reporting and marketing.

[22] It was also observed that there was no separation in his remuneration package for work carried out in relation to the cloud computing project and the New South Wales management function. There were also no employees engaged in the cloud project and none of the KPI's to which the Appellant was subject related to the cloud project.

[23] The position description for the New South Wales Manager's role was attached to the Appellant’s employment contract. That position description stated that the “State manager is a highly accomplished professional with a balance of strategic insight, operational expertise, technological and financial skills and is commercially savvy across both sales and marketing.” 6 The Appellant agreed with this summary of the position.

[24] Her Honour also noted that while the Appellant gave evidence that he had been employed because of his technical and product competencies, he was unable to remember any specific content of the relevant conversations in this regard. The Appellant also accepted that he had no formal qualifications in IT.

[25] Her Honour observed that the Appellant had accepted that he was an important member of the senior management team that reported to the CEO and that he was charged with running the New South Wales office as well as ongoing management of tracking and reporting on operational issues.

[26] Having set out the evidence above, her Honour found that the “role in which [the Appellant] was initially employed before accepting the NSW manager role involved the operation of Cloud solutions.” 7 She was satisfied on balance that that role was covered by the Award.

[27] Her Honour then observed that because the Respondent did not call an employee from Sydney to contradict the Appellant’s evidence, there was no reason for her to reject the Appellant’s evidence as given in relation to how the Appellant apportioned his duties over the working day. The Senior Deputy President then stated that she accepted the Appellant “as a witness of truth”. 8

[28] Her Honour then went on, however, to state that the relevant tests for the purposes of determining whether the Appellant was covered by the Award classification was not predicated solely on the basis of the apportionment of work or the work which was performed the majority of the time.

[29] Her Honour went on to conclude that the Appellant had been promoted into the New South Wales Manager's role, and that role was a change in that it “involved different duties including the overall management, including financial management, of the Sydney office”. 9 That move, her Honour concluded, was “a move up and move beyond the constraints of [the Appellant’s] previous position” and that she was satisfied that the New South Wales Manager's role was the principal purpose of the [Appellant’s] employment with the Respondent.10

[30] On her Honour’s reasoning, it followed that there was no award coverage of the Appellant’s position at the date of the termination of his employment and that the application must therefore be dismissed.

GROUNDS OF APPEAL

[31] The grounds of the appeal are as follows (in summary). In each instance the Appellant contends that her Honour:

FINDINGS ON APPEAL

[32] As is evident, the appeal grounds are interrelated and we have directed our findings to ensure a minimum of repetition.

1. failed to apply the principles in determining whether the Award covered the Appellant at the relevant time

[33] We assume that the reference to principles is a reference in broad phrasing to the principal purpose test, to which reference has been made above. It is sufficiently clear to us that her Honour was cognisant of the test (to which she referred in the course of her decision) and applied the same to the evidentiary case that was before her, as is evident in the express terms of her conclusions. As is evident from the discussion below, we are not persuaded that her Honour misapplied this test as it is, or that we should reconsider the formulation of that test by prior full benches.

2. erred in finding that the Award did not cover the Appellant at the relevant time

[34] It is true that her Honour’s reasoning does not demonstrate an application of the precise terms of the Award to the evidentiary case. A fair reading of her Honour’s decision, however, is that she considered the evidentiary case as led to be sufficiently decisive for purposes of the conclusion she reached. We discuss this evidence further below.

3. having accepted the Appellant as a witness of truth, erred in failing to give sufficient weight to the Appellant’s evidence that the Respondent had engaged him because of his technical and product specific competency and the management duties performed by the Appellant were merely an add-on to the Appellant’s substantive role

[35] It is sufficiently clear that her Honour accepted the evidence - uncontroverted as she said it was - in relation to how much time the Appellant apportioned to his role in the cloud management project. On a fair reading, we do not take her Honour’s declaration of the witness as being a witness of truth as having direct relevance beyond the context in which it arose. In this regard, we note that it would appear her Honour had difficulties with some aspects of the Appellant's evidence. For example, while the Appellant’s own evidence was that his job was covered by the Award, her Honour observed that he had no understanding about award concerns other than what he was advised by the Respondent. 11 Her Honour also noted that the Appellant’s memory about other aspects of his evidence was wanting.

[36] Once having declared the Appellant as a being a witness of truth (in the particular evidentiary context in which she accepted the Appellant's evidence about the apportionment of his time) her Honour turned immediately thereafter to weigh this discrete evidence against the wider deliberation required to ascertain the classification of the role performed by the Appellant at the time of his dismissal. This wider deliberation concerned the principal purpose test, to which reference has been made above.

[37] We comment in this regard that consistent with the decision of the Full Bench of the Australian Industrial Relations Commission (as it then was) in Carpenter v Corona Manufacturing Pty Ltd, an own employee’s estimation of the quantification of their workload is not determinative of the classification, if any, in an award, into which they might fall. One reason for this (and there will be more) is that an employee might perform duties (where they are not closely supervised) which the employee prefers, or believes to be required, but which are not the duties the employee is necessarily directed (or employed) to perform. This is why the Full Bench articulated the task of ascertaining the principal purpose of the employment as requiring “an examination of the nature of the work [...] the employee is employed to do”. 12

[38] We are not persuaded that her Honour erred in failing to give sufficient weight to the Appellant's evidence regarding his technical competencies (noting that these competencies did not find expression in any formal qualifications). She clearly had regard to those competencies - to the extent they were in existence - as they were expressed in the role performed by the Appellant prior to his employment in the role of New South Wales Manager and National Practice Manager - Cloud Solutions, and we have no doubt, given her reasoning, that she weighted them differently in the context of the subsequent position in which the Appellant was employed.

[39] Amongst other matters, the Appellant's evidence in this regard was that he had leadership and management responsibility for the New South Wales State office, which comprised some 21 employees. 13 The KPI’s associated with his role and on which his $100,200 annual bonus was based were also related to management functions (and not the cloud project). And the cloud responsibilities were subject to a six month review, while the role of New South Wales State Manager was on-going. We note the evidence of Mr Thomas, which was uncontested, was that the Appellant’s total remuneration package comprised fixed remuneration of $200,000 per annum (exclusive of 9% superannuation) and a performance-based bonus (referred to immediately above) of $100,200. This amount also excludes a contingent bonus of $25,000 that was available upon an investment amount being attracted, to which reference is made above). The Appellant’s remuneration is an amount well above the minimum wage rates prescribed in the Award.

[40] Further, the position description applying to the position was notably prescriptive (as further discussed below) and dealt virtually exclusively with the duties and responsibilities and performance expectations of the State Manager’s position. No reference is made to the cloud project responsibilities, other than that those responsibilities would be subject to review in six months.

[41] In the end, with the body of evidence before her, as we have set it out, her Honour did not accept the Appellant's view that his job as New South Wales Manager was a mere “add-on” to his original contractor role. 14 Her Honour instead concluded on the evidence before her that the offer and acceptance of the new and wider role in June 2011 changed the character of the range of duties performed by the Appellant and that the Award had no application to such a position.

[42] In effect, therefore, her Honour found that the principal purpose for which the Appellant was employed was to perform the functions of the New South Wales State Manager, which involved particularised managerial responsibilities.

[43] We do not see the role of this Full Bench to weigh anew, as it were, the matters that were properly taken into regard by the Member at first instance: a sufficiently formed factual matrix existed within which the Senior Deputy President’s conclusions came to sit, and we discern no error in the reasoning.

4. having correctly found that the role in which the Appellant was initially engaged was covered by the Award, her Honour misconstrued the evidence and erred in finding that the Appellant was promoted into the New South Wales Manager's role and this constituted a change in the Appellant’s employment so as to remove coverage of the Award in circumstances where the undisputed evidence of the parties was that there had been no change to the Appellant’s role since the commencement of his employment with the Respondent

[44] The Appellant’s evidence was that in early June 2011 Mr Thomas approached him and offered him the additional management responsibilities associated with incorporating the New South Wales State Manager role into his existing role and duties. The Appellant states that he was then subsequently interviewed by all members of the Respondent’s management team and that during the hiring process in late June 2011, it was made clear that he would not be giving up his responsibilities relating to cloud computing that that these would be reviewed in about six months. 15

[45] The Appellant’s further evidence was that he was offered eventually the position of New South Wales State Manager and National Practice Manager, Cloud Services. 16 The Appellant at this time was given an employment agreement, the deed of restraint and the position description, to which reference has been made above. The Appellant’s further evidence was that he commenced employment with the Respondent on 1 July 2011.17

[46] There appears to be little doubt on the Appellant’s own evidence that he was offered employment in the new role and accepted the same in the context of various conditions, including a remuneration framework of some $200,000 (exclusive of 9% superannuation) plus access to a $100,200 bonus upon achievement of a suite of management-related KPI's.

[47] Her Honour’s reasoning was that the position held by the Appellant at the time of the dismissal was not one that was covered by the Award (as we have discussed above).

[48] This conclusion was reached for reason that the original role in which the Appellant was engaged underwent a change upon him accepting an offer of employment in a full time, permanent capacity.

[49] The Appellant’s own evidence supported the Senior Deputy President’s understanding that the Appellant had accepted a new role with his employer in late June 2011, albeit one that maintained his former responsibilities, which now were to be subject to a six month review. Along with that new role came new responsibilities as well.

[50] The Appellant's position description, which was attached to his employment agreement, read relevantly as follows:

[51] The position description went on to state that the position held “Full financial responsibility for the Profit and Loss of the state and revenue responsibility to deliver the New South Wales sales number.”

[52] As State Manager, the Appellant was required to report directly to the CEO (Mr Thomas) on all strategic and financial objectives.

[53] The KPI’s appear to be derived from the detailed and lengthy key responsibilities set out in the position description. The KPI’s include:

[54] KPI's such as this were bracketed as “Strategy” related KPI's.

[55] Other KPIs related to “People” matters, and concerned utilisation of staff resources, succession planning and leadership and communication matters.

[56] Financial related KPI's concerned managing revenue streams, delivering on monthly targets, expense management, and managing and controlling departmental expenditure within agreed budgets.

[57] There were also a large number of further KPI's relating to operations and sales and marketing.

[58] The position did not require technical qualifications, but emphasised industry knowledge and key competencies in strong team leadership and stakeholder management.

[59] The position description, the prescriptive outline of position responsibilities in the articulated KPI's bear no direct relationship with the continuing role of the Appellant as National Practice Manager - Cloud Solutions. Mr Thomas' evidence had been that this position had no leadership or supervisory roles as there were no separately designated staff involved in the cloud practice as all sales and technical staff were expected to have broad familiarity with the businesses services.

[60] We discern no error in the Senior Deputy President’s decision in any of these respects: her Honour had before her a body of evidence, which she had articulated, about the offer of employment that was made in June 2011, and she came to a view as to whether the principal purpose of the work that was being performed at the time of the dismissal was covered by the Award.

5. having correctly found that the Award was specifically referred to by the Respondent in its employment documents specifying the Appellant’s duties as being within the relevant Award classification (and that there had been no reason to set aside that designation) her Honour erred by setting aside the designation of the Award on the misapprehension that the Appellant’s employment had changed since the commencement of his employment by the Respondent

[61] We are not persuaded that there is any error on the Senior Deputy President’s part as to her conclusion that the Award did not apply to the role performed by the Appellant at the time of his dismissal. There is no need for us to determine that any work carried out at some time prior to the dismissal was covered by the Award or not. The principal purpose test applies to the role performed at the time of the dismissal, not at an earlier time. That said, we discuss further the objection on the basis of award “designation” immediately below.

6. erred in failing to give any or sufficient weight to the level 4 professional employee classification in the Award, which specifically designates supervisory duties as falling within the scope of the Award

[62] The Award subparagraph referred to in this ground of appeal reads as follows:

[63] The Award makes clear that the supervisory element of the duties is in a context in which the employee is engaged in “professional engineering or professional scientific/information technology applications”. The managerial duties of the New South Wales State Manager are not comprehended by the terms of the Award. There was no duty upon her Honour, consequently, to have regard to an irrelevant consideration.

[64] The matter also was made somewhat more difficult by the claimed inadvertent inclusion of a reference to the Award in the generic or template employment agreement, which Mr Thomas contended was based on a contract used for more junior technical staff. Her Honour's decision in this regard made the following comment about this matter (at paragraph 33 of her decision):

[65] Our considered view is that her Honour formed a view that the Appellant’s role, as carried out for the Respondent prior to July 2011 was covered by the Award. But after that time, when he accepted the new and wider role set out above, the Award ceased to be of relevance as the principal purpose of that role in which he was now employed was managerial in nature.

[66] We think it is sufficiently clear that the Senior Deputy President’s reasoning was based on the evidence that the principal purpose of the Appellant’s function within the Respondent’s business (and for which he was principally employed to perform) at the time of his dismissal was managerial in nature, and outside the terms of the Award.

CONCLUSION

[67] It follows that we are not persuaded her Honour made an appealable error in concluding as she did. Nor are we persuaded her Honour erred in her findings about the principal purpose of the position held by the Appellant from July 2012.

[68] Demonstrably, the Appellant contends that the predominant weight of his duties favoured work of a technical kind that fell within the ambit of the Award. But regardless of that quantification, the wider evidence (including that of Mr Thomas and the particulars of the position description, KPI’s and remuneration arrangements) led the Senior Deputy President to conclude that the principal purpose of the work the Appellant was employed to perform stood outside of the Award.

[69] We discern no error in the decision in this regard.

[70] For the reasons we have given above, we decline permission to appeal.

[71] Nor do we consider it is in the public interest to grant permission to appeal.

[72] We therefore dismiss Mr McMenemy’s appeal.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr C Lowe, solicitor for the Appellant.

Mr D. Hartnett, solicitor for the Respondent.

Final written submissions:

Applicant’s submissions received 6 August 2012.

Respondent’s submissions received 16 August 2012.

Applicant’s submissions in reply received 21 August 2012.

 1   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 38.

 2   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 6.

 3   Appeal by Brand against decision of Deegan C of 19 June 2003 [PR933272] Re: APIR Systems Ltd, Giudice J, Marsh SDP, Thatcher C, 16 September 2003 [PR938031].

 4   Williams SDP, Lacy SDP, Tolley C, 17 December 2002 [PR925731].

 5   Carpenter v Corona Manufacturing Pty Ltd Williams SDP, Lacy SDP, Tolley C, 17 December 2002 [PR925731] at PN 9.

 6   Transcript of first instance proceedings dated 8 May 2012 at PN 213.

 7   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 33.

 8   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 34.

 9   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 36.

 10   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PNS 36-37.

 11   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 30.

 12   Carpenter v Corona Manufacturing Pty Ltd Williams SDP, Lacy SDP, Tolley C, 17 December 2002 [PR925731] at PN 9. See also Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Thales Australia Limited [2011] FWAFB 8246 at PNS 23-34.

 13   Transcript of first instance proceedings dated 8 May 2012 at PNS 470-471.

 14   Transcript of first instance proceedings dated 8 May 2012 at PN 353.

 15   Statement of Mr Nicholas McMenemy dated 1 May 2012 at PNS 4-5.

 16   Statement of Mr Nicholas McMenemy dated 1 May 2012 at PN 6.

 17   Statement of Mr Nicholas McMenemy dated 1 May 2012 at PN 7.

 18   Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWA 4955 at PN 33.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR528198>