| [2018] FWC 3078 [Note: a correction has been issued to this document] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy
Mr Robert Caruana
v
Shace Toop Trading Trust T/A Toop & Toop Real Estate
(U2018/1192)
DEPUTY PRESIDENT ANDERSON |
ADELAIDE, 30 MAY 2018 |
Application for an unfair dismissal remedy – whether protected from unfair dismissal – whether earnings exceeded high income threshold – whether covered by a modern award – Real Estate Award 2010 – whether employer estopped from raising jurisdictional objection – no estoppel – principal purpose test - jurisdictional objection upheld – application dismissed
[1] Mr Robert Caruana (the Applicant) has applied to the Fair Work Commission (the Commission) under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in relation to his dismissal by Shace Toop Trading Trust trading as Toop & Toop Real Estate (Toop or ‘the employer’). He claims to have been unfairly dismissed on 22 January 2018. At the date of dismissal he was employed as General Manager – Sales.
[2] Toop oppose the application and raise two jurisdictional issues.
[3] Firstly, the employer says that the Commission has no jurisdiction to hear the substantive application as Mr Caruana is not a person protected from unfair dismissal within the meaning of the FW Act. In particular, the employer says the sum of Mr Caruana’s annual rate of earnings exceeded the high income threshold under section 382(b)(iii) of the FW Act.
[4] In response, Mr Caruana says that he is a person protected from unfair dismissal. He disputes that his annual rate of earnings exceeded the high income threshold. In any event, he contends that his employment was governed by a modern award, the Real Estate Award 2010. He further contends that the employer is estopped from arguing that he is not so covered.
[5] Secondly, the employer claims that if Mr Caruana was a person protected from unfair dismissal then his dismissal was not unfair in that it was a case of genuine redundancy within the meaning of sections 385(d) and 389 of the FW Act.
[6] In response, Mr Caruana says that the requirements of section 389 (genuine redundancy) were not met by the employer and that his dismissal was, in all the circumstances, harsh, unjust or unreasonable. He seeks compensation.
[7] On 2 March 2018 conciliation of the application was conducted by a Commission-appointed conciliator. It was not resolved. It was then referred to a member of the Commission for hearing and determination.
[8] The application was originally allocated to Commissioner Platt, who issued directions on 26 March 2018 1 and set the matter down for hearing on 23 April. The Commissioner conducted further conciliation on 29 March 2018. The matter again did not resolve. Having conducted that further conciliation, the Commissioner considered it prudent to excuse himself from arbitrating the matter. It was reallocated to me for hearing and determination.
[9] On 5 April 2018 I conducted a directions hearing and issued further directions. 2 I directed that the hearing on 23 April deal with the first jurisdictional issue only, namely whether Mr Caruana was a person protected from unfair dismissal.
[10] At the directions hearing the employer foreshadowed that it would seek to be represented by a legal practitioner. Mr Caruana foreshadowed that he would oppose such a request. The parties were directed to make written submissions on representation. After receiving written submissions on representation, on 19 April 2018 I granted permission (on conditions) for the employer to be legally represented at the hearing of the first jurisdictional matter. 3
[11] I conducted that hearing by determinative conference on 23, 26, 27 April and 1 May 2018.
[12] In advance of the hearing, and consistent with my directions, I received witness statements, relevant documents and outlines of submissions from both Mr Caruana and the employer. 4
[13] This decision determines the first jurisdictional matter (whether Mr Caruana was a person protected from unfair dismissal).
[14] Toop operate a mid-sized real estate agency business in Adelaide. It has an annual turnover of approximately $16 million and employs approximately 102 employees. It operates from six suburban locations. Its core business is the sale of residential real estate. It also undertakes significant residential property management activities.
[15] Toop is a private family business founded by its Chairman Mr Anthony Toop and his wife Sylvia in 1985. Mr Toop’s two daughters Suzannah Toop and Genevieve Toop were, in early 2016, appointed joint Chief Executives of the business: Suzannah as Chief Executive of Property Investment and Finance; and Genevieve as Chief Executive of Sales and Marketing. Mr Toop was non-executive Chairman. In November 2017 executive management of the business within the family altered materially. On 18 November 2017 Genevieve Toop suddenly left active management and took long term leave due to complications with her pregnancy. In December 2017 Suzannah Toop was appointed Chief Executive. On 9 January 2018 Anthony Toop re-entered the business in an active operational role.
[16] Mr Caruana commenced employment with Toop as Sales Manager on 27 October 2016. He was appointed General Manager – Sales from 1 November 2017. He was dismissed on the ground of redundancy on 22 January 2018.
[17] The aforementioned is a brief summary only. Matters relating to Mr Caruana’s position(s) and work undertaken, and the relationship between his responsibilities and those of both Genevieve Toop and Suzannah Toop are directly relevant to the determination of the first jurisdictional issue. Specific findings of fact on those matters are made in the body of this decision.
[18] I received substantial documentary and oral evidence at the hearing of this matter. This included two witness statements from Mr Caruana, two witness statements from Suzannah Toop and one witness statement from Genevieve Toop. I heard oral evidence from Mr Caruana, from Genevieve Toop and from Suzannah Toop.
[19] No agreed statement of facts was submitted in advance of the hearing. That notwithstanding, a large number of factual matters are not in dispute. However, there are some relevant factual disputes. Where I need to make decisions on disputed facts I do so on the basis of both the oral and documentary evidence.
[20] In deciding this matter I have had the advantage of and taken into account the manner in which witnesses before me gave their evidence, and responded to cross examination. I am satisfied that all three witnesses gave their evidence honestly and to the best of their recall.
[21] Mr Caruana’s evidence was detailed although significant parts were attended by opinion and arguendo. This was not surprising of a self-represented litigant and is no criticism of him. I provided an appropriate level of guidance to Mr Caruana on framing questions and in distinguishing between evidence and submission.
[22] Although on factual matters he had good recall and was generally reliable, his evidence was attended by lengthy answers and some inconsistencies. For example, to advance his case of unfairness, on the one hand, Mr Caruana sought to highlight the significance of his work, his level of initiative, the application of his skill set across the business as a whole, and his progression into a high-value strategic role. On the other hand, to advance his case that he was award covered, his evidence was that he was only employed to provide leadership to the sales department and simply did extra work because it was required of him by others. 5 Somewhat inconsistently, he claimed that when he performed work outside the sales department it was his decision and not required of him.6 This dichotomy characterised his evidence, leading me to approach the inconsistent aspects with a degree of caution.
[23] Ms Genevieve Toop’s evidence was conscientiously presented and reliable. She had multiple direct and relevant interactions with Mr Caruana and with Suzannah Toop and Anthony Toop. She demonstrated a good recall of those events. She was willing to concede ground in cross examination and placed no particular gloss on her evidence.
[24] Ms Suzannah Toop was also a reliable witness. Although she had less direct interaction with Mr Caruana than her sister, and although she tended to reconstruct rather than recall events when her memory was not precise, she too was straightforward in evidence and in cross examination.
[25] In determining this matter, I am not bound by the rules of evidence but consider them to be a good and useful general guide. I adopt the approach of the Full Bench of this Commission which recently said:
“The Commission is obliged by statute to perform its functions in a manner that is fair and just pursuant to s. 577(a) of the Act. Although it is not bound by the rules of evidence and procedure, the Commission tends to follow the rules of evidence as a general guide to good procedure. However, that which is ultimately required is judicial fairness, and that which is fair in a given situation depends on the circumstances.” 7
[26] As noted, some of the oral evidence and evidence in witness statements strayed into the field of hearsay, opinion and assumption. I place reduced levels of weight on such evidence except where it is corroborated by direct evidence, is uncontested or is inherently believable.
[27] I make my findings and draw my conclusions based on all of the evidence and material before me.
[28] I am required to determine whether Mr Caruana was a person protected from unfair dismissal within the meaning of section 382 of the FW Act. It provides:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
i) a modern award covers the person;
ii) an enterprise agreement applies to the person in relation to the employment;
iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
[29] The minimum employment period required to have been served by Mr Caruana to comply with section 382(a) is six months. There is no contest that Mr Caruana was employed for fifteen months. I find that he completed the minimum employment period.
[30] An enterprise agreement did not apply to his employment. Mr Caruana will only be a person protected from unfair dismissal if either his annual rate of earnings was below the high income threshold or a modern award covered his employment. On the issue of modern award coverage, Mr Caruana submits that Toop should be barred from raising its objection on the ground that it had allegedly made contrary representations during his employment and since.
[31] Thus, the issues to be determined are:
• Did Mr Caruana’s earnings exceed the high income threshold?
• Is Toop barred from arguing against award coverage?
• Was Mr Caruana covered by the Real Estate Award 2010?
[32] It is clearly established on the evidence 8, and is not contested, that at the date of dismissal Mr Caruana’s remuneration package comprised a base salary of $200,000 per annum plus $19,000 superannuation (the statutorily required 9.5%) plus a company supplied fuel card.
[33] The employer submitted that the fuel card was a personal benefit valued between $1,800 and $2,400 per annum. 9 Mr Caruana’s evidence was that he “spent $60 per week on fuel”.10 I am satisfied on the evidence that at least two thirds of the fuel card value was a personal benefit. Based on Mr Caruana’s evidence about usage and cost, I estimate11 the level of personal value of the fuel card to be $2,080 per annum.
[34] Having regard to the definitions of “high income threshold” and “earnings” in sections 333 and 332 of the FW Act, the value of the statutorily required superannuation component is to be deducted from the earnings calculation for these purposes. I find that at the date of dismissal Mr Caruana’s “earnings” were $202,080 per annum.
[35] Mr Caruana submits that the “annual rate of earnings” for the purposes of section 382(b)(iii) should be his actual earnings in the twelve months immediately prior to his dismissal.
[36] It is clearly established on the evidence that Mr Caruana’s remuneration package altered in the preceding 12 months:
From 26 October 2016 to 3 September 2017: $120,000 base salary plus 9.5% superannuation plus $203.57 car allowance per week plus a discretionary bonus component; 12
From 4 September 2017 to 31 October 2017: $150,000 base salary plus 9.5% superannuation plus $203.57 car allowance per week plus a discretionary bonus component; 13
From 1 November 2017 to dismissal: $200,000 base salary plus 9.5% superannuation plus fuel card (as above).
[37] Mr Caruana’s evidence was that his actual earnings in the twelve months prior to his dismissal were $127,684. Under cross examination it was apparent that this was not a figure based on actual earnings but rather formed by loose assumptions based on weeks worked on contracted remuneration. 14
[38] Mr Caruana’s evidence was that the increase in his salary from 1 November 2017 (from $150,000 to $200,000) “wasn’t in effect an increase based on my previous base salary” given the removal of the bonus component and substitution of the car allowance with a fuel card. 15
[39] I approach Mr Caruana’s evidence on both counts with a degree of caution. Not having access to his pay-slips (though he does have access to his bank account and his final pay-slip 16) it is more probable than not that he has understated his actual earnings in the preceding 12 months and somewhat downplayed the value of the negotiated remuneration package from 1 November.
[40] I do not however need to determine the actual quantum of earnings he received. It is well established, and I consider a correct application of the FW Act, that an employee’s “annual rate of earnings” for the purposes of section 382(b)(iii) is to be assessed as at the time of dismissal and not as actual earnings in the preceding twelve months. 17
[41] The statutory high income threshold under the FW Act at the time of his dismissal was $142,000. 18 Mr Caruana’s annual rate of earnings at that time was $202,080 per annum. That is more than the high income threshold. Mr Caruana was not protected from unfair dismissal by section 382(b)(iii) of the FW Act.
[42] Mr Caruana will be a person protected from unfair dismissal if either his annual rate of earnings was below the high income threshold or a modern award covered his employment. On the issue of modern award coverage, Mr Caruana submits that Toop should be barred from raising its objection on the ground that it had allegedly made contrary representations during his employment and since. 19
[43] The pre-dismissal representations relied upon by Mr Caruana are his initial Employment Agreement 20 and his termination letter and pay-slip21, each of which make references to the Real Estate Award 2010. The post dismissal representation is the ‘Employer Response (F3) to Unfair Dismissal Application’ dated 18 February 2018 under the hand of Suzannah Toop and filed in the Commission that day. Question 1.1 on that form (“Was the Applicant covered by an award or enterprise agreement?”) was answered in the affirmative with the Real Estate Award 2010 being identified.
[44] Mr Caruana says that it was not until the directions hearing and conciliation proceedings before Commissioner Platt on 26 and 29 March 2018 and a subsequent email to the Commission on 29 March 2018 by Toop’s lawyers that he was made aware that Toop were contesting that he was covered by the Real Estate Award 2010 at the date of dismissal.
[45] He submits that as a matter of fairness, if not a matter of law, the employer should be barred from now contesting that proposition.
[46] In response, Toop say that there is no doctrine of estoppel applying to Commission proceedings and that the employer, now faced with these proceedings, is exercising its right to have that proposition determined. It says that whether an employee was covered by a modern award is a mixed question of fact and law which falls to be determined irrespective of what either the employee or the employer said or believed to be the case. On the issue of the employer’s representations, it points to Suzannah Toop’s evidence 22 that, at the time of completing the Employer Response (F3), she was unsure of the correct answer, initially intended to select ‘no’ but then ticked the affirmative box as the Award had (in the employer’s view) applied to Mr Caruana’s employment when he was first employed.
[47] Establishing award coverage is a legal issue based on jurisdictional facts. It is a jurisdictional prerequisite to be protected from unfair dismissal for an employee (such as Mr Caruana) who was neither earning below the high income threshold nor covered by an enterprise agreement. It would be error on the part of the Commission if it did not make a finding in that regard. Jurisdictional facts need to be established and applied to the instrument using relevant legal principles.
[48] Terms and conditions of an award are statutory in character and cannot be converted into private contractual rights. 23 What an employer says or believes during the course of employment on the question of award coverage is no more relevant than what an employee says or believes. Neither can unilaterally or even jointly contract into award coverage any more than they can privately contract out of award coverage (unless the instrument or governing statute itself permits). Consistent with well-established principles of statutory interpretation24, absent any ambiguity in the terms of a modern award, extraneous material such as the belief or intention of its author (the Commission) is not a relevant consideration. Even where ambiguity exists and resort may be had to the intention of those who framed the instrument, the subjective opinion of an employer (or an employee) at a given point in time cannot be evidence of the Commission’s intent.
[49] It would be incongruous if a pre-dismissal representation that is not relevant to determining a jurisdictional point acted as a bar to raising that jurisdictional point in proceedings before the Commission. For that reason alone, Mr Caruana’s submission must fail.
[50] Even if this were not the case, there is no legal doctrine of estoppel (or such other) that generally applies to the work of the Commission. The Commission is not a court of law. 25 Nor is it a tribunal of strict pleadings.26 In performing functions and exercising powers under the FW Act the Commission must perform those functions and exercise those powers in a manner that, relevantly is fair and just; is quick, informal and avoids unnecessary technicalities; and is open and transparent.27
[51] In administering its unfair dismissal jurisdiction, the Commission’s procedures are intended by the legislature to be “quick, flexible and informal” 28. The FW Act provides that the Commission may inform itself in relation to any matter before it in such a manner as it considers appropriate.29
[52] Absent any evidence of mala fides or abuse of process, it would be a denial of procedural fairness to prevent a party with standing the right to raise relevant legal or jurisdictional matters in proceedings before the Commission. It would also be inconsistent with the statutory directive concerning flexible and informal procedures to strictly bind a party to the terms of their originating proceedings or responses, without good reason.
[53] The evidence before me discloses no mala fides or abuse of process. Suzannah Toop’s evidence that she was uncertain how to respond to question 1.1 of the F3 is uncontroverted. Once Toop obtained legal advice on the application it recanted that position. Whilst this understandably frustrated Mr Caruana, it should not be a surprise to an applicant that a respondent to proceedings of this type will take steps to secure legal advice on claims made against them. Toop did not delay communicating that revised position to the Commission or Mr Caruana once it had been determined. Though it added a burden to Mr Caruana’s preparation of his case, it did not prejudice that preparation.
[54] I conclude that there is no basis on which Toop is estopped or otherwise barred from arguing against Mr Caruana’s claim of award coverage.
Onus of Proof
[55] In proceedings of this kind it is relevant to establish where the onus of proof lies. Although it is well established that an applicant to proceedings carries the obligation of making out their case, the application of this principle can be more vexed in the context of jurisdictional matters, particularly the establishment of facts on which a jurisdictional proposition is founded. 30
[56] It has been recently noted by a Full Bench of the Commission that: 31
“In most cases the question of where an evidentiary onus (or something analogous to it) resides will be answered by asking; in relation to each matter about which the Commission must be satisfied, which party will fail if no evidence or no further evidence about that matter were given? The evidentiary onus will generally be the party that will fail in that event.”
[57] Applying this approach, it is apparent that both parties before me bear an evidentiary onus.
[58] The primary onus rests on Mr Caruana. As applicant, he is required to satisfy the Commission that he is entitled to make a claim of this nature; that is, that he is a person “protected from unfair dismissal”. 32 It is his obligation to present sufficient evidence to establish a factual matrix on which both sections 382(a) (minimum employment period) and 382(b) (one of either award coverage, enterprise agreement application or lesser earnings than high income threshold) can be found by the Commission to have applied at the date of dismissal.
[59] I note that section 382(b)(i) is couched as an affirmative proposition, that is that “a modern award covers the person”. This supports a conclusion that the proponent of the affirmative proposition (the applicant) carries this onus.
[60] However, where a respondent employer contends that there is an alternative evidentiary basis on which that affirmative finding cannot be safely made, the respondent employer carries an evidentiary onus to establish the facts on which it relies.
[61] Accordingly, Mr Caruana has an onus to establish a body of facts on which the Commission can conclude, on the balance of probabilities, that he had served at least six months of employment (in this instance, an agreed matter) and that he was covered by the Real Estate Award 2010 at the date of dismissal. If he does not do so, his application will fail.
[62] Equally, to the extent that Toop rely on other facts, it carries an obligation to present a sufficient body of evidence on which it relies and on which it says the Commission should conclude, on the balance of probabilities, the proposition it advances (that the award did not cover the relevant employment at the relevant time). 33 If Toop does not do so, it bears the risk that the Commission may be satisfied (based on the applicant’s evidence) that the award covered the relevant employment at the relevant time.
[63] In the context of these proceedings, both Mr Caruana and Toop called evidence to advance their competing propositions about award coverage. Each has taken steps to meet the onus they need to discharge.
Clause 4 and Schedule B1.3 Property Sales Supervisor
[64] Mr Caruana submits that he was a person covered by the Real Estate Award 2010 throughout the course of his employment, including at the time of his dismissal.
[65] By virtue of section 143 of the FW Act, a modern award covers an employee in relation to particular employment if that award is expressed to cover the employee. A modern award must include a coverage term and that term must be expressed to cover specified employers and specified employees of employers covered by the award. A coverage term in a modern award must describe employees that are covered by the award by specifying their inclusion in a specified class or classes. A class of employees may be described by reference to a particular industry or part of an industry, or particular kinds of work.
[66] Clause 4 of the Real Estate Award 2010 deals with coverage. It relevantly provides: 34
“4.1 This award covers employers in Australia engaged in the real estate industry in respect to their employees engaged in classifications in clause 14—Minimum weekly wages to the exclusion of any other modern award.”
[67] In order for Mr Caruana to have been covered by the award at the time of his dismissal, it was necessary for Toop to have been in the real estate industry and for Mr Caruana to have been engaged in a classification for which the award made provision.
[68] There is no dispute that the respondent employer was relevantly engaged in the real estate industry within the meaning of clause 3.1 of the award. I also note that whilst clause 4 also provides certain exclusions from coverage, none apply to this matter.
[69] Clause 14 of the award sets out minimum wages for award classifications. One such classification was (at the date of dismissal) “Property Sales Supervisor”. Schedule B to the award defined award classifications. The definition of “Property Sales Supervisor” was (at the date of dismissal) as follows:
“B.1.3 Property Sales Supervisor
(a) Role definition
(i) A Property Sales Supervisor is employed to perform a broad range of skilled applications and the provision of leadership and guidance to others engaged in Property Sales classifications.
(ii) The role involves significant initiative, judgment, decision-making and problem solving in relation to the listing, marketing and selling or commercial leasing of real property or businesses.
(iii) This person is responsible for the overall leadership and supervision of a sales team in accordance with legislative and business requirements.
(iv) The position may also involve contribution towards the development of a broad business plan/strategies and budgets and having the accountability and responsibility for self and others in achieving the outcomes.
(b) Indicative tasks
The indicative tasks for a Property Sales Supervisor are as follows:
(i) Provide leadership in the workplace;
(ii) Supervise and/or manage work teams;
(iii) Ensure compliance with the various obligations imposed under relevant real estate law;
(iv) Implement and/or supervise quality customer service;
(v) Develop and/or supervise operational plans;
(vi) Manage personal work priorities and professional development of self and others in the work team(s);
(vii) Facilitate change and innovation;
(viii) Resolve customer complaints;
(ix) Develop and implement customer service strategies;
(x) Involvement in selling of real property or businesses, or leasing of commercial property; and
(xi) Responsibility for the overall supervision of the office as a licensed real estate agent and as required under real estate law.”
[70] For the purposes of determining whether a modern award “covers the person” within the meaning of section 382 of the FW Act the relevant time at which it needs to be established that the award applied is the time of dismissal. In this matter that date is 22 January 2018. It is not sufficient for Mr Caruana to establish that the award covered his employment when he first commenced at Toop (27 October 2016) or at other times throughout his employment if it did not cover his employment on 22 January 2018.
[71] It is also relevant to observe that the award which is to be assessed for the purposes of determining coverage is the award as it existed at the date of dismissal. It follows that variations to an award that were not in operation at the date of dismissal or which only commenced from a subsequent date are not relevant to the determination of coverage for the purposes of section 382(b)(i) of the FW Act.
[72] The Real Estate Award 2010 is a modern award made by the Commission. It has been the subject of variations over its life. It was recently varied by the Commission as part of the 4 yearly review of modern awards. By decisions on 6 July 2017, 17 January 2018, 16 March 2018 and 29 March 2018 35 and subsequent determinations36 provisions of the award (including classifications) were varied with a date of effect of 2 April 2018. That date of effect is after the date of Mr Caruana’s dismissal. The award which was in operation at the date of his dismissal was the award as varied on 4 December 2017. It is that award which I refer to as the Real Estate Award 2010 and which governs this decision.
The Legal Principles
[73] An approach applied when determining whether an employee was covered by an award at a relevant time has been described as the principal purpose test. This is not the only test formulated by courts and tribunals, 37 but is a test commonly applied by the Commission.38
[74] The principal purpose test requires an examination of the nature of the work undertaken and the circumstances in which the employee was employed to do the work in order to ascertain the principal purpose for which the person was employed and then assess whether the employee, in that employment, fell within the coverage provisions of the award. 39 It was succinctly expressed by a Full Bench of the Commission in Carpenter v Corona Manufacturing Pty Ltd:40
“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.”
[75] Also relevant, particularly to this matter, is the observation of the Commission in Kaufman v Jones Lang LaSalle (Vic) Pty Ltd: 41
“the question of award coverage is not determined by the person’s title – it is the duties performed that will be of significance.”
[76] In deciding this matter I apply the principal purpose test. I do not assess purpose in a narrow or subjective sense of what was intended by one party or the other (or both) at a given point in time. The character of work performed, as well as its objectively assessed purpose, is relevant in the formulation of the principal purpose test as applied by the Commission. What is relevant is the nature of the work undertaken and the circumstances in which the employee was employed to do the work duties performed.
Progression of Mr Caruana’s employment
[77] It is not disputed that Mr Caruana commenced employment with Toop on 27 October 2016 under the terms of an Employment Agreement 42 he and the employer executed in the month after he started. Mr Caruana was employed as Sales Manager reporting to Genevieve Toop, the Chief Executive of Sales and Marketing.
[78] Mr Caruana came to the business from managerial roles with Philip Morris, Pernod Ricard and Lion Dairy. He did not have a real estate industry background. He was the first person with a strategic management skill set the Toop family had employed from outside the real estate industry. 43
[79] Neither when first employed nor at any time whilst employed did Mr Caruana hold real estate qualifications. Although designated as Sales Manager he could not, and indeed it would have been unlawful for him to do so, transact a real estate sale or discuss with customers the value of property or the likely consequence of buying or not buying a property, or negotiate the level of commission a customer would pay on a sale or purchase. This he openly acknowledged in his evidence. 44
[80] Prior to being employed, he negotiated the employer’s original offer 45 upwards, leading to an agreed remuneration package with a base salary of $120,000 per annum plus superannuation plus a discretionary bonus and a substantial car allowance.
[81] Relevantly, his Employment Agreement made reference to the Real Estate Industry Award 2010 as follows:
“Clause 4 Classification and Position Title
Your Award classification will be Property Sales Supervisor and Your position title will be Sales Manager. We may change Your position title after consulting with you.”
“Clause 31 The NES and the Award
Although the NES and the award govern minimum terms of Your employment they do not form part of Your contract of employment. The Parties cannot contract out of the terms of the NES and the Award and must comply with both instruments.”
[82] A position description for the role of Sales Manager was provided and applied to Mr Caruana’s work. 46 It required Mr Caruana to manage a team of approximately 30 sales agents and to ensure they met their targets. It required him to co-ordinate, implement and maintain sales strategies and oversee projects, team standards, guidelines, initiatives and drive continual improvement of the sales team. It was both Mr Caruana’s evidence and Genevieve Toop’s evidence that this was required of Mr Caruana and that is what he did.47
[83] Within a short time after commencing in his role, Mr Caruana’s broader management and strategic skills became evident to Genevieve Toop and others in the business. I find that Mr Caruana demonstrated a level of performance and motivation that progressively saw him take an interest in not only management and performance of his sales team, but in the organisation as a whole. He was ambitious for the business and for himself to progress in the business, believing that he could add real value. Through a combination of self-belief, acknowledgement of his good work and skill set by the owners and (later) circumstance (that is, Genevieve Toop suddenly exiting the business) he progressed rapidly.
[84] Thus, Mr Caruana’s employment activities and responsibilities as well as his contractual arrangements altered during the course of his employment as his work in the business developed and expanded. However, it is noteworthy that whilst his employment activities and responsibilities developed in this way, he continued to be responsible for the sales team. The key findings I make concerning the progression of his employment are set out below.
[85] In April 2017 Mr Caruana and Genevieve Toop met to conduct a six month review (as required by his contract). He was given to understand that she had a high level of satisfaction with his work and it was agreed that he would take on more responsibilities over time (as he had already started doing). 48 It was agreed that they would collaborate on a salary review proposal which would then be submitted to the Board.
[86] In August 2017 Mr Caruana met with Chairman Anthony Toop and Genevieve Toop. He was asked about his long term vision for the business and this was discussed. His overall contribution to the business and its culture was recognised with satisfaction. He was told that the business wanted to retain him and would provide a base salary increase from $120,000 to $150,000, with a further review of his employment later in the year. The salary increase was confirmed by letter of 8 September 2017. It operated from 4 September.
[87] A few weeks later, in September 2017 and in advance of the 12 month employment review, Mr Caruana and Genevieve Toop discussed his future roles and titles. By then Mr Caruana was performing broader and additional roles in the business. This included some of Genevieve Toop’s responsibilities which she had devolved to him, as she had fallen pregnant in July and was planning ahead. 49 These are outlined later in this decision. Each recognised that the title of Sales Manager no longer reflected what he was doing. Each considered that the title detracted from his authority both within the business and amongst external parties.50 He was asked to propose a title revision. He subsequently submitted that of Chief Operating Officer.51
[88] In October 2017, one year into his employment, Mr Caruana again met Chairman Anthony Toop and Genevieve Toop. The meeting again discussed his current and future role. Again discussion centred on his long term involvement in the business and plans for its growth. Anthony Toop indicated concern at a business risk in coming years with both Chief Executives being his two daughters with no back-up plan should they need to leave the business for a time to raise families. 52 Mr Caruana was told that his title would become “General Manager – Sales”, which would be a new position in the business. He agreed. He was told that he had already taken on responsibilities that reflected this new position53 but that further responsibilities (and in particular marketing) would be progressively devolved to him by Genevieve Toop in the lead up to her absence to give birth (which was planned for February 2018). This intended further devolution was described as a ‘soft handover’. He agreed. He was told that a new remuneration package would accompany the new position being a $200,000 base salary plus 9.5% superannuation plus a fuel card. He agreed, noting though that the value of the increase was diminished by the removal of the bonus and car allowance. He was also told that his former role of Sales Manager would be backfilled. He agreed to help make that occur and subsequently prepared an updated draft position description which was duly advertised (though, by the date of dismissal not filled).
[89] Mr Caruana’s new position and title was formalised by letter dated 1 November 2017, which he countersigned on 8 November. It read: 54
“Dear Rob,
Re – Change of Position and Title
It is with pleasure that I confirm your change of position (and, as a result, a corresponding change to your position title) to General Manager – Sales, effective from 1 November 2017. You will continue to report to Genevieve Toop in this role.
As a result of this position and title change, as discussed, your role responsibilities and Key Performance Indicators will be reviewed and you will be issued with an updated position description to accurately reflect the expectations of this role.
The remaining terms and conditions of your employment will remain as per your contract of employment.
Should there be any further changes to your employment contract these will be communicated and mutually agreed in writing.
To confirm your acceptance of this change, please sign the acknowledgement and acceptance section and return to Meghan Williams, People and Culture Leader. Please keep a copy for your records.
I would like to thank you again for your contributions and efforts to date.
Yours sincerely,
Genevieve Toop”
[90] The new remuneration arrangements were formalised by a separate letter also dated 1 November 2017 which Mr Caruana also countersigned on 8 November. 55
[91] It was the understanding and intent of Mr Caruana, Genevieve Toop and Anthony Toop expressed at and following their October 2017 meeting that when Genevieve Toop went on maternity leave in February 2018 Mr Caruana would, having completed a soft handover, take over Genevieve Toop’s position as Chief Executive of Sales and Marketing. 56
[92] As events transpired, this is not what occurred.
[93] In mid-November 2017 complications with her pregnancy compelled Genevieve Toop to exit the business at short notice. On or around 8 November Genevieve Toop advised Mr Caruana of those complications. An immediate handover of her responsibilities commenced. She handed her responsibilities in part to her sister (and co-Chief Executive) Suzannah Toop, in part to Mr Caruana and in part to the Studio Co-ordinator. She exited the business on 18 November and on 20 November sent an email to Mr Caruana setting out her “brain dump” of the duties which she had devolved and to whom. 57
[94] On 5 December 2017 Mr Caruana met Suzannah Toop (who became sole Chief Executive in her sister’s absence) to discuss business structure looking forward into 2018. They discussed (but did not finalise agreement on) Mr Caruana becoming general manager for the business as a whole (including property management). An email sent by Suzannah Toop on 13 December summarising their meeting caused Mr Caruana concern. 58 In the email it was suggested that the remuneration increase he had received (to $200,000) was in consideration of him taking overall business responsibility in 2018. This was not factual and not Mr Caruana’s understanding.59 He believed that if he was to take overall business responsibility he would need to review the role and be further remunerated. The next day he met urgently with Suzannah Toop and the People and Culture Manager. Suzannah Toop corrected the record.
[95] On 4 January 2018 Mr Caruana again met with Suzannah Toop and discussed a draft organisational structure that he had prepared which could commence from February 2018. Mr Caruana agreed to draft summary descriptions for the new roles, including the role which he was already in practice doing but which would be formally re-titled General Manager Sales and Marketing. He did so.
[96] On 6 January 2018 Mr Caruana went on two weeks annual leave.
[97] On 9 January 2018 Anthony Toop re-entered the business in an active operational role.
[98] On 22 January 2018, when he returned from annual leave, Mr Caruana was advised by the People and Culture Manager in the presence of Suzannah Toop that he was terminated on the ground of redundancy. He was provided a letter of termination. He was provided two weeks payment in lieu of notice and a severance payment. The letter of termination relevantly said: 60
“Your employment will end immediately. Based on your length of service, your notice period is 2 weeks. Instead of receiving that notice, you will be paid the sum of $7,692.31, plus the redundancy entitlement set out below.
Due to your employment ending because of redundancy, you will also be paid redundancy pay of $15,384.62 in accordance with the National Employment Standards and Real Estate Award 2010. This amount represents 4 weeks’ pay which is based on your over one year of service.”
Consideration concerning award coverage
[99] As noted, what is relevant to this question is the nature of the work undertaken by Mr Caruana and the circumstances in which he came to be employed to do the work duties performed. The Commission must then assess those matters against the relevant award provision(s).
[100] Determination of this matter attracts a certain level of complexity consequent on three matters. Firstly, the work undertaken by Mr Caruana materially altered during the course of his employment yet there was no single circumstance which brought about those changes. Secondly, although it was intended that one be prepared, there was no position description settled for the “General Manager – Sales” role which Mr Caruana formally held at the date of dismissal. 61 Thirdly, the work of Sales Manager had not been back-filled by the date of dismissal.
[101] For reasons set out below, I find that in practice, by the date of dismissal, Mr Caruana was no longer simply performing sales work. His portfolio had been expanded by both design and circumstance into whole of business strategy, oversight of business activities that included but were not restricted to sales, and engagement in business activities that included but were not restricted to sales. In practice, by the time he went on leave on 6 January 2018, he was a senior executive in the business and a ‘go to’ person for a wide variety of operational departments.
[102] Genevieve Toop’s evidence, which I accept, was that he was the third most senior person in the business. 62 After Genevieve Toop exited the business, Mr Caruana was working between 70 and 90 hours per week (12 to 15 hours per day). Although not determinative, this quantum of working hours is consistent with that of a business executive performing at a senior level. His evidence was that this was considerably more hours than he had been working when he was Sales Manager.63
[103] On account of both the incidence and significance of these non-sales activities in his day to day work as well as the seniority attached to his oversight and performance of sales activities I have concluded that Mr Caruana was not covered by classification B.1.3 “Property Sales Supervisor” of the award at the date of dismissal.
[104] I conclude that this was certainly the case at the date of dismissal. Although I need not determine the point, in all probability it was also the case in the six months prior to dismissal, that is, in the three months leading up to the 1 November title change and in the almost three months that followed. Genevieve Toop’s evidence clearly establishes that Mr Caruana performed these broader duties and more senior duties in the final six months of his employment. 64 On multiple occasions in his evidence Mr Caruana acknowledged as much.65
[105] Nor do I consider that it was simply the duties he performed and acquired following the departure of Genevieve Toop from 18 November 2017 which warrant this conclusion. The extra duties he performed and acquired from that time further added to a role which had already expanded beyond a Property Sales Supervisor. Those extra duties came on more quickly than anticipated. 66 They enable a conclusion about the principal purpose of his employment at the date of dismissal to be safely drawn.
[106] The facts not already outlined in this decision which support this conclusion are as follows.
1. From about July 2017 Mr Caruana became a member of a restructured executive. The restructuring, partly at his suggestion, was to reduce the size of the former leadership group by excluding certain other managers and creating a smaller number of senior officers (the two Chief Executives, himself and the finance manager) to facilitate discussion of whole of business finances and whole of business strategy. 67 From that time onwards, Mr Caruana had line of sight and engaged in discussions with the Chief Executives on the performance of all business units, not just sales. He discussed and helped formulate business strategy with the Chief Executives as part of his job.68
2. From about July 2017 Mr Caruana was given access to whole of business finances, not just finances pertaining to his sales department. 69 He used this access to formulate ideas and make recommendations about whole of business growth and business strategy affecting other departments.70
3. By at least October 2017 Mr Caruana was engaging in very high level discussions about the business and its future with its Chairman and Chief Executives: 71
“I also had an open and honest discussion with Genevieve and Anthony because there was at stages conflicting discussions around strategy and performance of the team and overheads and capital expenditure and planning and I asked Anthony and Genevieve in the meeting which was in his office in Norwood, I asked if he could be honest with me in relation to what your future plans are for the organisation.”
4. In about August 2017 Mr Caruana assumed practical control from Genevieve Toop for the client concierge department. 72 Although it supported the sales team, I find that client concierge was a separate group from the sales team. I prefer Genevieve Toop’s evidence on this.73 From then, the client concierge manager, in practice, reported to Mr Caruana.74
5. In about August 2017 Mr Caruana assumed practical control from Genevieve Toop for sales information technology activities. 75
6. Prior to exiting the business, when Genevieve Toop was absent from the office, staff from sales and from other departments would seek out and obtain guidance from Mr Caruana on matters that would otherwise have been raised with the Chief Executive of Sales and Marketing. 76 Once Genevieve Toop exited the business, this happened as a matter of course.77 In his evidence, Mr Caruana put it this way:78
“When she left due to medical reasons, and associated responsibilities or management fell to me, because who else were they going to go to, Mr Clare? There was no-one in the business that was capable of managing those tasks.”
7. Once Genevieve Toop exited the business, and on the occasions when Suzannah Toop was absent from the head office in Norwood (which was frequent), Mr Caruana concerned himself with and handled a range of matters concerning the business as a whole, including property management. These came from both internal and external persons. He accepted in his evidence that he helped out the General Manager of Property Development, who was his counterpart on the other side of the business. 79 He became the ‘go to’ person for the business as a whole when the two Chief Executives were not present. His evidence was:
“…as my role progressed and discussions were had about the roles in the future, it [acquiring a real estate licence] was not mentioned, because it was more of a real high level strategic role and not a day to day management of the sales team.” 80
“I took over the responsibilities I needed to, to keep the business afloat until we reached the end of the year, which was a request from the Chairman to do.” 81
“I took responsibility for what needed to occur to keep the business moving. I wasn’t just going to sit on my hands and go, well, that’s not my responsibility, so ring someone else. There was no-one else to ring.” 82
8. From the outset of his employment Mr Caruana intended his role to expand into management and strategy given his skill set and the fact he could not lawfully transact sales despite being a sales manager. This is what occurred; and did so from as early as four months into his employment. 83 In his evidence, Mr Caruana listed more than twenty examples of activities he undertook in his first year (that is, prior to November 2017) concerning broader business strategies and initiatives.84
9. Mr Caruana started overseeing the work of the marketing department (called the Studio) from 1 November 2017 as part of the soft handover. This accelerated after Genevieve Toop left the business, 85 although operationally the Studio manager still performed day to day marketing work. In practice the Studio manager reported to Mr Caruana after Genevieve Toop left the business.86 Mr Caruana also undertook some marketing activities himself.87 At the request of Genevieve Toop and in her absence he presented to staff in December 2017 a whole of business marketing strategy that had been prepared by Genevieve Toop.88 On marketing, Mr Caruana’s evidence was that from 1 November 2017 “I was at that time handed full responsibility for the sales and marketing team and strategy, performance results.”89 Although his title did not formally change from “General Manager – Sales” he altered his LinkedIn profile and held himself out as “General Manager Sales and Marketing”.90
10. Mr Caruana presented on behalf of the business in the media, particularly on Adelaide radio station 5AA 91; something known to and approved by Genevieve Toop.92
11. When asked, Mr Caruana undertook, in conjunction with the Chief Executives, performance reviews and performance follow-up of other managers. For example, he did so with respect to the Wellness Manager in October 2017 93 and thereafter oversaw her management of the Wellness Centre.94 He had the authority to recommend firing of staff, but not the final say.95 In addition, prior to 1 November 2017 Mr Caruana prepared and submitted to the Chief Executives a proposal across the business for performance recognition.96
12. When asked, Mr Caruana was involved in recruiting staff into the business. For example he was engaged in the recruitment of a new position of Real Estate Concierge which then reported to him. 97
13. When asked, Mr Caruana helped design future whole of business staff organisational charts and recommended to the Chief Executives titles and summary position descriptions. 98
14. Mr Caruana had, in at least the last six months of his employment, authority for the discretionary spend of company funds on advertising, within the contracted advertising budget, which was considerable. 99
15. After Genevieve Toop exited the business, Mr Caruana had the authority to provide credits to customers for advertising. 100
16. Under guidance and direction from the Chief Executives, Mr Caruana engaged in commercial negotiations with external suppliers to the business including suppliers to the business as a whole (not limited to his sales team). This included on-line advertising (realestate.com), a photography supplier (DIAKRIT) and other businesses (such as Pernod Ricard). 101 Mr Caruana had commenced dealing with suppliers prior to 1 November 2017.102
17. In November 2017 Mr Caruana travelled overseas to Bangkok with the Chairman Anthony Toop and the Chief Executive Suzannah Toop to attend a supplier meeting. 103
18. Mr Caruana made recommendations to the Chief Executives on the settlement of legal matters. 104
[107] The award definition of Property Sales Supervisor is broadly framed. It is, by definition a skilled role (“a broad range of skilled applications” 105). It does not compel a person to be able to lawfully transact sales. It includes sales team supervision and the development of sales strategies. It is a role that specifically encompasses leadership and guidance both in its role definition and indicative tasks. It contemplates “significant” judgment, decision-making, problem solving and the taking of initiative. Whilst the position is defined around sales activities, it contemplates the position-holder making a “contribution towards the development of a broad business plan/strategies and budgets”.106 Of the three award property sales classifications, it is hierarchically the most senior.
[108] When first employed as Sales Manager Mr Caruana worked in a position that fell within the award framework. However, the role Mr Caruana performed at the date of dismissal was not that role. It was a materially different role. In his final six months Mr Caruana progressively performed higher level managerial and executive work across business units. He was no longer Sales Manager. Although his new title from 1 November 2017 of “General Manager – Sales” reflected the greater seniority and responsibility he was undertaking, the title itself did not reflect the true character of his broader non-sales activities. Those activities were material to his role at 1 November 2017 but became both material and substantial once Genevieve Toop exited the business on 18 November 2017. They were neither incidental nor accidental. Those responsibilities went beyond leadership of the sales department and strategies for its development. They also went beyond making a “contribution” to broader business strategies. Mr Caruana wasn’t simply making a “contribution”; he was developing and, together with others, implementing those strategies. By the date of his dismissal, they were material and substantive elements of a position which was general managerial in description and executive management in practice. Mr Caruana described the following as the “core responsibilities” of his role: 107
“strategic development, coaching, training, recruiting, inducting, forecasting, business reviews, client and supplier contractual negotiations”.
[109] Whilst the award position of “Property Sales Supervisor” contemplates “leadership and guidance to others engaged in Property Sales classifications”, Mr Caruana’s role was of a different character. He was providing leadership and guidance to the organisation as a whole including the two Chief Executives and occasionally the Chairman, not merely the sales team: 108
“I had almost every manager and employee reach out to me for advice, support, recommendations, meetings, clarity, issue resolution, customer complaints, internal team issues as well as suppliers as I was the only single employee in the business who had the career background and experience to provide support in the absence of the CEO’s…”
[110] The collective effect of the eighteen functions outlined above that were undertaken in the last six months of his employment, together with the circumstances by which he came to perform them, are a sufficient basis for me to conclude that, by the date of dismissal, the principal purpose of Mr Caruana’s employment was no longer supervision and leadership of the sales team. It was strategic management and chief executive support for the business as a whole, which included but was not limited to the sales department.
[111] Mr Caruana submits that he was award covered because his Employment Agreement with Toop of October 2016 says that he was award covered. He relies on clauses 4 and 31 of that Agreement. However, the meaning of those clauses and whether they provide evidence of a common intent does not determine whether, at law, Mr Caruana’s employment was covered by the award. As noted, neither an employer nor an employee can unilaterally or jointly contract into award coverage any more than they can privately contract out of award coverage. Mr Caruana’s case stands or falls on the duties he performed and the coverage provisions of the award as they existed at the relevant time.
[112] Mr Caruana also submits that he was award covered because he commenced as award covered and was never told that he was no longer award covered. He relies on the fact that both the salary variation letters (of 8 September 2017 and 1 November 2017) and the ‘change of position and title’ letter (of 1 November 2017) provide that “the remaining terms and conditions of your employment will remain as per your contract of employment”. I do not agree. Even were this representation interpreted as a common intention to carry over award coverage into his changing and new roles (which is not established on the evidence), a representation of this type is not capable of providing for award coverage if the terms of the award and the duties performed do not lead to that conclusion. In any event, the evidence establishes that neither Toop nor Mr Caruana turned their mind to the issue of award coverage in any of their discussions about his role, title or remuneration. This was accepted by Mr Caruana. 109 I find Mr Caruana’s evidence that he would have “gone back with questions”110 before accepting a more senior role in the business if he knew he was no longer award covered to be unpersuasive. He was a forthright individual who was more than capable of and successfully negotiated and re-negotiated his employment conditions. In those discussions he did not raise the issue of award coverage. His evidence on this point is a reconstruction, not a recall of his then state of mind.
[113] An allied submission by Mr Caruana is that he was award covered because his letter of termination and pay-slip 111 refers to the award. The reference to the award in that letter is made in the context of the redundancy payment being “in accordance with the National Employment Standards and the Real Estate Award 2010”. For similar reasons, irrespective of whether that assertion is a statement of intent about award coverage, it cannot be a basis on which award coverage is determined. In any event, I note the evidence of Suzannah Toop112 that this reference was made in the termination letter for similar reasons as to why she ticked the award coverage box in the (F3) response to the Commission. In relation to the pay-slip, her evidence113 was that the classification reference was automatically generated by the computer system when Mr Caruana was first employed and had not been changed when he became “General Manager – Sales”.
[114] Mr Caruana suggested that he could be said to be award “covered” even if it is concluded that the award did not in practice “apply” to his employment. 114 Although this proposition was not fully developed, it does not advance his case. The FW Act determines if and when an award covers an employee. If it covers an employee in respect of relevant employment, it applies to that employment by virtue of the operation of sections 48 and 47 of the FW Act unless it is otherwise declared by statute to not apply.
[115] Mr Caruana also suggested that he was employed on a guarantee of annual earnings and section 330(1)(b) of the FW Act operated to deem him an employee covered by an award. 115 This submission is a misapplication of section 330 of the FW Act. Section 330 does not import award coverage. Rather, it requires award coverage as a precondition for the statutory guarantee of annual earnings to be given by way of undertaking. As I have concluded that Mr Caruana was not award covered at the relevant time, I do not need to further consider the operation of sections 329 and 330 of the FW Act.
[116] Mr Caruana submitted that he was award covered because never received a position description for “General Manager – Sales”. Factually this is so. After being promised but not receiving one, in December 2017 he was asked to prepare a draft but given the circumstances of Genevieve Toop leaving the business in mid-November 2017 no position description had been settled. No conclusion can be drawn from these facts relevant to the question of award coverage. As apparent from these reasons, his employment was dynamic and changed progressively and, in the final months, rapidly. Whilst not irrelevant, what was done by Mr Caruana is more relevant than title or position description. As a high performing and self-motivated manager neither a position description nor his title provide a reliable basis for drawing conclusions about the true character of the work performed. In any event, the devolution of further responsibilities after Genevieve Toop unexpectedly left the business materially altered (by adding to) the “General Manager – Sales” role.
[117] More substantively, Mr Caruana submitted that the award covered his employment because he kept doing the Sales Manager work whilst his former position was being backfilled. I have found that this was factually the case as he had made incomplete attempts to appoint a person to the role in his final months of his employment. However, the issue for determination is not simply whether sales manager duties were being performed but the context in which they were being performed. That context was that, in his final six months (and certainly from 18 November 2017) they were a subset of a more senior and broader role he was performing in the business; a role which was general managerial in description and executive management in practice. He was no longer the Sales Manager. That was no longer the principal purpose of his employment. His employment had materially altered; the sales manager duties were performed only on a holding basis until an acceptable candidate assumed the role, and only as an incident of his new general managerial role.
[118] A significant element of Mr Caruana’s evidence and submissions was that he was award covered because he did not have full authority or the final say over the broader non-sales activities which he came to perform. For example, whilst he had the right to recommend firing of staff across departments, he did not have the right to fire them. That was the Chief Executive’s responsibility. Likewise, whilst he had the right to recommend legal settlements, or recommend whole of business strategy, or whole of business performance indicators, or whole of business organisational structures, the final say-so would be the Chief Executives. 116
[119] The issue for the Commission is what Mr Caruana did. Whether an employee has a final say-so is relevant to understanding the nature of their authority and seniority, but no more. What is relevant for the purpose of determining award coverage is whether the principal purpose of the role was such that the employment could be said to be award covered. I am satisfied that the authority given to Mr Caruana to consider and recommend to the Chief Executive(s) matters of this type which concerned the business as a whole were duties that were central to his new role. They concerned whole of business management and strategy. Their performance was not consistent with simply working as a Property Sales Supervisor under the award.
[120] Mr Caruana also submitted that he was award covered because non-sales department activities had a bearing on or link to sales. For example, commercial negotiations with suppliers or marketing and media appearances or responsibility for client concierge all supported the sales department. The issue for the Commission is not whether non-sales activities supported the sales department but whether the principal purpose of his employment was such that it could be said to be award covered. In a mid-sized real estate agency it is unsurprising that most if not all activities undertaken support real estate sales. This does not mean that employees irrespective of role or seniority are award covered. The non-sales activities performed by Mr Caruana, together with the seniority of his managerial role, came to be material and substantial. Irrespective of whether they supported the sales department directly or indirectly, they do not lead to a conclusion that he was a Property Sales Supervisor under the award.
[121] Mr Caruana contends that he was award covered because the Commission has previously found that persons working in real estate firms fell within the Property Sales Supervisor classification. It is trite but necessary to observe that each case falls on its own facts, even when dealing with the same or similar award or award classifications. In Muscat v Chase Commercial Pty Ltd 117 it was found that an employee in charge of asset management was a “Property Management Supervisor” under classification B2.3 of the award. In Kaufman v Jones Lang LaSalle (Vic) Pty Ltd118 it was found that an employee in a senior sales role was a “Property Sales Representative” under classification B1.2 of the award.
[122] Both decisions are distinguishable from the present matter. In Muscat the Commission found that the two non-sales activities performed by Ms Muscat were incidental to the principal purpose of her employment. One of those roles (trust account responsibility) was only performed for a short time four years prior to dismissal and had not been sought out by the employee. 119 In Kaufman the employee had no managerial responsibility, no direct reports and simply sold real estate.120 Mr Caruana, in contrast, did not sell real estate. He had direct reports and substantial management responsibility for sales and non-sales activities. He performed substantial non-sales activities some of which he sought out and others which he was asked to perform.
[123] Finally, Mr Caruana submits that it would be unfair to conclude that he was award covered on account of the expanded duties he performed in his last six months of his employment, given his high level of commitment to advance the business, the intimations which had been made to him about future career advancement and the heavy work-load he undertook in the weeks following Genevieve Toop exiting the business. 121 His effort was acknowledged in text messages from the Chief Executive.122
[124] These are understandable reactions that explain, in part, why this litigation is before the Commission. However, they are not relevant to the legal question of whether Mr Caruana was award covered. I have found that these expanded duties were neither incidental nor accidental. His position in the business, as well as his remuneration, changed both contractually and in practice over the final six months of employment. These were changes made and implemented with the knowledge of both sides and with the agreement of both sides, albeit the full quantum of the extra duties came on Mr Caruana more rapidly than expected when Genevieve Toop exited the business. They were not temporary. Mr Caruana’s sense of injustice is genuinely felt but cannot establish a jurisdictional basis if one does not otherwise exist.
[125] For these reasons, I am not satisfied that Mr Caruana has discharged the onus to establish that he was covered by the Real Estate Award 2010 at the date of his dismissal. I have concluded that he was not so covered.
[126] As Mr Caruana was not a person covered by a modern award (or an enterprise agreement) at the relevant time, and as his rate of earnings exceeded the high income threshold, he was not a person protected from unfair dismissal. He is unable to maintain his application before the Commission. The application is dismissed. An order to this effect is issued in conjunction with the publication of this decision.
DEPUTY PRESIDENT
Appearances:
R. Caruana, on his own behalf
A. Clare, with permission, for the Respondent
Hearing details:
2018.
Adelaide.
23, 26, 27 April and 1 May.
Printed by authority of the Commonwealth Government Printer
<PR607569>
1 Directions, Commissioner Platt, 26 March 2018
2 Further Directions, Deputy President Anderson, 5 April 2018
3 Decision [2018] FWC 2231 Anderson DP
4 Witness Statement of Robert Caruana (A1); Applicant’s Outline of Submission and Further Evidence (A2); Applicant’s Further Directions Materials (A3); Applicant’s Further Directions Materials (A4); Applicant’s Further Directions Materials (A5); Applicant’s Outline of Arguments – Merits (A7); Applicant’s Outline of Arguments – Objections (A8); Applicant’s Timeline (A9); Witness Statement of Genevieve Toop (R2); Witness Statement of Suzannah Toop (R4); Witness Statement No. 2 of Suzannah Toop (R6); Respondent’s Outline of Submissions in Relation to Jurisdictional Objection
5 PN 1097
6 PN 653
7 Pearse v Viva Energy Refining Pty Ltd [2017] FWCFB 4701 at [14]. See also section 591 of the FW Act and King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, 17 March 2000) Print S4213 at [61] - [62]; Enterprise Flexibility Agreement Test Case (Print M0464) at page 13; Pochi v Minister for Immigration and Ethnic Affairs (1979) 36 FLR 482 at 509
8 Letter 1 November 2017 countersigned 8 November 2017; R2 Attachment 6; A3 Attachment 3
9 Respondent’s Outline of Submissions in Relation to Jurisdictional Objection paragraph 9
10 PN 684
11 Fair Work Regulations 2009 Regulation 3.05(6)
12 Employment Agreement R2 Attachment 1
13 Letter 1 November 2017 countersigned 8 November 2017; R2 Attachment 4; A3 Attachment 1
14 PN 2173 - 2177
15 PN 684
16 A3 Attachment 4
17 Zappia v Universal Music Australia Pty Ltd [2012] FWAFB 6108 at [9]; Darling v Bechtel Pty Ltd [2015] FWC 1242 at [7]; Lindsay v H T Bawden (NSW) Pty Ltd [2018] FWC 1693 at [31]
18 From 1 July 2017, calculated according to Fair Work Regulations 2009 Regulation 2.13
19 PN 2130
20 Employment Agreement R2 Attachment 1
21 R7; A3 Attachment 5
22 Suzannah Toop audio transcript 27 April 2018 2.11pm; 2.15pm; 2.21pm
23 Byrne and Frew v Australian Airlines (1995) 131 ALR 422
24 Kucks v CSR Limited (1996) 66 IR 182 at 184
25 Belan v National Union of Workers (NSW Branch) [2018] FWCFB 94 at [39]
26 Bonnar v Rail Industry Safety and Standards Board [2018] FWC 2151 at [53]
27 Section 577 FW Act; Piyush Jain v Infosys Limited T/A Infosys Technologies Limited [2014] FWCFB 5595 at [75]
28 Section 381(1)(b)(i) FW Act
29 Section 590 FW Act
30 Piyush Jain v Infosys Limited T/A Infosys Technologies Limited [2014] FWCFB 5595 at [35]: “the question whether and the extent to which the legal concept of onus arises in relation to matters considered by a statutory tribunal such as the Commission is a difficult one”
31 Piyush Jain v Infosys Limited T/A Infosys Technologies Limited [2014] FWCFB 5595 at [37]
32 Muscat v CHEP Pallecon Solutions [2016] FWC 7081 at [55]: “the Applicant bears the onus of establishing jurisdiction for the application he seeks to prosecute”
33 Potts v Tolsat Pty Ltd (2002) PR920810 at [9]
34 Real Estate Award 2010 PR5988110
35 [2017] FWCFB 3543; [2018] FWCFB 354; [2018] FWCFB 1532; [2018] FWCFB 1882
36 PR601130, 16 March 2018; PR601638, 29 March 2018
37 As noted by a Full Bench of the Commission in Brand v APIR Systems Limited PR938031, 16 September 2003: “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.”
38 Brand v APIR Systems Limited PR938031, 16 September 2003; Carpenter v Corona Manufacturing Pty Ltd PR925731, 17 December 2002; Kaufman v Jones Lang LaSalle (Vic) Pty Ltd [2017] FWC 2623; Muscat v Chase Commercial Pty Ltd [2018] FWC 1398
39 Kaufman v Jones Lang LaSalle (Vic) Pty Ltd [2017] FWC 2623 at [6]
40 PR925731 at [9], 17 December 2002
41 [2017] FWC 2623 at [45]
42 R2 Attachment 1; executed 12 October 2016 and 13 October 2016
43 PN 2102
44 PN 2526 - 2545
45 A1 Attachment A
46 R2 Attachment 3
47 A3 pages 3 – 5; R2 paragraphs 20 - 21
48 A9 page 1
49 R2 paragraph 28
50 PN 2278
51 R2 Attachment 5; PN 833 – 838; PN 2109 - 2110
52 PN 2110; PN 2313
53 PN 2243; PN 2269; PN 2274; PN 2286; PN 2810
54 A1 Attachment F; R2 Attachment 6
55 A1 Attachment F; R2 Attachment 6
56 A2 Mr Caruana’s Timeline page 2
57 R2 Attachment 7
58 A1 page 7
59 PN 1710; PN 1948
60 A1 Attachment M; R7
61 PN 2128
62 PN 2281
63 PN 1874; PN 1913; PN 1983
64 PN 2217; PN 2255; PN2274; PN 2808; PN 2889
65 PN 1083; PN 1278; PN 1285 - 1290
66 PN 1905
67 PN 3030
68 PN 1470 - 1472
69 PN 1393 – 1399; PN 3022
70 PN 2505; PN 2555; PN 2783 – 2038; PN 3197
71 PN 622
72 PN 1116 - 1119; PN 2611; PN 2511; PN 2861
73 PN 2217 - 2223
74 PN 658 – 659; PN665
75 PN 2861 – 2865; PN 2874
76 PN 1083; PN 1123; PN 2247 - 2248
77 PN 1287 - 1290
78 PN 1869
79 PN 2041; PN 2485 – 2486; 24888 - 2489
80 PN 2555
81 PN 1383
82 PN 1453; PN 1869
83 PN 989 - 998; PN 1083; PN 1290; PN 1474
84 A2 pages 9 - 10
85 PN 1209; PN 2290
86 PN 1765
87 PN 1319; PN 2071; PN 2297
88 PN 1381; PN 2238
89 A9 page 3; PN 1888 - 1898
90 R3; PN 2425 – 2441; PN 1392; PN 2425 - 2432
91 PN 2561 - 2567
92 PN 3061 - 3074
93 PN 1169; PN 2497
94 PN 2993
95 PN 1477 - 1804
96 PN 2907
97 PN 1400 - 1409
98 PN 1583 – 1600; PN 1626
99 PN 1426 – 1427; PN 3220
100 PN 1443; PN 3212
101 PN 1518; PN 1540; PN 1565
102 PN 2836; PN 2894; PN 3279
103 PN 3179
104 PN 1541
105 B1.3(a)(i)
106 B1.3(a)(iv)
107 A8 page 3
108 A5 page 6
109 PN 732 - 733
110 PN 733
111 A1 Attachment M; R7; A3 Attachment 4
112 Suzannah Toop audio transcript 27 April 2018 2.15pm
113 R6 paragraphs 2 and 3
114 PN 65 - 71
115 A4 page 8
116 PN 2507
119 [2018] FWC 1398 at [77]
120 [2017] FWC 2623 at [43] and [45]
121 PN 1869; PN 1898; PN 2128
122 A4 Attachment 4