s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - high income threshold - jurisdictional objection upheld - application dismissed.

• [1] On 9 September 2022, Mr Samuel Kerrins (Applicant), made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (FW Act) for an order granting a remedy, alleging that he has been unfairly dismissed from his employment with Trigon Trading Pty Ltd (Respondent).

• [2] At the time of his dismissal the Applicant was:

a) employed as the Respondent's Chief Operating Officer (COO); and

b) earning $179,185.52 plus superannuation.

• [3] On 7 October 2022, the Respondent filed its response to the application. It raised three jurisdictional objections; genuine redundancy, high-income threshold (HIT Issue) and compliance with the small business fair dismissal code.

• [4] For reasons that will become apparent, the matter can be resolved by deciding the HIT Issue and dismissing the matter on that basis.

• [5] The matter has a long history in the Commission before being allocated to me,

a) On 9 September 2022, the Applicant filed the current application with the Commission.

b) On 18 November 2022, the matter was allocated to the Chambers of Commissioner Spencer.

c) On 22 November 2022, Commissioner Spencer listed the matter for a mention/directions hearing on 2 December 2022 and directed the Respondent to file submissions on the jurisdictional objections.

• d) On 28 November 2022, the Respondent provided the requested submissions.[1]

e) Between 2 December 2022 and 13 December 2022, various offers of settlement were exchanged between the parties but they were ultimately unsuccessful.

f) On 14 December 2022, the Chambers of Commissioner Spencer advised the parties that the matter would be re-allocated to another Member of the Commission as it is no longer possible for the Commissioner to determine the jurisdictional objections in a reasonable timeframe.

g) On 21 December 2022, the matter was re-allocated to Deputy President Lake.

h) On 17 January 2023, the Respondent sought that the proceedings be stayed due to it going into voluntary administration.

1. On 30 January 2023, the matter was referred back to the Regional Coordinator, Vice President Catanzariti, and the matter stayed.

j) On 15 December 2023, the Applicant confirmed that he wishes to continue with his application.

k) On 2 January 2024, the matter was allocated to my Chambers.

1. On 11 January 2024, I conducted a mention/directions hearing and issued directions listing the matter for a jurisdictional objection hearing to determine the HIT Issue.

• [6] The jurisdictional objection hearing was conducted by video using Microsoft Teams on 6 February 2024.

• [7] The Respondent sought to be legally represented relying upon sub-sections 596(2)(a) and (b) of the FW Act.[2] In relation to the:

a) first limb, it was posited that the matter is complex due to the technical nature of the jurisdictional objection and the contested factual background, and thus legal representation would assist in the efficient conduct of the matter.

b) second limb, it was asserted that it would be unfair to allow the Respondent to represent itself in circumstances where appointed administrators do not have experience in HR or Commission proceedings.

• [8] The Applicant did not object to permission being granted.[3] Notwithstanding the fact that the Respondent's representative missed both deadlines in the directions, I was satisfied that the matter was invested with some complexity and that the administrators could not properly represent itself. Therefore, I decided to grant permission pursuant to s.596 of the FW Act.

a) the Applicant represented himself, and

b) the Respondent was represented by Ms Georgie Chard of Hamilton Locke.

• [10] In advance of the hearing, the parties filed materials which were compiled in a Digital Tribunal Book (DTB). For completeness I set out below the documents relied upon by the parties. I have had regard to all these materials in coming to this decision:

The Respondent's outline of submissions filed in 2022

• [11] An order for reinstatement or compensation may only be issued where the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of the dismissal.

• [12] Section 382 of the FW Act provides as follows:

'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

(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.'

a) the Applicant earned above the high-income threshold ($162,000.00 at the time of dismissal),

b) the Applicant was not covered by an enterprise agreement nor a modern award; and consequently,

c) the application ought to be dismissed for want of jurisdiction.

• [14] The Applicant acknowledged that his remuneration was $198,000.00 inclusive of superannuation. However, he contended that the high-income threshold did not apply to him because:

a) there was no guarantee of annual earnings as stipulated by s.329 of the FW Act; and

• b) he was covered by the Banking, Finance and Insurance Award 2020 (BF&I Award).[4]

• [15] The first contention is a non-issue. Section 329 of the FW Act relates to high-income employees under Part 2-9 of the FW Act. It is only relevant where an employee is covered by a Modern Award and the employer has given a guarantee of annual earnings with the consequence that the relevant award will not apply to the employee. Part 2-9 of the FW Act has no connection with Chapter 3 of the FW Act which relates to protection from unfair dismissal and encapsulates s.382.

• [16] In relation to the second contention, it is agreed between the parties that:

a) the Applicant was not covered by an enterprise agreement, but

b) the business was covered by the BF&I Award.

• [17] Therefore, the only controversy centers on whether the Applicant is to be classified as Level 6 in the BF&I Award, which states as follows:

A Level 6 position typically performs a middle managerial role primarily to control the conduct of a part of the employer's business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level provided that this level 6 classification does not cover classes of employees:

(a) who, because of the nature or seniority of their role, were not traditionally covered at all by awards; or

(b) who perform work that is not of a similar nature to work that has previously been regulated at all by awards.

Indicative job list - branch manager, human resources or fraudulent relations manager, financial planner, information technology specialist, relationship manager, senior analyst, subject matter manager, divisional manager.'

• [18] The parties also agree that I must apply the principal purpose test in determining award coverage. The test is well established,[5]

'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...'

• [19] There is a body of research that casts doubt on the ability of a finder of fact to make accurate credibility findings based on the demeanour of witnesses. Notwithstanding, I should say something about the witnesses who appeared before me.

• [20] The Respondent called Matteo Salerno to give evidence. Mr Salerno is the Co-Founder and Chief Executive Officer (CEO) of the Respondent. He gave evidence about the nature of the Respondent's business (it is a market maker and liquidity provider trading in cryptocurrency). He also gave evidence about the history of the Applicant's employment. Mr Salerno was a responsive witness. He made concessions when it was appropriate to do so. Mr Salerno struck me as a witness of truth.

• [21] The Applicant gave evidence on his own behalf. He has a lot to lose if he is not covered by the BF&I Award. Consequently, it is clear that he has tailored his evidence to conveniently fit into Level 6. At times the Applicant was unresponsive. When he was responsive to questions, at times, it took him a long time to make concessions that were obvious, especially in relation to the Telegraph messages (see below). However, just because I disbelieve the Applicant about the Telegram messages does not mean that I must automatically believe Mr Salerno. Nevertheless, overall, the Applicant was an unimpressive witness. He was, more often than not, self-serving in his evidence.

• [22] The only controversy in this matter is whether the Applicant was covered by classification level 6 of the BF&I Award at the time of his dismissal. According to the Applicant's contention, the answer to this question is to be yes. He contends that the promotions were merely as a gesture of goodwill with no expectations of providing something in return. The Respondent rejected the contention and noted that it was not its business model to pay employees more for simply performing the same role. It is fair to assume that the Respondent would act rationally in its business dealings. It would be uncommon for an employer to pay an employee $50,000 more in exchange for nothing. In this sense the Applicant's proposition was hard to believe.

• [23] In the Kaufman v Jones Lang LaSalle (Vic) Pty Ltd T/A JLL [2017] FWC 2623 (Kaufman) matter relied on by the Applicant, that employee had been with the same employer for some 27 years and was found to be 'a high performing employee principally responsible for attracting and executing high-value real estate transactions'.[6] However, the Applicant's employment tenure with the Respondent was merely in its infancy in comparison to the Kaufman matter. The Applicant is to be commended for securing the promotions, but any suggestion that he did so without any increase or change to his duties is nonsense. The evidence does not support the same.

• [24] During cross examination of the Applicant, the duties of the COO were put to him, and the Applicant responded as follows (adopting the same paragraph structure as below):

• a) The Applicant agreed that he oversaw and managed some but not all of the Respondent's operations;[7]
• a. During the cross examination of Mr Salerno, the Applicant conceded that he was responsible for monitoring an element of the proprietary trading of the Respondent which constituted a large part of its operations.[8]
• b) The Applicant agreed that he was responsible for overseeing trading functions with clients, as well as planning and managing the day-to-day operations, including the movement of between $20-40 million dollars in transactions daily;[9]
• c) The Applicant agreed that he was responsible for reviewing and training some staff on policies and procedure. He also agreed that he was responsible for implementing and reviewing client data, as well as ongoing review of trading and settlement procedures;[10]
• d) The Applicant agreed that he was responsible for planning staff rosters, both nationally and internationally;[11]
• a. During the cross examination of Mr Salerno, the Applicant conceded that he was also responsible for coordinating the onboarding of staff with the HR department.[12]

• f) The Applicant agreed that he would look at budget forecasts but said that he was not responsible for it;[13]
• g) The Applicant agreed that he was responsible for reporting to CEO on team results, including human resources tasks and conducting performance reviews for a few staff members. He also agreed that as part of his Finance Manager role he was required to build relationships with broader community, interviewing, completing reference checks and portfolio candidate for the CEO's approval;[14] and
• h) The Applicant agreed that he was responsible for improving trading processes.[15]

• [25] Further, the Respondent submitted two screenshots of Telegram messages exchanged between the Applicant and the CEO, that it said supported the contention that the COO position was different to previous positions held by the Applicant and, clearly meant he was beyond the coverage of the BF&I Award.

• [26] The manner in which the Applicant responded to the evidence was unimpressive. For instance,

• a) in relation to the identity of the Telegram messages (any excuse about the longstanding nature of the matter is not acceptable. The parties have had ample opportunity to review and consider the material during the preparation of their submissions):[16]

'PN62 - Ms Chard: Can you see these messages, these are correspondence between yourself and Matteo Salerno, is that correct?

Mr Kerrins: These were submitted by Matteo. I believe they would be. Yes, I haven't seen these messages for two years, but yes, I believe they are between me and Matteo.

PN94 - The Commissioner: Okay. Well, Mr Kerrins, do you accept that the messages on the left-hand side, on page 6 of MS1, page 73 of the digital tribunal book, are you?

Mr Kerrins: Well, it says, 'deleted account.' I can't honestly say that it's me, but I can try and answer some of the questions in there if Georgie has some.

PN95 - Ms Chard: It might assist, Mr Kerrins, if you read the message that was sent at 11.31 where it starts, 'Wages now per month?'

PN96 - Ms Chard: Do you accept that you prepared that and sent it to Matteo?

Mr Kerrins: No, I could've potentially asked one of the accountants for those figures. I don't know. This is two figures in a finance business a year and a half ago.

PN97 - Ms Chard: Yes, but do you accept that you sent - in the context of this Telegram messaging, do you accept that you sent this to Matteo Salerno?

Mr Kerrins: Well, I can't see my name on it, so no. It says, 'deleted account.' I can't honestly say that was me. It says, 'deleted account.'

PN99 - The Commissioner: Well, okay - well let's take it slowly then. Did you want a graduate to be able to take trades, initiate and assist Val onboarding?

PN100 - The Commissioner: Did you - - -? (Indistinct) - - -

PN101 - - - - (indistinct) that the approval would be a replica of Val?

PN102 - The Commissioner: And that there will be a reducing in Emily and Amy's hours and expense?

PN103 - The Commissioner: And that Amy and Emily are currently $200K a year, 10 days work. I mean now that you read through this carefully - I want you do that - do you accept that more likely than not this is you writing to Matteo?

• b) in relation to the proprietary trading of the Respondent,[17]

'PN259 - The Commissioner: Mr Kerrins, do you accept you did that in relation to proprietary trading?

PN261 - The Commissioner: Well, why haven't you told me that before? You told me you had nothing to do with it, and now you're conceding you did have something to do with it.

PN262 - Mr Kerrins: What Matteo just spoke about was referring to client trading. My point is I have nothing to do with Matteo's proprietary trading. So I was not managing - - -

PN263 - The Commissioner: Well, he just explained that you did.

PN265 - The Commissioner: That you monitored risk in relation to proprietary trading. Did you do that or not?

PN266 - Mr Kerrins: Yes, I would view the risk of Matteo's trades at times. I did not manage it.

PN267 - The Commissioner: That's sounding pretty high level to me...'

• c) in relation to the onboarding of staff,[18]

'PN319 - Mr Kerrins: No, not at all. HR would've done the first part of his statement, and secondly, I didn't even have any authority to arrange any logins to the places. That would've been Emily and Amy. I may have said at the moment we're doing a lot of trading at these places, but it's not possible for me to have done that.

Mr Salerno: Do you agree? --- It's not possible for you to have done, for example, putting his details into Macquarie Online, but - Macquarie Online was a trading system that we used, and all our traders would have to have logins to there - but it was your responsibility, Sam, to ensure that whatever he needed, or our staff, whatever they needed for their job, to carry out their job, you were responsible for it. Whether you'd have to task Amy or Emily to do the job, it had to be done, but that was your responsibility.

PN320 - Mr Kerrins: I do disagree with parts of that.

PN322 - Mr Kerrins: I don't believe that when we hired someone, I was responsible for giving the instruction to HR to do a police check, or anything in regards to a new person starting with us.

PN324 - The Commissioner: '...the letter of offer to Jayden, did you organise that?

PN325 - Mr Kerrins: Potentially. I believe I would've asked Kate, the HR lady, to do it? --- Kate's an independent contractor. She's not an employee. So I wouldn't go to Kate and ask her to do that. I'd say, Sam, we want Jayden - you brought forward Jayden as a trader to start with us, and so you went through the whole procedure to get him a letter of offer - you and I had a discussion with him and then sent through a letter of offer, and then discussed pay with him, and then got him onboarded with all of our systems. I think you'd agree that that's what you had to do.

PN326 - Kate - once me and you agreed that we wanted Jayden to work for us, it was handed over to Kate, who again, my understanding was she worked in HR the entire time I was at Trigon. So are you saying Kate didn't do the HR part?

Mr Salerno: Kate was an independent contractor, Sam. She did roles that required - ad hoc roles for us. She wasn't employed full time as a HR manager.

PN327 - Mr Kerrins: So would she perform the HR function if we wanted to hire someone?

Mr Salerno: You've got be a bit clearer on that, because she would draft, under your responsibility, the letter of offer, and then you would send it out to the potential staff.

PN328 - Mr Kerrins: I don't believe that's correct. I believe Kate would send those out?

Mr Salerno: Well, you just said it was when you sent it out to Jayden.

PN329 - Mr Kerrins: I don't remember who actually sent it out, but I believe it actually would've been sent out from Kate. For example, when I started I - - -

PN332 - The Commissioner: Okay? I accept that a functionary in the HR likely sent out the letter. What's being put against you is that you coordinated it. You'd call the HR person: hey, organise this, do this, do that. The fact that the functionary actually sends it out doesn't mean that you're not responsible for it.

PN334 - The Commissioner: We don't expect a chief operating officer to send out every email. I do expect them to make sure it's done, and that's what's being put against you.

• [27] Having considered all the evidence, I prefer the Respondent's characterisation of the COO role and its duties. The corroborative evidence of the Telegram messages lends support to preferring the evidence of Mr Salerno over that of the Applicant. So too the general proposition that a corporate entity, like the Respondent, would, through its decision makers, act rationally and in the best interests of its shareholders.

• [28] It may be that not all aspects of the role were up and running by the time that the employment ended. However, that is not uncommon with a new role. What is clear is that the Applicant was no longer in the position of Operations and Risk and was no longer in the position of Finance Manager. He had clearly been promoted to the position of the COO and, in consideration of the promotion, was being paid nearly $50,000 more. The Respondent is not a charity. It rightfully expected something in return for the promotion, title change and increase in remuneration.

• [29] Many matters were either agreed between the parties or not substantially contested. Where there was contested evidence, I have assessed the competing contentions (above) and made the following findings of fact based on the evidence considered as a whole:

• a) On 18 January 2021, the Applicant commenced employment in the position of 'Operations & Risk'.[19] The employment contract explicitly stipulated that the Applicant is being employed at classification level 6 of the BF&I Award.[20] The position offered a salary of $87,600.00 with 9.5% superannuation contributions.[21] The contract stipulated,[22]

'The duties of this role are described as including (but not limited to):

• Risk Manage the balance sheet
• Daily/Weekly P&L report on client trades / position trades
• Work with back office team to ensure timely settlements of clients and counterparties - (digital and fiat)
• Maintain daily and monthly P&L and risk accounting and update daily market settles, including for options and other derivative products (preferred).
• Collaborate with the technology team to continuously improve and automate our risk reporting and accounting systems
• Participate in the development and maintenance of the documentation around key operational processes and procedures.
• Perform ad-hoc operational tasks as needed to support the global trading function.
• Ensure the day-to-day accuracy and reconciliation of trade entries, including investigating and resolution of any discrepancies.
• Assist the onboarding team to progress clients through the onboarding process
• Understand the AML/KYC requirements under AUSTRAC
• Manning the desk and chat sites
• Receipting/allocating client funds/asset into client accounts/addresses
• Communicating daily balance and trades to clients'

• b) On 19 July 2021, the Applicant was promoted to the position of 'Finance Manager' with a salary of $143,000.00 inclusive of superannuation.[23] A copy of the contract or the letter of offer was not provided to the Commission.

1. At some time in April 2022 there were discussions between the Applicant and Mr Salerno about a promotion. The Applicant wrote to Mr Salerno about the COO role in the following terms:

'Wages now per month = $153,343 v $161,301 expected with new hires.

• January 178k v New expense 161k (with finance manager, approver & graduate)
• I want graduate to be able to take trades, initiate & assist Val onboarding etc (Workload is there).
• Approver will be a replica of Val, reducing Emily / Amy hours & expense
• Amy/Emily currently 200k a year (10 days work)
• Grad & Approver = 130k.
• 70k remaining for Emily/Amy (3.5 days week total)

Graduate will indirectly free me up in the am 5-8am, and Brad for periods of his shift.

It will move me off doing gritty work in chats etc & managing a team effectively.

7. Business Partnering (Departments talking to each other)

• d) On 25 April 2022, the Applicant was further promoted to the position of 'Chief Operating Officer' (COO) with a remuneration of $198,000.00 inclusive of superannuation.[24] A copy of the contract or the letter of offer was not provided to the Commission.

• e) On 29 June 2022 the Applicant wrote,[25]

• be a first point of contact to CEO for all relevant matters

• partnerships with Finance, IT & Compliance function to ensure Trigon operates to the highest standard

• strong understanding of financial position that will allow for business decision making

• finding solutions & implementing processes to ensure CEO/board directions are implemented correctly

• day to day management of staff, including leave, pay reviews, performance etc

• rostering - ensuring our roster is continuing to remain relevant and efficient regarding the clients we are servicing and time zones we are operating in

• overall management to ensure business continues with staffing, resignation, holidays

• trading of Trigon Capital Funds at the relevant times required to ensure we hold correct asset in correct location

• ensuring all new market makers and exchanges are implemented into our current operational processes seamlessly

• overall management of Market Makers/Exchanges - ensuring settlements and processes are correctly implemented to ensure staff can execute efficiently each day

• hold conversation with prospective clients, providing opportunities and solutions for them to ensure we win business'

f) On 28 August 2022, the Applicant was informed that his position as COO would be made redundant.

g) On 1 September 2022 the dismissal took effect.

• [30] In support of its jurisdictional objection, the Respondent submitted that, as the COO, the Applicant had ascended to the position of a senior management employee; consequently he was no longer covered by the BF&I Award. The Respondent posited that as the COO, the Applicant was responsible for,[26]

'(a) overseeing and managing the Respondent's Operation and Risk, Settlement and Finance and Accounting Teams;

(b) planning and managing the day-to-day operations including movement of between $20-40 million dollars in transactions daily, autonomously and accurately. Managing high pressure, fast paced and time critical event requests, whilst utilizing expert industry knowledge to move funds to support the Respondent's trading activities;

(c) reviewing and updating the Respondent's standard operating procedures to ensure standard trading terms are met for clients. This included implementing contingency plans where external banking partners failed to transact funds in time. Reviewing and training staff on policies and procedures in an ever changing and volatile cryptocurrency and foreign exchange environment. Implementation and ongoing review of client data input procedures, and implementation and ongoing review of trading and settlement procedures;

(d) maintaining operational quality controls and managing risk. This included planning appropriate staff rosters both nationally and internationally to ensure trading operated consistently 24/7. Ensuring strict onboarding and offboarding policies and procedures are met for all employees which complied with cyber and privacy protection laws across multiple jurisdictions;

(e) assessing the Respondent's business strategies and their operational impact. This included ongoing assessment of macro-environments and media releases that may adversely affect client trading behaviours. Such disruptors required ongoing evaluation to support decisions regarding increasing or decreasing staff levels, amending team policy and procedures, reviewing legislative and compliance changes and ensuring staff were adequately trained and supervised effectively;

(f) devising methods for meeting the Respondent's benchmarks and goals. The Applicant was required to implement accurate budget forecasts to ensure daily operational costs were satisfied, budgets revised regularly to account for operational changes and market fluctuations;

(g) reporting to the CEO on key performance indicators. The Applicant was required to report on team results, human resource tasks including hosting of performance reviews, additional training and where required, termination of employment. The Applicant was

responsible for establishing and maintaining relationships with specialised recruiters to build a pipeline of potential candidates. The Applicant was required to build relationships with the broader community, interview, complete reference checks autonomously and put forth the final candidate for my approval;

(h) reducing operational costs and improving processes to sustain an organisation that traded 24/7.'

• [31] The Respondent submitted that the Applicant managed approximately 10 employees and reported directly to the CEO and that he was considered second in charge. It relied on the case of George v ParkTrent Properties Group Pty Ltd [2013] FWC 7447 (George), where Commissioner Macdonald found in considering the same BF&I Award,

'[73] The top grade in the classification structure is Level 6 and applies to persons performing a middle managerial role and primarily controlling the conduct of a part of the employer's business. An indicative job list going to control of the conduct of a part of the employer's business includes - "branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager."

[74] The top grade level demonstrates that the indicative job list is about employees who have control of part of the business. The job description of the Applicant confirmed that she oversees these managers in control of part of the business. Thus, it says under "Accountabilities" that she has a number of "Key Result Areas" and one of which is "Cost Control". The first entry against "Cost Control" says:

"constantly assessing business units and managers for effective cost management."

That entry means that the Applicant's work involves assessing the whole business - that is, assessing all of the parts which parts are the indicative tasks listed for the top grade of level 6.

[75] Accordingly, I find that even if the Employer was engaged in business, whereby some if its employees' work was covered by the Banking etc Award, that said Award did not cover the senior management role of the Applicant. Her role was beyond middle management.'

• [32] The Applicant in turn submitted that his duties did not change when he was promoted to the Finance Manager role nor to the COO role. Rather, he contended, his duties remained the same as those in his original role as Operations & Risk (a position that was covered by the BF&I Award).

• [33] In justifying his contention, the Applicant relied on the case of Kaufman, where Deputy President Gostencnik found in considering a different modern award,[27]

'...But where the duties or principal purpose for which an employee is engaged in a role correspond with the coverage provisions of a relevant award, high levels of remuneration paid to such an employee are indicative only of an employer's view that the employee is valuable to the business and a reflection of the success with which the employee has executed the principal purpose for which he or she was engaged. In this regard, high levels of remuneration would say nothing about whether such a person is Award covered.'

• [34] Having regard to the principles in Kaufman, the Applicant submitted that the titles and salary levels that applied to him should not solely be relied upon by the Commission in determining award coverage. I agree with the Applicant. The titles given and salary paid to an employee only tell part of the story. Neither is determinative of award coverage.

• [35] An exhaustive search of the Commission's website has revealed six decided matters where the BF&I Award coverage has been discussed and determined.[28] I will briefly outline each in chronological order.

• [36] On 13 April 2012, Deputy President Hamilton found that a client adviser was covered by the BF&I Award,[29]

'[45] However, the 'Indicative job list' in each classification is not a complete list of all jobs within the classification. It indicates the type of jobs that fall within that level. It is not fatal that the indicative list does not include the terminology of 'Client Adviser'. It is not enough for different terminology to be used to describe a job together with some changes to duties for a Level 5 or 6 job to be changed into a nonaward job and employee. It would be a strange result if that were sufficient. A Client Adviser at UBS is clearly a similar type of job to these other jobs. There is some degree of similarity or even overlap between for example financial planners and Client Advisers. Both could be said to be broadly financial or investment advisers or similar terminology. It may be that a financial planner may be said to require additional qualifications. A sensible non-technical approach to such classification levels has to be taken.

[46] On the evidence and submissions before me the position of Client Adviser at UBS performed by Mr. Marshall is a 'specialised role ... requiring formal qualifications and/or specialised vocational training' in Level 5, or a managerial role within Level 6, in which he was responsible for 'conduct of the part of the business', namely that part constituted by his clients for whom he was the Client Adviser. The modern award applied to Mr. Marshall's position.'

• [37] On 28 June 2012, Commissioner Lee found a manager portfolio and funds management was not covered by the BF&I Award,[30]

'[39] On all of the evidence the Applicant held a very senior, specialist and advisory role of enormous responsibility for many millions of dollars' in funds and how they were invested...

...[made] money autonomously. He did this by making decisions about investing substantial quantities of money, buying and selling shares on a daily basis. As such the Applicant was operating at a highly professional level and operating at a very high level in the organization.

[41] He directly reported to the Managing Director. He met with clients at any time and at any place. It was uncontested that when the Managing Director was overseas the applicant reported to no one, and on his own admission he was the second most important person in the business. This was put as the principal purpose of the role and cannot be overlooked in a consideration as to whether or not the modern award applies. The principal purpose in my view does not at all find a place within the classification structure of the modern award, particularly when one considers the history of the development of that award that I have alluded to.'

• [38] On 24 May 2013, Commissioner Gregory found an administration manager was not covered by the BF&I Award,[31]

'[32] The Applicant in the present matter was clearly in a senior role. The Managing Director's evidence was that he was originally employed in the position of "Manager - Group Superannuation Services", but this was changed to "Administration Manager" to better reflect his role in having, in the Applicant's own words, principal responsibility for managing around $100 million in funds under administration and held on behalf of approximately 17,000 client investors or contributors to the fund. The seniority and significance of his role as an Administration Manager can be contrasted with other similarly titled roles, where the administration task is of a much lesser order of magnitude. The evidence indicates the Applicant's role clearly involved important compliance, governance and management responsibilities in regard to the Fund, as well as liaison and management of the relationship with the consultant fund managers.

[33] The Applicant reported to the Managing Director and was a member of the Executive Board. He was a member of the Investment Committee. Whilst there was some dispute about who else was involved in this Committee it clearly involved senior members of the organisation, including the Managing Director, and exercised important strategic, compliance and senior management functions within the organisation. The Applicant sought to downplay his involvement as a participant at this level by indicating, on the one hand, around 21 per cent of the total number of employees in the organisation were also involved, and although he was involved he had no control as a participant. These submissions were directed, in particular, at the management style of the Managing Director, Mr Westoby. The Applicant stated Mr Westoby "had the final say on all decisions" and "called the shots. So I had no control."

[34] However, I am satisfied the relatively small size of the organisation in terms of employee numbers, and the nature of the Managing Director's management style, do not of themselves change the fact the principal purpose of the Applicant's role was employment in a senior role at a senior level within the organisation.

[35] The Applicant's job description was also tendered by the Respondent. The "Key Responsibilities" listed in that document were set out at an earlier point in this decision and are not restated. However, they involve compliance and continuous improvement obligations in a relatively complex regulatory environment. They refer to reporting and information sharing obligations at a Group Department Manager level and the provision of policy advice on strategies for the short, medium and long-term management of the Department.

[36] The Applicant's submissions also made reference to the Australian Banking and Finance Industries Remuneration Report published by a remuneration consulting firm and sought to link the Career Level 6 "Divisional Manager - Other" position description in the Report with the Level 6 classification in the Award. However, I am not satisfied the reference in each case to Level 6 and to a Divisional Manager position means there is therefore a link or relationship that bears on the determination of this matter. Indeed, the description of Divisional Manager in the Report, being someone responsible for "Managing and ensuring the profitability of a division or major operating unit and profit centre" and "a person who reports to the Chief Executive Officer/Managing Director" with the "Alternative title: General Manager," does little to suggest that role is likely to be one encompassed at the Level 6 classification in the Award.

[37] The Applicant was also in receipt of a salary approximately three times the highest level provided for in the Award. This is not by any means determinative of itself but does add emphasis to the fact the purpose of his role was associated with the exercise of senior responsibilities within an organisation, in contrast to the middle management role encompassed within the classification description at the Level 6 classification in the Award.

[41] There is then reference to a definitive circumstance which requires a person to be classified at this level, being when the person is responsible for managing more than 10 employees. That is not relevant in the present matter. The indicative job list at the Level 6 classification includes Branch Manager and Divisional Manager, but also others in specialist roles without specific management responsibility, for example, financial planners, information technology specialists and senior analysts. These are all important roles in an organisation and involve day-to-day decision making and acceptance of responsibility for the administration and conduct of that part of the business they are involved in.

[42] However, I am also satisfied a person in a role classified at Level 6 in the Award is employed for a "principal purpose" that is distinctly different from what the Applicant was employed to do. A number of particular factors can be highlighted. An employee in a middle management Level 6 classification role is most unlikely to report directly to the CEO or Managing Director. They are almost certainly not a member of the organisation's Executive Management Board or the Investment Committee, or indeed anything with a similar level of seniority and responsibility. There is nothing in the classification description in the Award to suggest they have responsibility for important compliance issues in a complicated and changing regulatory environment. There is nothing that indicates an intent for the employee to be responsible for strategic and policy responsibilities at a corporate level. Finally, "a middle managerial role primarily to control the conduct of a part of the employer's business," as described in the Award, would not seem to anticipate or encompass responsibility for the management of around $100 million in funds under administration, held on behalf of 17,000 clients, and the associated responsibilities involved in dealing with fund managers acting as consultants to the fund.

[43] Based on the application of the principal purpose test I am satisfied that the Applicant's role and responsibilities existed at a senior management level and, in all the circumstances, cannot be said to fall within the Level 6 classification description contained in the Award. Therefore, the Applicant is not covered by a modern award and not a protected person for the purposes of s.394 of the Act. It follows that the Commission does not have jurisdiction to deal with his unfair dismissal application. The application is accordingly dismissed.'

• [39] On 8 November 2013, Commissioner McDonald in the decision of George which is relied on by the Respondent and outlined above, found that a chief financial officer was not covered by the BF&I Award.[32]

• [40] On 26 February 2016, Commissioner Cribb found a senior manager technology was not covered by the BF&I Award,[33]

'[104] Finally, the decisions in Currie and Lanteri set out various criteria for determining whether the position was a senior management role or a middle management role. When the relevant criteria are applied in this particular matter, the result is as follows:

• Mr Simonsen did not report directly to the CEO or Managing Director (as in Currie and Lanteri)
• Mr Simonsen was not a member of the company's Executive Management Board or similar as was found in Currie.
• Mr Simonsen was required to compile monthly reports in relation to his department (this was found, in Currie, to be reflective of a senior manager's position). It should be noted that the monthly reports that were provided by Mr Simonsen concerned the number of IT incidents raised by employees; the number resolved within the Service Level Agreement and the number of major incidents. In addition, the project status and estimated project end date for the IT and telephony projects were set out in a summary. It was Mr Simonsen's undisputed evidence that the report was developed by Datacom and sent to him, as instructed by the KPM, for distribution.
• Mr Simonsen's total remuneration package was $164,000 plus superannuation compared with Mr Currie's total remuneration package of $143,532 in 2013.
• The Award classification structure does not indicate an intent regarding responsibility for strategic and policy responsibilities at a corporate level. Mr Simonsen's job description required setting the overall direction for IT through strategic planning and evaluation. However, there is not a great deal of evidence that Mr Simonsen performed this activity.
• In Lanteri, the applicant was operating at a highly professional level at a very high level organisation. In this matter, it is clear that Mr Simonsen was the most senior IT specialist in the company. Up until February 2015, Mr Simonsen was the only IT specialist within the company. At that point a Technology Coordinator was recruited reporting to him.

[105] Taking all of the above considerations into account, I now turn to consider the principle purpose test. It is common ground that the primary purpose of Mr Simonsen's position was as set out in the Primary Objective of the job description. This is as follows: "Responsible for all aspects of the company's information technology and systems by managing controls and risks in the planning, implementation and evaluation of the company's IT systems and ensuring the effective, efficient and secure operation of all automated data processing systems in order to improve cost effectiveness, service quality and business development."

[106] However the parties disagreed as to the degree to which the position was a hands-on or strategic planning position. From the company's perspective, the position was a senior position, part of the senior management team, which provided technical IT expertise and advice to the KMP. On the other hand, Mr Simonsen emphasised the degree of hands-on administrative work required.

[107] It was common ground, and clear from the evidence, that Mr Simonsen performed the role of an in-house IT specialist. The question is whether the provision of that specialist knowledge/expertise and advice was within the context of a senior management position. From the evidence, it appears that the position encompass both higher-level duties together with lower level ones. An example of the higher-level duties was Mr Simonsen's role as part of the group who renegotiated the contract with Datacom. The group included the Managing Director, COO and the CFO. At the other end of the spectrum are the IT administrative duties and the redistribution of a service provider's monthly report to the Board (monthly report).

[108] It has already been found that Mr Simonsen's position, organisationally, was two levels below that of the Managing Director. Mr Simonsen's manager (the COO) was between Mr Simonsen and the Managing Director. Mr Simonsen had one direct report and was the most senior IT employee in the business. Mr Simonsen's salary was considerably above that of the Level 6 classification in the Banking Award.

[109] On fine balance, on the basis of the application of the principle purpose test, I have been persuaded that Mr Simonsen's position was a senior management position which operated at a higher level than a middle management position covered by Level 6 of the Banking Award. The principal purpose of a position is that determined principally by the employer. In this case, the principal purpose of Mr Simonsen's position was responsibility for managing controls and risks in the planning, implementation and evaluation of the company's IT systems and ensuring its effective, efficient and secure operation. In reality, the work that was performed by Mr Simonsen was in accordance with the primary role objective but it also included a substantial amount of work that was more hands-on and less strategic in its focus. In his evidence, Mr Simonsen gave a number of examples of his work at the higher (senior managerial) level. These included that, in relation to Project Aristotle, the decision to go with a particular provider had been made by the COO, Managing Director, CFO, Senior Manager Operations and himself.

[110] It was also Mr Simonsen's evidence that he had also been involved in some of the evaluation, and had assisted in the decision-making, in relation to fairly large projects. The two examples Mr Simonsen gave related to the Risk Register project and the PWC audit. Mr Simonsen explained that the reason for his involvement was that there was no other appropriate person within the company who had the specialist skill to understand the technological issues. That is a statement of fact but it does not take away from another fact that Mr Simonsen did contribute to the decision making at that senior level.

[111] It is also clear from the evidence that there was a significant component of hands-on, non-strategic duties. These included the database, telephone and computer administration and support together with being the internal contact point within the business in relation to issues with the IT system. These responsibilities were, however, delegated to the Technology Coordinator position from February 2015. The evidence shows that Mr Simonsen was also involved in providing advice on the set up of the new offices on a particular floor. This included advice in relation to the audiovisual and other requirements. It is acknowledged that this advice was provided directly to the Managing Director and the COO. However, it is my view that this particular project was more of a middle management project rather than a senior management project.'

• [41] On 24 February 2021, Commissioner Hunt found that the applicant was an independent contractor but noted in obiter that if she were to be wrong, she would have found the applicant not covered by the BF&I Award in his position as managing partner.[34]

• [42] Having regard to the balance of authorities, the facts in the present matter more conveniently fall in a way that is analogous with those cases where the BF&I Award does not apply.

• [43] Having considered the above decisions, it appears that in the overall exercise of the principal purpose test, several factors were often considered, such as,

a) the title;

b) the salary;

c) the reporting line;

d) the seniority of the role; and

e) the quantity of money responsible for.

• [44] In applying the same to the matter before me, the Applicant,

a) was the COO;

b) was on a remuneration of $198,000.00 inclusive of super;

c) conceded that he was reporting to the CEO for some but not all matters;

• d) conceded that 'in some regard' he was the second in charge in the CEO's absence;[35] and

e) conceded that he was responsible for between $20-40 million dollars in transactions daily.

• [45] However, I must still satisfy myself whether the Applicant did indeed fall beyond the coverage of the BF&I Award when applying the proper purpose test.

• [46] First, I observe that the COO role does not align with any of the jobs listed in the BF&I Award's 'Indicative job list'.

• [47] Next, when considering the concessions made by Applicant during cross-examination and other evidence in totality, I find that the Applicant was responsible for control of a portion beyond a part of the employer's business as that contemplated by the BF&I Award. This is especially in the context of a business that had some 21 employees per the Applicant's own count.[36] It seems to me that the Applicant was in some varying degrees involved in nearly every part of the Respondent's enterprise. He was not, as required by the BF&I Award, only in 'control of a part of the employer's business.'

• [48] For these reasons, I reject the contention that the Applicant received two substantive promotions, within consequent pay rises, and yet remained at Level 6 of the BF&I Award.

• [49] Overall, having outlined the evidence and the authorities', I am satisfied that the Applicant's COO role was beyond a middle managerial role. Consequently, the Applicant was not covered by the BF&I Award.

• [50] In being satisfied that the Applicant was not covered by the BF&I Award, not covered by an enterprise agreement and that he was earning above the high income threshold, the Applicant is not a protected person for the purpose of s.394 of the FW Act. Therefore, the Commission is devoid of jurisdiction to determine the Applicant's substantive application. The application is thus dismissed and I do so order [PR772842].

Ms G Chard with permission on behalf of the Respondent

[1] The Digital Tribunal Book (DTB), Exhibit 4.

[5] Mr Nicholas McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWAFB 7184, [11] citing Carpenter v Corona Manufacturing Pty Ltd, Williams SDP, Lacy SDP, Tolley C, 17 December 2002 [PR925731].

[6] Kaufman v Jones Lang LaSalle (Vic) Pty Ltd T/A JLL [2017] FWC 2623, [43].

[24] DTB, Exhibit 5, p 61; see also DTB, Exhibit 6, p 82.

[25] DTB, Exhibit 5, p 74; see also Transcript, PN18.

[28] George v ParkTrent Properties Group Pty Ltd [2013] FWC 7447; see also J Marshall v UBS AG Australia Branch T/A UBS [2012] FWA 1708; see also David Faulder v Lanteri Partner Financial Management Pty Ltd T/A Lanteri Partner Group [2012] FWA 4801; see also Robert Currie v SMA Super Pty Ltd [2013] FWC 3225; see also Gregory Simonsen v Pioneer Credit Limited [2016] FWC 901; see also Mr Christopher Grindal v CGA Accounting Pty Ltd T/A CGA Accounting [2021] FWC 1002.

[29] J Marshall v UBS AG Australia Branch T/A UBS [2012] FWA 1708, [45]-[46].

[30] David Faulder v Lanteri Partner Financial Management Pty Ltd T/A Lanteri Partner Group [2012] FWA 4801, [39]-[41].

[31] Robert Currie v SMA Super Pty Ltd [2013] FWC 3225, [32]-[43].

[32] George v ParkTrent Properties Group Pty Ltd [2013] FWC 7447, [73]-[75].

[33] Gregory Simonsen v Pioneer Credit Limited [2016] FWC 901, [104]-[111].

[34] Mr Christopher Grindal v CGA Accounting Pty Ltd T/A CGA Accounting [2021] FWC 1002, [183].

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