Award covered high paid employee? Oxymoron?

The Fair Work Commission has reaffirmed the principle that in determining whether the job performed by an employee falls within an award classification, the test to be used is the “principal purpose test”. This involves an examination of the nature of the work and the circumstances in which the employee is employed to determine the principal purpose for which the employee is employed.

In a recent decision, the Commission found that a real estate employee with the title “Director of Asset Management” was covered by the Real Estate Industry Award 2010 under the classification “Property Management Supervisor”.

It was accepted by the employer that whilst the employee performed all of the indicative tasks of a Property Management Supervisor as listed in the Award, the employee performed additional higher-level duties including management of the trust bank account and negotiating management fees with clients for leasing arrangements. The employer further suggested that the fact the employee was the only person with the title “director” within the business was an indication that the employee was employed at a level above an award classification.

The Commission was not satisfied that the title given to the employee was of any significance particularly in circumstances where the employee was given that title when she started with the agency some nine years prior, at which time she was the only employee in the leasing division of the agency. Applying the “principal purpose test”, the Commission arrived at the conclusion that the principal purpose of the employee’s employment was to lead the property management team and to increase revenue from managed properties, which, the Commission said, fell squarely within the Award classification of Property Management Supervisor.

It is therefore important for employers to appreciate that an employee with a senior title, significant  salary and high-level responsibilities may nevertheless be covered by an award if the “principal purpose” of the employee’s employment is to undertake duties that fall within the classification structure of an award. This is particularly the case for certain awards, such as the Real Estate Industry Award 2010 and the Banking, Finance and Insurance Award 2010 where the classifications extend to supervisory and management roles.

Karen Muscat v Chase Commercial Pty Limited T/A Chase Commercials [2018] FWC 1398 (29 March 2018)

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.