Can a manager be covered by an award?

Can a manager be covered by an award?

By Paul Munro on 10 April 2018 A recent Fair Work Commission decision highlights the danger of giving employees a job title that suggests management responsibility, when their actual duties are covered by an applicable modern award. This matter involved an employer who classified a property manager as a director.

The Commission determined  the employee’s role fell within the Real Estate Industry Award 2010 classification of ‘property manager supervisor’ and her duties fell within the indicative tasks for that classification. In other words, the job title was a misnomer.

In determining whether or not an employee is covered by a modern award, industrial courts and tribunals generally apply the 'principal purpose test'. This is the same test used when determining which award applies when an employee is performing duties covered by multiple awards. It considers what is the major or substantial purpose for which an employee was employed.

In this case, the question was whether the employee was primarily employed because of her management responsibilities or supervisory skills? 

Principle purpose test

The so-called ‘principal purpose test’ has long been recognised by industrial tribunals where the work under consideration involves a range of different activities. In determining which award applies, it is not merely a matter of quantifying the time spent on various elements of work performed by an employee. The quality of the different types of work done is also a consideration.

If an employee’s role was performing client sales and also management responsibilities, the latter would be considered the more ‘substantial’ of the duties, with an employee considered to be award-free. Also, it is not a question of which duties occupy most of an employee’s time. Aspects of the employment to be considered include the substance, the nature of the work, the principal purpose, or the major objective for which an employee was employed.

Management duties

Professional, semi-professional and managerial employees in an office environment would not normally be covered by a modern award. Exceptions to this general rule include professional engineers, architects and surveyors. Other professions may also be covered by a modern award, such as health professionals, veterinary surgeons, medical practitioners and pharmacists. An employee in a managerial position, however, would not be covered by a modern award.

Consequently, an employee who is performing the duties and responsibilities of a manager would not be covered by a modern award. In describing management duties, industrial tribunals have normally referred to ‘the unfettered discretion that is the hallmark of the independent manager’.

The following duties and responsibilities are factors to be taken into account when determining whether the principal purpose of the employee’s duties and functions is that of a manager:
  • the authority to recruit and dismiss staff
  • the authority to bind the company to any contracts
  • the authority to set targets (such as sales targets)
  • participate in the policy direction of the company, and
  • responsibility for preparing a budget.
Not all of these factors need to be present in a particular matter for the person to be deemed a manager, however, the existence of any of these responsibilities would suggest an executive function within the employer’s enterprise.

Conversely, an employee described as a ‘field sales manager’ was deemed by an industrial tribunal to be covered by the relevant clerical award because the employee had no authority to perform any of the abovementioned responsibilities. This was despite the employee being regarded as a member of the company’s ‘middle management’.

Modern awards

A modern award may contain a classification which covers a manager, such as the Registered and Licensed Clubs Award 2010, which has a classification which covers a ‘club manager’. Reference should be made to the relevant modern award to determine whether there is an award classification for a manager.

Manager vs clerical duties

A manager or professional employee may claim award coverage in (say) an unfair dismissal matter on a jurisdictional point. The award claimed is commonly the Clerks - Private Sector Award 2010. Professional and managerial employees are clearly not clerks. Where the primary purpose of the role is the exercise of skills of a professional or quasi-professional nature, the role will not be regarded as clerical – notwithstanding that the role involves various administrative office functions. See  Layton v North Goonyella Coal Mines Pty Ltd [2007] AIRCFB 713; Michelle Gray v Hamilton James and Bruce Pty Ltd [2011] FWAFB 6884.

In considering that a modern award does not cover an employee, (then) Fair Work Australia needed to be satisfied an employee’s duties were not the major and substantial role of the employee, and this activity was not the principal purpose of his or her employment and was incidental to the principal purpose of his or her employment.

The following decisions have applied the principal purpose test in relation to modern awards: See Tucker v Digital Diagnostic Imaging Pty Ltd [2011] FWA 1767; Power v Barrick Australia Pacific [2011] FWA 8092; Halasagi v George Weston Foods Ltd [2010] FWA 6503.   

Miscellaneous Award 2010

The commencement of the modern award system introduced a new award, the Miscellaneous Award 2010. This initially created some conjecture about whether the award had scope to cover management and professionally-qualified employees who were not covered by a specific modern award.

It was determined the award was not intended to cover award/agreement free employees, or those employees not traditionally covered by an award. This includes managerial employees and professional employees such as accountants and financiers, marketing, legal, human resources, public relations and information technology specialists.

The bottom line: An employer should ensure that an employee whose job title includes manager is actually performing duties commensurate with the responsibilities and skills of a manager. A reference to an employee as a manager does not mean the employee is excluded from award coverage.


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