Application of awards to employees 'on staff'

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Application of awards to employees 'on staff'

Many employers are under the mistaken belief that promoting an employee to 'staff' or 'salary' status means the employee becomes award-free.

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Many employers are under the mistaken belief that promoting an employee to 'staff' or 'salary' status means the employee becomes award-free.

 

This issue has been determined by various industrial courts and tribunals throughout Australia and the principles involved have been firmly established. The following article highlights some of these principles.

Job title - indeterminate

The first point to make is that the job title does not determine whether an employee is award-free or subject to an award.

In the modern workplace, job titles may not necessarily reflect the nature of the job. An employee may feel quite happy with a job title such as 'manager', 'consultant', or 'facilitator', despite the fact the duties being performed may not accurately reflect the job title. This can create problems for the employer as it may not be immediately obvious as to what is the nature of the work actually being performed by the employee.

Industrial tribunals have generally determined that award coverage does not hinge on the job title given to the employee, but the actual nature of the work being performed by the employee for the 'major and substantial part of their time'.

Major & substantial function

The so-called 'major and substantial function' test has long been recognised by industrial tribunals where the work under consideration involves a range of different activities. It's generally applied to determine the application of an award where duties are of a mixed character and contain elements which if taken alone would be covered by more than one award.

Tribunals have generally determined that the major emphasis should be placed on the major and substantial function, purpose or object of the engagement rather than on the major and substantial time spent on the performance of the duties.

Aspects of the employment to look at include: the substance, the nature of the work, the principal purpose or the major objective for which the employee was employed. For example, the employer of an employee performing 40% tradesperson's work and 60% labouring work may be ordered by a tribunal to pay the higher trade rate because the trade work is the more "substantial" (more highly skilled) of the duties, despite the employee's work time comprising more labouring duties.

Industrial tribunals also apply this principle where an employee may be performing some duties covered by an award and other duties which are award-free. Jobs of a clerical, retail or commercial traveller nature are more prone to scrutiny on this point than others.

However, similar problems also arise in those industries where the relevant award provides for foreperson or leading hand classifications.

Managers - who qualifies?

The use of the term 'manager' in a job title may not accurately reflect the responsibilities involved in the job. The problem here is the conditions of employment of a manager are not usually determined by an award.

Industrial tribunals refer to the 'unfettered discretion that is the hallmark of the independent manager' in determining whether an employee is truly a manager or not. It is evident that the role of recruiting and terminating employees is one of the determinants of the existence of management responsibility.

However, a 'manager' who is subject to supervision by a higher authority within the company to recruit or terminate employees on an incidental basis is not exercising 'management responsibility', but merely acting as a functionary of higher management.

For example, an employee described as a 'field sales manager' was deemed by a tribunal to be covered by the relevant state clerical award because the employee had no authority to bind the company to any contracts, no authority to hire and fire staff, no authority to set sales targets or otherwise participate in the policy direction sales and marketing procedures of the company. This was despite the fact the employee was categorised by their employer as a member of 'middle management'.

As this illustrates, having the job title 'manager' does not automatically grant the employee award-free status. This is particularly so in clerical, retail, and sales-related occupations where the employee may be on the fringe of executive functions, particularly where such work is part of a career path which may ultimately result in the employee's promotion to executive management within the company.

Professional qualifications - not exclusive of award coverage

The necessity for an employee to possess professional qualifications as a prerequisite to obtaining employment within the company may not, in itself, mean the employee is award-free.

Federal and State awards exist which cover such professions as scientists, engineers, surveyors, and architects. Employers with employees in these professions should refer to the relevant award to determine their award status.

Leading hand - award coverage

An employee who primarily allocates work to other employees normally under the direction of a foreperson or supervisor, assists in ensuring continuity of production, assists in training new employees, and still performs manual work, would be classified as a leading hand under the relevant award, rather than a foreperson or supervisor.

Foreperson or supervisor - sometimes award covered

A foreperson or supervisor is generally an employee appointed as such and required by the employer to be mainly engaged in the direct supervision of employees including those employed as leading hands.

The foreperson/supervisor is normally required to allocate work to employees, ensure continuity of production, maintains discipline, is responsible for the security of the area under their control and is representative of the management on the shop floor. The foreperson/supervisor does not perform manual work except to train new employees, train other employees in new processes, and to demonstrate safe practices or to prevent accidents.

Some awards may provide a classification for a foreperson or supervisor, for example, the metal industry. Once again, reference should be made to the relevant award to determine the award status of these employees.

Conclusion

If it so happens that an employee who is on staff is nevertheless covered by an award, the employer should take the time to understand the obligations that have to be met in this respect.

There may be overtime and leave implications as well as issues such as travelling time that apply to the employee. Some awards exclude certain provisions, but apply other conditions, to those paid in excess of award rates who are still covered by the scope of the award.

Related

 

Employee acts to recover overaward payments, superannuation and loss of vehicle: NSW

Staff policy entitled employees to allowances and reimbursements

 

Meal breaks implied in contract: AIRC

 

 

  

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