WHAT’S IN A NAME? HIGH EARNING REAL ESTATE DIRECTOR ELIGIBLE TO BRING UNFAIR DISMISSAL CLAIM

Workplace Directions

Mr James Kaufman v Jones Lang LaSalle (Vic) Pty Ltd T/A JLL [2017] FWC 2623

Background

Mr Kaufman (the Applicant) was a Regional Director of multibillion dollar real estate business, Jones Lang LaSalle (the Respondent). He worked with the Respondent from September 1989 until December 2016, when his position was made redundant. He commenced unfair dismissal proceedings in the Fair Work Commission under the Fair Work Act 2009 (Cth).

The question of eligibility

Among other things, in order to bring an unfair dismissal claim in the Commission, an Applicant is required to:

  • have completed a minimum period of service (12 months for small businesses and six months for larger businesses), and
  • earn less than the high income threshold (currently $138,900 per annum) or be covered by the classifications of a Modern Award.

Because the Applicant earnt over the high income threshold, he was required to establish that he was covered by the Real Estate Industry Award 2010 (the Award) in order for his claim to proceed. Like other Modern Awards, the Award contains employee classifications up to middle level management, including ‘Property Sales Representative’ and ‘Property Sales Supervisor’. Traditionally, higher-level executive roles are not covered by Modern Awards.

Respondent’s objection

The Respondent objected to the claim proceeding on the basis that the Applicant’s senior position exceeded the middle-level management classifications contained in the Award and he was consequently not covered by the Award. In this respect, the Respondent noted that the Applicant:

  • performed high level executive duties beyond those described under the Award classifications;
  • held the executive position title of Regional Director, which demonstrated the substantially more senior nature of his role; and
  • received remuneration well above the minimum weekly rate paid to the highest position prescribed by the Award.

Decision

Despite the Respondent’s objections, the Commission held that the Applicant was covered by the Award and he was eligible to proceed with his unfair dismissal claim on the basis that:

  • despite his senior title, the Applicant’s duties were similar to those of a Property Sales Representative referred to in the Award. These duties included the listing and sale of properties or businesses and interacting with buyers and sellers of property; and
  • where the duties or principal purpose for which an employee is engaged correspond with the coverage provisions of a relevant award, high remuneration and senior position titles will only demonstrate the employer’s view that the employee is a valuable part of the business.

Key lessons

This case demonstrates that, in determining whether an employee is covered by a Modern Award, the courts will consider the substantive duties performed and not simply the position title of the employee. Employers should be aware that even senior level employees may have access to the unfair dismissal regime in challenging a dismissal.

Employers should also undertake regular reviews of the Modern Award coverage of their workforce to identify additional right and responsibilities.

Authored by Nick Duggal, Partner & Elizabeth Aitken, Senior Associate, Melbourne


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