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January 2019

Dispute over modern award coverage leads to unfair dismissal claim

Dispute over modern award coverage leads to unfair dismissal claim

The Case

McCullagh v Acciona Infrastructure Australia Pty Ltd (2018)

Acciona Infrastructure Australia Pty Ltd (Acciona) employed Mr McCullagh as a general foreperson on a building and construction site. Acciona terminated Mr McCullagh’s employment when he failed a drug test. Mr McCullagh lodged an unfair dismissal application with the Fair Work Commission (FWC).

Acciona lodged a jurisdictional objection on the basis that Mr McCullagh’s employment was not covered by a modern award or enterprise agreement, and his annual earnings were above the high-income threshold. At the time of dismissal Mr McCullagh’s annual earnings were $202,575 plus a fully maintained motor vehicle. The then high-income threshold was $142,000 per annum.

Mr McCullagh argued his employment was covered by the Building and Construction General On-Site Award 2010 (Award). He argued that in the position of general foreperson, he performed the same duties as a foreperson, which was one of the classifications covered by the Award.

The Verdict

The FWC reviewed the Award and held:

  • that the classification of foreperson in the Award was limited to forepersons in the metal and engineering industries, and not forepersons in the civil construction industry;
  • even if the classification of foreperson included those engaged in the civil construction industry, the Award still would not have applied to Mr McCullagh’s employment because the duties he performed in his role did not correlate with those duties described in the Award for a foreperson;
  • Mr McCullagh was the most senior person in his area and he worked unsupervised whereas the foreperson classification under the Award indicated the person in that role would be “under limited supervision” but did not go so far as to say the person would work unsupervised; and
  • Mr McCullagh held a very senior role, earned a substantial salary and was responsible for an area of the business worth $15 million. These elements, while not determinative, supported a finding that the Award did not cover the role Mr McCullagh held.

The FWC upheld Acciona’s jurisdictional objection and dismissed Mr McCullagh’s unfair dismissal complaint.

The Lessons

It is important to determine whether a modern award covers your employees – not just because they may have access to the unfair dismissal jurisdiction, but because you must comply with any relevant obligations in an applicable modern award.

To ascertain whether a modern award covers an employee, examine the work the employee actually undertakes, not simply their position title, salary and nature of your business.

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