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Defining Managerial and Directorial Roles and Can These Employees Make Unfair Dismissal Claims?

This blog takes a look at a number of factors that must be considered when trying to define a managerial, or directorial role within a business.  We have also taken a look at some potential issues surrounding unfair dismissal applications made by employees who are not covered by either an enterprise agreement, or an industry/occupation award.

Firstly, it is important to note that an employee is able to make an unfair dismissal claim if they are covered by a modern award or enterprise agreement.  Employees not covered by a modern award or enterprise agreement are able to make an unfair dismissal claim, although this is only if they earn less than the high income threshold, which is currently set at $142,000 (NB: this amount is subject to change as it is indexed from year to year).

In determining whether or not a person is legally covered by an award, it is necessary to consider their position in its entirety, that is, not only the employee’s job title but their associated duties, as well as the principle purpose of the position.  Focusing solely on an employee’s title (or even their associated remuneration) can be both deceptive and hazardous for an employer caught up in an unfair dismissal claim.

By way of example, ordinarily one might assume that an employee holding the position of ‘Manager’ or ‘Director’ would not be covered by an award, particularly if their salary exceeds the high income threshold.  With that said, in the recent case of Karen Muscat v Chase Commercials Pty Limited T/A Chase Commercials [2018] FWC 1398, heard before the Fair Work Commission, this assumption proved to be very wrong.

In this case, the employee’s title with Chase Commercial was ‘Director of Asset Management’ and her salary was approximately $180,000, although following her termination she filed an unfair dismissal application.  The employer objected to the application on the basis that the employee was not legally eligible to make an unfair dismissal claim as she was not covered by an award, and that her salary exceed the high income threshold.

The employee argued that she was indeed covered by an award, specifically the Real Estate Industry Award 2010 (‘the Award’), and that under that award her duties clearly fell under the classification of ‘Property Management Supervisor’.  The employee further argued that her title was irrelevant, that she was simply a ‘property manager with a fancy title’ and that the objective of the fancy title was that it allowed her to mix with other owners of the same calibre.

Following an examination of the principal purpose of the employee’s position, the FWC sided with the employee and concluded that her position did fall within the classification of a ‘Property Management Supervisor’ under the Award, and that her title of ‘Director’ had not resulted in her being elevated beyond the status of an award employee.

Award classifications can often be tricky at their core, as can be determining whether an employee is eligible to make an unfair dismissal claim.  If you have any doubts or concerns with regard to either of these issues, or would simply like to speak with an experienced lawyer in our Employment Law team – please do not hesitate to contact us.

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