UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00173

DELIVERED : friday, 19 april 2024

FILE NO. : U 5 OF 2024

Applicant

AND

Western Metropolitan Regional Council

Respondent

CatchWords : Industrial Law (WA) – Unfair Dismissal Application – Whether the Commission has jurisdiction – Operation of s 29AA – Local government industry transition – Whether an industrial instrument applied to Chief Executive Officer of national system employer – Local Government Officers’ (Western Australia) Award 2021 did not apply as employer is national system employer – Local Government Industry Award 2020 applied under s 80BB but expressly excludes Chief Executive Officer from coverage – No industrial instrument applied to the employment – Salary exceeds prescribed amount – No jurisdiction to determine claim – Claim dismissed

Legislation : Industrial Relations Act 1979 (WA) s 7, s 29(1)(c), s 29AA, s 80BA, s 80BB, s 80BB(2), s 80BB(3)(b)

Industrial Relations (General) Regulations 1997 (WA)

Industrial Relations Legislation Amendment Act 2021 (WA)

Industrial Relations Regulations (Consequential Amendment) Regulations 2022 (WA)

Fair Work Act 2009 (Cth)

Fair Work Amendment (Transitional Arrangements–Western Australian Local Government Employers and Employees) Regulations 2022 (Cth)

Fair Work (State Declarations – employers not to be national system employers) Endorsement 2022 (No. 1) (Cth)

Result : Application dismissed for want of jurisdiction

Representation:

Applicant : Mr S Frodsham

Respondent : Kennedys

Case(s) referred to in reasons:

Hoffman v Paladin Energy Ltd [2016] WAIRC 00073; (2016) 96 WAIG 121

Quinn v Kalgoorlie Consolidated Gold Mines Pty Ltd [2006] WAIRC 05220; (2006) 86 WAIG 2725

Springdale Comfort Pty Ltd t/as Dalfield Homes v Building Trades Association of Unions of Western Australia (Association of Workers) (1986) 67 WAIG 325

Reasons for Decision

1         Mr Stefan Frodsham was employed as the Chief Executive Officer of Western Metropolitan Regional Council from June 2018 until 15 December 2023.

2         The Council terminated Mr Frodsham’s employment summarily for serious misconduct.

3         Mr Frodsham denies that he engaged in misconduct. He says the Council failed to take into account, consider or have appropriate regard to his responses to the allegations and the evidence available to it. He says the findings made against him were not supported by the available evidence and were not impartial. He also alleges that the investigation into the allegations denied him procedural fairness.

4         As he was aggrieved by the Council’s decision to terminate his employment, Mr Frodsham referred a claim of unfair dismissal to the Western Australian Industrial Relations Commission under s 29(1)(c) of the Industrial Relations Act 1979 (WA).

5         In his unfair dismissal application, Mr Frodsham stated his gross salary was $192,213. He also identified the Local Government Officers’ (Western Australia) Award 2021 (LGO Award) as applying to his employment.

6         The Council denies that the termination of Mr Frodsham’s employment was unfair. It also objects to Mr Frodsham referring his claim of unfair dismissal to the Commission because it says the Commission lacks jurisdiction. This is because Mr Frodsham’s contract of employment provides for a salary exceeding the prescribed amount of $187,800 and no industrial instrument applies to him.

7         The issue before the Commission is whether it has jurisdiction to hear and determine Mr Frodsham’s unfair dismissal claim. The resolution of this issue turns on the operation of s 29AA of the Act and whether the LGO Award or any other industrial instrument applied to Mr Frodsham’s employment for the purposes of that section.

8         If the Commission lacks jurisdiction because of s 29AA, the Commission has no ability to consider the referral of Mr Frodsham’s claim, and Mr Frodsham’s claim must be dismissed.

9         The parties agreed that the present jurisdictional issue should be determined on the papers.

10      In a brief letter dated 2 April 2024, Mr Frodsham informed the Commission of what was obvious by the fact he had made an unfair dismissal application, namely that he did not object to the Commission’s jurisdiction. Otherwise, Mr Frodsham offered no submissions, evidence or other documents to establish the Commission had jurisdiction.

11      I have concluded that the Commission lacks jurisdiction. This conclusion will come as no surprise to Mr Frodsham. The Council produced a copy of an email from Mr Frodsham to the Council’s lawyer, saying that he had no intention of contesting the Council’s jurisdictional objections. It would have been proper, in those circumstances, for Mr Frodsham to discontinue his claim. His failure to do so has meant that both the Council and the Commission have committed resources to dealing with his claim, including in producing this decision. The public interest would have been better served had this course been avoided.

Section 29AA

12      The general provisions of the Act conferring jurisdiction and providing standing to refer a claim must be construed to give way to the specific limits on the Commission’s jurisdiction: Hoffman v Paladin Energy Ltd [2016] WAIRC 00073; (2016) 96 WAIG 121 at [42]. Section 29AA(3) of the Act is such a limit, on the Commission’s jurisdiction to deal with referrals of unfair dismissal matters under s 29(1)(c). Section 29AA(3) says:

(3) The Commission must not determine a claim of harsh, oppressive or unfair dismissal from employment if —

(a) an industrial instrument does not apply to the employment of the employee; and

(b) the employee’s contract of employment provides for a salary exceeding the prescribed amount.

13      Section 29AA(5) says:

(5) In this section —

industrial instrument means —

(a)  an award; or

(b)  an order of the Commission under this Act that is not an order prescribed by regulations made by the Governor for the purposes of this section; or

(c)  an industrial agreement; or

(d)  an employer-employee agreement;

prescribed amount means —

(a)  $90 000 per annum; or

(b)  the salary specified, or worked out in a manner specified, in regulations made by the Governor for the purposes of this section.

14      The prescribed amount calculated in accordance with reg 5 and reg 6 of the Industrial Relations (General) Regulations 1997 (WA) at the time Mr Frodsham lodged his claim was $187,800.

15      Mr Frodsham must establish that his claim is within the Commission’s jurisdiction: Springdale Comfort Pty Ltd t/as Dalfield Homes v Building Trades Association of Unions of Western Australia (Association of Workers) (1986) 67 WAIG 325.

Does an industrial instrument apply to Mr Frodsham’s employment?

16      Section 29AA(5) of the Act defines the expression ‘industrial instrument’. It includes ‘an award’. The word award is, in turn, defined in s 7 as:

award —

(a) means an award made by the Commission under this Act; and

(b) for the purposes of section 37C(1), includes an award made under a law of the Commonwealth, another State or a Territory extending to and binding employees;

17      It also includes ‘an industrial agreement’ which s 7 defines as meaning an agreement registered by the Commission under the Act as an industrial agreement.

18      An industrial instrument will apply to the employment of an employee if it affects the terms and conditions of employment of the employee. An instrument would fit this description if it set out or impacted upon the terms and conditions of employment, including by the creation of particular obligations upon an employer or employee: Quinn v Kalgoorlie Consolidated Gold Mines Pty Ltd [2006] WAIRC 05220; (2006) 86 WAIG 2725 at [57].

19      Mr Frodsham says the LGO Award is an industrial instrument that applies to his employment.

20      It is clear that the LGO Award is an industrial instrument for the purposes of s 29AA. Its scope is broad and includes Chief Executive Officers and other Executive Officers: see clause 3 ‘Scope’, clause 4.8 ‘Definitions’ and clause 13 ‘Salaries’. The question is whether it applies to Mr Frodsham.

21      In its written submissions, the Council says there is no industrial instrument that applies to Mr Frodsham’s employment. It says the LGO Award does not apply to Mr Frodsham because:

…

29. Prior to 1 January 2023, the Respondent operated in the national industrial relations system under the Fair Work Act 2009 and relevant employees of the Respondent were covered by the Local Government Industry Award 2020.

30. As of 1 January 2023, all WA local governments transferred to the state industrial relations system and the Local Government Industry Award 2020 became an industrial agreement under the IR Act.

31. In effect, employees of the Respondent who were covered by the Local Government Industry Award 2020 prior to 1 January 2023 continue to be covered by the Local Government Industry Award 2020 by virtue of its operation as an industrial agreement in the state industrial relations system. The Respondent continues to employ relevant staff under the Local Government Industry Award 2020 (as an example, the attached job advertisement for the position of Waste Administration Officer specifies the employment is subject to the “Local Government Industry Award 2020 – State Industrial Agreement”).

32. The Applicant was not, and could not have been, covered by the Local Government Industry Award 2020 because clause 4.3(a) of that award expressly provides that the award does not cover the Chief Executive Officer of a local government.

33. In his application, the Applicant indicated that his employment was covered by the Local Government Officers’ (Western Australia) Award 2021. That is plainly incorrect. The Local Government Officers’ (Western Australia) Award 2021 does not apply to the Respondent, and has never applied to the Respondent. The parties to that award are set out in clause 32 and the list does not include the Western Metropolitan Regional Council.

…

22      The Council is a trading corporation. Until 1 January 2023, it operated under the Federal industrial relations system as a national system employer.

23      On 1 January 2023, the local government industry transitioned from the national industrial relations system to the state industrial relations system, by the combined operation of the Industrial Relations Legislation Amendment Act 2021 (WA), the Fair Work Amendment (Transitional Arrangements–Western Australian Local Government Employers and Employees) Regulations 2022 (Cth) and the Fair Work (State Declarations – employers not to be national system employers) Endorsement 2022 (No. 1) (Cth), the Industrial Relations Regulations (Consequential Amendment) Regulations 2022 (WA) and the Industrial Relations (General) Regulations 1997 (WA). The Council is an employer listed in Schedule 4, Division 2 of the Industrial Relations (General) Regulations 1997 (WA) as an employer declared not be to be a national system employer.

24      So, at the time Mr Frodsham’s employment was terminated, the Council was a declared employer for the purpose of Part 2AA of the Act, and Mr Frodsham, as a person employed by a declared employer, was a declared employee.

25      Section 80BA(1) of the Act says that the regulations may provide that an award specified in the regulations applies to employees of a declared employer specified in the regulations. The LGO Award is not specified in the regulations as applying to the Council. In fact, reg 8 of the Industrial Relations (General) Regulations 1997 (WA) expressly states that while a new State instrument is in force, an award does not apply to the declared employer and declared employees, unless the new State instrument provides otherwise for the period of two years beginning on 1 January 2023.

26      Accordingly, the LGO Award did not apply to Mr Frodsham’s employment with the Council.

27      Where s 80BA does not apply, then s 80BB of the Act effectively creates an industrial instrument, known as a ‘new State instrument’, where immediately prior to the commencement day, an instrument made under the Fair Work Act 2009 (Cth) (FW Act), applied to ‘a declared employer and a declared employee’. In short, an award or enterprise agreement made under the FW Act became, under s 80BB(2), an ‘industrial agreement’, described as a new State instrument and ‘applied’ to a declared employer and employees.

28      Section 80BB says:

80BB. New State instruments

(1) This section applies —

(a) to the extent section 80BA does not provide for a declared employee of a declared employer; and

(b) if, immediately before the relevant day, a federal industrial instrument (the old federal instrument) applies to, or purports to apply to, the declared employee.

(2) On the relevant day, an industrial agreement (the new State instrument) applies to the declared employer and declared employees.

(3) The new State instrument is taken —

(a) to have been registered under this Act on the relevant day; and

(b) except as provided in this section or section 80BC, to have the same terms as the old federal instrument including those terms as added to or modified by any of the following —

(i) terms of a federal award incorporated by the old federal instrument;

(ii) orders of a federal industrial authority;

(iii) another instrument under the national fair work legislation or the repealed Workplace Act;

and

(c) to have a nominal expiry date that is the earlier of the following —

(i) a day that is 2 years after the relevant day;

(ii) the day that, immediately before the relevant day, was the nominal expiry day of the old federal instrument.

(4) This Act applies in relation to the new State instrument subject to any modifications or exclusions prescribed by regulations for this subsection.

(5) The new State instrument applies except as provided in the [Minimum Conditions of Employment Act 1993 (WA)].

29      In accordance with the above scheme, the Local Government Industry Award 2020 (LGI Award), made under the FW Act, became a new State instrument on 1 January 2023.

30      The LGI Award’s coverage is set out in clause 4. It says:

(b) nurses engaged in accordance with the Nurses Award 2020;

(c) doctors engaged in accordance with the Medical Practitioners Award 2020;

(d) early childhood teachers (university qualified) engaged in accordance with the Educational Services (Teachers) Award 2020; or

(e) local government associations and their employees.

…

31      The LGI Award, as a new State instrument, is taken to have these same terms: s 80BB(3)(b).

32      So, although the LGI Award applied to the Council pursuant to s 80BB(2) at the time Mr Frodsham’s employment was terminated, he was not covered by it. As Chief Executive Officer, he was expressly excluded from its coverage.

33      This means that an industrial instrument did not apply to Mr Frodsham’s employment for the purpose of s 29AA.

Does Mr Frodsham’s salary exceed the prescribed amount?

34      The preceding conclusion means it is necessary to also consider whether Mr Frodsham’s contract of employment provides for a salary exceeding the prescribed amount.

35      The Council produced a copy of Mr Frodsham’s employment contract dated 18 August 2023, which was for a three-year term commencing 24 August 2023 to 23 August 2026. Clause 5 of the employment contract provides:

5 REMUNERATION

5.1 Remuneration – general provisions

5.1.1 The Local Government must pay to You each year Remuneration comprising Salary and Superannuation contributions of the amount specified in item 9 of Schedule 2.

5.1.2 Your Remuneration takes into account:

(a) the requirement to attend Local Government meetings and perform other Functions that require work outside standard working hours;

(b) that You are not entitled to any annual leave loading, penalty rates or payment for additional hours or overtime.

5.1.3 In accordance with either:

(a) the terms of a Policy; or

(b) the approval of the Council,

you may salary sacrifice any part of the salary if:

(c) it complies with the relevant taxation legislation and Australian Taxation Office rulings; and

(e) there is no additional cost to the Local Government or, if there is an additional cost, such cost is borne by You by way of a deduction from Your salary.

5.2 Salary

The salary is payable in accordance with the Local Government’s normal salary payment cycle, by electronic funds transfer to an account nominated by You.

5.3 Superannuation

5.3.1 The Local Government must make, in respect of Your employment, superannuation contributions as specified in item 9 of Schedule 2.

5.3.2 The superannuation contributions include the minimum contribution required to be made to avoid the imposition of a superannuation guarantee charge (payable by the Local Government under the Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee Charge Act 1992 (Cth)).

5.3.3 You may elect to have superannuation contributions paid by the Local Government into a superannuation fund of Your choice.

5.3.4 You may elect to pay additional superannuation contributions as part of a salary sacrifice arrangement with the Local Government, acknowledging that such an arrangement will result in a lower salary being paid to You.

36      The employment contract’s Schedule 2 – Contract Details, item 9 says:

37      It is clear that the employment contract provides for a salary exceeding the prescribed amount of $187,800.

38      Accordingly, s 29AA means the Commission must not determine Mr Frodsham’s unfair dismissal claim.

39      The application is therefore dismissed for want of jurisdiction.