Federal Court of Australia

Ord Minnett Holdings Pty Limited v Theodorou [2025] FCA 721

ORDERS

THE COURT ORDERS THAT:

1.    Leave to appeal be granted.

2.    The appeal be allowed.

3.    The judgment of the Federal Circuit and Family Court of Australia (Division 2) dated 12 June 2024 be set aside, and in lieu thereof it be ordered that the originating application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

KENNETT J:

Introduction

1    The respondent (Mr Theodorou) began working for the applicant (Ord Minnett) in March 2012 and resigned from that employment with effect from 13 December 2019. His job title was “Private Client Adviser” until April 2013 and thereafter “Associate Adviser”. On 1 July 2021 he commenced proceedings against Ord Minnett in the Federal Circuit and Family Court of Australia (Division 2) (the FCFCOA).

2    Mr Theodorou sought declarations that Ord Minnett had breached the following provisions of the Fair Work Act 2009 (Cth) (the FW Act) and the Fair Work Regulations 2009 (Cth) (the FW Regulations):

(a)    section 45, by:

(i)    failing to pay the minimum rates of pay set out in the Banking, Finance and Insurance Award 2010 (the Award); and

(ii)    failing to pay annual leave loading prescribed by the Award during employment and upon termination;

(b)    section 44, by failing to pay Mr Theodorou at the base rate of pay for ordinary hours of work during periods of:

(i)    annual leave (as required by s 90),

(ii)    personal/carer’s leave (as required by s 99) and

(iii)    public holidays (as required by s 116); and

(c)    reg 3.42(3), by failing to provide a copy of the employee record within 14 days of receiving a request for that record.

3    He also sought orders for the payment of an amount of $231,046.82 which he claimed was outstanding, compensation for the breach of reg 3.42(3), interest and the imposition of pecuniary penalties on Ord Minnett.

4    The matter was heard in the FCFCOA on 19 and 20 October and 1 December 2022. On 12 June 2024 the primary judge delivered reasons, made declarations substantially in the terms sought by Mr Theodorou and listed the matter for directions at a later date.

5    Ord Minnett filed an application for leave to appeal and draft notice of appeal on 26 June 2024. An amended version of the draft notice of appeal was annexed to an affidavit filed on 11 July 2024. The matter was listed before me for hearing on both the application for leave and, if leave be granted, the substantive appeal.

6    On 31 July 2024, after the application for leave to appeal had been filed, the primary judge made orders requiring Ord Minnett to pay Mr Theodorou the sum of $245,483.96, plus interest, due to him as a result of the declarations made on 12 June 2024, and stayed the payment of these amounts to await the outcome of the proceedings in this Court. These orders were headed “by consent”, even though Ord Minnett was still seeking to contest its liability to pay the sum referred to in this Court. The nature of that “consent” is thus somewhat unclear, but it was not submitted before me that it rendered the application for leave to appeal moot. The orders of 31 July 2024 appear to embody an agreement between the parties as to the amount of compensation that is payable if the judgment delivered on 12 June 2024 remains in effect.

Leave to appeal

7    Even though the declarations made by the primary judge are indisputably final in character, the parties proceeded on the basis that his Honour’s judgment was an “interlocutory judgment” for the purposes of s 24(1A) of the Federal Court of Australia Act 1976 (Cth) and leave to appeal was therefore required. This approach accords with authority: Monash Health v Singh [2023] FCAFC 166 at [44] (Katzmann, Snaden and Raper JJ). The judgment is interlocutory in that questions of compensation and penalty were left for later determination, so that not all of the substantive issues in the proceeding were determined.

8    Questions as to leave to appeal from an interlocutory judgment are ordinarily dealt with by reference to two issues: whether the decision is attended by sufficient doubt to warrant consideration at appellate level; and whether, supposing the decision to be wrong, substantial injustice would result from a refusal of leave (see eg Davidson v Official Receiver [2021] FCAFC 73; 286 FCR 148 at [15] (Allsop CJ, Markovic and Anastassiou JJ)).

9    In the present case, for reasons which will appear below, there are significant questions concerning the correctness of the judgment below.

10    The judgment finally determined substantive issues in the proceeding. It has the consequence that the parties are required to engage with questions of compensation and penalty. The quantum of compensation appears to be agreed between the parties. The range of issues going to penalty is limited, but the contraventions that have been found extend over a period of nearly eight years and the trial of those issues may therefore involve a substantial body of evidence. On the assumption that the judgment is wrong, this effort will be wasted. In the light of s 570 of the FW Act, Ord Minnett is unlikely to recover any of its costs. In addition, a trial of the remaining issues is likely to result in the imposition of pecuniary penalties against Ord Minnett, with the risk of damage to its reputation which would not be wholly remedied by the orders being set aside on appeal. I am therefore satisfied that, supposing the judgment to be wrong, injustice which can properly be described as “substantial” would arise from a refusal of leave to appeal.

11    Leave to appeal will therefore be granted.

The issues in the court below

12    As noted above, Mr Theodorou claimed relief in respect of alleged breaches of ss 44 and 45 of the FW Act.

13    Section 44 provides that an employer must not contravene a provision of the National Employment Standards (NES). These are set out in Part 2-2 of the FW Act and cover matters such as maximum weekly hours, flexible working arrangements and various types of leave.

14    Section 45 of the FW Act provides that a person “must not contravene a term of a modern award”. It is subject to s 46 (which provides that a modern award does not impose obligations on or give entitlements to a person unless it “applies to” the person) and s 47 (which sets out the circumstances in which a modern award “applies to” an employee, employer, organisation or outworker entity). Relevantly here, s 47(1) provides as follows.

(1)     A modern award applies to an employee, employer, organisation or outworker entity if:

(a)     the modern award covers the employee, employer, organisation or outworker entity; and

(b)     the modern award is in operation; and

(c)    no other provision of this Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity.

    (Emphasis in original.)

15    By operation of s 48(1), a modern award “covers” an employee, employer, organisation or outworker entity if it is “expressed to cover” that person or entity. However, under s 48(3), a modern award does not cover an employee, employer, organisation or outworker entity if a provision of the FW Act, an “FWC order” made under the Act or an order of a court provides to that effect. A provision of potential relevance in this respect is s 143(7) of the FW Act, which provides as follows.

(7)     A modern award must not be expressed to cover classes of employees:

(a)     who, because of the nature or seniority of their role, have traditionally not been covered by awards (whether made under laws of the Commonwealth or the States); or

(b)     who perform work that is not of a similar nature to work that has traditionally been regulated by such awards.

Note:     For example, in some industries, managerial employees have traditionally not been covered by awards.

16    Section 136(1) of the FW Act provides that a modern award “must only include terms that are permitted or required by” specified provisions of the FW Act, including Subdivision C of Division 3 (within which s 143 is located). Section 137 of the FW Act provides that a modern award “has no effect to the extent that it contravenes section 136”.

17    It is necessary to identify relevant aspects of how the parties’ cases were pleaded and advanced in the court below.

Mr Theodorou’s case

18    The case advanced by Mr Theodorou in his statement of claim (SOC) was as follows.

(a)    Mr Theodorou alleged that he had been employed by Ord Minnett on a full time basis (SOC [4]).

(b)    His duties were as follows (SOC [5]).

(a)     managing a part of the Respondent's business comprising a portfolio of its private clients;

(b)     managing relationships with a portfolio of the Respondent's private clients;

(c)     executing share transactions on behalf of the Respondent's private clients, such as by placing orders for trades of ASX equities;

(d)     providing personal advice to private clients in the form of investment recommendations, such as with respect to financial products and financial services;

(e)     providing financial planning for private clients;

(f)     generating revenue for the Respondent, such as by means of transactional and other fees charged to private clients for the provision of financial products and financial services;

(g)     seeking to attract new private clients to engage the Respondent for the provision of services; and

(h)     undertaking training and compliance requirements, including at the direction of the Respondent.

(c)    His terms of employment were contained in a written agreement (the employment agreement) (SOC [6]).

(d)    He was remunerated “by way of commission only” (SOC [7]).

(e)    Ord Minnett was covered by the Award in respect of his employment and the Award applied to Ord Minnett. This was on the basis that Mr Theodorou came within the classification identified by cl B6 in Schedule B of the Award (SOC [9]).

(f)    Ord Minnett was required to pay Mr Theororou in accordance with the Award, being minimum weekly rates of pay (under cl 13.1(a)) and annual leave loading (cl 24.3(a) and (b)) (SOC [11]).

(g)    Ord Minnett was required to comply with the NES under the FW Act relating to annual leave, personal/carer’s leave and public holidays (SOC [12]).

(h)    Under cl 13.1(a) Ord Minnett was required to pay Mr Theodorou specified rates of pay (identified by reference to the rates of pay for classification B6 in Schedule B) (SOC [16]). It did not do so (SOC [18]). It thereby breached cl 13.1(a) and consequently s 45 of the FW Act (SOC [19]).

(i)    Ord Minnett did not pay Mr Theodorou for annual leave taken (SOC [23]). It thus contravened the NES and therefore contravened s 44 of the FW Act (SOC [24]).

(j)    Ord Minnett failed to pay Mr Theodorou annual leave loading pursuant to cl 24.3 of the Award (SOC [31]). This was a further contravention of the Award and therefore s 45 of the FW Act (SOC [33]).

(k)    Ord Minnett failed to pay Mr Theodorou for personal/carer’s leave taken and for public holidays (SOC [37], [42]). These were further contraventions of the NES and therefore s 44 of the FW Act (SOC [38], [43]).

(l)    Mr Theodorou’s solicitors requested that a copy of his employee record be made available to him (under s 535 of the FW Act) on 6 April 2021 (SOC [44]). The record was emailed to the solicitors on 29 April 2021 (SOC [45]). This was outside the time limit prescribed by reg 3.42(3)(b) and that regulation was thus contravened (SOC [46]).

19    Each of the pleaded contraventions of s 45 of the FW Act depended on Mr Theodorou’s employment being covered by the Award. It was common ground that the applicable aspects of the NES also depended on his employment being within the scope of the Award. As the primary judge explained (J[135]-[137]), this was because the relevant provisions defining leave entitlements as part of the NES proceeded by reference to the employee’s base rate of pay for ordinary hours of work, and Mr Theodorou did not have a base rate of pay (having been remunerated only by commission) unless the Award applied.

20    The only basis advanced by Mr Theodorou for such coverage was that he came within cl B6 in Schedule B. It is useful to set out cl B6, as it stood at relevant times, at this point.

21    Following a decision by Smith DP on 30 September 2013 (Application by Australian Federation of Employers and Industries [2013] FWC 5482 (the September 2013 variation)), cl B6 was in the following form.

This level covers those who perform a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level provided that this level 6 classification does not cover classes of employees:

(a)     who, because of the nature or seniority of their role, were not traditionally covered at all by awards; or

(b)     who perform work that is not of a similar nature to work that has previously been regulated at all by awards.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.

22    The issues in the proceeding are complicated slightly because a further order by Smith DP dated 22 November 2013 (the November 2013 variation) varied the clause again, with effect from the first pay period commencing on or after 21 October 2013. No reasons seem to have been published for this determination and it has no medium-neutral citation; however, it can be found at www.fwc.gov.au/documents/awardsandorders/html/pr543670.htm. From October 2013 to the end of Mr Theodorou’s employment with Ord Minnett cl B6 read as follows.

A Level 6 position typically performs a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level provided that this level 6 classification does not cover classes of employees:

(a)     who, because of the nature or seniority of their role, were not traditionally covered at all by awards; or

(b)     who perform work that is not of a similar nature to work that has previously been regulated at all by awards.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planners, information technology specialists, relationship manager, senior analyst, subject matter manager, divisional manager.

23    The primary judge set out the text of cl B6 as it stood after the September 2013 variation at [90] and quoted aspects of Smith DP’s reasoning at [91]. His Honour did not mention the November 2013 variation, but at [95] quoted part of the first sentence of cl B6 in its post-November 2013 form (including the word “typically”). I therefore infer that his Honour had the later version of the clause before him. The question whether there is any material difference between the two versions, and how it affects the issues in the appeal, will be touched on later in these reasons.

Ord Minnett’s case

24    In its amended defence (AD) Ord Minnett took issue with some aspects of the way Mr Theodorou’s duties were described in SOC [5]. At AD [5(c)] it described his duties as follows.

…

(i)     executing share transactions on behalf of the Respondent's private clients, such as by placing orders for trades of Australian Securities Exchange (ASX) shares;

(ii)     providing advice to private clients on investment recommendations, principally ASX shares, based on his professional judgement and skill and relying on internal research provided to the Applicant by the Respondent;

(iii)     generating revenue for the Respondent by means of transactional and other fees charged to private clients for the provision of financial products or services, including brokerage for trades on the ASX; and

(iv)     seeking to attract new private clients to engage the Respondent for the provision of services, including the stockbroking services provided by the Applicant;

…

25    AD [5] went on to plead that “the principal purpose for [Mr Theodorou’s] role was to undertake work as a stockbroker and not as a financial planner”.

26    Ord Minnett accepted that Mr Theodorou’s employment was under the terms of the employment agreement and also (save for the first 18 months of his employment, and except to the extent that he received small “top-up payments”) that he was paid only by commission.

27    At AD [9] Ord Minnett denied that it was covered by the Award in respect of the employment of Mr Theodorou and said that his role was not covered by the Award. The particulars to these propositions read as follows.

The Modern Award and the classification of level 6 contained in Schedule B of the Modern Award do not apply to employees who— (a) because of the nature or seniority of their role, were not traditionally covered at all by awards; or (b) who perform work that is not of a similar nature to work that has previously been regulated at all by awards.

The work undertaken by the Applicant was of the nature of stockbroking which was not traditionally covered at all by awards or, in the alternative, was work that was not previously regulated at all by awards.

28    AD [9] also expressly repeated AD [5].

29    Ord Minnett went on to deny the application of the Award and therefore each of the contraventions of ss 44 and 45 of the FW Act.

30    As to the first alleged breach of s 45 (failure to pay salary in accordance with cl 13.1(a) of the Award), Ord Minnett pleaded in the alternative that it was entitled to set off or bring to account the amounts paid to Mr Theodorou by way of commission under the employment agreement against any amount it was required to pay by way of salary under the Award (AD [19(c)]).

31    As to the alleged breaches of the NES, Ord Minnett pleaded in the alternative that Mr Theodorou was a “pieceworker” for the purposes of s 16(2) of the FW Act and his base rate of pay was to be calculated on that basis.

The Reply

32    Two aspects of Mr Theodorou’s reply to the AD (the Amended Reply) should be noted.

33    In response to AD [5], Amended Reply [2] expressly denied that the principal purpose of Mr Theodorou’s role was to undertake work as a stockbroker and alleged that the principal purpose was “to undertake work as a private client adviser and as a financial planner”.

34    In response to AD [9], Amended Reply [7] denied that the “exclusions under level 6” applied to Mr Theodorou on the basis that:

… [t]he principal purpose of the Applicant’s role was as a private client adviser and as a financial planner which was not work performed by employees who were not previously covered at all by awards or previously regulated at all by awards.

35    By way of “Particulars of previous award coverage and regulation”, the Amended Reply cited cl 9.2.2(a)-(e) of the CommSec Award 2006 (the CommSec Award).

Relevant reasoning of the primary judge

36    The primary judge reviewed the evidence and made findings concerning the work performed by Mr Theodorou. In doing so his Honour addressed Ord Minnett’s contention that Mr Theodorou’s duties were in effect those of a stockbroker. His Honour said (at J[70]):

… I find that Ord Minnett appointed Mr Theodorou as a “Private Client Adviser” and “Associate Adviser”, and represented him to the world as a Private Client Adviser, rather than a “stockbroker”, because Ord Minnett itself recognised that the tasks Mr Theodorou was engaged to perform, although they included tasks stockbrokers perform or traditionally performed, would extend to the performance of tasks that went beyond those performed by a stockbroker. …

(Emphasis in original.)

37    His Honour went on to describe Mr Theodorou’s duties, and the main source of the commission he received, as follows (at J[72]-[74]).

… Mr Theodorou was engaged to develop, maintain, and expand a book of clients who had money to invest in the financial products Ord Minnett offered as part of its Wealth Advice business. The principal tasks Mr Theodorou was expected to perform, and which he did perform, consisted of the following:

(a)     Seek out potential clients with a view to assisting them to prepare CPFs and send them to Ord Minnett for the purpose of Ord Minnett generating and issuing SOAs to the potential clients.

(b)     Meet potential clients to whom Ord Minnett had issued a SOA with a view to providing advice (consistently with the SOA, and given the client’s financial circumstances, goals, and criteria) about the financial products the potential client could consider acquiring.

(c)     Give effect to decisions a client has made on the basis of the advice Mr Theodorou had given by acquiring the securities the client had decided he or she would wish to acquire and, if so enter details of the investments the client had decided to make in Ord Minnett’s information systems.

(d)     Where the client’s instructions involved the acquisition of a portfolio of securities, and the client has agreed to acquiring services Ord Minnett offers through one or more of its portfolio services, and in particular PARS, monitor information generated by Ord Minnett’s information systems that is relevant or potentially relevant to whether, given the client’s financial circumstances, goals, and criteria, the client might consider selling or replacing or expanding the investments that constitute the client’s portfolio, and convey such information to the client with a view to advising the client about the options that are available to the client.

(e)     Quite apart from the circumstances referred to in (d), provide advice to a client whenever the client considers whether he or she wishes to sell or acquire securities.

(f)     Act as an agent in the selling or buying of securities without being called to give advice.

(g)     Undertake tasks that support the tasks in (a)-(e), and in particular, being aware of the constant flow of information that is generated by Ord Minnett’s systems and other sections of Ord Minnett that are relevant to understanding the markets and securities in which current and potential clients have invested or intend to invest.

The tasks Mr Theodorou performed do not reflect the tasks of “management” or of a “manager”, within the ordinary meaning of those words ...

The principal source of commission Mr Theodorou earned reflected the principal sources of revenue his activities as an employee generated for Ord Minnett, these being advice given in connection with the buying and selling of securities; and the work Mr Theodorou performed in monitoring the portfolio of investments the clients he managed held.

38    The primary judge held that Mr Theodorou came within cl B6. This involved the following steps.

(a)    Mr Theodorou’s duties came within the first sentence of the clause, supported by the indicative job list.

(b)    Ord Minnett bore the onus of proof in relation to whether Mr Theodorou’s position came within the part of the clause commencing “provided that this level 6 classification does not cover …” (referred to as the proviso) and it had failed to satisfy that onus.

(c)    Alternatively, if Mr Theodorou bore the onus in this respect, the evidence established that he did not come within the proviso.

39    The consequence of these findings was that Mr Theodorou was entitled to be paid an amount of $245,483.96 in respect of work that he performed from 1 July 2015 to 13 December 2019. This calculation appears not to have been disputed; however, Ord Minnett claimed to be entitled to set off against this amount certain sums which it had paid Mr Theodorou.

40    Mr Theodorou accepted that a credit of $14,437.14 should be given to Ord Minnett in respect of one of the “top-up payments” referred to earlier. However, the parties remained at issue in respect of $231,046.82 that had been paid to Mr Theodorou by way of commissions under the employment agreement. The primary judge held that the obligation to pay these commissions was not an obligation of the same kind as the obligation under the Award to pay a salary. The commissions depended on transactions entered into on behalf of clients and the value of Mr Theodorou’s clients’ portfolios, rather than on performing or being available to perform the work for which he had been engaged (J[158]). His Honour therefore rejected Ord Minnett’s set-off argument.

41    Finally, reg 3.42 of the FW Regulations (which is set out in full below) requires an employer to make a copy of an employee record available to the employee or former employee on request. Subregulation (3) imposes a deadline for that production in circumstances where the record is kept at the premises where the employee works or used to work: it must be made available at those premises within three days or posted within 14 days.

42    By an email sent on 6 April 2021, Mr Theodorou’s solicitor had requested that a copy of his employee record be provided by no later than 5 pm on 20 April 2021. Ord Minnett’s solicitor advised on 20 April 2021 that it was not able to meet this request because the person responsible for collating the documents was on leave. Some records were provided on 29 April 2021. On this basis, the primary judge was satisfied that reg 3.42(3) had been contravened (J[163]).

The issues in the appeal

43    By its amended draft notice of appeal Ord Minnett seeks to raise the following issues.

(a)    Ground 1 alleges that the primary judge erred in finding (at [123]) that Mr Theodorou’s position fell within the terms of cl B6.

(b)    Ground 2 alleges that the primary judge erred in holding that Ord Minnett bore the onus of proof in relation to the application of the proviso.

(c)    Ground 3 alleges that the primary judge erred in finding that, if Mr Theodorou bore that onus, it was satisfied.

(d)    Ground 4 alleges that the primary judge erred in failing to find that Mr Theodorou was a pieceworker within the meaning of s 21(1)(c) of the FW Act.

(e)    Ground 5 is expressed to flow from the errors identified in grounds 1 to 4, and 7. It alleges that, as a result of those errors, the primary judge erred in holding that the Award covered Mr Theodorou’s employment and that as a result he was entitled to payments in respect of annual leave, personal or carer’s leave and public holidays. Properly understood, however, this consequence flows if ground 1 succeeds or grounds 2 and 3 succeed. Ground 4 only arises if the Award did not apply. The parties framed their arguments on this basis.

(f)    Ground 6 alleges that the primary judge erred in finding Ord Minnett was not entitled to set off the commission it had paid Mr Theodorou against the amounts found to be owed to him.

(g)    Ground 7 alleges that the primary judge failed to deal with (or gave insufficient reasons for rejecting) an argument advanced by Ord Minnett that the payment of “commissions” to Mr Theodorou while he was on leave satisfied its obligations to pay him in respect of such periods.

(h)    Ground 8 alleges error in the primary judge’s finding that reg 3.42(3) had been contravened.

Clause B6 (ground 1)

44    The issues raised by ground 1 concern whether Mr Theodorou’s role came within the language of clause B6 that precedes the word “provided”. His Honour proceeded on the basis (which is correct in my view, and not challenged) that the proviso should be understood to qualify the whole of what precedes it, and not merely the first part of the sentence of which it forms part.

The primary judge’s approach

45    The primary judge’s discussion of the construction of cl B6, leaving aside the proviso, was as follows (at J[95]-[97]).

The first point to note is that Clause B6 applies to a person who “typically performs a middle managerial role”. The meaning of the expression “middle managerial role” is suggested by the words that immediately follow it, namely, “primarily to control the conduct of a part of the employer’s business”; and at least part of the meaning of this expression, in turn, is suggested by the words that immediately follow that expression, namely “decisions are regularly made”; and “responsibility accepted” on “matters relating to the administration and conduct of the part of the business”. This part of Clause B6 must be read with the job descriptions included in the “[i]ndicative job list”. All but three of the indicative job descriptions have “manager” attached to them; the three that do not are “financial planners”, “information technology specialists”, and “senior analyst”.

Thus the class of persons covered by Clause B6 would include a “manager” within the ordinary meaning or meanings of that word. One such meaning is a “person who manages (a department of) a business, organization, institution, etc.; a person with an executive or supervisory function within an organization”. But the inclusion in the “[i]ndicative job list” of job descriptions that do not include “manager” suggests that Clause B6 applies to persons who are not “managers” within the ordinary meaning or meanings of that word. That is particularly suggested by the inclusion of “financial planners”. That, in turn, suggests that “manager” in Clause B6 includes persons who do not supervise or control the activities of others, but nevertheless control the conduct of part of the employer’s business. That would be the case where the employee himself or herself conducts activities on behalf of the employer which directly generates revenue for the employer. Further, the inclusion of “relations manager” in the indicative job list suggests that “manager” is used in a broader sense than in its usual sense to extend to interactions with persons who are not employees or agents of the employer and, therefore, to persons who are not subject to the power, authority, or control of the person holding the position of “relations manager”.

The second point to note is that Clause B6 requires that “[t]hose responsible for managing more than 10 people must be classified at this level”. The word “managing” in this context is used as a verb that connects the acts of a manager with the object of the acts of the manager; that is, “managing”, in this context, means “to take charge of, control, or direct (a . . . business . . .)”. Thus “managing”, in this part of Clause B6, denotes the acts by which a person with authority controls or directs the actions of other employees or agents of the employer.

(Footnotes omitted.)

46    On the basis of that discussion, the primary judge framed the question for the purpose of this aspect of the case as follows (J[102]).

… Were the tasks Mr Theodorou performed tasks primarily by which he controlled the conduct of part of Ord Minnett’s business, and which involved him regularly making decisions, and accepting responsibility, on matters relating to the administration and conduct of part of Ord Minnett’s business, and for that reason, but subject to the Proviso, covered by “this level 6 classification”? …

47    Ord Minnett’s submissions were recorded as being that Mr Theodorou’s tasks were not managerial tasks; his responsibilities were limited to his book of clients and Ord Minnett set parameters by which he could deal with those clients; he was not assisted by any other adviser; he shared his administrative assistant with other client advisers and had no power over their employment; and the fees he could charge were set by Ord Minnett.

48    The primary judge criticised these submissions as not directed to the language of the clause but relying on an unarticulated notion of a “middle managerial role”. His Honour considered that the terms of the clause extended beyond the tasks ordinarily denoted by the words “manage” and “management” so that the real issue was whether Mr Theodorou’s role could properly be characterised as to control the conduct of a part of the employer’s business in which decisions were made and responsibility taken. Mr Theodorou was seen as controlling a part of Ord Minnett’s business in the sense that he sought out and solicited clients and then took responsibility for advising and servicing the needs of (and deriving income from) those clients.

Pleading issues

49    Ground 1 alleges error on four interrelated bases:

(a)    in the overall finding at [123] that Mr Theodorou’s position came within cl B6;

(b)    in not holding that Mr Theodorou did not come within cl B6;

(c)    in failing to find that the principal purpose of Mr Theodorou’s role was to provide services in the nature of stockbroking; and

(d)    in finding at [96] that for an employee to come within cl B6 they did not need to “supervise or control the activities of others”.

50    Mr Theodorou submitted that it was not open to Ord Minnett to advance points (a), (b) and (d) because they were not part of its pleaded case below. I reject this submission.

51    As noted above, AD [9(a)] denied that Ord Minnett was covered by the Award in respect of Mr Theodorou’s employment and AD [9(b)] pleaded that his role was not covered by the Award. The particulars provided for AD [9(b)] referred only to the operation of the proviso. However, AD [9(c)] expressly repeated AD [5], which contained propositions about Mr Theodorou’s duties that were clearly directed to an attempt to take his role outside cl B6. These included, but were not limited to, the proposition that his role was to undertake “work as a stockbroker and not as a financial planner”. AD [9] was itself repeated in AD [10], as part of the denial of the allegation in SOC [10] that Mr Theodorou was within cl B6. These pleadings were laying the groundwork for arguments that, by reference to the duties he performed, Mr Theodorou was either outside the general terms of cl B6 or alternatively within the proviso. As to the first of these arguments, Ord Minnett’s pleaded case was not limited to the attempt (which the primary judge rejected) to characterise Mr Theodorou’s duties as those of a stockbroker.

52    It is also clear from the primary judge’s reasons that the construction of cl B6 and its application to the role Mr Theodorou was found to have performed (which, aside from the “stockbroker” label, was not very different from the role asserted by AD [5]) were live issues in the trial. Even if that were not so, the issues raised by points (a), (b) and (d) above are issues of construction of the Award which take as their starting point the factual findings made by the primary judge. To the extent that any of the arguments now put are new, they are not points which would have been met by evidence if raised below.

Analysis of the clause

53    The expression “middle managerial role” is given content in cl B6 by the remainder of the sentence in which it appears. First, therefore, the primary purpose of the role is controlling the conduct of a part of the employer’s business. Secondly, the role is one in which “decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business” (emphasis added).

54    These two specifications are expressed cumulatively (by the use of “and”). The specifications themselves take part of their colour from the fact that they are being used to describe a class of “management” role. “Management”, of course, usually connotes directing or supervising those who do the primary work of an organisation (and support staff) rather than actually doing that work. While there may be an element of circularity in this observation, recognising that each word is part of the context of each other word is necessary if the clause is to be read harmoniously and as a whole. Further, and contrary to a submission advanced by Mr Theodorou, I do not accept that the word “primarily” creates room for roles other than “middle managerial” roles to come within the clause: the word is part of the description of the relevant “middle managerial” roles. Without looking any further afield, therefore, I would construe the “middle managerial role” to which cl B6 refers as referring to managers in the ordinary sense: those who control (subject to senior management) a part of an entity’s business primarily by directing the work of others.

55    This understanding of “middle managerial role” gains support from two aspects of the wider context in which the expression appears.

56    Clause B6 describes “Level 6” in a hierarchy of work levels, each of which builds on the previous one in terms of seniority and complexity of work. Clause B5 describes a “Level 5” position in the following way.

A Level 5 position is one in which tasks, service requirements and supervisory functions are performed using a more extensive range of skills and knowledge at a higher level than that required at Level 4.

The position may be:

(a)     a specialised role, possibly supported by one or two junior staff members, requiring formal qualifications and/or specialised vocational training; and/or

(b)    a managerial role (managing 5 – 10 people) responsible for the operation of part or parts of the employer’s business.

Those employed at this level exercise considerable discretion and/or are responsible for operational planning.

Indicative job list—human resources consultant, senior learning and development officer, accountant, senior claims officer, analyst programmer, fraud investigator, call centre team leader, credit controller, administration manager, underwriter, sales manager, customer service team leader, assessor, loss control officer, business analyst, assistant branch manager, personal lending specialist, team leader.

57    The first aspect of this context is that the second sentence of cl B6 links directly with cl B5(b), by requiring that a person “responsible for managing” more than 10 people is to be classified at Level 6. This gives a further indication that the activity of “management” is to be understood to involve managing staff.

58    The second, and perhaps more significant, aspect is that cl B5 refers as separate concepts to “a specialised role” (involving technical or subject-matter expertise) and a “managerial role (managing 5 – 10 people)”. In language that is echoed in cl B6, a “managerial role” is described as “responsible for the operation of part or parts of the employer’s business”. Clause B6 refers to a “managerial role”, at a higher level and with more responsibility than cl B5, but makes no reference at all to a “specialised role”. If the two clauses are read together, giving consistent meanings to the words used, the term “middle managerial role” can only be understood to refer to managers in the ordinary sense.

59    However, there are two other aspects of cl B6 that need to be taken into account.

60    First, the “indicative job list” at the end of the clause refers to three job titles that do not include the word “manager”: “financial planners”, “information technology specialists” and “senior analyst”. While there is no evidence before the Court concerning the nature of these roles in the industry to which the Award relates, their titles as a matter of ordinary English suggest jobs that involve using technical or subject-matter expertise to achieve outcomes rather than primarily supervising the work of other people. Additionally, a “relationship manager” is ordinarily understood to be a person responsible for taking care of relations between the entity and a particular client or group of clients: “manager” is being used in a different sense in this job title. The same may be true of “fraudulent relations manager”, but I confess that this is a mystery to me. The point is that the indicative job list, if it is to be given operation, expands the scope of cl B6 beyond “middle managerial” roles in any ordinary sense of that term.

61    The indicative job list must have been included for a reason and should, if possible, not be treated as mere verbiage. It is a list of fairly specific jobs that the authors of the Award must have made a conscious decision to include. It should be understood to extend the coverage of cl B6, beyond the concept of a “middle managerial role” as discussed above, at least to the extent of including the roles described in the list. This is not sufficient for Mr Theodorou because, for reasons explained below, his role does not come within any of those descriptions (in particular I do not accept that he was a “financial planner”). However, the list describes itself as “indicative” and the effect of this description needs to be considered.

62    Secondly, in the later version of cl B6 set out above, the opening sentence provides that a Level 6 position “typically” performs a middle managerial role. “Typically” has various senses but the relevant one in this context appears to be, prima facie, that the “middle managerial role” of the kind indicated is the type or representative specimen of a Level 6 role. If it is read in this way, however, any certainty as to the meaning of cl B6 melts away. One is left with “middle managerial” roles as representative specimens of a class, with the other roles mentioned in the indicative job list presumably being specimens as well. There is nothing to indicate where the boundaries of the class might lie. In a document intended to fix legal entitlements enforceable under the FW Act, such a reading is unsustainable. Familiar principles applicable to the construction of awards, which emphasise the avoidance of narrow or pedantic approaches and the search for the meaning intended by the document’s framers (see eg Kucks v CSR Ltd (1996) 66 IR 182 at 184), do not countenance such a result.

63    The opening words “a Level 6 position typically performs” were, as noted earlier, introduced by an order made by Smith DP and dated 22 November 2013. The order was expressed to come into operation on the first full pay period commencing on or after 21 October 2013. So far as I have been able to find, no reasons were published for this variation, which was expressed to be “further to the decision issued on 30 September 2013”. I therefore infer that the variation was not controversial as between the parties to the application which had led to the earlier decision and was not regarded by Smith DP as effecting a significant change in coverage. However, one can only speculate about why the variation was considered appropriate and the purpose sought to be achieved. The history therefore sheds no useful light on what work was intended to be done by the word “typically”.

64    Returning to the language of the clause itself, the best explanation for the insertion of the word “typically” is that it reconciles what is otherwise an inconsistency between the main body of cl B6 and the indicative job list that is appended to it (as well as, possibly, an inconsistency between the first and second sentences of the clause). That is to say, the scope of “Level 6” is defined by the first sentence of cl B6, but subject to the express inclusions or additions effected by the second sentence and the indicative job list. Giving the word “typically” a broader operation produces a degree of indeterminacy that the authors of the Award are unlikely to have intended. Thus, cl B6 is concerned (subject to the indicative job list) with positions whose primary role is “management” in the ordinary sense of that term.

65    I therefore disagree with the conclusion of the primary judge that Mr Theodorou came within cl B6 on the basis that he was responsible for the conduct of a part of Ord Minnett’s business. The relevant wording is “decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business”. The extent to which Mr Theodorou made decisions and accepted responsibility as part of his daily duties is unclear. The important phrase, however, is “administration and conduct”. This, particularly in the context described above, connotes taking responsibility for directing the operations of a team of people rather than for carrying out particular transactions.

66    Nor, did Mr Theodorou come within the clause by way of the indicative job list. The role in that list to which his duties came closest is “financial planner”. However, I understand that description to refer to a person who gives clients strategic advice about building wealth or planning for retirement. Based on the findings that his Honour made, Mr Theodorou advised clients only as to the performance of investments they had made (through him) in products offered by Ord Minnett and the suitability of other such investments.

67    For these reasons, ground 1 is made out.

The proviso to cl B6 (grounds 2 and 3)

68    In the light of my conclusion as to ground 1 it is not strictly necessary to consider the proviso. However, I will set out my conclusions out of respect for the detailed arguments of the parties and in case the matter should go further.

Burden of proof

69    The first issue that should be considered is who bore the burden of proof in relation to application of the proviso.

70    In University of Sydney v National Tertiary Education Industry Union [2024] FCAFC 57; 304 FCR 18 (NTEU), the Full Court considered a provision in an Enterprise Agreement in the context of a claim that s 50 of the FW Act (which prohibits contraventions of such an Agreement) had been breached. At [185] I said:

As a matter of statutory construction, the allocation of onus in respect of a particular question depends on whether the matter in question is part of the total statement of the relevant obligation or is in the nature of an excuse or justification, a question which is to be approached as a matter of substance. This proposition was recently affirmed by Jackson J in Australian Pesticides and Veterinary Medicines Authority v Arnica Pty Ltd (No 2) [2022] FCA 815; 293 FCR 533 at [88], referring to Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88 at 119 (McHugh J) and to the well known statement of the High Court in Vines v Djordjevitch (1955) 91 CLR 512 at 519–520 (Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ) as follows:

When an enactment is stating the grounds of some liability that it is imposing or the conditions giving rise to some right that it is creating, it is possible that in defining the elements forming the title to the right or the basis of the liability the provision may rely upon qualifications exceptions or provisos and it may employ negative as well as positive expressions. Yet it may be sufficiently clear that the whole amounts to a statement of the complete factual situation which must be found to exist before anybody obtains a right or incurs a liability under the provision. In other words it may embody the principle which the legislature seeks to apply generally. On the other hand it may be the purpose of the enactment to lay down some principle of liability which it means to apply generally and then to provide for some special grounds of excuse, justification or exculpation depending upon new or additional facts. In the same way where conditions of general application giving rise to a right are laid down, additional facts of a special nature may be made a ground for defeating or excluding the right. For such a purpose the use of a proviso is natural. But in whatever form the enactment is cast, if it expresses an exculpation, justification, excuse, ground of defeasance or exclusion which assumes the existence of the general or primary grounds from which the liability or right arises but denies the right or liability in a particular case by reason of additional or special facts, then it is evident that such an enactment supplies considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter.

(Citations omitted.)

71    I concluded at [189]-[190] that the question posed by these passages should be addressed from the perspective of the relevant statutory norm (there, s 50) and that any “exculpation, justification, excuse, ground of defeasance or exclusion” would therefore need to be found in a provision excluding the application of s 50 to some specific class of case where it otherwise applied. The other members of the Court (Perram and Lee JJ) agreed with this reasoning.

72    The same reasoning applies here. The Award had no statutory force of its own. It was, to borrow a phrase from Ex parte McLean (1930) 43 CLR 472 at 479 (Isaacs CJ and Starke J), “a factum merely”, upon which s 45 of the FW Act operated to create statutory obligations. Mr Theodorou sought declarations that Ord Minnett had contravened s 45 and further orders which depended on that alleged breach being established. It is not in doubt that Mr Theodorou bore the onus of proving that Ord Minnett had contravened s 45. The proviso, contained within the terms of the Award, was not capable of constituting an “exculpation, justification, excuse, ground of defeasance or exclusion” from the obligation imposed by s 45.

73    Part of what Mr Theodorou needed to prove, in order to make out his case that there had been contraventions of s 45, was that he came within cl B6 of the Award. That entailed proving that the proviso did not apply to him.

74    The same result is reached if, contrary to the reasoning in NTEU referred to above, the relevant statutory norm is understood to reside in the provisions of the Award that are alleged to have been contravened. The operative provisions, with which Ord Minnett allegedly failed to comply, were cl 13.1 in relation to salary and cl 24.3 in respect of annual leave loading. They provided (relevantly) as follows:

13.1 Adult employees

(a)     A full-time adult employee must be paid a minimum rate for their classification as set out in the table below:

Level        Minimum annual salary    Minimum weekly rate
             $                 $

…

    Level 6             56,290         1082.50

(b)     The classification structure and descriptors for the above classifications are contained in Schedule B—Classification Structure.

…

24.3 Annual leave loading

(a)     During a period of annual leave an employee will receive a loading calculated on the rate of wage prescribed in clause 13—Classifications and minimum wage rates. Annual leave loading payment is payable on leave accrued.

75    Clause B6, which is part of the Schedule referred to in cl 13.1(b), is definitional. It identifies the class of employees in respect of whom cl 13.1(a) requires a specified minimum salary to be paid. The obligation imposed by cl 13.1(a) then triggers a further obligation under cl 24.3. The proviso in cl B6 was therefore not an “exculpation, justification, excuse, ground of defeasance or exclusion” that might come into play if the obligation in cl 13.1(a) were found to apply; it was an integral aspect of determining whether the obligation did apply.

76    Two other points should be mentioned briefly.

77    First, it will be apparent that I am not persuaded by Mr Theodorou’s submission that Ord Minnett bore the onus of proving that the proviso applied because it had invoked the proviso in its pleadings and submissions. At least in a case concerning alleged breach of a statutory obligation, the course taken by the parties’ pleadings is not necessarily a reliable guide to where the onus of proof lies (cf NTEU at [188]). “He who asserts must prove” may be little more than a slogan in such cases, begging the question of who is asserting what. In the present case Mr Theodorou alleged in his pleadings that he came within cl B6 (which includes the proviso). When Ord Minnett invoked the proviso in AD [9(b)], it was not confessing and avoiding; it was giving notice of a basis upon which it contended that Mr Theodorou did not come within cl B6. If Ord Minnett had not invoked the proviso in its defence and then sought to rely on it in submissions, Mr Theodorou could properly have said that it should not be allowed to do so; however, this is an aspect of procedural fairness rather than onus.

78    Ground 2 is therefore made out.

Did Mr Theodorou establish that the proviso did not apply?

The approach of the primary judge

79    Having found that Ord Minnett bore the onus of proof in relation to the proviso, the primary judge addressed the case on that basis and held that Ord Minnett had not met the onus. His Honour considered whether Mr Theodorou had succeeded in proving that the proviso did not apply only in the alternative and on the assumption that his conclusion as to onus was wrong. This analysis followed on from, and was in some respects coloured by, the way in which his Honour had treated Ord Minnett’s positive case that the proviso applied.

80    That positive case, it will be recalled, was pleaded by way of AD [9(b)] and its particulars, which are set out at [27] above. The primary judge thus introduced his discussion of the issue as follows (at [124]).

I have found that Ord Minnett bears the onus or proving that the Proviso applies; and although Ord Minnett submits that Mr Theodorou bears the onus of proving the Proviso does not apply, Ord Minnett, in its defence, has positively asserted that the Proviso does apply; and it alleges the Proviso applies because Ord Minnett engaged Mr Theodorou to perform the role of a stockbroker, a role that has not traditionally been covered by an award.

81    His Honour considered and rejected this argument at [125]-[126].

82    At [127] his Honour said:

I will now assume that, contrary to what I have concluded, Ord Minnett did engage Mr Theodorou to perform the tasks of a stockbroker or a full-service stockbroker. The question I would need to consider is whether these constituted roles that “were not traditionally covered at all by awards”, or the work “is not of a similar nature to work that has previously been regulated at all by awards”.

83    Having stated the issue in that way, the primary judge turned to consider the CommSec Award, which had been referred to by Mr Theodorou in his Amended Reply and tendered by him. His Honour addressed the coverage of that award (at [128]-[130]), and a submission by Ord Minnett that reference to a single award was insufficient to establish “traditional” coverage by awards (at [131]), before concluding as follows (at [132]).

Thus, even if Mr Theodorou’s role or activities were those of a stockbroker, the work he performed as an employee of Ord Minnett is not of a nature that was not regulated at all by an award; and his role was not one that was not “traditionally covered at all by awards”, as I have construed that expression. Thus, if Mr Theodorou were to bear the onus of proving that the Proviso did not apply to his employment, he would have discharged that burden.

The correct approach

84    The primary judge thus approached the question whether Mr Theodorou had satisfied the onus of proving that the proviso did not apply by reference to the scope of the case advanced by Ord Minnett (who, in this analysis, did not bear any onus) that the proviso did apply. It was submitted by Ord Minnett in the appeal that the scope of its case should not be allowed to distract attention from what Mr Theodorou needed to prove and whether he had succeeded in proving it. I am not persuaded that that is correct, at least as a matter of procedural fairness. Pleadings are intended to identify the issues in dispute between the parties. With Ord Minnett having expressly pleaded in its AD that the proviso applied on a particular basis, Mr Theodorou was entitled to proceed on the understanding that his forensic task was to negative that allegation. Correspondingly, without giving fair notice (which would normally be done by amending its pleading), it was not open to Ord Minnett to argue that for some new or different reason Mr Theodorou had not proved his case.

85    However, Ord Minnett’s pleaded case was not as narrow as the reasons of the primary judge seem to suggest. It particularised its allegation at AD [9(b)] that Mr Theodorou was not covered by the Award by referring to the proviso and then saying that the work he performed “was of the nature of stockbroking which was not traditionally covered at all by awards”. At AD [9(c)] Ord Minnett repeated all of AD [5], which contained its case as to the actual duties undertaken by Mr Theodorou. In this context, the phrase “of the nature of stockbroking” should be understood as an attempt to encapsulate the essence of what had been pleaded as Mr Theodorou’s duties, rather than the pleader staking everything on the designation “stockbroker”. For this reason, it was not sufficient to find that Mr Theodorou was not a “stockbroker” or a “full service stockbroker”. Nor was it sufficient, in the alternative, to assume that Mr Theodorou was a “stockbroker” or a “full service stockbroker” and then ask whether those roles were covered by awards. The particular duties he performed and did not perform needed to be addressed before a conclusion could be stated as to whether he came within the proviso.

The issue and the construction of the proviso

86    The material that Mr Theodorou relied upon to show that the proviso did not apply to his position was the CommSec Award. Ord Minnett’s submissions in the appeal did not appear to take issue with the primary judge’s conclusion at [130] that roles described in the CommSec Award covered or substantially covered the duties that he performed. The question that therefore requires attention is whether proof of one award that covered positions of the kind occupied by Mr Theodorou is sufficient to establish that he was not within a class of employees who (in the language of the proviso):

(a)    “because of the nature or seniority of their role, were not traditionally covered at all by awards”; or

(b)    performed “work that is not of a similar nature to work that has previously been regulated at all by awards”.

87    Mr Theodorou needed to establish that he fell outside both of these categories.

88    The meaning of “not traditionally covered” is somewhat obscure. “Traditionally” ordinarily connotes something done with a degree of frequency or regularity over a period of time. However, the time period and the frequency that are needed for the thing to be regarded as “traditionally” done are likely to be highly debatable and probably context-specific. The scope of the debate in the present case is narrowed by the fact that, so far as the evidence showed, there was only one award that covered positions similar to that occupied by Mr Theodorou. He needs to establish that that singular event was sufficient for “traditional” coverage. However, it is a mistake to seek to construe a statutory phrase by reference to the facts of a particular case. For the purpose of construing the proviso, the lack of clarity in the ordinary meaning of the phrase is something that must be taken into account.

89    The September 2013 variation inserted the proviso into cl B6. It appears from the reasons of Smith DP (at [23]) that the revised wording of the clause was his own proposal. Smith DP described the intended effect of the variation as follows (at [24]):

By adopting this course the Award will not apply to those, who because of their [sic] seniority of their role, were not covered by awards. It does no more that [sic] recognise the statutory injunction contained in s.143(7). In taking this course I am satisfied that in a very real sense the variation will not remove employees from coverage as those employees should not have been covered in the first place. It would not be appropriate in a review to make a variation which would remove coverage and this connection. I am concerned to ensure that those employees, who have coverage, even in a limited way, do not lose that coverage. To avoid doubt this variation should not disturb award coverage of those employees to whom some sections of awards previously applied. This is why I have included reference to “at all”. It should not be forgotten that this is a minimum safety net. In not altering the indicative job list I have decided that it is important to concentrate on seniority and coverage rather than providing that a job title could impact upon the coverage of an award. I will provide the parties to the proceedings with 14 days to comment upon the proposed terms of the variation to ensure that unintended consequences do not arise from the decision made.

90    The final sentence of this extract provides some background to the small variation in wording effected by the November 2013 variation (for which, as noted earlier, no reasons were published). It seems likely that that variation was effected as a result of feedback from the parties.

91    What emerges from this reasoning is that the insertion of the proviso was not intended to do anything more than recognise, within the four corners of the Award, the effect which s 143(7) of the FW Act had in any event. It is therefore necessary to consider the meaning of that subsection.

92    Section 143 of the FW Act is located in Division 3 of Part 2-3 of the Act, which deals with “Modern Awards”. As noted above, 136(1) provides that a modern award “must only include terms that are permitted or required by” specified provisions of the FW Act, including Subdivision C of Division 3; and s 137 provides that a term of a modern award “has no effect” to the extent that it contravenes s 136. Section 143(7), which is in Subdivision C, is quoted above. It provides that a modern award “must not be expressed to cover” particular classes of employees. Although the relationship between ss 136 and 143 is not expressed as clearly as it might be, the result appears to be that a term in an award purporting to cover employees in the classes designated by s 143(7) is a term that is not “permitted or required by” any of the provisions of the FW Act referred to in s 136.

93    The Award was therefore ineffective to the extent that it purported to cover employees in either of the classes referred to in s 143(7). It is apparent that Smith DP intended only to recognise this limitation and considered that the insertion of the proviso would not exclude anybody who was not already excluded. Questions as to the effect of the proviso are therefore best approached through the construction of the (nearly identical) language of s 143(7). There may be shades of difference in meaning between “not traditionally covered” (the proviso) and “have traditionally not been covered” (s 143(7)), but this can be ignored for present purposes. The problem remains, however, what is meant by “traditionally” in this context.

94    The other provisions of Subdivision C, which is the immediate context in which the words of s 143(7) appear, do not provide any guidance as to what they were intended to mean. Nor does the explanatory memorandum to the Bill for the FW Act (which contained s 143 in substantially its current form) provide any specific assistance.

95    The origin of s 143(7) appears to be an Award Modernisation Request (AMR) issued to the (then) Australian Industrial Relations Commission (AIRC) on 28 March 2008 by the Minister under the Workplace Relations Act 1996 (Cth) (the WR Act). This was part of an “award modernisation” process which itself had a long history (discussed in, eg, Creighton B and Stewart A, Labour Law (5th ed, Federation Press, 2010)).

96    Very briefly, for most of the twentieth century, regulation of employment relationships occurred through conciliation and arbitration for the prevention and settlement of “industrial disputes” under s 51(xxxv) of the Constitution. In this context, an “award” was the outcome of a process of conciliation or arbitration which bound the parties to the original “dispute”. The number of awards became very large and their terms were sometimes complicated; awards could cover the whole range of matters capable of being the subject of an “industrial dispute”. Legislative change in 1996 limited the range of matters allowed to be covered by awards and initiated a long process of “award simplification” through the AIRC.

97    The substantial reforms enacted in the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) changed the constitutional underpinnings of the legislation so that awards were no longer dependent on industrial disputes and their coverage was no longer limited to the parties to a dispute. Awards could therefore make common rules for participants in an industry or occupation. The matters permitted to be covered by awards was further reduced and a further round of “award simplification” was envisaged. The WR Act, as amended, also provided for a process of “award rationalisation” which was intended to reduce drastically the number and complexity of awards. The award rationalisation process was to be undertaken by a Full Bench of the AIRC and was to be triggered by an “award rationalisation request” directed to the President of the Commission by the Minister under s 543 of the WR Act. However, little if any progress was made with these processes before a new government was elected in 2007.

98    Further amendments to the WR Act, which came into effect on 28 March 2008, replaced the award simplification and award rationalisation provisions with a process, under Part 10A, termed “award modernisation”. The task was to be undertaken by one or more Full Benches of the AIRC and was to be triggered by the Minister issuing an AMR to the President of the AIRC under s 576C. Part 10A set out (in ss 576A and 576B) some guidance as to the intended nature and function of modern awards and the matters to which the AIRC was to have regard in the award modernisation process.

99    The AMR that was issued by the Minister on 28 March 2008 included text that mirrored ss 576A and 576B. It also included, at [2], a statement as to what the creation of modern awards was not intended to do. This said, in part:

The creation of modern awards is not intended to:

(a)     extend award coverage to those classes of employees, such as managerial employees, who, because of the nature or seniority of their role, have traditionally been award free. This does not preclude the extension of modern award coverage to new industries or new occupations where the work performed by employees in those industries or occupations is of a similar nature to work that has historically been regulated by awards (including State awards) in Australia …

100    The FW Act was assented to on 7 April 2009 and Part 2-3, which deals with modern awards, came into force on 1 January 2010. The AIRC had by that time completed the task set for it under the former Part 10A. The statement in the AMR, that modern awards were not intended to cover employees who “have traditionally been award free”, is echoed by the provision in s 143(7) that modern awards are not to extend to employees who “have traditionally not been covered by awards”.

101    This excursion into the historical background indicates that the phrase “have traditionally not been covered by awards” emanates from the “award modernisation” process and was intended to direct attention to the period before the creation of modern awards; ie, to awards that were in operation before the award modernisation process began in 2008. Beyond that, however, it provides little if any assistance in understanding what work the word “traditionally” was intended to do.

102    Ordinary principles of interpretation dictate that the word must be taken to have been intended to do something, and the Court should therefore strive to give it some effect: see eg Northern Land Council v Quall [2020] HCA 33; 271 CLR 394 at [61] (Kiefel CJ, Gageler and Keane JJ). Section 143(7) should therefore not be construed as if the word “traditionally” were not there (ie, as referring simply to employees who “have not been covered by awards”). If “traditionally” is given its ordinary meaning (and there is no apparent reason why it should not be), its insertion means that the employees being referred to are those in respect of which there was not a “tradition” of coverage. “Tradition” (as noted earlier) denotes a practice followed over time, although it is somewhat indeterminate as to how consistent and long-standing that practice needs to be. It is unlikely that the word “traditionally” would have been used if it had been intended to designate only categories of workers who were not covered at all by awards before 2008.

103    This seems to be how Perram J understood the expression in Fair Work Ombudsman v Lam [2021] FCA 205; 390 ALR 39 at [15], where his Honour observed (in relation to an award provision framed in similar terms to the proviso) that:

There is no evidence before the Court as to whether domestic workers and nannies have ‘traditionally been covered by awards’ within the meaning of this clause. The evidence which would be necessary to make good such a contention would be reasonably complex and would involve a survey of the position of domestic workers and nannies under Australian industrial awards over the vague period of time implied by the word ‘traditionally’. Armies of law clerks could be consumed by such a task.

104    In order to establish that he was not caught by s 143(7) (the effect of which is reflected in the proviso), Mr Theodorou needed to establish that he was not part of a class of workers who, because of the nature or seniority of their roles, had “traditionally not been covered by awards”. Stripping away the double negative, he needed to prove that his role was one that was “traditionally” covered by awards (or, if it was not covered, that this was for some reason other than its nature or seniority). If proper recognition is given to the word “traditionally”, the result is that Mr Theodorou could not meet this onus by proving coverage by a single award made in 2006. “Traditionally” connotes repeated instances over a period (probably of decades rather than years).

105    Ground 3, therefore, is also made out.

Ground 5

106    As noted above, the conclusion urged by ground 5 — that the primary judge erred in holding that the Award applied — flows if either ground 1 succeeds or grounds 2 and 3 succeed. In the light of my conclusions above, ground 5 is made out.

The pieceworker issue (ground 4)

107    In the court below, Ord Minnett submitted that Mr Theodorou was a “pieceworker” within the meaning of reg 1.12 of the FW Regulations. If that submission was correct, it followed that Mr Theodorou’s “base rate of pay” in respect of periods of leave was defined by reg 1.09 of the FW Regulations.

108    Section 21(1) provides as follows.

(1)     A pieceworker is:

(a)     a national system employee to whom a modern award applies and who is defined or described in the award as a pieceworker; or

(b)     a national system employee to whom an enterprise agreement applies and who is defined or described in the agreement as a pieceworker; or

(c)     an award/agreement free employee who is in a class of employees prescribed by the regulations as pieceworkers.

Note:     Sections 197 and 198 affect whether the FWC may approve an enterprise agreement covering a national system employee that includes a term that:

(a)     defines or describes the employee as a pieceworker, if the employee is covered by a modern award that is in operation and does not include such a term; or

(b)     does not define or describe the employee as a pieceworker, if the employee is covered by a modern award that is in operation and includes such a term.

109    The “base rate of pay”, applicable under reg 1.09 for the purposes of the NES, is defined in reg 1.09(2) as follows.

(2)     The base rate of pay, expressed as an hourly rate of pay, is worked out using the formula:

where:

TA is the total amount earned by the employee during the relevant period.

TH is the total hours worked by the employee during the relevant period.

the relevant period is:

(a)     for an employee who was continuously employed by the employer for a period of 12 months or more immediately before the base rate of pay is to be worked out—the 12 months before the rate is to be worked out; or

(b)     for an employee who was continuously employed by the employer for a period of less than 12 months immediately before the base rate of pay is to be worked out—that period.

110    Ord Minnett accepted that, if the Award applied to Mr Theodorou, he could not come within s 21(1)(c) and the argument would therefore fail. The primary judge, having found that Mr Theodorou was covered by the Award, therefore did not consider the argument (at [136]).

111    If (as I have concluded) Mr Theodorou was not covered by the Award, he was an “award/agreement-free employee” (see the definition in s 12 of the FW Act) and the next question is whether he was within a class of employees prescribed as pieceworkers. The relevant class is defined by reg 1.12 of the FW Regulations, which provides as follows.

1.12  Meaning of pieceworker

(1)     For paragraph 21(1)(c) of the Act, this regulation prescribes a class of award/agreement free employees as pieceworkers.

Note:     Under paragraph 21(1)(c) of the Act, a pieceworker is an award/agreement free employee who is in a class of employees prescribed by the regulations as pieceworkers.

 (2)     The class is award/agreement free employees who:

(a)     are paid a rate set by reference to a quantifiable output or task; and

(b)     are not paid a rate set by reference to a period of time worked.

Examples of rates set by reference to a quantifiable output or task

1  A rate of pay calculated by reference to the number of articles produced.

2  A rate of pay calculated by reference to the number of kilometres travelled.

3  A rate of pay calculated by reference to the number of articles delivered.

4  A rate of pay calculated by reference to the number of articles sold.

5  A rate of pay calculated by reference to the number of tasks performed.

112    In the Court below Mr Theororou accepted that the commission payable to him under his employment agreement was a form of payment “by reference to a quantifiable output or task”. On this basis, Mr Theodorou was within the prescribed class and therefore a “pieceworker” as defined by s 21(1).

113    Mr Theodorou submitted that, if he was a pieceworker, he was entitled to be paid the prescribed “base rate of pay” for periods of leave in addition to the commission that he was paid pursuant to his employment contract. Ord Minnett resisted this submission. It pointed out that Mr Theodorou received the commission that was due to him each month regardless of whether he took leave, and was thus remunerated for those periods at the same level as the periods in which he was working.

114    Ord Minnett’s submission is to be preferred. The evident purpose of the provisions prescribing a “base rate of pay” for pieceworkers, for the purposes of the NES provisions relating to leave entitlements (ss 90, 99 and 116 of the FW Act), is that employees who are remunerated according to tasks or outputs rather than time worked are not deprived of income when they take leave to which they are entitled. The “base rate of pay” provides a floor below which the employee’s income will not fall, rather than a prescribed amount of income in addition to any ordinary remuneration that becomes payable during the period of leave. If the remuneration paid to Mr Theodorou pursuant to his employment contract fell below the applicable “base rate of pay” for any period of leave that he took, the FW Act would require that he be paid the difference. It does not appear to have been alleged that that occurred.

115    Ground 4 is made out.

Set-off (grounds 6 and 7)

116    The set-off issue only arises if Mr Theodorou was entitled to the payments of salary and leave loading that he claimed pursuant to the Award and the FW Act. It does not require determination in the appeal in the light of my conclusions on grounds 1 to 4.

117    SOC [49] identified a figure of $245,483.96 as the “gross underpayment”, said to follow from the contraventions of the FW Act alleged against Ord Minnett, and $231,046.82 as the “total underpayment” after taking into account a specific payment which Mr Theodorou accepted should be set off. AD [52] was as follows.

In the event that the Court grants the relief to Applicant for any or all of the total underpayment identified in paragraph 49, the Respondent claims a set off, at general law and restitution, of all amounts the Respondent paid to the Applicant for commissions during the Applicant's employment.

118    The principles in relation to set-off in this context were helpfully summarised in Wardman v Macquarie Bank Limited [2023] FCAFC 13; 322 IR 278 at [131] (Wheelahan J) as follows.

The seminal decision on these questions is that of the New South Wales Industrial Commission in Ray v Radano, and in particular the separate reasons for judgment of Sheldon J which have received subsequent appellate approval. Material passages in the reasons of Sheldon J were approved by the Full Court (Keely, Ryan and Gray JJ) in Poletti v Ecob (No 2), where it was held at 333 that if payments are made by an employer in discharge of a contractual obligation, the question whether concurrent statutory obligations are thereby discharged is answered by looking to the contractual purpose of the payment, objectively ascertained. Thus, if there is a coincidence of purpose, or at least a close correlation between the nature of the particular award obligation and the nature of the contractual obligation, then a payment may operate to discharge both obligations: Australia and New Zealand Banking Group Ltd v Finance Sector Union of Australia [2001] FCA 1785; 111 IR 227 (ANZ v FSU) at [47], [51]-[52] (Black CJ, Wilcox and von Doussa JJ). See also, Linkhill at [98] (North and Bromberg JJ). And consistently with the observation by Sheldon J in Ray v Radano at 478 that the answer to the problem can be found by applying common sense, it is not necessary that the same label by used for the payments: ANZ v FSU at [52]. It follows from these propositions that the terms of a contract of employment need not advert to award or statutory obligations in order that payments made under the contract operate to discharge those concurrent obligations: James Turner Roofing at [29] and [44] (Anderson J, Scott J at [52] generally agreeing, and Parker J at [68] concurring).

119    The primary judge considered at [153]-[159] whether the necessary degree of correlation existed between the award obligations and the contractual obligation in this case. His Honour considered that the obligations were different and the payments of commission therefore could not be treated as discharging the award obligations.

120    Had I concluded that the Award applied to Mr Theodorou, I would have come to a different view.

121    Mr Theodorou pleaded at SOC [7] that during the relevant period he was “remunerated by the Respondent by way of commission only, and not wholly or partly by wages or salary, for the duties performed by him”. His case was therefore that the commissions he was paid constituted the remuneration for the duties he performed. In other words, the recompense that he received in exchange for coming to work each day and performing the duties allocated to him was in the form of commissions based on the revenue that his efforts generated.

122    This is consistent with the evidence. Mr Theodorou was not trading with Ord Minnett: he was not, for example, receiving a percentage of income generated by the exploitation of intellectual property or some other right that he had licenced to it. All that he brought was his labour, which was directed at generating income for Ord Minnett by encouraging clients to invest in its products. What he received in exchange for those efforts was commissions on the income that he generated.

123    There is therefore, to my mind, a “coincidence of purpose” between the commissions payable to Mr Theodorou pursuant to the employment agreement and the amounts that would have been due to him under the Award and the NES. It would be a strange result if an employee who entered into an employment contract providing for remuneration by commission only, and received those commissions over a period of years, could insist on those commissions being completely ignored in a reckoning of their rights against the employer.

Regulation 3.42 (ground 8)

124    Regulation 3.42 provides as follows.

3.42 Records—inspection and copying of a record

(1)     For subsection 535(3) of the Act, an employer must make a copy of an employee record available for inspection and copying on request by the employee or former employee to whom the record relates.

Note:     Subregulation (1) is a civil remedy provision to which Part 4-1 of the Act applies. Division 4 of Part 4-1 of the Act deals with infringement notices relating to alleged contraventions of civil remedy provisions.

(2)     The employer must make the copy available in a legible form to the employee or former employee for inspection and copying.

Note:     Subregulation (2) is a civil remedy provision to which Part 4-1 of the Act applies. Division 4 of Part 4-1 of the Act deals with infringement notices relating to alleged contraventions of civil remedy provisions.

(3)     If the employee record is kept at the premises at which the employee works or the former employee worked, the employer must:

(a)     make the copy available at the premises within 3 business days after receiving the request; or

(b)     post a copy of the employee record to the employee or former employee within 14 days after receiving the request.

Note:     Subregulation (3) is a civil remedy provision to which Part 4-1 of the Act applies. Division 4 of Part 4-1 of the Act deals with infringement notices relating to alleged contraventions of civil remedy provisions.

(4)     If the employee record is not kept at the premises at which the employee works or the former employee worked, the employer must, as soon as practicable after receiving the request.

(a)     make the copy available at the premises; or

(b)     post a copy of the employee record to the employee or former employee.

Note 1:     Subregulation (4) is a civil remedy provision to which Part 4-1 of the Act applies. Division 4 of Part 4-1 of the Act deals with infringement notices relating to alleged contraventions of civil remedy provisions.

Note 2:     Under the Act, an inspector is also permitted to inspect and copy an employee record for the purposes of the Act. The inspector may also require the production of the employee record.

125    Regulation 3.42(3) is expressed to apply where the relevant record is kept at the premises where the employee works or worked. If that condition is not met reg 3.42(4) applies and there is no specific deadline for production of the record.

126    Ms Georgina Sheppard, a Human Resources Adviser at Ord Minnett, deposed in an affidavit that Ord Minnett’s payroll functions were managed by external providers and that therefore “employee records relating to pay and leave are not held at the Respondent’s premises”. Ord Minnett submits that this evidence was unchallenged and was expressly relied upon but not referred to by the primary judge. It is correct that Ms Sheppard’s evidence is not referred to in the reasons of the primary judge.

127    Ms Sheppard was cross-examined. It emerged from that cross-examination that the “originals” of records relating to payroll were held at the premises of the external provider, but that Ms Sheppard or her staff were able to download payslips for Mr Theodorou from a cloud environment on 7 April 2021 (the day after the request for Mr Theodorou’s employee records was made). However, Ms Sheppard’s evidence was that the payslips that were downloaded were incomplete. Somebody at Ord Minnett needed to contact the external provider to obtain the original documents so that the full record could be provided to Mr Theodorou’s solicitors. The records provided to Mr Theodorou’s solicitors on 29 April still contained some discrepancies that were remedied by further production in June 2021. When it was put to Ms Sheppard that she could not explain why it took until 29 April 2021 for the payslips to be produced, her answer was “We had gone back with a leave query that we needed further information for”. A little later it was put to Ms Sheppard that she had only gone back to IOOF for more information after 29 April 2021 and she responded:

No, we went back – so we had the cloud environment that we downloaded the payslips from, but we also had a leave query about what we had downloaded. So there was – that we went to IOOF for further information …

128    Mr Theodorou submits that the evidence establishes that the relevant records were available to be downloaded by Ord Minnett and were therefore kept “at the premises at which … the former employee worked” for the purposes of reg 3.42(3). There is considerable force in the argument that documents which exist in a cloud environment and can be downloaded by the employer’s staff are relevantly “kept at the premises at which the employee works or the former employee worked”. However, my reading of the evidence is that what Ord Minnett was able to download was incomplete; in order to provide complete (and therefore non-misleading) records, it had to contact an external service provider and have the original documents interrogated. In so far as Ms Sheppard gave this evidence it was not contradicted. It was therefore not open to the primary judge to find that reg 3.42(3) was engaged.

129    On this understanding of the facts, the case came within reg 3.42(4). No breach of the requirement of that subsection (to provide the records “as soon as practicable after receiving the request”) was alleged.

130    Ground 8 is therefore made out.

Disposition

131    There will be a grant of leave to appeal.

132    The appeal will be allowed and the judgment under appeal set aside. In lieu thereof, there will be an order that the application be dismissed.

133    It appears that the further orders made on 31 July 2024 should also be set aside. However, these orders were not the subject of any application in this proceeding.

134    Neither party sought to be heard on costs. In the light of s 570 of the FW Act, there will be no order as to costs.

Associate:

Dated:    2 July 2025