One matter that employers frequently struggle with is determining the appropriate classification levels for employees under modern awards.

All awards provide a range of classification levels which will dictate the minimum wage that is payable to the employee – get it wrong and you risk underpaying your staff.

Most, if not all, awards also provide an obligation for employees to be informed in writing of their classification when they start employment, and also whenever their classification level changes. 

A recent case in the Fair Work Commission provides guidance on the distinction between Level 1 and Level 2 under the Social, Community, Home Care and Disability Services Industry Award 2010 (‘SCHADS Award’), and in particular the relevance of the employee having a Certificate IV qualification which the employer had not actually required the employee to obtain.

Given many awards differentiate levels based (at least partly) on the employee’s qualifications, the case provides guidance that is relevant outside of the SCHADS industry.

The case can be read here: United Workers’ Union v Casson Homes Inc [2023] FWC 129


How did the case arise?

For employees covered by modern awards, there is a power contained within awards themselves for the Fair Work Commission to determine a dispute regarding matters relating to the award. This can be used, as was done in the present case, to settle a dispute about an employee’s classification level.

If you do have a dispute about award coverage on classification levels in your business, this can be a useful tool to resolve it.

The nature of the dispute in the current case was whether three of Casson Homes’ employees should be classified as Level 1 employees (as the employer contended) or Level 2 (as the employees argued).

All the employees were support workers assisting clients with mental health issues, in particular helping those people participate in the community. They were there classified under the “social and community services” stream of the SCHADS Award. The classification levels of which are contained within Schedule B to the Award. The case mainly centered around Ms Kehal who had obtained a Certificate IV in Mental Health after commencing work with Casson Homes.


What does the award say?​

Relevantly to the case, one of the differences between the Level 1 and Level 2 classification in the SCHADS Award, is that the Level 2 classification contains the following wording:

“Employees who have completed an appropriate certificate and are required to undertake work related to that certificate will be appointed to this level”

The employer asserted that Ms Kehal did not have an “appropriate certificate” within the meaning of the clause as it was not a requirement of the job that employees held a Certificate IV qualification, they evidenced this by pointing to job descriptions and recruitment materials for the role, which nowhere mentioned a requirement to hold such a qualification.


What did the FWC find?

The FWC found that the employer’s interpretation misconstrued the meaning of the words in the Level 2 classification. 

It found that the wording of the clause does not mean that there must be a requirement coming from the employer that the employee hold a certificate. Rather, the wording of the clause means:

  1. The employee must hold a certificate; and 
  2. The employee is required to undertake work relevant to the certificate.

It does not matter whether or not the employee obtained the certificate due to a requirement of the role. Rather, so long as an employee holds a certificate and the employee performs work related to that certificate, that will be enough to satisfy this aspect of the Level 2 classification.

In Ms Kehal’s case the FWC found that she held an appropriate certificate, given:

  • Clients of Casson Homes accessed the employer’s services because of mental health issues
  • Ms Kehal was a support worker engaged to assist people with mental health challenges to engage with society 
  • The units of study within her Certificate IV in Mental Health were relevant to the work she was required to perform

The FWC also pointed out that these factors do not of itself mean that she should be classified as Level 2, she would still need to satisfy the other elements of the Level 2 classification too (eg the list of duties described, etc).

In respect of the two other employees who were subject of the application, neither of them attended the hearing, and so the FWC had to determine matters in respect of them just by considering the documentation they submitted. Given their qualifications did not focus on mental health (which was very much the purpose of their roles), the FWC said that it could not be convinced that they were “appropriate certificates” in the context of meeting the requirements of the Level 2 classification. It put it this way:

“With respect to Ms Cooper and Ms Spice, I again note that neither presented for the hearing – having given notice the day earlier of their unavailability.  With respect to the certificates annexed to their witness statements, I observe that Ms Coopers’ Certificate III in Allied Health Assistance includes one unit dedicated to mental health issues.  Ms Spice’s Certificate III in Individual Support (Ageing) did not reflect units undertaken specific to mental health.  Briefly stated, based on the evidence before me, I am not content to find that the certificates constituted ‘appropriate certificates’, as understood by reference to clause B.2.1(e).” 


Lessons for employers

The case illustrates that in determining whether employees hold an “appropriate certificate” to classify them as Level 2 employees under the SCHADS Award, the relevant questions to ask are:

  • What are the units of study within an employee’s certificate?
  • How many of those units are relevant to the work that the employee is required in the role?

If a significant proportion of them are, then this will likely satisfy this particular element of the Level 2 classification.

That is not the end of the story, and to come within Level 2, the employee will need to satisfy the other elements listed (or, at least a significant proportion of them) re: the list of duties, etc.

It is not relevant whether or not the employer actually required the employee to have the certificate or whether it would be possible to do the role without having obtained a certificate.

If you require any further information, or assistance in making an application to the FWC to determine a dispute under a modern award, please contact us.