Job titles: the Principal Purpose Test

So job titles are important to your workers? Of course they are. Most of us associate success with a job title. But can titling a role in a particular way come back and bite you?

Job titles have come a long way since the days where “Manager” was an organisation’s most senior position. Recruitment for social media roles often contain position titles such as “Conversation Manager” or “Brand Ambassador”. Steve Jobs; Co-founder and Chief Executive of Apple had the self-anointed title of “Chief Know It All” (although that one was probably accurate) and it’s reported that Kodak once had a “Chief Listening Officer.”

It’s rare I receive a business email from anyone other than a “Chairman”, “Director”, or “Executive”. In my days working in mining, I held the title “HR Superintendent” and, as a HR Consultant, I have been greeted by a person sitting behind the Reception desk of an office who had the job title “Vice-President of First Impressions”.

There’s little doubt job titles can help define a hierarchy within a business. Job titles can also enhance our self-esteem, identity and status. And that can be a good thing. But the trend of “job fluffing” – the practice of giving a role an important sounding title in order to make role appear more valuable – can come back and bite you if you are not classifying your employee correctly under the applicable Modern Award.

“Vice-President”? There’s no Award containing that as a position title so your “Vice-President of First Impressions” must be Award-free, right? No. Get this wrong and it can cost you. How much?  Type the word “misclassifying” into the Fair Work Ombudsman’s News and Media releases page and see what you find.

From a Fair Work Commission perspective, the actual position title means little. To determine whether an employee is employed under a classification within a Modern Award the Commission must assess the nature of the work and ascertain the principal purpose for which the employee was employed.

The Principal Purpose test considers what is the major and substantial function of the employee’s work? In other words, what is the principle purpose for which the employee was hired?

While there may be good intentions behind titling par­tic­u­lar occu­pa­tions in a certain way, the mere renam­ing of a posi­tion does not, of itself, change its essen­tial character. If your Vice-President of First Impressions is primarily undertaking administrative-type duties, it’s likely they will have coverage under the Clerk’s-Private Sector Award 2020…including the 13 allowances that employees under this Award may be entitled to.

Deter­min­ing Mod­ern Award cov­er­age with accu­ra­cy is crucial. A fail­ure to prop­er­ly cat­e­gorise a posi­tion can lead to breach­es of a Mod­ern Award and expose your business to under­pay­ments and Fair Work Commission penal­ties.

Want to get your HR function right? Smart. Call Bare Bones Consulting today or shoot us an email here. We make it simple for you. At a value for money price.