[2013] FWC 8890

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Miss Eleanor Downes
v
The Uniting Church in Australia Property Trust (Q.) T/A Wesley Mission Brisbane
(U2013/10566)

SENIOR DEPUTY PRESIDENT RICHARDS

BRISBANE, 19 NOVEMBER 2013

Summary: jurisdictional objection - whether contract for a specified period and - Explanatory Memorandum directs attention to changed meaning of “specified period” - differences between the Act and its predecessor - whether paying out contract until the end date means Applicant was dismissed despite contract being for a specified period - scope for remedy and arbitration where contractual obligations discharged at earlier time - no likelihood of contract renewal.

[1] On 14 June 2013, Ms Eleanor Downes made an application under s.394 of the Fair Work Act 2009 (“the Act”) seeking an unfair dismissal remedy arising from her dismissal by the Uniting Church in Australia Property Trust Queensland trading as the Wesley Mission Brisbane (“the Respondent”). The Applicant was an Access and Intake Worker, as defined under the Health Professionals and Support Services Award 2010.

[2] The application was subject to a conciliation conference which was unsuccessful. There were some delays, subsequently, in bringing the matter to arbitration as the Applicant sought additional time for making her submissions and an adjournment for health-related reasons (following the initial hearing of the matter). Eventually, where it proved difficult to identify a time at which the Applicant might be available and ready to participate in a hearing, it was agreed that the matter would be determined off the documents. The Applicant filed further materials in support of her challenge to the objection to her application (which is discussed immediately below).

[3] At the outset, the Respondent resisted the application as made on the basis that it objected to the jurisdictional competence of the application. The Respondent argued in essence that the Applicant was not dismissed for purposes of s.386 of the Act for reasons that the contract of employment was not renewed after 30 June 2013.

[4] The Respondent contends that it offered and the Applicant accepted a fixed term contract for a period specified to commence on 1 July 2012 and to end on 30 June 2013 to deliver the Headspace Hervey Bay Lead Agency role. A signed statutory declaration was made to this end Mr Shane Beacall, the Operations Manager for the Respondent, and submitted by the Respondent to inform its objection. A copy of the signed contract was also provided.

[5] The Respondent contends that the Applicant was employed under a contract of employment for a specified period of time for the purposes of s.386(2)(a) of the Act, and as such her application for relief was outside the Commission’s jurisdiction.

[6] This is because s.386(1)(a) of the Act states that a person cannot be unfairly dismissed unless they are dismissed from their employment. This is set out at s.386(1)(a) of the Act:

386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

[...]

[7] A “dismissal” is defined at s.386(2)(a) of the Act (for current purposes) as follows:

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

[8] The Respondent contends that the Applicant was subject to a contract of employment for a specified period of time and that the employment was terminated at the end of that period of time (by the effluxion of time).

[9] The contract of employment entered into by the parties was signed and dated by the Applicant on 6 July 2012.

[10] The Applicant does not deny signing the contract and doing so without duress or coercion.

[11] More generally, the parties appear on the terms of the contract they jointly signed to create a particular set of legal rights and responsibilities.

[12] One of those was that the legal relationship between the parties would cease on 30 June 2013.

[13] There is no evidence that there was a commonly shared objective view held by the parties that the signed contract of employment meant something else other than what it stated.

[14] There is no evidence either that one party forced, or by some other mischief, caused the other party to become a party to a signed contract of employment that they would not otherwise have been.

[15] I see no reason at all to read away the fact of the signed, written agreement entered into by the parties. It says what it says, and the parties are obliged to discharge their legal obligations as freely entered into.

[16] I add that there is no provision in the terms of the written contract that cause the specificity of the period of time for which the contract is intended to operate to fall into question. Admittedly, some of the terms may be more applicable in ongoing employment contracts (such as long service leave entitlements and annual performance reviews). But these terms do not have the effect of creating any ambiguity about the contract period. The contract period is 1 July 2012 to 30 June 2013. The written contract, as signed, was for a period of time that was to run no further than 30 June 2013.

[17] The terms of appointment specify the position, the location, the position status, expected hours of work, the reporting arrangements, the position description, the remuneration including referable industrial instruments, superannuation entitlements, leave and salary packaging arrangements. The contract of employment also includes references to a probationary period of employment (three months).

[18] In this respect, the contract of employment includes a term as follows:

Probationary Period: Three months, confirmation of your appointment will be subject to satisfactory achievement within this period.

Characterisation of a contract for a specified period

[19] The initial question to determine is how this probationary clause may be construed for the purposes of determining whether the contract entered into by the parties can be characterised as a contract for a specified period.

[20] This probationary provision can be said to reflect the common law right to terminate an agreement for misconduct or for some other breach (such as non-performance). That is, here the probationary provision might arguably be qualified in so far as it may only be subject to exercise for a defined period in the context of unsatisfactory achievement being demonstrated. The incapacity to perform the service anticipated under the contract may be a species of breach at common law upon demonstration of which a contract may be terminated.

[21] The probationary clause, therefore, cannot be exercised at large, but only on a reasonable basis should the Applicant fail to satisfactorily achieve service of the contract.

[22] It seems to follow that the contract here under consideration would continue to be a contract for a specified period regardless of the inclusion of a probationary term because of the narrow operation of that term. The probationary provision in the contract is not a broad or unfettered right to terminate the contract such as that on which the Federal Court commented in Andersen v Umbakumba Community Council (1994) 126 ALR 121:

The unqualified rights to terminate without reason under cl.21(c) and 21(d) make it clear, in my opinion, that the contract cannot be so characterised (as one contract of employment for a specified period of time).” [My emphasis]

[23] I add that the Court also held, as a corollary to this principle, that a clause that provides for early termination upon breach (as discussed earlier) may not cause the contract to cease to be characterised as a contract of employment for a specified time:

Different considerations may apply where a contract of employment for a period of time fixed by clearly stated dates of commencement and cessation contains a term which permits either side to terminate the contract on breach by the other side. In such a case, it is possible that the contract would be characterised as a contract of employment for a specified period of time notwithstanding the possibility that on breach of its term by one side or the other it may sooner come to an end.

[24] Given this discussion, the contract of employment under which the Applicant was employed or engaged is a contract of the kind envisaged by s.386(2)(a) of the Act. The Applicant herself would be a person who has not been dismissed under s.385(1)(a) of the Act for reason that she was employed under a contract for a specified period of time (assuming her employment ceased by the effluxion of time in accordance with the cessation date, which I will discuss below).

Has statutory meaning of contract for a specified period been changed?

[25] I add that regardless of whether the probationary term was considered a broad or unconditional right to terminate the employee or not, there is some argument further to be had as to whether the Applicant would nonetheless be a person who was not dismissed for purposes of s.386(1)(a) of the Act.

[26] I suggest this, albeit tentatively, because the Explanatory Memorandum, states that notwithstanding the existence of a provision allowing for early termination of the contract in any terms (broad or narrow), the contract nonetheless is a contract for a fixed period if the agreement ends by the effluxion of time. I will set out the relevant item from the Explanatory Memorandum further below. Before turning to doing so, however, I will examine some of the differences between the Act and its predecessor legislation.

[27] The current Act includes the same reference to the jurisdictional exclusion on the grounds the person was “employed” or “engaged” under a contract for a “specified period” as did former s.638(1)(a) of the Workplace Relations Act 1996. This section read as follows:

638 Exclusions

Exclusions from Subdivisions B, D and E and sections 660 and 661

(1) The following kinds of employee are excluded from the operation of Subdivisions B, D and E and sections 660 and 661:

(a) an employee engaged under a contract of employment for a specified period of time;

(b) an employee engaged under a contract of employment for a specified task;

(c) an employee serving a period of probation, if the duration of the period or the maximum duration of the period, as the case may be, is determined in advance and, either:

(i) the period, or the maximum duration, is 3 months or less; or

(ii) the period, or the maximum duration:

(A) is more than 3 months; and

(B) is reasonable, having regard to the nature and circumstances of the employment;

(d) a casual employee engaged for a short period, within the meaning of subsection (4);

(e) a trainee whose employment under a traineeship agreement or an approved traineeship:

(i) is for a specified period; or

(ii) is, for any other reason, limited to the duration of the agreement;

(f) an employee:

(i) who is not employed under award-derived conditions (see subsection 642(6)); and

(ii) to whom subsection (6) or (7) applies;

(g) an employee engaged on a seasonal basis, within the meaning of subsection (8).

Note 1: The expression employee engaged under a contract of employment for a specified period of time (used in paragraph (a)) has been addressed in a number of cases before the Industrial Relations Court of Australia, including, in particular, Cooper v Darwin Rugby League Inc (1994) 57 IR 238, Andersen v Umbakumba Community Council (1994) 126 ALR 121, D’Lima v Board of Management, Princess Margaret Hospital for Children (1995-1996) 64 IR 19 and Fisher v Edith Cowan University (unreported judgment of Madgwick J, 12 November 1996, No. WI 1061 of 1996).

Note 2: An employee who is excluded from the provisions of the Act specified in this subsection may still be eligible to apply for a remedy in relation to the termination of employment under a provision of a State law that is not excluded under section 16.

Note 3: The definitions in section 642 apply for the purposes of this section. [My emphasis]

[28] But there are some changes, notwithstanding both Acts referring to “a contract of employment for a specified period of time.” These changes comprise the removal of “Note 1”, as cited above, which directed the reader to the various court authorities. As mentioned earlier, the authorities indicate that a contract of employment for a specified period cannot by definition include a term that provides an unqualified right of early termination. The notation is intended to provide legislative guidance, to some measure at least, as to the meaning of the phrase an “employee engaged under a contract of employment for a specified period of time”.

[29] Not only has this notation been removed from the Act, as mentioned above the Act’s Explanatory Memorandum expresses the legislative intention that a contract of employment may be for a specified period notwithstanding that it includes a term for early termination (unqualified or otherwise).

[30] In this respect, Item 1532 of the Fair Work Bill 2008 Explanatory Memorandum states as follows:

Paragraph 386(2)(a) reflects a common law position that termination in the circumstances should not be a dismissal. The fact that an employment contract may allow for early termination would not alter the application of this provision as the employment has terminated at the end of the period, task or season. However, if the person engaged on this sort of contract is terminated prior to the end of the time specified in the contract, they may seek an unfair dismissal remedy if they satisfy the other requirements.

[31] The Explanatory Memorandum, for its purposes, makes it clear that s.383(2)(a) of the Act is not affected by whether or not an employment contract may allow for an earlier termination (and on whatever terms). Such a contract, notwithstanding a provision providing for early termination, does not alter the fact that the when a contract comes to an end by the effluxion of time (referrable to a term in the contract) it is characterised as a contract for a specified period (according to the Explanatory Memorandum).

[32] Thus the Explanatory Memorandum (perhaps along with the removal of the statutory notation) purports to disrupt the line of reasoning through the Court and following the court, Full Benches of this Commission (see for example Appeal by SPC Ardmona Operations Ltd 1 and Ledington v Sunshine Coast University)2 as to the proper characterisation of contracts for a specified period.

[33] Some difficulty arises as to whether regard should be had to the Explanatory Memorandum. Traditionally, recourse should only be made to such extrinsic documents when the meaning of the relevant legislative provision is ambiguous or in doubt and cannot be construed from the plain language of the statute read in its context.

[34] Here, the meaning of an employee engaged under a contract of employment for a specified period of time is not one that emerges from the plain words of the statute as such, or its context, as it is not a defined term. But the phrase has a meaning derived from judicial interpretation over time (and which is reflected in the parochial authorities).

[35] The Parliament may have intended by the exclusion of the statutory note in the Act to provide a different definition of the phrase that is consistent with the Explanatory Memorandum. Yet Parliament did not see fit to alter the statutory phrase itself. The jurisdictional exclusion remains referrable to an employee engaged under a contract of employment for a specified period of time. The words of the central statutory phrase have not been amended. The exclusion of the statutory notation arguably changes little as such notes are not a substitute for the words of the statute itself.

[36] I would have been more inclined to approach the phrase an employee engaged under a contract of employment for a specified period of time consistent with the Explanatory Memorandum if the statutory phrasing to which the judicial consideration had applied had itself changed in some material manner. But this is not the case. The removal of the statutory note and the words of the Explanatory Memorandum may not be sufficient to warrant a fresh approach to the meaning of an employee engaged under a contract of employment for a specified period of time, as judicially considered.

[37] But having said as much, this is hardly the case by which to reach any state of conclusiveness. The parties did not address the matter, and as they were not represented, they were not in a position to do so regardless.

Did employment cease for reason of effluxion of time?

[38] Whether or not the Respondent sought for whatever reason to offer or not to offer a further contract does not affect the operation of this contract term as agreed. Further, whether or not the employer had concerns about the performance of the contract over the life of the contract is also irrelevant to a finding that the employment came to an end for reasons of the effluxion of time (as provided for by a term of the contract).

[39] Clearly, in this case, the Respondent did not wish to renew the Applicant’s contract of employment and informed her so by email on 21 May 2013 and verbally on 27 May 2013.

[40] But what transpired subsequent to this advice is important.

[41] The Respondent (through the agency of Mr Mark Bradley, Director, Human Resources) has indicated as follows:

Would it be possible to advise Senior Deputy President Richards that further to the comments made by Ms Downes in our previous [day’s hearing] we have reviewed our records and can confirm that her employment did in fact terminate on 30 June 2013 as documented in her contract which we have already provided. The last four weeks were paid out but not worked by Ms Downes - in essence a payment in lieu of the balance of her contract given the dysfunctional working relationship. We believe that Ms Downes has mistaken the last day she worked as a date of dismissal but this can be shown not to be the case. [...].

[42] Under the heading contract date the agreement specifies that the period of employment is between 1 July 2012 and 30 June 2013.

[43] In the Applicant’s materials she states that:

I was employed by [the Respondent ] within the recently acquired program contract for the Headspace National Program on the Fraser Coast, known as Headspace Fraser Coast [...] as an Access and Intake Worker (position) from 1 July 2012 (date of commencement) until 30 May 2013 (date of termination).

[44] It would appear from the evidence of both the parties that the Applicant was informed that her contract of employment would not be extended or renewed and thereafter was paid out the balance of her contract (until 30 June 2013), with 30 May being the last day on which she performed any work for the Respondent.

[45] The Explanatory Memorandum as cited above indicates relevantly that:

[...] if the person engaged on this sort of contract is terminated prior to the end of the time specified in the contract, they may seek an unfair dismissal remedy if they satisfy the other requirements.

[46] In the circumstances before me, the Applicant was required to perform no further duties after 30 May 2013 and was paid out the balance of her contract of employment until it is ordinary cessation date, being 30 June 2013.

[47] The contract of employment therefore did not conclude by the effluxion of time, or at the end of the time specified in the contract. That is, the Applicant was not notified that her contract would cease on the specified date and that she remained subject to the contract until that time. Instead, the Applicant’s employment or engagement concluded at an earlier time, and because of the unilateral intervention of the employer. This intervention must be characterised as a dismissal.

[48] The Explanatory Memorandum cited above makes clear that where an employee engaged on a contract for a specified period is dismissed prior to the end of the time specified in the contract, that employee may seek an unfair dismissal remedy (subject to the jurisdictional requirements being met). This must be the case because the employment or engagement did not cease on the date specified in the contract (but at an earlier time).

Conclusion

[49] Therefore, though the Applicant was a party to a contract for a specified period (and otherwise not able to make an application for an unfair dismissal remedy), by dismissing the Applicant prior to the end date of the contract, the availability of the jurisdiction under Part 3-2 of the Act was enlivened (which is consistent with the Explanatory Memorandum).

[50] As a consequence, the jurisdictional objection raised by the Respondent must be dismissed. The Applicant’s application under s.394 of the Act must therefore proceed to arbitration.

[51] The reasons for the dismissal cannot be discerned conclusively from the materials before me. It is enough to say that there is a suggestion that the relationship between the Applicant and the Respondent entered into some dysfunction and the Respondent held concerns about the Applicant’s stability and well-being. It may well be the case, though I cannot conclude with any definition currently, that the Respondent encouraged the Applicant to resign her employment in advance of the conclusion of the contract.

[52] Be that as it may, the Applicant will need to consider the practical issue of the scope her application may have in relation to achievable remedy.

[53] The Applicant has agreed that the employer informed her on 21 May 2013 (by email) and 27 May 2013 (by verbal direction) that her contract of employment would not be renewed or extended. The Applicant was bound by a contract of employment that her engagement ceased on 30 June 2013. The Applicant was paid, it would appear, the money she would otherwise have earned for the period up until 30 June 2013.

[54] The critical question for the purposes of any arbitration - and it is one about which the Applicant may seek advice - is whether the Applicant, even if she was found to have been harshly unjustly and unreasonably dismissed (and that is a question that remains very much left open for determination) would have any scope for re-employment, or compensation in lieu, as a consequence of the employer having discharged its obligations to her in full.

[55] The Applicant would need to carefully consider this question before pressing her claim further.

SENIOR DEPUTY PRESIDENT

Hearing details:

Determined on the basis of the written documents.

Final written submissions:

8 November 2013