[2013] FWC 351

Download Word Document



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

Mr Alan Smith
Mareeba RSLA Services Club Inc



Application for unfair dismissal remedy - jurisdictional objection - “dismissed” - contract of employment for a specified period of time - s.386(2)(a)


[1] An application pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy was filed by Mr Alan Smith (the Applicant) on 13 September 2012 on the grounds that the termination of his employment from Mareeba RSLA Service Club Inc (the Respondent/the Employer) was harsh, unjust and or unreasonable. The application alleged that the Applicant’s employment commenced on 7 April 1997 and that the dismissal took effect on 9 September 2012.

[2] Pursuant to the Fair Work Amendment Act 2012, Fair Work Australia (FWA) was renamed the Fair Work Commission (the Commission). The proceedings in this matter traversed the amendments to the Act but are not relevant so far as the substantive matters in this decision are concerned. This decision will however continue on the basis that it is a decision of the Commission rather than FWA and will be referred to as such except where context requires otherwise.

[3] The matter was conciliated before a FWA Conciliator on 28 September 2012 but the matter did not settle. The matter came before the Commission, as presently constituted, for Arbitration and final determination.

[4] The Commission convened a directions conference on 17 October 2012. It arose during those proceedings that the Respondent wished to raise a jurisdictional objection to the application for unfair dismissal remedy on the basis that the Applicant was not dismissed within the meaning of the Act s.386(1) by virtue of s.386(a); being that the Applicant was engaged according to the terms a contract of employment for a specified period of time and the employment ended, because the end of that period was reached.

[5] Directions were issued for the filing of evidence and submissions to determine the jurisdictional objection only. The Respondent, at the time of the Directions being issued, was self-represented. The Applicant was represented by Mr Ross Sheehy, Solicitor of Girgenti Lawyers. The Respondent retained representation after the filing of the Applicant’s submissions in reply to the objection. At the close of submissions the Respondent was represented by Mr Chris Mossman of Macpherson+Kelley Lawyers.

[6] As a result of the late engagement of representation by the Respondent, it was necessary for further Directions to issue, to allow the Applicant to fully respond to those matters raised by the Respondent in their final reply. An opportunity was also given to the Respondent to have a final right of reply, to those matters raised by the Applicant in their further reply.

[7] Only the Applicant provided witness evidence in this matter. The Applicant was not required for cross-examination by the Respondent. Both Parties consented to the jurisdictional objection being determined on the papers. In the circumstances of the matter, primarily as no witnesses were required for cross-examination, the parties had filed written submissions and the consent of the parties to this course of the matter is determined on the papers.

[8] The issue in this case can be stated as: was the Employee terminated at the “initiative” of the Employer? In addition in accordance with s.386(2)(a) of the Act it must be determined whether the “contract of service agreement” (the contract) was a “contract of employment for a specified period of time” and if so was the Applicant’s employment, terminated at the end of that period or by the effluxion of time? If the answer to the second question is yes then does the exception in the Act at s.386(3) apply in the circumstances. That is was the contract formed by the Employer with a ‘substantial purpose’ of avoiding their obligations under Part 3-2 of the Act.

[9] Whilst all of the evidence and submissions in this matter are not referred to in this decision, all of such have been considered.

Relevant Provisions of the Legislation

[10] The Act s.385 provides:

385 What is an unfair dismissal

A person has been unfairly dismissed if FWA is satisfied that:

[11] Further the Act s.386(1) and (2)(a) provide:

386 Meaning of dismissed

Summary of the Respondent’s Submissions and Evidence

[12] The Respondent identified in the initial material that an employee who was employed under a contract of employment for a specified period and is “dismissed” at the end of that period is not covered by the “unfair dismissal laws”. The Respondent referred the Commission to the contract of employment between the Parties, which was not renewed.

[13] The Respondent also referred to an “official warning” (the warning) issued on 2 February 2012 to the Applicant. No submissions were made as to what this warning represented or how it related to the jurisdictional objection. The warning related to an alleged failure of the Applicant to abide by decisions of the Management Committee; specifically relating to free drinks for staff. The relevance of the warning to the jurisdictional question (in regard to a contract for a specified period of time) was not made clear by the Respondent.

[14] In reply submissions, the Respondent stated the nature of the jurisdictional objection was on two alternative bases. Primarily, the Respondent submitted that if the Commission held that the contract was one for a specified period of time, which has “terminated upon its expiry date”, then the application is required to be dismissed. In the alternative if the contract is held by the Commission as not being for a specified period of time, the Commission still needs to consider whether the termination was at the initiative of the Employer or whether the employment ended due to the “effluxion of time”. In this regard the Respondent relied upon Drummond v Canberra Institute of Technology 1. An assessment must also be made, if a specified term contract is formed, then in accordance with s.386(3); as to whether the contract was initiated by the Respondent to avoid their obligations under the Part.

[15] The primary argument proceeded on the basis that the Commission is to determine, as a question of fact, whether the contract is for a specified period of time having regard to the “objective intentions of the parties”. 2 The Respondent submitted that there is “clear evidence3 as to the Parties’ objective intention that the contract should be for a specified period of time. In this regard the Commission was simply referred to clause 3.1 of the contract and a letter from the Applicant to the Management Committee on 25 July 2012 seeking to enter negotiations for an extension of the contract.

[16] Clause 3.1 of the contract provided as follows:

Summary of the Applicant’s Submissions and Evidence

[17] The Applicant filed submissions in reply and a brief statement of evidence.

[18] The Applicant submitted that the threshold question is whether the employment was terminated on the employer’s initiative. The evidence of the Applicant, was that he had been employed with the Respondent for 13 years prior to the time the contract in question was entered into. 4

[19] The Applicant’s evidence was that as a result of the previous Manager leaving employment with the Mareeba RSL Sub Branch, the QLD RSL commenced a merger. As part of the merger, staff were advised that the Management Committee proposed changes to the structure and operation of the Mareeba RSL. As part of these changes, staff were to be offered contracts with probation periods and at the same time staffing levels were to be adjusted. The Applicant referred, although not specifically, to a letter given to staff regarding these changes. This letter was not in evidence.

[20] The further evidence of the Applicant was in regard to a conversation on about 18 August 2010 5, between the Applicant and Mr Fewing, who was at the time, the Commercial Manager of the Qld RSL. The Applicant’s evidence was that he raised with Mr Fewing his reluctance to enter into a “two year contract” due to concerns regarding job security.6 In response to this reluctance, the Applicant’s evidence, was that Mr Fewings advised him that he should have no fear in signing the contract, because “I could always return to the assistant manager’s role if it didn’t work out”. It was the Applicant’s evidence that as a result of this assurance he signed the contract. The submissions on behalf of the Applicant were that this assurance, distinguished the facts of the matter from those in the decision of Drummond7.

[21] The case of Drummond, could be distinguished in the submission of the Applicant from the current circumstances, because of the finding of the Tribunal in that decision, that the Applicant in that matter, was employed on a “series of contracts” 8. Following from this, the Applicant asserted that he had a legitimate expectation of ongoing employment relying upon, the authority of D’Lima v Board of Management, Princess Margaret Hospital for Children9. In that case it was submitted that Marshall J held, that, the relationship was not one that was for a specified period of time. Marshall J stated:

[22] Further, the Applicant submitted that at no time during the employment, was it discussed with him, that his employment was to be terminated at the end of the contract. However the contract does state otherwise if it is not renewed. Clause 3.3 stated:

[23] The Applicant also gave evidence of another discussion with Mr Fewing (although he does not provide evidence as to when this occurred) where he queried with Mr Fewing why staff contracts were the “best way to go”. The Applicant’s evidence is that Mr Fewing’s response was, that contracts gave the Respondent greater flexibility with staff management and staff numbers.

[24] The alternative submission of the Applicant, concerned the effect that the contract had on his existing employment. Prior to the Applicant entering the purported two year contract of employment the Applicant had already had 13 years of employment. At the time of the termination the Applicant had already been employed for 15 years. It is the Applicant’s submission that the contract did not terminate the Applicant’s ongoing employment as Assistant Manager, but merely changed his position description, responsibilities and remuneration arrangements.

[25] The Applicant also referred to some drafting issues within the contract, which it submitted pointed to a conclusion that the contract was not one for a specified period of time was clause 3 of the contract stated:

[26] The Applicant emphasised the use of the heading “TERMS” for clause 3 of the contract; the reference in clause 3.1 to “employment conditions” rather than referring to the duration of the contract and the ambiguous use of the word “both” in clause 3.2.

[27] The Applicant also raised certain issues with the contract, regarding the failure of the Respondent to negotiate, as to the renewal or extension of the contract. The Applicant also pointed to an ambiguity in the term “out of contract”. 10

[28] The Applicant submitted that each of these ambiguities should be interpreted against the party, who inserted such and will benefit from the term. The Applicant submitted, that in each case, that party is the Respondent. There is however limited evidence as to the negotiation, if any, of the contract and its terms.

[29] The Applicant’s final submission was that, if the contract was for a specified period of time, the purpose of implementing the contract was an attempt to exclude the application of the Act, for a remedy for unfair dismissal and as such the purpose of the contract, fell within the exception, expressed in the Act s.386(3).


[30] The Respondent has an obligation to demonstrate the basis of its jurisdictional objection. The Respondent relied on the provisions of the contract and the circumstances that arose between the parties. However the Respondent did not file any evidence in regard to this, and further elected not to challenge the evidence of the Applicant.

[31] A contract of employment for a specified period of time is a “contact whose time of commencement and time of completion is unambiguously identified either with a clear statement of fixed times, dates or events, upon which the contract will end or by stating the duration of the contract as a number of days, weeks, months or years”. 11

[32] Whilst the current contract, contains a term that it is a “24 month” contract of employment, the commencement date is blank.

[33] The time of commencement and time of completion in this contract are not unambiguously stated:

[34] In the matter of the Department of Justice v Lunn 13 the contract in question was not for a “specified period” because the contract provided that it could be terminated on notice during its’ term, making it such that it was not possible to identify the “period”. Rather such a contract was an “outer limits” contract and a termination occurring simply by the agreed term being reached could not be a termination at the initiative of the Employer.

[35] The contract in question, has a renegotiation clause and a variation by agreement clause. A further vague clause, seems to provide the opportunity for a party to bring the contract to an end prior to the completion of the purported 24 month term. Clause 4.4 states as follows:

[36] The decision of Lunn was considered by Deegan C in Drummond, where it was held, that changes to the legislative regime with the introduction of the Act did not substantially alter the position at common law. In the Commissioner’s view the legislative change altered the operation of exclusions to unfair dismissal remedies. That is, under the Workplace Relations Act, an Employee employed under a contract for a specified period of time, could not resort to an unfair dismissal remedy, where their dismissal was brought about by the effluxion of time or otherwise. It was held that the new Act did not bar an Employee employed under a contract for a specified period of time from obtaining a remedy for unfair dismissal where their employment was ended other than because of the effluxion of time. The Commissioner accordingly followed the decision of Lunn.

[37] The contract in question in this matter was not strictly drafted or finalised. Certain terms of the contract are indeterminate. Spaces, which have been created in the contract for those entering into the agreement to specify the dates the contract was made and the date the 24 months term was to run from, have been left blank. Relevant to the issue of execution of the contract is clause 2 titled “CONTRACT OF EMPLOYMENT”. This clause has two spaces, presumably for the parties to include, at the time of entering into the agreement, the specific beginning and end dates of the term of the contract. This has not been done on the contract now in evidence, only a reference to a term of 24 months. Indeed the only reference to a date in the agreement can be found in the signature section as to the date of signing. However no submissions or evidence were provided to satisfy the Commission that this date was in fact the commencement date of the contract. Accordingly it is questionable as to whether the contract, not properly executed, could be relied on in the manner submitted by the Respondent as a contract for a specified term, given it is not able to be confirmed by the contract, or the evidence, when the 24 month term would be finalised.

[38] Further arguments were pressed by the Respondent, about the objective intention of the parties to enter into a contract for a specified period of time. There is insufficient evidence to demonstrate that this is the case. The contract is ambiguous in its’ terms. The evidence of the Applicant, which was not challenged by the Respondent, demonstrates that a reasonable person in the circumstances, would not have considered that he had entered into a fixed term contract which ceased the Applicant’s previous ongoing employment and his significant period of service. The evidence of the Applicant was that he indicated to Mr Fewings his reluctance to enter into a fixed term contract and concerns regarding losing his “job security”. 14 The evidence of the Applicant was that the assurances provided by Mr Fewings, induced the Applicant, into entering into the contract.

[39] The contract on its terms is not sufficiently clear, so as to identify the implementation of the “specified period of time”, for which the contract was to be in operation. The “term” is specified as 24 calendar months with a possible extension of a further period of “not less than” 12 months. Whilst the “term” is stated, there is no indication in the contract, as to when it was to commence. The contract itself specifies “[T]his agreement made this....................day of August, 2010”. However no date has been included as to the date the agreement was made or commenced operation. This term when read in the context of the contract being signed in September provides further ambiguity.

[40] As stated the contract has not been properly executed, and the proposed specified period of time, due to the above stated omissions, cannot be unambiguously identified. Given these reasons for finding that there is no appropriately formed contract, nor one for a specified period of time, the Respondent’s argument that the contract ended due to the effluxion of time must also fail. For a contract to be able to expire due to the effluxion of time, certainty must be had about when the time period will expire. The terms in this contract are not sufficiently certain to be able to identify the period, when the contractual terms operate so as to come to a natural end.

s.386(3) Exception

[41] It is the Applicant’s submission that even if the contract were a contract for a specified term, the Applicant was still nevertheless dismissed because of the operation of the Act s.386(3). That is, a substantial purpose of the Respondent’s actions in placing the Applicant on the contract was to avoid the obligations in the Act.

[42] No significant submissions or evidence were provided in relation to this particular legislative provision, except that the Applicant’s evidence was that he discussed his reluctance to enter such a contract as it may make his employment vulnerable. The Applicant stated that alternative ongoing employment options were discussed with him, in the event, the Respondent sought to rely on the contract. The Commission was also not referred to any authority in relation to the operation of s.386(3) or the circumstances of the matter.

[43] The evidence in relation to s.386(c) was limited, therefore it is unable to be concluded on the material provided whether a “substantial purpose” of the contract was to avoid the operation of the Part of the Act. The evidence that was provided by the Applicant 15 in relation to his ongoing employment, was unchallenged and unexplained by the Respondent. However, given that the alleged specified term contract was not properly executed, it did not bring the original employment contract to an end, therefore the Applicant is not prevented on the basis of the contract, in proceeding with the unfair dismissal application.


[44] The Respondent did not challenge the evidence in the Applicant’s statement, having chosen not to cross-examine him or provide evidence refuting his claims or to explain the absence of a response to this evidence. The evidence of the Applicant in relation to the contract is accepted. On the balance of probabilities, the Applicant relied on the assurance of the alternative employment (in circumstances where the proposed contract was not renewed), in relation to his reluctance to sign the contract. It is reasonable that an employee with a significant period of service, would be concerned about entering into a contract which appears to limit the term of the employee’s employment. On the material provided, the Applicant queried the terms of the proposed employment contract and its consequences for his ongoing employment. A person with experience in these types of matters, may have insisted that the terms of the contract be amended to reflect such oral assurances. There is no evidence, as to the Applicant’s familiarity with such matters.

[45] It was open to the Respondent to counter the evidence of the Applicant, or to provide an explanation as to why there was an absence of such evidence challenging it. The failure to challenge such evidence leaves it open to the Commission to draw an inference in the circumstances, that the evidence of the conversation was as the Applicant set out. 16 That is, the evidence was, that the Applicant’s employment would be ongoing if the employment contract ended.

[46] In assessing the nature of fixed term contracts, Harrison C noted in the decision of Otto Senagroun Banchit v St Mina’s Global Restaurants Pty Ltd:

[47] The circumstances of this matter on the Applicant’s submissions require an assessment of the reality of the employment relationship, beyond the contract. The Applicant was an employee of long standing and there is limited evidence of any performance issues until December of 2011. It was not submitted that the matters raised in the two warning letters in evidence were of a serious nature. On the contrary, the evidence of the Applicant was that he was encouraged to apply for the higher position of General Manager. No other evidence was led by the Respondent, nor was the evidence of the Applicant on these issues, challenged by the Respondent.

[48] There was no evidence that the restructure of the Employer, led to a change in the position requirements of the General Manager. There was no evidence that the Applicant was consulted about the refusal of the Management Committee to renew or extend the contract. There was no evidence as to why the Management Committee decided not to renew the Applicant’s contract of employment. In relation to why the Applicant was not returned to his original position as Assistant Manager, the Respondent’s submission was that the employment as Assistant Manager, ceased upon the Applicant’s commencement of the contract relating to the position of General Manager. The Applicant does not confirm that he was aware that this was to be the case.

[49] In the absence of reliable evidence the Commission cannot finds that a “substantial purpose” of employing the Applicant on such a contract after such a lengthy period of employment was to avoid the operation of Part 3-2 of the Act.

[50] However the Applicant submitted that the contract did not extinguish his existing employment contract as the Assistant General Manager. In this regard the Respondent referred the Commission to Quinn v Jack Chia (Australia) Ltd 18 to support the proposition that a new contract essentially extinguishes pre-existing contracts of employment. Some reliance was placed upon the fact that in Quinn, the new contract was for a more senior position, where no alternative employment was held out, as is the Applicant’s case in the current matter.

[51] In Quinn, it was confirmed that the answer will often turn on the specific facts of the case before the Tribunal or Court. The matter of Quinn can be distinguished from the facts here. In Quinn the Employee Applicant did not have a significant period of service prior to entry into the “new contract”. Mr Quinn was also in a significantly more senior position, undertaking some management aspects of what was at the time a billion dollar project. The Applicant in Quinn also did not rely on specific inducements to sign the contract, such as are argued here, by the Applicant.

[52] On the material before the Commission the contractual terms are not sufficiently clear so as to determine that a specified term contract was in place, that could be relied on to bring the employment to an end. An objective assessment of the evidence surrounding the incomplete clauses, and the discussions at the time of the alleged execution of the contract, confirms that the contract cannot operate to repudiate the Applicant’s employment or jurisdictionally bar him from an unfair dismissal application.

[53] In the circumstances, the Respondent sought to unilaterally amend the Applicant’s employment from a long serving permanent employee, to place him on a contract for a specified period. The incomplete contract cannot be relied on in this way, taking into account its omissions and the evidence of the Applicant as to his ongoing employment.

[54] Accordingly, given the evidence and the state of the contract, the Employer’s conduct in relying on such (and it appears the warnings) has, at their own initiative brought about the termination of the overall employment contract, but does not operate to prevent the Applicant’s s.394 application.

[55] For the aforementioned reasons it is found that the Applicant was dismissed at the initiative of the Employer, and the Commission’s jurisdiction is enlivened to determine the Applicant’s application for unfair dismissal.

[56] The jurisdictional objection, that the alleged contract for a specified period acts as a bar to the proceedings, is dismissed. I Order accordingly.

[57] A separate notice of listing will issue for the progress of the application to conciliation and for further Directions.


 1   [2010] FWA 3534.

 2   Respondent initial submissions in reply at [3].

 3   Respondent initial submissions in replay at[4].

 4   Affidavit, Applicant, 19 November 2012, at [7].

 5   The affidavit of the Applicant on 19 November 2012 refers to this date as being 2012 rather than 2010. This was identified as a typographical error and amended by the admission of a further affidavit of the Applicant, with the consent of the Respondent, being the affidavit of Mr Alan Smith sworn 12 December 2012.

 6   Affidavit, Applicant, 19 November 2012, at [7].

 7   [2010] FWA 3534.

 8   Ibid at [9].

 9   (1995-1996) 64 IR 19.

 10  Applicant submissions, paragraph 35, referring to the Contract of Service Agreement. Clause 3.3.

 11   Harrison C in Otto Senagroun Banchit v St Mina’s Global Restaurants Pty Ltd PR940477 at [18] referring to Andersen v Umbakumba Community Council (1994) 126 ALR 121.

 12   Andersen v Umbakumba Community Council, 126 ALR 121, (1994) 56 IR 102 at 106, 26 September 1994, von Doussa J.

 13   Department of Justice v Lunn (2007) 158 IR 410.

 14   Affidavit of Applicant, sworn19 November 2012, at paragraph 7.

 15   Statement of Applicant, 19 November 2012 at [7].

 16   Jones v Dunkel [1959] HCA 8.

 17   PR940477 at [39].

 18   [1992] 1 VR 567.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR533231>