Fair Work Act 2009
s.739—Dispute resolution

National Tertiary Education Industry Union
v
Murdoch University
(C2014/194)

Application to deal with a dispute.

[1] This application has been made under section 739 of the Fair Work Act 2009 (the Act) and pursuant to clause 45−Dispute Resolution Procedure of the Murdoch University Academic Staff Enterprise Agreement 2010 [AE880251] (the 2010 Agreement).

[2] The applicant is the National Tertiary Education Industry Union (the union or the applicant) and the respondent is Murdoch University (Murdoch or the respondent).

[3] The application was the subject of a conference however the matter was not resolved and the matter was referred for arbitration as is provided for in clause 45.7 of the 2010 Agreement.

[4] The 2010 Agreement ceased to operate on 5 May 2014 when it was replaced by the Murdoch University Enterprise Agreement 2014 [AE407853] (the 2014 Agreement). The 2014 Agreement, at clause 46.8, contains a transitional provision by which the parties have agreed that disputes initiated under the 2010 Agreement but not concluded at the time when the 2014 Agreement commenced will continue to be dealt with in accordance with the provisions of the 2010 Agreement.

[5] This application was made prior to the 2014 Agreement coming into effect and I am satisfied that the Commission has jurisdiction to deal with the application.

Background

[6] Mr Adam McHugh (Mr McHugh) was employed at Murdoch as a Lecturer commencing on 31 March 2008.

[7] Mr McHugh was employed on fixed term contracts, the first contract commenced on 31 March 2008 and ended on 31 March 2010 and the second contract began on 1 April 2010 and ended on 31 March 2013. There is a dispute between the parties as to how what occurred from 1 April 2013 onwards should be characterised however there is agreement that Mr McHugh remained in employment until 31 December 2013.

[8] The dispute to be determined by the Commission is:

1. Whether Mr McHugh was a fixed term or continuing employee; and

2. Whether Mr McHugh was entitled to severance payment and, if so, the quantum of that payment.

[9] The applicant’s position is that Murdoch is required to pay Mr McHugh a severance payment of the same quantum he would have been entitled to had he been converted to a continuing employee during 2013 and his position been made redundant with effect from 31 December 2013.

[10] The application also sought for the Commission to require Murdoch to issue an instruction to their staff regarding the criteria for consideration of applications for conversion from fixed term to ongoing employment however as I indicated at the hearing such a direction would be beyond the scope of this particular dispute and so would not be considered by the Commission in this decision.

The evidence

[11] There is little dispute about the factual history of this matter.

[12] Considering the witness evidence I find that Mr McHugh was first employed on a fixed term contract for the period 31 March 2008 until 31 March 2010 (the first contract).

[13] Between 31 March 2008 and 31 March 2010 Mr McHugh was working as an Associate Lecturer.

[14] On 16 March 2010 Mr McHugh was offered a further fixed term contract with a commencement date of 1 April 2010 and a finish date of 31 March 2013 (the second contract). He accepted this offer on 17 March 2010.

[15] The 2010 Agreement came into operation on the 10 September 2010 and replaced the Murdoch University Academic Staff Collective Workplace Agreement 2006 [AC301388] (the 2006 Agreement).

[16] Before the second contract expired, Mr McHugh was told by his School Dean that his employment would continue beyond 31 March 2013. He received no detail about this nor written confirmation.

[17] On 26 March 2013 Mr McHugh wrote to Ms Lamont the Director of Human Resources asking to have his employment converted from fixed term to continuing or ongoing employment.

[18] There was no immediate response to Mr McHugh’s application.

[19] After 31 March 2013 Mr McHugh continued to be employed and work at Murdoch.

[20] On 4 April 2013 Mr McHugh received a letter 1 from Murdoch that said:

“I am pleased to confirm that your current fixed term contract in the position of Lecturer, EN 0700B09, School of Engineering and Technology, has been extended to 31 December 2013. All other conditions of your employment contract will remain unchanged.

If there is anything you wish to discuss regarding your contract, please contact... I would also like to thank you for your continued support of Murdoch University and wish you every success during your further appointment in this role.”

[21] Mr McHugh did not respond to that letter and at the time was unsure what his employment status was.

[22] Mr McHugh continued to work until 31 December 2013.

[23] Between March 2010 and 31 December 2013 Mr McHugh worked as a Lecturer.

[24] On 1 July 2013 Mr McHugh received an email from the School Manager in the School of Engineering and Information Technology advising that a business case had been prepared and submitted which if accepted would mean Murdoch would convert him to “ongoing status” however this had not been agreed to by Murdoch and Murdoch was to “... undertake a suitable recruitment campaign towards the latter part 2013 for this position and preparation for the cessation of your current contract.”

[25] I accept the evidence of Mr Cusack that the option Murdoch considered of offering Mr McHugh ongoing employment based on the business case put forward by the School of Engineering and Information Technology was an option not provided for in clause 9−Contract of Employment, subclause (l)−Conversion Criteria of the 2010 Agreement. In effect it was an additional route for Mr McHugh to be granted ongoing employment which Murdoch considered but ultimately decided against. This was a discretionary option not founded in Mr McHugh’s rights under the 2010 Agreement.

[26] On 2 July 2013 the union wrote to the Director of Human Resources asking that Mr McHugh receive a response to his conversion application of 26 March 2013 and subsequently the parties met on 9 July 2013 to discuss this. Mr McHugh was advised by the Director of Human Resources, Ms Lamont, that his application for conversion was unsuccessful.

[27] Murdoch’s position was confirmed by letter on 25 July 2013 which advised that his request for conversion was not approved because he did not meet two of the criteria namely that he did not have the qualifications and experience required for the role and could not demonstrate through annual review, teaching or student surveys, or similar processes that his performance had been satisfactory.

[28] Subsequently the parties agreed that there would be a review of Mr McHugh’s conversion request.

[29] By email of 25 November 2013 Mr Cusack advised that Mr McHugh’s current contract was to replace another employee as provided for in clause 9.5−Fixed Term Contracts, subclause (c)−Replacement Employee and such categories of fixed term contracts were not open to be converted to continuing or ongoing employment under the terms of the 2010 Agreement. The email also said that even if Mr McHugh had been entitled to consideration for conversion to ongoing employment then he was not entitled to conversion because he would not have satisfied the criteria relating to merit selection nor did he have the appropriate qualifications because he does not hold a Ph.D. 2

[30] On 22 November 2013 Mr McHugh received an offer of a fixed term appointment from 1 January 2014 to 31 July 2014. The offer was expressly made pursuant to clause 9.5(c) of the 2010 Agreement. The position identified in the offer was that of Lecturer.

[31] Mr McHugh did not believe it was correct to say, as Murdoch did, that this employment was properly covered by clause 9.5−Fixed Term Contracts, subclause (c)−Replacement Employee. Mr McHugh did not accept that he would be performing the duties of a vacant position pending recruitment by Murdoch.

[32] Consequently Mr McHugh did not accept the offered fixed term appointment.

[33] The union on behalf of Mr McHugh put to Murdoch that Mr McHugh was a continuing employee by virtue of his continuing to work beyond the term of his second contract, 31 March 2013, in circumstances where Murdoch’s purported extension was not advised to him until 4 April 2013.

[34] This was rejected by Murdoch in correspondence dated 4 December 2013 wherein it was put that Murdoch offered Mr McHugh a fixed term contract of employment on 4 April 2013 and Mr McHugh had at no time advised that he was declining the offer and through his continued performance of his duties he has indicated an acceptance of Murdoch’s offer of that fixed term contract. In any event Murdoch argued that there has never been an offer to Mr McHugh of an ongoing contract of employment which he could have accepted accordingly it was reinforced that Mr McHugh’s fixed term contract would conclude on 31 December 2013.

[35] On 27 November 2013 Mr McHugh received an email from the Office of Human Resources advising that his fixed term contract was due to end on 31 December 2013 and in the absence of a further contract his current contract would end then.

[36] By letter of 5 December 2013 the union wrote to Murdoch’s management stating that, given the notice of 27 November 2013 that Mr McHugh’s contract would end on 31 December 2013, he would be entitled to a severance payment either as a continuing or a fixed term employee.

[37] Murdoch rejected these claims on behalf of Mr McHugh and Mr McHugh’s employment ended on 31 December 2013.

Submissions

The applicant’s submissions

[38] It is submitted that Mr McHugh is a continuing employee because:

• He was wrongly denied conversion from fixed term to containing employment; and



• He continued to work beyond the expiry of his fixed term contract ending 31 March 2013.

[39] Mr McHugh submitted an application for conversion from fixed term to continuing staff on 26 March 2013 which addressed the criteria for conversion.

[40] On 1 July 2013 Mr McHugh received an email from his School Manager advising that an extensive business case was presented to Murdoch’s management, but that a recommendation that his employment be converted from fixed term to continuing was not approved.

[41] The email also raised what was described as the separate but related issue about tenuring someone who had not been recruited through an internationally competitive process, and that it would have to be subjected to a rigorous process of peer review, it would have to be an exceptional circumstance and only with the Vice-Chancellor’s approval. These are all criteria outside those in the 2010 Agreement.

[42] Mr McHugh was advised on 25 July 2013 by the Director of Human Resources that:

• Conversion was not an option as there was not a continuing position for him to fill; and



• He failed to meet two criteria in that he did not have the qualifications and experience for the role, and that he could not demonstrate through annual review, teaching or student surveys, or similar processes that his performance has been satisfactory.

[43] Mr McHugh was told that he did not have a PhD and that his 2011 PES (Performance Enhancement System) stated that he needed to complete his PhD and publish to consolidate areas of study.

[44] It is submitted by the applicant that Murdoch’s management later stated that Mr McHugh did not have a right to conversion because his current contract was entered into under clause 9.5(c) of the 2010 Agreement, that he was hired as a replacement employee for a Dr Schlapfer who was on a period of leave, and that staff hired under clause 9.5(c) of the 2010 Agreement do not have a right to be considered for conversion.

[45] Murdoch’s management also reported that Mr McHugh would not have satisfied the criteria relating to merit selection.

[46] By that stage there were now in the order of eight reasons that Mr McHugh has not had his employment converted.

[47] It is submitted that working beyond the fixed term ending 31 March 2013 means he was a continuing employee.

[48] Clause 9 of the 2010 Agreement provides for three categories of academic employee; casual, fixed term and continuing.

[49] Clause 9.3 of the 2010 Agreement defines continuing appointments as appointment other than fixed term or casual.

[50] At the expiry of Mr McHugh’s contract on 31 March 2013 Mr McHugh’s continued to be employed but he was “other” than a fixed term or casual employee. It is therefore submitted he can only have been continuing.

[51] On 4 April 2013 Mr McHugh was offered further fixed term employment; however he did not accept that offer as he was by then employed in a capacity “other” than fixed term or casual.

[52] He was not employed for a specified term or ascertainable period, and there was no instrument of engagement specifying any finishing date or contingency relating to a specific task or project upon which the term of employment would exist as is specified in clause 9.5 of the 2010 Agreement.

[53] Murdoch’s management was aware that Mr McHugh did not accept the offer of 4 April 2013, but continued to employ him.

[54] The respondent failed to provide Mr McHugh with not less than 4 week’ written notice of whether or not he would be offered further work as required by clause 9.5(n) of the 2010 Agreement and was not entitled to subsequently unilaterally impose a new fixed term contract or amend the terms of his existing one.

[55] It is submitted that if McHugh was not casual or fixed term, Mr McHugh can only have been a continuing employee.

[56] Mr McHugh’s employment was brought to an end on 31 December 2013 by notice of Murdoch given on 27 November 2013. There was no further offer of employment after 27 November 2013.

[57] As a continuing employee, Murdoch’s management was only entitled to terminate Mr McHugh’s employment by way of severance or as a result of performance management or misconduct processes. Mr McHugh was not subject to misconduct or performance related processes and termination of employment should, only have arisen through a change management and ultimately redundancy process.

[58] Mr McHugh was not subject to any misconduct or performance related processes, so the only other ground that Mr McHugh’s employment could have been terminated by Murdoch’s management is through a change management process.

[59] Under the voluntary separation provisions at clause 14.2 of the 2010 Agreement, Mr McHugh would have been entitled to a payment equivalent to 48 weeks’ salary.

[60] Alternatively, if it is held that Mr McHugh was not a continuing staff member and genuinely fixed term, the applicant submits he was entitled to a severance payment in accordance with clause 9.5 of the 2006 Agreement.

[61] Clause 9.5(r)(iii) of the 2010 Agreement provides that an employee whose fixed term contract commenced under the 2006 Agreement and expires under the 2010 Agreement is entitled to the benefit of any severance payment that would have been payable under subclause 9.5 of the 2006 Agreement, and in the circumstances prescribed by that Agreement.

[62] Mr McHugh’s last contract commenced on 1 April 2010, while the 2006 Agreement was in force, and expired on 31 December 2013. The 2010 Agreement came into force on 3 September 2010 and remained in force at the time of the separation.

[63] Clause 9.5 of the 2006 Agreement provided that a fixed term employee whose contract of employment is not renewed, where the employee seeks to continue the employment, will receive severance payment in prescribed circumstances.

[64] The prescribed circumstances are that the employee is on a second or subsequent contract where there is continuity of employment between the contracts or the employee is on a first contract and the duties will continue to be required. Mr McHugh satisfied both of those criteria.

[65] There are some exceptions to the payment of severance at clause 9.6 of the 2006 Agreement, but it is submitted none apply in this case.

[66] Mr McHugh satisfied the eligibility criteria in that his contract of employment was not renewed and he sought to continue his employment.

[67] Murdoch’s management have denied liability by relying on clause 9.5(r)(ii) of the 2010 Agreement which provides that where Murdoch offers and an employee does not accept comparable alternative employment, severance will not be paid.

[68] The entitlement to a severance payment arising through the grandfathered provision at clause 9.5(r)(iii) of the 2010 Agreement is not qualified or diminished by clause 9.5(r)(ii) of the 2010 Agreement.

[69] Alternatively, if it is held that clause 9.5(r)(ii) of the 2010 Agreement has a qualifying effect on 9.5(r)(iii) of the 2010 Agreement, eligibility is subject to the test of comparable alternative employment.

[70] The 2010 Agreement defines comparable alternative employment as employment which provides the employee with overall conditions and salary comparable to existing conditions. That provides two tests; whether the overall conditions are comparable and separately whether the salary is comparable.

[71] It is not contested by the applicant that the salary would not have been comparable however, the overall conditions were not comparable in two areas; term and entitlement to severance.

[72] Mr McHugh was offered a seven month contract with no expectation of continuing employment, whereas he has been on two contracts covering a period of almost six years. Mr McHugh’s last contract was for a period of six years and eight months, a contract of seven months is by no means comparable.

[73] Secondly, had he accepted the further contract, Mr McHugh would have lost the severance entitlements in the 2006 Agreement which were grandfathered under clause 9.5(r)(iii) of the 2010 Agreement. He would no longer have been eligible.

[74] Under the 2010 Agreement severance is limited to employees on contracts established under clauses 9.5(a) and (b) under that agreement. Mr McHugh’s contract was offered under clause 9.5(c) of the 2010 Agreement.

[75] Had Mr McHugh accepted the new contract and his employment ended at its expiry, he would not have been entitled to any severance payment. In this case, the loss of a 10 weeks’ severance entitlement is not a hypothetical one. The person who has replaced Mr McHugh is on a fixed term contract established under clause 9.5(c)(ii) of the 2010 Agreement, the documentation for which shows that Murdoch now proposes to fill the position on a continuing basis.

[76] A seven month contract superseding a three year and eight month contract coupled with the loss of a significant severance entitlement is not comparable employment under the definition in the 2010 Agreement.

The respondent’s submissions

[77] Mr McHugh was employed on a series of fixed term contracts as follows:

1. 31 March 2008 to 31 March 2010 (as previously defined as the first contract)

2. 1 April 2010 to 31 March 2013 (as previously defined as the second contract)

3. 1 April 2013 to 31 December 2013 (the third contract).

[78] Mr McHugh was offered, and rejected, a further offer of fixed term employment from 1 January 2014 to 31 July 2014 (the fourth contract).

[79] The application argues that Mr McHugh ought to be entitled to be paid redundancy pay as if he had been a continuing employee, on two alternative bases:

1. that Mr McHugh ought to have been converted to continuing status; or

2. that because Mr McHugh did not accept the third contract in writing, he was employed on a continuing basis.

[80] The respondent submits neither argument has any merit.

[81] Clause 9.5(l) of the 2010 Agreement sets out the criteria for conversion. The evidence demonstrates that Mr McHugh did not meet those criteria. This is the case both in relation to the assessment conducted by Ms Lamont documented in her letter of 25 July 2013 3 and in the further assessment conducted by Mr Cusack. The fact that the two assessments reached the conclusion for different reasons does not negate the fact that Mr McHugh did not satisfy the criteria in clause 9.5(l) of the 2010 Agreement.

[82] It is submitted the applicant’s reliance on a “business case” having been put for the conversion of the position occupied by Mr McHugh is misplaced. Conversion pursuant to a “business case” is separate from, and not reliant on, the process under the 2010 Agreement.

[83] In any event, the union’s submissions proceed on the argument that the third contract was in fact an extension of the second contract, and hence governed by the provisions of the 2006 Agreement. There is no provision for conversion under the 2006 Agreement.

[84] Even if Murdoch had failed to convert Mr McHugh in circumstances where it should have under the 2010 Agreement, this failure would not lead to the consequence that Mr McHugh became employed on a continuing basis 4.

[85] Similarly, Mr McHugh’s failure to accept the offer of the third contract, while continuing to work under its terms, did not result in him becoming a continuing employee. The terms of the contract are clear, by letter dated 4 April 2013 Mr McHugh was offered fixed term employment with an expiry date of 31 December 2013. By his conduct, Mr McHugh accepted the offer of employment, by continuing to work in accordance with it.

[86] The respondent submits Mr McHugh’s employment therefore expired due to effluxion of time, effective 31 December 2013. His employment was not terminated at the initiative of Murdoch. Nevertheless, as it is asserted that Mr McHugh’s employment was terminated, the respondent made the following comments.

[87] As the union’s submissions note termination of employment of continuing employees is limited to certain circumstances and these are set out at clause 12.3(a) of the 2010 Agreement. It is not disputed by the respondent that it did not terminate Mr McHugh in accordance with the requirements of the 2010 Agreement but rather it is submitted the respondent simply did not terminate him Mr McHugh.

[88] If it is the case that Mr McHugh was eligible for conversion, then by definition the work he was undertaking must have been ongoing. That is entirely at odds with the basis on which it is said that Mr McHugh should be eligible for a voluntary separation payment. Voluntary separation, with attached severance pay, is dependent upon the relevant position having become redundant. The work undertaken by Mr McHugh still needs to be done, albeit on a fixed term basis pending recruitment; in fact Mr McHugh declined an offer of further employment.

[89] If, as the union’s submission appears to suggest, the work done by Mr McHugh is required to be done on a continuing basis, then by definition the position cannot be redundant.

[90] The parties are not agreed as to whether the contract which commenced on 4 April 2013 constituted a new contract or an extension of the second contract. The respondent’s position is that the better view is that a new, third contract was created. However, regardless of which characterisation is to be preferred, Mr McHugh is not entitled to severance pay under either clause 9.5(r)(i) or 9.5(r)(iii) of the 2010 Agreement.

[91] Clause 9.5(r)(i) of the 2010 Agreement provides that severance is payable only where the fixed term contract was entered into under the categories of “specified task or project” or “a research-only function”. It is submitted Mr McHugh was not employed under either of these categories.

[92] Even if Mr McHugh had been, he would not have been entitled to severance pay, because the offer of the fourth contract constituted “comparable alternative employment” as it was in the same terms as the earlier three fixed term contracts under which he had been employed. It provided comparable conditions and salary with Mr McHugh’s existing conditions.

[93] If the union’s argument is correct, then no fixed term contract offered under the 2010 Agreement where the staff member had previously been employed under a fixed term contract commencing under the 2006 Agreement, and that agreement had then expired under the 2010 Agreement could be considered “comparable”.

[94] If the contract entered into on 4 April 2013 was an extension of the second contract, Mr McHugh would not be entitled to severance pay under clause 9.5(r)(iii) of the 2010 Agreement, which preserves entitlement to severance pay where it would have been payable in respect of a fixed term contract currently in place, but entered into under the 2006 Agreement.

[95] Clause 9.5 of the 2006 Agreement provides that an employee employed on a second or subsequent contract where there has been continuity between the contracts is entitled to severance payment “where the employee seeks to continue the employment”.

[96] It is not in dispute that Mr McHugh did not accept the offer of a further fixed term contract from 1 January 2014 to 1 July 2014. He cannot therefore be said to have sought to “continue the employment”. The words “the employment” appears in the context of the clause that deals with fixed term employment. They can only then mean fixed term employment.

[97] It is not correct, as appears to be asserted by the applicant, that the respondent has attempted to qualify the wording of clause 9.5 of the 2010 Agreement by assuming that the word “comparable” ought to be inserted. Ms McNab’s letter 5 is clearly written on the basis of Murdoch’s view that Mr McHugh was employed pursuant to the 2010 Agreement at the time that his contract expired on 31 December 2013.

[98] The union’s submissions appears to assert that if the third contract was a new contract under the 2010 Agreement, rather than an extension of a contract made under the 2006 Agreement, then it was not made under a category of fixed term employment allowed for under the 2010 Agreement. It is submitted this assertion is incorrect. The third contract was offered pursuant to clause 9.5(c)(ii) of the 2010 Agreement. Even if it had not been, reference is made again to NTEIU v University of Wollongong [2002] FCA 31 at paragraphs 36 to 40 with regard to the consequences of engaging an employee on a fixed term basis other than as prescribed by the provisions of the relevant enterprise agreement.

[99] The first remedy sought seeks the payment of severance pay to Mr McHugh. The application seeks a redundancy payment calculated in accordance with the redundancy payable to a continuing employee (presumably under the 2010 Agreement). It is submitted by the respondent that neither the application nor the union’s submissions seek a fixed term severance payment as an alternative remedy, although the union appears to have previously sought this and it is asserted in the union’s submissions that if Mr McHugh was a fixed term employee, he is entitled to severance in accordance with clause 9.5 of the 2006 Agreement.

[100] In any event, the respondent submits the Commission ought not to make any order requiring Murdoch to pay any form of severance or redundancy payment to Mr McHugh. Mr McHugh was not a continuing employee of Murdoch. His position could not have become “redundant” as it was a fixed term position and is still required to be performed on a fixed term basis. Mr McHugh has no entitlement to any fixed term severance payment under the 2006 Agreement or the 2010 Agreement.

Consideration

Was the employment a continuing appointment or a fixed term appointment?

[101] In the case of NTEIU v University of Wollongong 6 Branson J dealt with a situation concerning in part the nature of an employee’s appointment with the University where the applicant was seeking a declaration that the employment of a Dr Rodwell was “continuing employment” under the terms of the relevant agreement. Branson J dealt with this issue as follows,

“Clause 8.1.4 of the Agreement

35 The terms of cl 8.1.4 are set out in [15] above.  It is accepted by the parties that a dispute which fell within the ambit of cl 8 of the Agreement arose in about October 2001 and that, as at 17 December 2001, the procedures described in cl 8 had not been completed.  It was submitted by the applicants that by advertising in November 2001, and then making an appointment in December 2001, to a continuing position of Lecturer HSIE, the University failed to comply with par c of cl 8.1.4 of the Agreement.  The applicants conceded that this submission could only succeed if their contention that Dr Rodwell is employed by the University on a continuing basis also succeeded.  It is therefore convenient to defer consideration of the applicants’ submission that the University failed to comply with cl 8.1.4 of the Agreement until after consideration has been given to the applicants’ claim for a declaration that the nature of Dr Rodwell’s employment by the University is “continuing employment” as defined by cl 19.4 of the Agreement.

The Nature of Dr Rodwell’s Appointment

36 The applicants accept that the only offer of employment made to Dr Rodwell by the University was an offer of employment for a fixed-term of twelve months.  Dr Rodwell accepted that offer of employment.  However, the applicants contend that because Dr Rodwell was employed by the University in circumstances which, under the Agreement, did not justify the use of fixed-term employment, he was in fact employed on a continuing basis.

37 The applicants argued that the first sentence of cl 19.4 of the Agreement (see [6] above) provides support for the above contention.  However that sentence merely provides a definition of “continuing employment”.  It does not operate to deem any contract providing for fixed-term employment in circumstances outside those defined in cl 19.6 to be a contract providing for continuing employment.  Nor does any other provision of the Agreement purport to have such an effect.  The Agreement is silent as to the consequences of the University using fixed-term employment in circumstances outside those identified in cl 19.6 of the Agreement.  It may be noted, however, that cl 25.1 of the Agreement allows fixed-term positions of up to twelve months duration to be filled without advertisement and cl 25.3 requires a merit based selection process to be adopted for continuing positions but not for fixed-term positions.  That is, important requirements of the Agreement touching upon the integrity of the process by which continuing positions are to be filled, would be open to ready avoidance if, as a matter of law, on any occasion on which the University utilised a fixed-term contract of employment outside the limited circumstances prescribed by cl 19.6, the employee concerned was employed on a continuing basis.

38 In the circumstance that the Agreement does not deal with the consequences of a breach of cl 19.6 of the Agreement, the consequences of the University’s breach of the clause is to be determined by reference to the WR Act.  Section 178 of WR Act provides for the imposition of penalties where a party bound by a certified agreement breaches a term of the agreement.  Section 178 identifies circumstances in which additional relief may be obtained from the party in breach of the certified agreement.  Underpayments may be recovered and restorative orders with respect to underpayments into superannuation funds may be obtained.  However, nothing in s 178 provides a basis for the applicants’ argument that a breach of a certified agreement can alter the express term of a contract of employment.

39 Neither s 178, nor any other provision of the WR Act, discloses, in my view, an intention that a consequence of the type for which the applicants here contend should flow from a breach of a term of an enterprise agreement.  Were an intention able to be gleaned from the terms of the WR Act that the making of contracts in breach of enterprise agreements is prohibited, it would be necessary to consider whether the statute also discloses an intention that such contracts should be rendered void and unenforceable (see Yango Pastoral Company Pty Ltd v First Chicago Australia Limited (1978) 139 CLR 410).  However, in this case the applicants do not argue in favour of invalidity.  They argue in favour of a “contract” of employment coming into existence, the terms of which do not reflect any offer made by the University or accepted by Dr Rodwell.  No principle of law was identified by the applicants which would justify the Court in declaring the existence of such a “contract”.

40 I conclude that the applicants are not entitled to the relief, or any aspect of the relief, sought by par 3 of the application.  It follows, having regard to the concession appropriately made by the applicants (see [35] above), that the University did not breach cl 8.1.4 of the Agreement by, in late 2001, advertising and filling a continuing position of Lecturer HSIE in the Faculty of Education.  The relevant “pre-existing work, staffing or organisation of work arrangements” were that Dr Rodwell’s contract of employment would terminate on 31 January 2002.” (Underlining added)

[102] The Court held that the University had breached two of the terms of the agreement in respect of the employment of Dr Rodwell.  The University did not limit the use of fixed term employment as required by the agreement and it did not provide to Dr Rodwell, upon his engagement, an instrument of appointment that complied with the requirements of the agreement. The Court imposed financial penalties for these breaches. However the Court refused to declare the employment as “continuing” notwithstanding the fixed term employment had been in breach of the agreement.

[103] In Mr McHugh’s case the facts are similar in that the only offers of employment or extensions to his contract offered by Murdoch were expressly for a fixed term.

[104] It was submitted by the applicant that because Murdoch wrongly failed to agree to convert his fixed term appointment into a continuing appointment his fixed term appointment became a continuing appointment.

[105] It is also argued that because the 2010 Agreement in clause 9−Contract of Employment only provides for three categories of employment, being continuing (ongoing), casual or fixed term appointments then if the facts of Mr McHugh’s employment do not meet all of the requirements in the 2010 Agreement for a casual or a fixed term appointment then the employment must therefore be a continuing (ongoing) appointment.

[106] Neither of these arguments are supported by reference to any provision in either the 2006 Agreement or the 2010 Agreement to the effect that employment offered and accepted as fixed term “becomes” continuing in such circumstances.

[107] Following the approach of Branson J above if indeed this Commission concluded that Murdoch was wrong to reject Mr McHugh’s application to be converted to ongoing employment under clause 9(l) of the 2010 Agreement there simply is no basis on which the Commission should hold that the automatic consequence of this was that Mr McHugh’s employment as at 31 December 2013 was other than a fixed term appointment. If there had been an error by Murdoch regarding Mr McHugh’s conversion or some other breach of the 2010 Agreement by Murdoch regarding the detail of the appointment(s) of Mr McHugh this simply does not cause a contract of employment for a continuing (ongoing) appointment that was never offered by Murdoch to Mr McHugh to come into existence.

[108] Consequently there is no necessity for the Commission to decide whether or not Murdoch’s decision not to convert Mr McHugh’s fixed term appointment to ongoing employment was correct.

[109] I find that as at 31 December 2013 Mr McHugh was employed on a fixed term appointment.

Entitlement to severance payment

[110] Mr McHugh’s employment ended on 31 December 2013.

[111] If Mr McHugh was a continuing employment contrary to my conclusions above then clause 14− Redundancy of the 2010 Agreement has application as explained in 14.1(c) only,

“Where the University has decided to terminate the employment of one or more employees for reasons of economic, technological, structural or similar nature...”

[112] Whilst the respondent submits with some force that there was not a termination of Mr McHugh’s employment at the initiative of Murdoch but rather that his fixed term appointment ended due to the effluxion of time if this was not correct and there was a decision made by Murdoch to terminate the employment of Mr McHugh who was a continuing employee the evidence does not support a finding that the circumstances fell within those identified in 14.1(c) of the 2010 Agreement which is a necessary precondition for clause 14− Redundancy to apply.

[113] Consequently even if Mr McHugh’s was a continuing appointment I am not satisfied that there is any entitlement to severance payment under clause 14−Redundancy of the 2010 Agreement in these circumstances.

[114] As I have found above in my view at the time his employment ended Mr McHugh was a fixed term appointment. I accept it is unclear whether at this point his fixed term appointment had commenced on 1 April 2010 and been extended on 4 April 2013 or whether alternately a new fixed term appointment had been offered and accepted on 4 April 2013. If the former is the true situation then it is necessary because of the savings provision in clause 9.5−Fixed-Term Contracts, (r)−Severance Pay (iii) to consider the severance payment provisions under the 2006 Agreement however if the latter is the true situation and then it is necessary to consider the severance pay provisions in clause 9.5−Fixed-Term Contracts of the 2010 Agreement.

[115] For completeness I will consider both situations.

The 2006 Agreement

[116] The relevant provisions in the 2006 Agreement are as follows,

“9.5. Severance Pay

A fixed term Employee whose contract of employment is not renewed, where the Employee seeks to continue the employment, will, subject to subclause 9.6, receive severance payments in accordance with the table below in the following circumstances.

i. the Employee is employed on a second and subsequent contract where there is continuity of employment between the contracts; or

ii. the Employee is employed on a first contract, and the duties undertaken will continue to be required but another person has been appointed, or is to be appointed, to undertake those duties.

Length of continuous service	Payment
More than 1 year and up to 2 years	4 weeks
More than 2 years and up to 3 years	6 weeks
More than 3 years and up to 4 years	7 weeks
More than 4 year and up to 5 years	8 weeks
More than 5 years and up to 6 years	9 weeks
More than 6 years and up to 7 years	10 weeks
More than 7 years and up to 8 years	12 weeks
More than 8 years and up to 9 years	14 weeks
More than 9 years and up to 10 years	16 weeks
More than 10 years	18 weeks

9.6. Exceptions to severance

Severance will not be paid in the circumstances of:

i. a pre-retirement contract;

ii. a contract to replace an Employee who is on leave;

iii. a traineeship or apprenticeship.

9.7. Long Service Leave

An Employee who has been employed on a series of fixed term contracts for a continuous period between seven (7) and ten (10) years, and who is paid a severance payment, will also be paid pro-rata long service leave.

9.8. Incremental Advancement

A fixed term contract employee who has a period of continuous service in a classification which has an incremental structure shall be entitled to progress through that structure in the same way as an employee engaged as a continuing employee in the same or similar classification.

9.9. Expiry of Term

When an appointment expires through the effluxion of time it shall not be construed as a termination of the appointee’s contract at the University’s initiative.” (Underlining added)

[117] Relevantly to the question of any entitlement to severance payment under this clause the facts are that on 22 November 2013 Mr McHugh received an offer of another fixed term appointment from Murdoch. This fixed term contract was offered to operate from 1 January 2014 to 31 July 2014. The offer was expressly made pursuant to clause 9.5(c) of the 2010 Agreement.

[118] Mr McHugh did not believe it was correct to say, as Murdoch did, that this employment was properly covered by clause 9.5−Fixed Term Contracts, subclause (c)−Replacement Employee. Consequently Mr McHugh chose not to accept the contract.

[119] Turning then to consider clause 9.5−Severance Pay and the first sentence of the clause I do not believe on these facts it is correct to say that Mr McHugh’s contract was not to be renewed given he had been offered a further fixed term contract by Murdoch. Separately I do not think it is correct to say that Mr McHugh was seeking to continue the employment given he had chosen not to accept the offer of a further fixed term appointment.

[120] Consequently it is clear that there was no entitlement to severance pay under the 2006 Agreement.

The 2010 Agreement

[121] The relevant provisions in the 2010 Agreement are as follows,

“9.5 Fixed-Term Contracts

...

(r) Severance Pay

(i) A fixed-term contract appointee employed on a contract for:

• a specific task or project; or



• a research only function;




who has not secured comparable alternative employment at the expiry of his/her contract because:

• the same or substantially similar duties are not required by the University;




or

• the duties of the kind performed in relation to the work continue to be required but another person has been appointed, or is to be appointed, to the same or substantially similar duties;




will be entitled to the following amount of severance:

Period of continuous service Severance pay

Up to the completion of 2 years 4 weeks

More than 2 but not more than 3 years 6 weeks

More than 3 but not more than 4 years 7 weeks

More than 4 years 8 weeks

(ii) Where the University offers and an employee does not accept comparable alternative employment, severance will not be paid.

Comparable alterative employment will mean employment with the University which provides the employee with overall conditions and salary comparable to existing conditions.

(iii) An employee whose fixed-term contract commenced under the Murdoch University Academic Staff Collective Workplace Agreement 2006 and expires under this Agreement will be entitled to the benefit of any severance payment which would have been payable under sub-clause 9.5 of that Agreement and in the circumstances prescribed by that Agreement.” (Underlining added)

[122] The wording of the first sentence of this clause limits severance pay to a fixed term contract appointee employed on a contract for a specific task or project or a research only function. The evidence is that Mr McHugh was working between March 2010 and 31 December 2013 as a Lecturer. The offer of a further fixed term appointment made by Murdoch on 22 November 2013 which would have run for a further seven months through to 31 July 2014 identified the position offered as that of Lecturer.

[123] The evidence demonstrates that Mr McHugh was neither engaged on a contract for a specific task or project nor was he engaged on a research only function. Consequently Mr McHugh’s circumstances do not meet the prerequisites for severance pay under this clause.

[124] I note that the parties do not agree as to whether the seven month fixed term appointment which was offered to Mr McHugh on 22 November 2013 but which he did not accept amounted to comparable alternative employment.

[125] Whilst it is not necessary to resolve this disagreement given my conclusion immediately above even if the Commission accepted that there was no comparable alternative employment at the expiry of Mr McHugh’s contract the additional prerequisites in that clause, being the third and fourth dot points of (r)-Severance Pay (i) were not met in any event.

[126] The circumstances here were not that the same or substantially similar duties are not required by Murdoch, self-evidently they were required hence the offer of a further fixed term appointment. Nor was this a case where Mr McHugh did not secure comparable alternative employment because the duties performed continue to be required by Murdoch but another person has been appointed or is to be appointed to the same duties. Consequently regardless of the comparable alternative employment question the additional prerequisite for an entitlement to severance pay are not met in this case.

[127] Consequently it is clear for these reasons that even if my finding at [123] is wrong there is no entitlement to severance pay under the 2010 Agreement.

Conclusion

[128] Mr McHugh’s employment was a fixed term appointment.

[129] Mr McHugh has no entitlement to severance pay under either the 2006 Agreement or the 2010 Agreement.

COMMISSIONER

Appearances:

M Braithwaite of the applicant.

C Pugsley of the Australian Higher Education Industrial Association for the respondent.

Hearing details:

2014.

Perth:

May 26.

 1   Exhibit A1, Attachment 7

 2   Ibid., Attachment 14

 3   Ibid., Attachment 11

 4   NTEIU v University of Wollongong [2002] FCA 31 at paragraphs 36 to 40

 5   Exhibit A1, Attachment 23

 6   [2002] FCA 31

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