[2019] FWC 5821 [Note: An appeal pursuant to s.604 (C2019/5608) was lodged against this decision. - refer to Full Bench decision dated 28 February 2020 [[2020] FWCFB 606] for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Unfair dismissal

Sarabjeet Pal
v
Commonwealth of Australia represented by the Department of Home Affairs
(U2019/2397)

DEPUTY PRESIDENT CLANCY

MELBOURNE, 21 AUGUST 2019

Application for unfair dismissal remedy-whether Applicant a person protected from unfair dismissal- Applicant not an employee of the Commonwealth and therefore not a national system employee- Application dismissed for want of jurisdiction.

[1] Mr Sarabjeet Pal has applied under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. He submits that he was forced to resign from his employment with the Commonwealth of Australia as represented by the Department of Home Affairs (the Department) on 15 February 2019, and that this took effect from 18 February 2019.

[2] The Department has objected to Mr Pal’s unfair dismissal application on two matters of jurisdiction:

a) It submits Mr Pal was not, and could not be, an employee of the Commonwealth, and therefore is not protected by the unfair dismissal regime of the Act; and

b) Even if the Fair Work Commission (the Commission) were to find Mr Pal was an ‘employee’ of the Department for the purpose the unfair dismissal regime of the Act, it submits Mr Pal does not have standing to bring his unfair dismissal application because he was not, and has not been, ‘dismissed’ within the meaning of s.386 of the Act.

[3] The matter was referred to conciliation on 9 April 2019 but did not resolve. Subsequently, the matter was listed for a Jurisdiction (No Dismissal; Not an Employee) and Arbitration Conference/Hearing on 17 June 2019.

[4] Upon the matter being allocated to me, I conducted a mention hearing via telephone on 3 June 2019, where I consulted with the parties as to their views on whether the matter should proceed by way of determinative conference or formal hearing. After consideration of the requirements of s.399(1) of the Act, I determined it would be most appropriate for the matter to be dealt with by way of a hearing.

[5] The Department sought permission, under s.596 of the Act, to be represented at the hearing by a lawyer, Mr Peter McNulty of Ashurst. I considered oral submissions on this issue from the parties at the mention hearing via telephone on 3 June 2019. After weighing up the circumstances and the considerations in s.596 of the Act, I determined that allowing the Department to be represented by a lawyer would enable the matter to be dealt with more efficiently, taking into account its complexity. I therefore decided to exercise my discretion to grant permission for the Department to be represented.

Witnesses at Hearing

[6] At the hearing on 17 June 2019, Mr Pal gave evidence on his own behalf.

[7] Ms Rhodora Masri (Manager Interpreter Liaison – Translating and Interpreting Service, Department of Home Affairs) gave evidence on behalf of the Department.

[8] I determined at the hearing that I would decide the question of whether Mr Pal was an employee or an independent contractor before dealing with any other matters.

Initial matters to be considered

[9] There is no dispute between the parties, and I am satisfied, in relation to three of the four matters referred to in ss.396(a)-(d) of the Act, as follows.

[10] Firstly, Mr Pal’s application was made within the 21 day period required by s.394(2) of the Act (s.396(a) of the Act).

[11] Secondly, as to whether this matter involves a dismissal that was consistent with the Small Business Fair Dismissal Code (s.396(c) of the Act), it was not in dispute and I find that the Department is not a small business employer within the meaning of s.23 of the Act, having 15 or more employees at the relevant time. As such, I am satisfied that the Small Business Fair Dismissal Code does not apply.

[12] Thirdly, neither party suggested this case involves a dispute as to whether or not the circumstances involved a genuine redundancy (s.396(d) of the Act) and I am satisfied this is the case.

Section 396(b) - was Mr Pal protected from unfair dismissal?

[13] As to the fourth matter referred to in s.396(b) of the Act, s.382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

[14] For present purposes, it is necessary to focus on whether or not Mr Pal was an employee. The analysis begins having regard to the fact that Part 3-2 of Chapter 3 of the Act covers the unfair dismissal of national system employees. Where the term employee is used in Part 3-2, it means a “national system employee”, 1 which is in turn defined by s.13 of the Act as “an individual so far as he or she is employed…by a national system employer…” In Victoria, with some limited exceptions not applicable to Mr Pal, all persons who are employees fall within the provisions of Part 3-2 of the Act.2

[15] Where the term employer is used in Part 3-2, it means a “national system employer”, 3 which is in turn defined by s.14 of the Act to include “the Commonwealth, so far as it employs, or usually employs, an individual.”4

First Jurisdictional Objection- Mr Pal was not, and could not be, an employee of the Commonwealth, and therefore is not protected from unfair dismissal

[16] As outlined above at [2], the first jurisdictional objection of the Department is that Mr Pal was not, and could not be, an employee of the Commonwealth, and therefore is not protected by the unfair dismissal regime of the Act. As indicated at [8] above, at the hearing I determined I would decide the question of whether Mr Pal was an employee or an independent contractor before dealing with any other matters.

[17] The Department says that as a Department of State it can only act in a manner consistent with the legislative framework within which it must operate.

[18] It further says employment in the Commonwealth is governed by the Public Service Act 1999 (Cth) (the PS Act) and from this, referred to:

  Section 6(1): “All persons engaged on behalf of the Commonwealth as employees to perform functions in a Department or Executive Agency must be engaged under this Act, or under the authority of another Act.”

  Section 6(3): “This section does not, by implication, affect any power that an Agency Head might otherwise have to engage persons as independent contractors.”

  Section 22 (1) and s.22(2):

“(1)  An Agency Head, on behalf of the Commonwealth, may engage persons as employees for the purposes of the Agency.

(2)  The engagement of an APS employee (including an engagement under section 72) must be:

(a)  as an ongoing APS employee; or

(b)  for a specified term or for the duration of a specified task; or

(c)  for duties that are irregular or intermittent.

Note: The usual basis for engagement is as an ongoing APS employee (see paragraph 10A(1)(b)).”

[19] The Department submitted:

a) no other legislation authorises it to engage employees, meaning there must be engagement pursuant to the PS Act to establish an employment relationship;

b) If there is no engagement pursuant to s.6(1) of the PS Act, a person cannot be an employee of the Commonwealth represented by the Department; 5

c) There is no evidence Mr Pal was engaged by the Department as an employee pursuant to s.22 of the PS Act and in particular, the evidence of Ms Masri was that he was not, at any time, engaged as an employee in the Department;

d) Clear words are required for an Agency Head to exercise the statutory power of engagement pursuant to s.22 of the PS Act; and

e) The fact of a Deed of Standing Offer being entered into between the Applicant and the Department does not create an engagement pursuant to the PS Act. The Deed of Standing Offer makes clear that no employment relationship is created. 6

[20] The essence of the Department’s submission was that if there is no engagement pursuant to s.22 of the PS Act, Mr Pal cannot be an employee. It submitted two authorities which it says go to the fact that for civil servants of the Crown, even if there is a contractual relationship established, that contract must be established in a manner that is consistent with the statutory provisions that apply to the engagement of the civil servant by way of the Crown.

[21] The first was Director-General of Education v Suttling 7and the Department relied on it to submit that s.6 of the PS Act provides that all persons engaged on behalf of the Commonwealth as employees must be engaged under the PS Act, effectively because there is no other Act pursuant to which the Department could engage employees. Further, it submitted the Deed of Standing Offer establishes an independent contractor arrangement, pursuant to the Department's powers to enter into contracts on behalf of the Commonwealth, and it is not a document which represents an engagement pursuant to the PS Act. The Department submitted clear words would be required and the Deed of Standing Offer makes it clear and express that no relationship of employment is created by operation of the terms of that deed.

[22] The second authority was Re Australian Industrial Relations Commission and Another; Ex parte Commonwealth. 8

[23] The Department submitted that in the absence of some sort of an instrument of engagement that is in compliance with s.6 of the PS Act, there cannot be an employment relationship and further, absent the exercise of power in s.22 of the PS Act to engage Mr Pal as an employee, there cannot be an engagement as an employee.

[24] At the hearing, Mr Pal challenged the validity of the Deed of Standing Offer on the basis that it was neither signed nor initialled on each page and thus, he had neither read nor agreed to it. Mr Pal also took issue with the Department’s contention that the Deed of Standing Offer had been extended. His contention was that on each occasion a letter purporting to extend the arrangements was sent to him, it should have been accompanied by a full copy of the Deed of Standing Offer.

[25] In relation to whether his status was that of an employee or an independent contractor, Mr Pal submitted in his final written submissions:

  Each page of the Deed of Standing Offer should have been marked Independent Contractor, as should his payslips;

  It was never mentioned in any of the Department’s documents that he was not an employee;

  “the prerequisite of being an APS to being an employee” was never raised at the time of his recruitment in 1991;

  The Department has not presented any evidence of having sent and asked him to return a signed copy of APS laws, by-laws or regulations during his 28 years of interpreting and translating work;

  He was referred to as a service provider in the Deed of Standing Offer, as opposed an independent contractor;

  He was “deceitfully” classified as an independent contractor;

  The renewals were not done with the Deed of Standing Offer attached but rather, “the same old deed”, lacking his initialling and without a declaration that he had read, understood and accepted it.

[26] Mr Pal also outlined a range of submissions going to the common law indicia used to determine whether an individual is an employee or independent contractor.

[27] In reply, the Department submitted:

a) Its evidence was that there has been no engagement pursuant to the PS Act;

b) Mr Pal adduced no evidence that, at any time over the 28 year period during which he provided services, there was any reference made by the Department to an employment relationship being created or an engagement pursuant to the PS Act;

c) The absence of any documents to this effect is consistent with the Department’s evidence that the Applicant has never been engaged as an employee pursuant to the PS Act;

d) The references to Mr Pal as a service provider in the Deed of Standing Offer, rather than an independent contractor, does not change the status of the arrangement; and

e) The terms and conditions upon which interpreters provide services to the Department are not relevant in assessing whether an interpreter has been engaged as an employee pursuant to the PS Act.

[28] The Department submitted that there being no evidence that Mr Pal has been engaged as an employee pursuant to the PS Act, the Commission need not enquire into whether the terms of the arrangement between Mr Pal and the Department would or would not otherwise meet the common law indicia of an employment relationship. 9

Consideration

[29] The Department relies on the operation of the PS Act and the Deed of Standing Offer executed by Mr Pal on 11 May 2015 10 to submit that he was not an employee of the Commonwealth.

[30] The text of the Deed of Standing Offer includes:

  The Description of Mr Pal as being the Service Provider and the request that he supply an Australian Business Number (ABN);

  Recital A, which details that the Service Provider is one of the suppliers on a panel of interpreters to provide interpreting and translating services to clients of the Department;

  Recital B, which includes acknowledgement by the Service Provider that there is no guarantee or assurance of any or any particular volume of the services;

  Recital C, which provides that the Service Provider has fully informed itself of all aspects of the work, any Contract formed under the Deed of Standing Offer and has submitted an offer to provide the Services in the manner set out in the Deed of Standing Offer;

  Recital D, which includes acknowledgement by the Service Provider that it is not, and will not be, an employee of the Department in providing the services;

  Recital E, which provides that the Department has agreed to accept the Service Provider’s offer to make a standing offer to the Department for the provision of the Services on the terms and conditions contained in the Deed of Standing Offer;

  Approximately 35 pages of Operative Provisions following the Recitals were introduced with the wording “The parties to this Deed agree as follows…”;

  Clause 3, which provides for the duration of the Deed of Standing Offer to be from 1 July 2015 to 31 December 2016 but capable of being extended at the absolute discretion of the Department for the further periods, in the manner detailed above. Clause 3 further provides that any extensions will be on the same terms and conditions as set out in the Deed of Standing Offer;

  Clause 7, which provides that the Service Provider is not by virtue of the Deed of Standing Offer an employee, and an acknowledgement by the Service Provider that as it is not an employee of the department, it is not entitled to payment for annual leave, public holidays, sick leave, long service leave, redundancy or any other entitlements afforded to employees either by statute, award or common law;

  Clause 8.6.8, which deals with obligations of the Service Provider if it is employed as an Australian Public Servant separate to the provision of services to the Department under the Deed of Standing Offer;

  Clause 10.2, which provides a warranty from the Service Provider that it has done everything possible to inform itself fully and completely as to the requirements in the Deed of Settlement;

  Clause 11.2, which requires the Service Provider to have and maintain public liability, professional indemnity, workers’ compensation and travel insurance unless the Department, at its discretion, arranges for it and meets its expense;

  Clause 12, which in addition to providing the Department with the right to terminate the Deed of Standing Offer, empowers the Department to reduce the scope of the services by requiring the Service Provider to cease providing a part of the services immediately, together with the right to suspend the services;

  Clause 13, which provides that the Deed of Standing Offer records the entire agreement of the parties in relation to its subject matter; and

  Attachment D Operations Manual, which includes clause 40(a) which in turn states that the Service Provider must not list TIS National or the Department as its employer.

[31] The Deed of Standing Offer was dealt at the hearing as follows:

  The Department tendered a template Deed of Standing Offer which comprises 98 pages; 11

  The Department also tendered what it termed the “execution pages” of a copy of the Deed of Standing Offer and a complete copy of the Deed of Standing Offer between it and Mr Pal, which appeared to have been completed and signed by Mr Pal on 11 May 2015. 12 From these it is apparent that Item 2 of the Deed Details and Clause 3.1.1 of the Deed of Standing Offer state that its Initial End Date was 31 December 2016 and further, Item 3 of the Deed Details and Clause 3.1.2 of the Deed of Standing Offer provide that the Department could, at its absolute discretion, extend the term of the Deed for a further period, or periods, ending no later than 30 June 2020 by Notice given to Mr Pal. Clause 3.1.2 also states that any extension would be on the same terms and conditions, and cover the same services, as set out in the Deed.

  The Department further tendered three letters which it said extended the operation of the Deed of Standing Offer between itself and Mr Pal to 31 December 2017, then 31 December 2018 and finally 30 June 2020. 13 Mr Pal does not appear to dispute receiving these letters but complained that none of them were accompanied by a copy of the Deed of Standing Offer.14

[32] Mr McNulty explained the process of extending the Deed of Standing Offer:

“MR McNULTY:  Your Honour, you requested that the respondent during the luncheon adjournment identify copies of extension letters with respect to the Deed of Standing Offer.

THE DEPUTY PRESIDENT:  Yes.

MR McNULTY:  The way in which the  department goes about extending the deed is by preparing template letters and then conducting what is known as a mail merge whereby it has a list of individual names and addresses and various things like that and then automatically generating the addresses into each of those templates and sending the letters off.  What we have provided to your associate for printing is copies of the template letters for each time at which the deed has been extended.

THE DEPUTY PRESIDENT:  Yes.

MR McNULTY:  We have also provided a copy of the list of interpreters for the purpose of the 2019 extension.  Now in the department's submission there is one line of that document which is relevant, which is the fact that that confirms that Mr Pal was one of the persons to whom the most recent extension letter was sent.” 15

[33] The text of the three letters that outlined the extension of the operation of the Deed of Standing Offer was, respectively:

1) “We refer to the Deed of Standing Offer for the provision of interpreting services (the ‘Deed’) between the Department of Immigration and Border Protection (the ‘Department’) and you [insert name] (the ‘Service Provider’).

The Deed is due to expire on 31 December 2016. Pursuant to clause 3.1.2 (Deed Term) of the Deed, the Department has the option to extend the Deed for a further 12 months by giving you written notice of such extension, prior to the expiration of the Deed.

The Department hereby provides notice that it is exercising the option under clause 3.1.2 to extend the Deed by a period of 12 months. The Deed will now expire on 31 December 2017 and will be on the same terms and conditions, and cover the same Services as set out in the Deed…” 16

2) “We refer to the Deed of Standing Offer for the provision of interpreting services (the ‘Deed’) between the Department of Home Affairs (the ‘Department’) and you XXXXXXXXXXXXXXXXX (the ‘Service Provider’).

Extension to the term of the Deed

The Deed is due to expire on 31 December 2017. Pursuant to clause 3.1.2 (Deed Term) of the Deed, the Department has the option to extend the Deed by giving you written notice of such extension, prior to the expiration of the Deed.

The Department hereby provides notice that it is exercising the option under clause 3.1.2 to extend the Deed for a further period of 12 months on the same terms and conditions, and cover the same Services, as set out in the Deed. The Deed will now expire on 31 December 2018. The Department reserves its rights to further extend the Deed on the terms and conditions as set out in the Deed...” 17

3) “We refer to the Deed of Standing Offer for the provision of interpreting services (the ‘Deed’) between the Department of Home Affairs (the ‘Department’) and you.

Extension to the term of the Deed

The Deed is due to expire on 31 December 2018. Pursuant to clause 3.1.2 (Deed Term) of the Deed, the Department has the option to extend the Initial End Date of the Deed by giving you written notice of such extension, prior to the expiration of the Deed. Any extension will be on the same terms and conditions, and cover the same services, as set out in the Deed.

The Department hereby provides notice that it is exercising the option under clause 3.1.2 to extend the Deed for a further period of 18 months on the same terms and conditions, for the provision of the same Services, as set out in the Deed. The Deed will now expire on 30 June 2020…” 18

[34] Mr Pal submits the Deed of Standing Offer does not have the effect of establishing he was an independent contractor. Essentially, his case is that the Department cannot rely on the text of the Deed of Standing Offer because he did not initial each of its pages and nor was it attached to any of the Notices purporting to extend it and further, that the Commission should look beyond its text. Mr Pal’s case that he was an employee is based on his submissions pertaining to the nature of his work, the manner in which it was performed and the various characteristics of the relationship he had with the Department.

[35] Applying the principle from Director-General of Education v Suttling, 19 for there to have been an engagement by the Department of Mr Pal as an employee, it had to have been consistent with s.6 of the PS Act. Section 6 provides that all persons engaged on behalf of the Commonwealth must be engaged either under the PS Act or under the authority of another Act. As far as the PS Act is concerned, there is nothing to suggest Mr Pal was an employee engaged by an Agency Head, on behalf of the Commonwealth, pursuant to s.22. Further, there is nothing before me to suggest the Department had authority under another Act to engage Mr Pal as an employee. In short, there was no evidence of Mr Pal having been engaged as an employee of the Commonwealth pursuant to a written contract of employment coming within the scope of s.6 of the PS Act. I am therefore satisfied that in this case, the Department did not exercise the statutory power of engagement pursuant to s.6 of the PS Act and note that Mr Pal acknowledged he does not have a document from the Commonwealth that describes him as an employee.20

[36] Noting that s.6(3) of the PS Act also empowers the Department to engage persons as independent contractors, I am satisfied, having reviewed the terms of the Deed of Standing Offer, that this is what occurred in Mr Pal’s case despite his assertions to the contrary. The Deed of Standing Offer stated in express terms that the relationship between Mr Pal and the Commonwealth (through the Department) was not one of employment. Additionally, in executing the Deed of Standing Offer, Mr Pal specifically acknowledged that he was a Service Provider and not an employee. Further, Mr Pal agreed to the Department having the right to extend the Deed of Standing Offer at its discretion. I am satisfied that Mr Pal agreed to be bound by the terms of the Deed of Standing Offer, having signed it in the presence of a witness on 11 May 2015, and the Department’s right to extend it was validly exercised in the manner outlined above at [32]–[33]. Despite Mr Pal’s assertions, the Deed of Standing Offer did not require the parties to initial each of its pages and nor was there a requirement for it to be attached to any Notice of extension.

[37] I do not accept the proposition advanced by Mr Pal that the way in which the Deed of Standing Offer operated in practice made him an employee. Recognising in this case the Commonwealth does not concede that Mr Pal was an employee at common law, the following passage from Re Australian Industrial Relations Commission and Another; Ex parte Commonwealth 21 is nonetheless apposite:

“The fact that subsequent "operational" factors such as the method of work and performance would have the hypothetical effect at common law that Mr Arends was an employee does not mean that he was in employment by authority of a law of the Commonwealth, particularly in circumstances where the instrument under which the contract was made was specific in stating that the contract did not effect employment.  His own belief as to his status is not relevant.” 22

[38] Consistent with the conclusion of the Full Court in Re Australian Industrial Relations Commission and Another; Ex parte Commonwealth, having concluded that there is no evidence that Mr Pal was engaged as an employee either under the PS Act or the authority of another Act, and that he was instead engaged under a contract which specifically stated the relationship between him and the Department was not one of employment, it is not necessary for me to assess whether the terms of the Deed of Standing Offer did or did not meet the common law indicia of an employment relationship.

[39] As such, having been persuaded Mr Pal was not engaged as an employee under the PS Act, Mr Pal cannot have been an employee of the Department and therefore does not come within the definition of a national system employee. This being the case, Mr Pal was not an employee to whom Part 3-2 of Chapter 3 of the Act applies and was therefore not a person protected from unfair dismissal.

Conclusion

[40] It is noted that much of Mr Pal’s material and submissions addressed what he considered to be the merits of his application. However, s.396 of the Act requires me to decide whether Mr Pal was protected from unfair dismissal before considering the merits of his application. Having determined Mr Pal was not a person protected from unfair dismissal, the Commission does not have jurisdiction to deal with his unfair dismissal application.

[41] Having made this finding, it is therefore not necessary for me to proceed to consider the merits of Mr Pal’s unfair dismissal application and, in particular, his submissions that the circumstances of his resignation were such that he was ‘dismissed’ within the meaning of s.386 of the Act. The consequence of my finding is that Mr Pal’s unfair dismissal application must be dismissed.

[42] Mr Pal’s unfair dismissal application must be dismissed because he was not a person protected from unfair dismissal. An order to this effect will be issued shortly.

esig

DEPUTY PRESIDENT

Appearances:

Mr Sarabjeet Pal, on his own behalf.

Mr Peter McNulty, solicitor, for the Respondent.

Hearing details:
2019.
Melbourne:
19 June.

Final written submissions:
Mr Pal, 24 June 2019.
Department of Home Affairs, 28 June 2019.

Printed by authority of the Commonwealth Government Printer

<PR711558>

 1   Section 380 of the Fair Work Act 2009.

 2   Section 30C of the Fair Work Act 2009.

 3   Section 380 of the Fair Work Act 2009.

 4   Section 14(1)(b) of the Fair Work Act 2009.

 5   Transcript PN 34.

 6   See Recital D and Clause 7 of Exhibits R2 and R4.

 7   (1987) 162 CLR 427 at page 437.

 8   145 FCR 277.

 9   Ibid.

 10   Exhibit R4 at page 41.

 11   Exhibit R2.

 12   Exhibits R3 and R4.

 13   Exhibits R5,R6 and R7.

 14   Transcript PN 1069-1080.

 15   Transcript PN 1038-1042.

 16   Exhibit R5.

 17   Exhibit R6.

 18   Exhibit R7.

 19   (1987) 162 CLR 427 at page 437.

 20   Transcript PN 492.

 21   145 FCR 277.

 22   Ibid at page 287.