PR912882

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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.45 appeal against decision

issued by Commissioner Laing on 20 April 2001

PR903576

Pacific Rim Employment Pty Ltd

(C2001/3046)

s.170CE application for relief in respect of termination of employment

P.R. Lloyd

and

Pacific Rim Employment Pty Ltd

(U2000/60165)

Pacific Rim Employment Pty Ltd

(C2001/3048)

s.170CE application for relief in respect of termination of employment

M.S. Clarke

and

Pacific Rim Employment Pty Ltd

(U2000/60166)

   

JUSTICE GIUDICE, PRESIDENT

  

SENIOR DEPUTY PRESIDENT KAUFMAN

  

COMMISSIONER O'CONNOR

MELBOURNE, 4 JANUARY 2002

Appeals - termination of employment - jurisdiction - whether applicants employed pursuant to contracts of employment for a specified period of time - Workplace Relations Act 1996 s.170CC(1)(a) - Workplace Relations Regulations reg. 30B(3) - written agreement -construction of agreement - whether agreement a sham - leave to appeal granted - appeal upheld.

DECISION

[1] These appeals, for which leave is required, involve an examination of the terms upon which employees were engaged by Pacific Rim Employment Pty Ltd (the appellant) to carry out duties at the Curtin Air Base near Derby in Western Australia. Mr Paul Richard Lloyd and Mr William Sergei Clarke, the respondents, made applications pursuant to s.170CE of the Workplace Relations Act 1996 (the Act) for relief in respect of the termination of their employment. In each case the appellant took jurisdictional objections. The objections were heard together by Commissioner Laing. The Commissioner, in a decision issued on 20 April 2001, dismissed the jurisdictional objections [PR903576].

[2] The appellant contended, firstly, that the respondents were engaged pursuant to a contract of employment for a specified period of time and secondly, in the alternative, that they were casual employees engaged for a short period of time. If the first contention is made out the respondents were excluded from the Commission's jurisdiction pursuant to s.170CE by operation of s.170CC(1)(a) of the Act and reg.30B(3). If the second contention is made out it would be necessary to examine the implications of the recent decision of the Federal Court of Australia in Hamzy v Tricon International Restaurants trading as KFC [2001] FCA 1589 (16 November 2001).

[3] The appellant's appeal in relation to the decision concerning Mr Lloyd's application was lodged in the Western Australian Registry on 7 May 2001. The appeal in relation to the decision concerning Mr Clarke's application was lodged in the same Registry on 8 May 2001. The appeals came on for hearing on 16 October 2001. Mr Parry of counsel appeared on behalf of the appellant. Mr Llewellyn appeared for the Australian Workers' Union on behalf of the respondents, Mr Lloyd and Mr Clarke. At the conclusion of the appellant's submissions Mr Llewellyn pointed out that the appeal documents had not been served on the respondents until some months after the notice of appeal was lodged. Rule 11(5) of the Commission's rules requires an appellant to serve the appeal documents on the respondent as soon as practicable. It was not submitted that the respondents were prejudiced in any way by the appellant's non-observance of the rule. In the circumstances we dispense with compliance with Rule 11(c), pursuant to Rule 6.

[4] These appeals concern the Commission's jurisdiction to deal with the respondents' applications for a remedy in relation to the termination of their employment by the appellant. As we understand the position the contracts under which the respondents were engaged are used generally by the appellant for the purposes of supplying labour at the Curtin Air Base and possibly at other locations. The contractual arrangements are unusual and raise some novel issues. Furthermore the outcome in this case may have important implications for persons engaged to work in other remote locations. We grant leave to appeal.

[5] The background to the engagement and the terms of the contract in each case are set out in the Commissioner's decision. No challenge is made to the Commissioner's summary of the evidence. For the purposes of the appeal it is only necessary for us to set out the salient facts based on that summary and the additional evidence to which we were referred. We shall deal with the appeal in relation to Mr Lloyd's application first.

[6] On 30 December 1999 Mr Lloyd signed a "schedule" and a contract of employment with Australasian Correctional Management Pty. Ltd. (ACM). ACM supplies detention services to the Australian government under contract. On 2 January 2000 Mr Lloyd travelled to the Curtin base and commenced work. On the following day he signed an Australian Workplace Agreement (the agreement). That document incorporated the "schedule" which he had signed on 30 December 1999. The appellant was the other party to the agreement. It was common ground, both before Commissioner Laing and on appeal, that Mr Lloyd was employed by the appellant.

[7] The agreement includes the following terms:

[8] It is apparent that the agreement provides for periods of work of 44 days duration during which Mr Lloyd was to reside at the base (cll. 11.1, 11.2.4, 11.2.5, 11.2.6, 13.1, 15.1 and the provisions of Schedule A).

[9] During his first period of duty Mr Lloyd worked at the base for 44 days in accordance with the agreement, returning to Perth in mid-February 2000. He commenced a further 44 day period of duty in late February 2000. That period was extended from 44 to 58 days by agreement between Mr Lloyd and a Mr Lingard, ACM's manager at the base.

[10] Mr Lloyd commenced a further 44 day period of duty on 19 May 2000. There was a proposal that this period also be extended beyond 44 days, on this occasion by a further 7 days to 51 days. Mr Lloyd sought the extension in a pro forma memorandum to Mr Lingard dated 25 May 2000. The memorandum was in the following terms:

Mr Lingard's signature appears at the foot of the memorandum by way of endorsement. The endorsement is dated 26 June 2000, although is clear that the date should be 26 May 2000.

[11] On 1 June 2000, before the third period of duty had finished, Mr Lloyd was involved in an incident with another officer. Shortly thereafter he was directed to return to Perth, which he did. He was paid for the balance of the period of employment and he was informed some time afterwards that he was not to be offered any more periods of employment.

[12] The evidence concerning the circumstances in which Mr Lloyd entered the contract is limited and not contested. Mr Lloyd gave evidence that he was in secure employment prior to accepting the position with the appellant and that he had been told by Mr Sadlo, the appellant's Food Services Supervisor, at some time after he commenced employment that he had a position for as long as he wanted it and that he, Sadlo, "would just keep bringing me back". He said that Mr Sadlo had indicated on a later occasion that there was employment for Mr Lloyd for one to one and a half years. He testified that the appellant did not inform him that employment was for a fixed term and that he would not have resigned from his previous position to take up a job with the appellant, but for the assurances of continuing work given to him by Mr Sadlo. Mr Lloyd testified further that during his first period of duty he noticed that he had been pencilled in on the roster to return for another 44 day period. Approximately 3 weeks into each period employees were shown a roster of when they would go home and when they should return to work for the next period.

[13] In cases of this kind the terms of a written contract are not to be departed from unless there is evidence indicating the agreement is a sham or, perhaps, that there has been a subsequent oral agreement varying the terms of the written agreement. In Mr Lloyd's case we are not convinced that the agreement is a sham. Mr Lloyd testified under cross-examination that he read and had "a basic understanding" of the agreement when he signed it. His conduct in relation to the extensions is consistent with the terms of the written agreement. The evidence concerning rosters being posted in advance for further periods of duty is not inconsistent with the terms of the written agreement. It is accepted that at one stage Mr Sadlo told Mr Lloyd that, in Mr Lloyd's words, he would "just keep bringing me back." That statement is no more than the expression of an intention to keep offering 44 day periods of employment. There is no evidence to suggest that it constituted a variation of the agreement.

[14] We have concluded that the written agreement, in essential respects, governed the contractual relations between Mr Lloyd and the appellant. We agree with Commissioner Laing in that respect. The next question is whether Mr Lloyd was employed by the appellant pursuant to a contract of employment for a specified period of time.

[15] Commissioner Laing concluded that the contract of employment was not one for a specified period of time. He relied on two aspects of the agreement in particular. The first was that, as he construed it, the agreement accords the appellant the right to unilaterally terminate the contract without penalty of any kind. The second was that although the agreement provides for periods of duty of 44 days, it also provides for extensions of the periods of duty.

[16] Mr Parry submitted that the Commissioner fell into error in his construction of the agreement and that on its true construction Mr Lloyd was engaged by the appellant under a contract for a specified period of time. This submission proceeded on the basis that the agreement was not itself a contract of employment but represented the agreement of the parties as to the terms which should apply during each period of employment. Put another way, the agreement provided for the formation of a series of separate contracts of employment. In the alternative Mr Parry submitted that the agreement, being expressed to operate for a defined period, was itself a contract of employment for a specified period of time.

[17] We think that Mr Parry's analysis of the legal effect of the terms of the agreement is correct. The agreement is not itself a contract of employment but is an agreement governing the terms which shall apply to each period of employment. Each period of employment requires a separate offer and acceptance (cl.11.1) and the appellant is not bound to offer any particular number of periods of employment ( cl.11.3). The terms of the agreement governing the obligations of the appellant as employer are only to operate during periods of employment at the base and the appellant's right to terminate the employment only operates during a period of employment (cl.15.1). At all times Mr Lloyd was to be an employee of another company, ACM, and that company was to be the sole employer between periods of employment with the appellant: see cll. 11.2.1 and 11.2.4 to 11.2.6. We turn now to the Commissioner's reasons for concluding that in this case there was no contract for a specified period of time.

[18] The Commissioner's finding that the contract was not one for a specified period of time because the appellant had a unilateral right to terminate the contract was erroneous. Clause 15.1 provides that the appellant shall have the right to terminate the employment, during a period of employment, without notice in accordance with the Code of Conduct or for any of the reasons listed in Schedule A. We were not provided with a copy of the Code of Conduct. We note that by cl.8 of the agreement Mr Lloyd was obliged to comply with the Code as amended from time to time. A number of the terms of Schedule A may be relevant including those which place a duty on Mr Lloyd to be ready willing and able to perform work (Availability for Work), liability for termination of employment for absenteeism or excessive sick leave (Absence from Base) and a reference to disorderly conduct being contrary to the code of conduct (Wet Canteen). It is clear, however, that the employer may only terminate the contract for cause. We think cl.15.1 creates a right analogous to the common law right to terminate the contract for misconduct. A contract which provides for such a right may be one for a specified period of time.

[19] The Commissioner's second reason for finding that Mr Lloyd was not employed pursuant to a contract for a specified period of time was that the agreement provided for an extension of individual periods of duty. In this respect he can be taken to have been referring to the following sentence in the Appendix to the agreement:

[20] The Appendix provides that the length of each period of employment is to be 44 days. Although the Appendix also contemplates that a period of employment might be extended, there is no provision for the manner in which an extension is to occur. In the absence of any such provision it is a necessary inference that an extension can only occur by agreement. It is in the nature of all agreements that they can be varied by mutual consent. Where an agreement recognizes that a specified period of time for employment may be extended by consent the agreement simply makes explicit what is implicit in any case. The Commissioner's view was that because the agreement recognized that a period of employment could be extended the contract could not therefore be characterized as one for a specified of time. That conclusion was also erroneous.

[21] At the time of the termination of his employment Mr Lloyd was engaged by the appellant pursuant to a contract of employment for a specified period of time, namely 44 days. It appears that the proposal that the period be extended to 51 days was ultimately not agreed to by the appellant, although the proposal was endorsed by ACM's manager at the base.

[22] It is not necessary to deal in any detail with the circumstances surrounding Mr Clarke's employment. It is sufficient to note that he was bound by a written agreement with the appellant which was in relevantly the same terms as the agreement with Mr Lloyd. There is no evidence which would lead us to conclude that the written agreement was a sham or was subject to later variation orally or in writing. Mr Clarke described the situation in the following terms:

The evidence shows that on 16 March Mr Clarke fell ill with pneumonia and was thereafter paid for the duration of the 12 week period and flown back from the base.

[23] At the time of the termination of his employment Mr Clarke was engaged by the appellant pursuant to a contract of employment for a specified period of time, namely 44 days.

[24] We have concluded that the agreements between the appellant and Mr Lloyd on one hand and Mr Clarke on the other provided for a series of engagements which in the case of each engagement was a contract of employment for a specified period of time. It is not necessary that we deal with the appellant's alternative submission, that both Mr Lloyd and Mr Clarke were casual employees engaged for a short period.

[25] Mr Llewellyn submitted that we should nevertheless decline to uphold the respondent's jurisdictional objection because of Regulation 30B(2). That regulation reads:

There was no direct evidence before the Commissioner, or before us, that the purpose of the engagement is, or was at any relevant time, to avoid the appellant's obligations under any of the specified provisions of the Act. Whilst the contractual arrangements in this case are certainly unusual, in the absence of any evidence of the purpose of those arrangements we are not inclined to conclude that the purpose of the engagements is to avoid the relevant statutory obligations. While the nature of the arrangements might support such a conclusion, we cannot exclude the possibility that the purpose referred to in the regulation is not a purpose of the engagement. In those circumstances we must reject the AWU's submission.

[26] We grant leave to appeal, uphold the appeal and quash Commissioner Laing's decision of 20 April 2001. The Commission has no jurisdiction to hear the respondent's applications pursuant to s.170CE of the Act and the applications are dismissed.

BY THE COMMISSION:

PRESIDENT

Appearances:

F. Parry of counsel for Pacific Rim Employment Pty Ltd

M. Llewellyn for the Australian Workers' Union

Hearing details:

Perth.

2001.

October, 16.

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