Dec 616/98 M Print Q1482
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against decision Print [P6994]
issued by Vice President Ross on 26 November 1997
Qantas Airways Limited
(C No. 24436 of 1997)
s.170CE Application for relief re termination of employment
S J Fetz
(U No. 20444 of 1997)
(U No. 20445 of 1997)
D E Hennessy
(U No. 20446 of 1997)
Qantas Airways Limited
JUSTICE GIUDICE, PRESIDENT
SENIOR DEPUTY PRESIDENT HARRISON
SYDNEY, 9 JUNE 1998
Appeal - apprentices - termination of employment - whether contract of employment for a specified period or a specified task - whether termination at the initiative of the employer - estoppel - jurisdiction.
This is an appeal by Qantas Airways Limited (Qantas) against an order made by Vice President Ross on 26 November 1997 requiring Qantas to employ Messrs Fetz, Duhigg and Hennessy (referred to collectively as the respondents) as tradespersons within 21 days of that date [Print P6994]. Each of the respondents had served a four year apprenticeship in Qantas' Maintenance and Engineering Division in Sydney. Their employment terminated on completion of their apprenticeship on 16 May 1997. Each filed an application for relief pursuant to s.170CE(1) of the Workplace Relations Act 1996 ("the Act") in respect of the termination of their employment. We take the Vice President's order to have been made under s.170CH, following a hearing pursuant to s.170CG, each of the applicants having made the relevant election under s.170CFA(1).
The precise nature of the contractual relationship between the respondents and Qantas, and the characterisation to be given to the manner in which that relationship, ceased are in contention. For present purposes, the history of the matter may be briefly stated as follows:
· Each of the respondents commenced employment in Qantas' 1993 apprentice intake in May of that year.
· Each apprenticeship was to last four years.
· At the conclusion of the apprenticeship a position might be available in Qantas' tradesperson workforce.
· For practical purposes it was the norm that apprentices became part of the company's workforce at the end of their apprenticeship.
· Following a reappraisal of staffing needs for the 1997-98 year, in April 1997 Qantas decided to initiate a staff reduction program.
· To assist in the achievement of staff reductions Qantas decided not to offer continuing employment to the apprenticeship class graduating on 16 May 1997, which included the respondents.
· This decision was communicated to the apprentices orally and by letter on 1 May 1997 and they were granted immediate paid leave until the final day of their employment.
· The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (the AMWU) notified a dispute pursuant to s.99 of the Act. Agreement was subsequently reached between the AMWU and Qantas on 9 May 1997 in relation to a number of matters arising out of the staff reduction programme and the position of the apprentices. Any existing right to take further action was specifically reserved to the apprentices by the settlement.
· On 6 June 1997 the applicants lodged applications pursuant to s.170CE(1) together with an application for the waiver of the requirement for lodgement fees. On 10 June the waiver applications were rejected. The lodgement fees were duly paid by the respondents on 12 June.
For completeness we note that since the stay of Vice President Ross' order granted by the Commission on 16 December 1997, two of the respondents have been re-employed by Qantas through an unrelated recruitment procedure.
THE DECISION UNDER APPEAL
Vice President Ross was called upon to decide first whether the applications were lodged within time and, if not, whether to exercise his discretion to extend the time. Qantas, while conceding before him that the date of physical lodgement, 6 June 1997, was within the 21 days prescribed by s.170CE(7), argued that the lodgement was ineffective because it was not accompanied by the prescribed fee. His Honour decided that the applications lodged on 6 June 1997 were within time because payment of the lodgement fee prescribed by regulation 30BD is not a condition precedent to a valid lodgement. He found in the alternative that the time for filing ought be extended by the exercise of the discretion conferred on the Commission by s.170CE(8). The basis for this finding was that the lodgements were perfected by payment of the prescribed filing fee on 12 June 1997, six days later.
The next issue dealt with in the decision is whether the applicants were employed by Qantas for a specified period of time or for a specified task. Section 170CC(1) relevantly provides:
"(1) The regulations may exclude from the operation of specified provisions of this Division specified classes of employees included in any of the following classes:
(a) employees engaged under a contract of employment for a specified period of time or a specified task;"
Regulation 30B(1) provides:
"(1) For subsection 170CC(1) of the Act, the following kinds of employees are excluded from the operation of Subdivisions B, C, D, E and F of Division 3 of Part VIA of the Act:
(a) an employee engaged under a contract of employment for a specified period of time;
(b) an employee engaged under a contract of employment for a specified task;"
It is common ground that if the respondents were engaged under contracts of employment for a specified period of time or for a specified task the Commission has no jurisdiction. There was a deal of written and oral evidence before the Vice President which bore on this question, which we analyse later in this decision. It is sufficient at this point to record the fact that the Vice President declined to make a definitive finding about the true nature of the contracts. He adopted an assumption that the contracts of employment were for the duration of the apprenticeship. Based on that assumption he found that because the contracts did not "unambiguously identify the contractual completion date" the contracts were not for a specified period of time within the meaning of regulation 30B(1)(a). This conclusion was based on the potential for the length of an apprenticeship to be varied during its currency. This potential arose in a number of ways. They included the power of the Commissioner for Vocational Training to vary the term of an apprenticeship (said to be four years), the requirement in Qantas' letter of appointment that unpaid absences and workers compensation must be made up before advancing to the next year and the possibility of the apprenticeship being varied, suspended or cancelled by the Vocational Training Board pursuant to the terms of the Industrial and Commercial Training Act 1989 (NSW) ("the NSW Act"). We shall return to this finding at the conclusion of this summary of the decision.
His Honour next dealt with Qantas' submission that because the contracts of employment in question were apprenticeships they ought properly be characterised as being for a specified task. The task, it was submitted, was the training which is the primary and essential element of an apprenticeship. His Honour rejected the argument for two reasons. The first was that whilst the primary purpose of an apprenticeship is training, it is not the only purpose. Another purpose is the provision of valuable work to the employer, particularly in the later years of the apprenticeship. The second reason for rejecting the argument was based upon the terms of regulation 30B(1)(e). That regulation states:
"(1) For subsection 170CC(1) of the Act, the following kinds of employees are excluded from the operation of Subdivisions B, C, D, E and F of Division 3 of Part VIA of the Act:
. . .
(e) a trainee whose employment under a traineeship agreement or an approved traineeship:
(i) is for a specified period; or
(ii) is, for any other reason, limited to the duration of the agreement;"
A "trainee" is defined in regulation 30A to mean "an employee (other than an apprentice) who is bound by a traineeship agreement". His Honour found that the existence of this regulation, excluding from the Act as it does trainees engaged under a traineeship agreement for a specified period, was indicative of a Parliamentary intention that traineeship agreements are not agreements for a specified task. By parity of reasoning apprenticeship agreements are not agreements for a specified task either.
Vice President Ross next considered whether in the circumstances the cessation of the respondents' employment at the end of their apprenticeship on 17 May 1997 was a termination of employment of a kind for which the Act can provide a remedy. By the combined effect of ss.170CE(1) and 170CD(1) the Commission's power to grant a remedy relevantly depends upon whether there was a termination of employment at the initiative of the employer. The respondents contended that taken as a whole the evidence shows that the apprentices were engaged for an indefinite period, subject only to their performance, and that at the end of their apprenticeships they would be promoted into trades work. Qantas contended that it only ever offered an apprenticeship and that was the only contractual relationship between it and the respondents. While it would offer apprentices a position at the end of their time subject to operational need and performance, that arrangement was not contractual and would require the formation of a new contract of employment. On this view of it, the contracts simply expired at the end of the apprenticeship.
In the event His Honour did not make a factual finding either way. He concluded the question by reference to the doctrine of estoppel. He found that Qantas had "engaged in conduct and representations" which estopped it from relying on any contractual term that employment would cease at the end of the apprenticeship period. He further found that Qantas' "conduct and representations gave rise to a reasonable expectation on behalf of each of the applicants that if their performance was adequate then they would continue in employment after the completion of their apprenticeship". From this it followed, according to the reasoning, that the termination in each case was at the initiative of the employer.
Vice President Ross then dealt with the merits of the case. He found that there was no valid reason for the dismissal pursuant to s.170CG(3)(a). In substance His Honour concluded that Qantas' central reason for terminating the respondents' employment was the mistaken belief that the apprentices were fixed term employees. Proper selection criteria should have been applied to the apprentices such as were applied to other staff in the maintenance area. For reasons which will become apparent, we have not found it necessary to deal with this finding in any depth. Nor will it be necessary to deal in more than cursory fashion with the remedy granted by the Vice President.
ISSUES ON APPEAL
We turn now to the principal issues on the appeal. They are five in number:
1. Were the applications filed in time, and if not was an extension of time warranted?
2. Were the respondents engaged under a contract of employment for a specified period of time or for a specified task?
3. Was the employment of the respondents terminated at the initiative of the employer?
4. Was there a valid reason for the termination of the respondents' employment, and was there any basis for a finding that the terminations were harsh, unjust or unreasonable?
5. Was the remedy granted appropriate?
Should any of the first three issues be resolved in the negative it would be unnecessary to consider any of the remaining issues. No party suggested that we should consider whether leave to appeal ought be granted as a threshold issue. In the circumstances it is convenient to deal with the question of leave and the merits of the appeal at the same time. In considering both matters we will apply the approach set out in House v R [(1936) 55 CLR 499] as explained and applied by a Full Bench of the Commission in Asahi Test Case [(1995) 59 IR 385]. We should add that we do not understand the decision in either case to inhibit the Commission, where it forms the view that the decision under appeal is vitiated by jurisdictional error, from giving effect to that view.
1. Were the applications within time?
Although Qantas submitted that Vice President Ross' conclusions involved error, it was conceded that such error was within the discretion allowable to a member at first instance and would not lead to correction on appeal. Because of that concession we do not intend to deal with the issue and it will play no part in our decision on this appeal.
2. Were the respondents engaged under contracts of employment for a specified period of time or for a specified task?
We turn first to the question of whether the respondents were engaged under contracts of employment for a specified period of time. If they were, regulation 30B applies and the Commission has no jurisdiction.
The Vice President decided this question on the basis of an assumption that the contracts of employment were for the duration of the apprenticeship. Having made that assumption, he found that the contracts were not for a specified period of time because they do not unambiguously identify the contractual completion date [Print P6706 at 14]. We think, with due respect to him, that the Vice President's conclusion is wrong. We have no doubt that the period of the apprenticeship was specified in the contract to be four years. True it is, as the Vice President said, that the term of apprenticeships can be varied, suspended or cancelled by the Vocational Training Board pursuant to s.80(1) of the NSW Act. But the possibility of this kind of intervention serves only to emphasise that so far as the contract itself is concerned, the term of the apprenticeship is four years. A number of authorities were cited to us, but it is sufficient for present purposes to refer to what was said by von Doussa J in Andersen v Umbakumba Community Council [(1994) 56 IR 102 at 106]:
"In the expression, `specified' is the past participle of the verb `to specify'. The ordinary meaning in the English language of "to specify" is to mention, speak of, or name (something) definitely or explicitly; to set down or state categorically or particularly; to relate in detail: Shorter Oxford English Dictionary, 3rd ed. In the context of Art 2, par 2(a) of the Termination of Employment Convention `specified' identifies a period of time or a task the scope and parameters of which are stated definitely. A `specified period of time' is a period of time that has certainty about it. A contract of employment for a specified period of time would be one where the time of commencement and the time of completion are unambiguously identified by a term of the contract, either by the contract stating definite dates, or by stating the time or criterion by which one or other end of the period of time is fixed, and by stating the duration of the contract of employment. As the period of time is defined in this way, it is apt to refer to a contract of employment for a specified period of time as a contract of employment for a fixed term, although this is not the description used in the regulation.
A contract of employment to run throughout a nominated number of days, weeks, or years would be a contract of employment for a specified period of time. If the terms of the contract of employment, instead of identifying in this manner the period of time during which it is to run, provides that it is to run until some future event, the timing of the happening of which is uncertain when the contract is made, the contract will be for an indeterminate period of time."
In this case the period of the apprenticeship was fixed at four years by the letter of appointment each of the respondents received, their indenture, the NSW Act and the relevant award. It was clear, to use the words of von Doussa J, that "the time of commencement and the time of completion are unambiguously identified by a term of the contract". Ross VP's conclusion that the period was not unambiguously specified was based on the possibility of an extension of the length of the apprenticeship or some other variation to its term under the NSW Act. But that possibility did not change the nature of the contract. Many contracts are susceptible to variation by outside intervention against the will of one or both parties. The possibility of variation pursuant to s.127A of the Act (which is concerned with independent contractors) or the unfair contracts legislation of a number of States, provide other examples of such a situation. His Honour also relied on the fact that pursuant to the letter of appointment the apprentices were required to make up unpaid absences and workers compensation before advancing to the next year. His Honour seems to have concluded that this provision could lengthen the term of the apprenticeship. Mr Buchanan QC, who appeared with Mr Dixon for Qantas on the appeal, submitted that the purpose of the stipulation was to make it clear when the annual increment to the apprentices' rate of pay would accrue. The relevant paragraph from the respondents' letters of appointment reads where relevant:
"Term of Apprenticeship will be four years, unless varied by the Commissioner of Vocational Training. The rate of pay during the first year is as per the first page of this letter. This will increase at the commencement of each succeeding year of Apprenticeship, providing no time is lost during the previous year. All unpaid absences and Workers' Compensation must be made up before advancing to the next year of apprenticeship."
We are unable to agree with the Vice President's conclusion. Seen in its context, the stipulation has the meaning contended for by Mr Buchanan. The first sentence in the extract makes it clear that only the Commissioner of Vocational Training can alter the four year term. The next three sentences are directed at the rate of pay and how it will increase. The last and relevant sentence deals with the same issue as the words which immediately precede it: "providing no time is lost during the previous year." The stipulation is about pay, not the length of the apprenticeship.
Our conclusion does not resolve the question of the application of regulation 30B, however, because Vice President Ross did not make a conclusive finding in relation to the underlying nature of the contract. As we have noted, he decided the point on the assumption that the contract was for the duration of the apprenticeship. It will be necessary for us to examine whether that is in fact the case and for that purpose to review the relevant evidence.
It was common ground that each of the respondents received a letter of appointment in April 1993 which constituted their contract of employment at that time. It is desirable to set out the contents of that letter in full [Exhibit A5]:
"Apprentice Training Centre
70-80 Euston Road
05 April 1993
I am pleased to confirm that your application for employment as an Apprentice AVIONICS has been successful.
Your date of appointment is 17 May 1993 and you should report at 0800am on that date to the Apprentice training [sic] Centre, 70-80 Euston Road, Alexandria.
You are employed under the Aircraft Industry (Qantas Airways Ltd) Award.
Your pay will be $194.37 per week which is comprised of $190.30 basic pay plus $4.07 Tool Allowance.
As your salary will be paid on a fortnightly basis into your nominated account, please advise Apprenticeship Training of your account number on your date of commencement. It will also be necessary that you have your Taxation File Number with you on that date. In keeping with Company practice, you will operate for three months on a probationary basis whilst your performance and suitability of the role are assessed.
On commencement you will be required to join the Company's Staff Superannuation Plan and be bound by the regulations covering the Plan.
It is a condition of employment that when requested by a Security Officer or other Authorised Officer of the Company you must open for inspection, lockers, parcels, baggage or any other containers being brought into and taken away from the Company's premises, or property, whether carried personally or in any vehicle.
During your employment, you will be required to comply with all the requirements of Law, Government or other Authorities of countries in which you may be called upon to serve or visit and to respect local customs of the people of such countries.
During your employment, you shall not disclose and shall use the best endeavours to prevent the disclosure by any person, of any trade secret, manufacturing process, knowledge of information of a confidential nature concerning the affairs of the Company which may come to your knowledge.
You are required to observe the Company's rules, regulations and instructions, particularly those contained in `YOU IN QANTAS' and `CORPORATE POLICIES AND PROCEDURES MANUAL', as varied from time to time.
Employee concessional travel is a privilege which may be withdrawn at any time. Moreover, abuse of it can lead to disciplinary action including dismissal.
The position offered requires as a condition of your employment that you join the union appropriate to your classification and Award/Agreement coverage on completion of your Apprenticeship.
As evidence of your understanding and acceptance of this offer, please sign and return one copy of this letter to me.
APPLICABLE TO PREVIOUS QANTAS EMPLOYEES
I understand that in the event of my being reappointed to the Company's staff, any period of employment which I served previously with the Company shall not be taken into consideration in determining my future entitlement to long service leave, annual or sick leave, superannuation, or any other employee benefit granted to employees according to their length of service with the Company.
All Qantas Engineering Apprentices are indentured under the NSW Apprentices Act, administered by the Department of Industrial Relations and will be trained initially at the Qantas Apprentice Training Centre and the Qantas Jet Base Mascot by "on the job" experience within the different workshops. This is done under the guidance and supervision of skilled tradespeople and supervisors and by regular attendance at the appropriate Trades Course at the required Technical College.
To ensure that each Apprentice gains the maximum experience possible, apprentices are exposed to many different sections applicable to his or her own trade, with the emphasis on learning practical skills.
The general conditions of employment will be in accordance with the AIRCRAFT INDUSTRY (Qantas Airways Limited - Incorporated in Queensland) AWARD. Term of Apprenticeship will be four years, unless varied by the Commissioner of Vocational Training. The rate of pay during the first year is as per the first page of this letter. This will increase at the commencement of each succeeding year of Apprenticeship, providing no time is lost during the previous year. All unpaid absences and Worker's Compensation must be made up before advancing to the next year of Apprenticeship. Dependant upon company operational requirements and successful completion of your period of indenture, you will be given the opportunity to formally apply for a permanent position, however, no guarantees are given by Qantas, of further employment to you.
The Apprentice will obey all lawful commands of the Employer and will not take part in any actions arising from Industrial Disputes such as stopwork meetings, strikes, bans imposed on company equipment or overtime. To do so can lead to cancellation of the indentures.
Qantas Apprenticeship Training is designed, not only to develop trade skills, but to develop citizenship as well. Good behaviour and application to the job are of the utmost importance. Therefore, the co-operation of parents is important to assist us in the apprentice's training and to encourage him/her in studies. Serious misdemeanours, either on or off the job, can lead to cancellation of the indentures.
It is each employee's responsibility to get to work on time each day, or shift, he/she is rostered for duty. Time off will only be granted in special circumstances. Personal business should be conducted outside of working hours. Inability of the apprentice to attend for work because of sickness or other reasonable cause must be notified to the Section Supervisor. The apprentice will not absent himself from duty without prior approval from his supervisor and/or Apprentice Training.
TECHNICAL COLLEGE ATTENDANCE
Apprentices are required to regularly attend the appropriate Trades Course at the Technical College. All such attendances are to be recorded on card or attendance sheet provided and tendered to the Apprentice Training Co-ordinator for recording purposes after each attendance.
TECHNICAL COLLEGE FAILURES
Each apprentice selected to work for Qantas has the ability to cope with the necessary learning for his/her particular Trades Course, if he/she diligently applies himself/herself to his/her studies. Therefore, Technical College failures will not be tolerated and the Company's policy in this regard is as follows:-
· Individual subject failures will necessitate attending a repeat class at your own expense.
· Failure at any one stage could require a repeat of that year's Technical College attendance at your own expense, or application to the Apprenticeship Directorate to extend the Apprenticeship term by a period of one year, or the Company may apply to the Apprenticeship Directorate for cancellation of indentures.
UNIFORMS, OVERALLS, NUMBER PATCHES ETC
Each apprentice is issued with safety footwear [sic], uniforms, and number patches. You are required to be suitably dressed in a clean uniform at the commencement of each day.
LOCKERS AND STAFF CANTEEN
Each apprentice is allocated a locker and it is suggested that he/she supply a small padlock. Staff Canteen facilities are available for hot meals or sandwiches and cakes.
The Qantas Apprentice is requested to be clean shaven, neat and tidy at all times. Apprentices are also required to meet safety standards by wearing suitable footwear on the job at all times. Under the NSW Shop Factory and Industry Act, it is an offence in an area that machinery is in operation for employees to have long hair uncovered. The relevant regulation under the Act is as follows:
a] whose hair is not cut short, or uncovered, or securely fixed and confined close to the head by a net or otherwise.
b] who is wearing loose ribbons, loose laces, or other loose articles of dress, shall be employed in a factory at, near, or about any moving machinery or in any room or part of the factory where he/she may have occasion to pass close to machinery. A person deemed to have contravened the provisions for this regulation.
THE DEPARTMENT OF INDUSTRIAL RELATIONS advises that it is each person's own responsibility to comply with these safety regulations.
COMPANY RULES AND REGULATIONS
Failure to observe rules and regulations as published from time to time will render the apprentice liable to disciplinary action.
We are aware of, and understand, the general conditions concerning an apprenticeship with Qantas Airways Limited and accept the Company's offer of an apprenticeship, the probationary period of which will commence on 17th of May 1993
SIGNATURE OF PARENT OR GUARDIAN: ______________________________
Mr Dubler, who appeared on behalf of the respondents, submitted that on its true construction the letter evidenced a contract for employment for an indefinite period, of which the initial, temporary period was to be as an apprentice. Any ambiguity in the letter should be resolved in favour of the respondents according to the principle that a contract ought be construed against the party which proposed it. It was contended by Mr Buchanan, on the other hand, that the contract was for an apprenticeship of four years containing at the highest an undertaking to offer employment as a tradesman at the end of the apprenticeship subject to operational requirements and successful completion of the indenture. We think this construction is correct. For the reasons which we now mention we have concluded that the contract of employment on its face was for an apprenticeship of four years.
Mr Dubler referred to the use of the term "employment" (and its derivatives) and contrasted it with the use of the term "apprenticeship" to support his contention that the letter made a clear distinction between the contract of employment and the apprenticeship. We have concluded that although the two things are conceptually distinguishable, in the letter they are treated as one. The very first sentence indicates that the nature of the employment is apprenticeship. The last two sentences of the paragraph headed "General Conditions" serve to indicate that in the absence of a further offer of employment, which was not guaranteed, employment would terminate at the end of the apprenticeship. Finally, the acknowledgement at the foot of the letter unambiguously states that each respondent accepts the offer of an apprenticeship.
Mr Dubler also relied upon the following sentence from the letter: "The position offered requires as a condition of your employment that you join the union appropriate to your classification and Award/Agreement coverage on completion of your Apprenticeship."
He submitted that the paragraph should be interpreted as imposing an obligation on the respondents to join the appropriate union on completion of their apprenticeship - by implication being continuing Qantas employees. The alternative construction is that union membership was a condition of employment for apprentices during their apprenticeship. The clause is ambiguous, as Vice President Ross found. On our reading of the document as a whole we find that the alternative construction is more likely to be correct, but we express no final view.
Mr Dubler next asserted that the respondents' construction of the agreement (i.e. that it was one for indefinite employment) was supported by the fact that the letter of appointment states that each respondent is employed under the Aircraft Industry (Qantas Airways Ltd) Award. The contract of employment clause (clause 14) provides for weekly employment and there is no provision for fixed term employment. Further, clause 2 of the Qantas Airways Limited Enterprise Bargaining Agreement III, an agreement certified under the Act, contains the following words: "Qantas is currently turning away third party work due to an inability to employ fixed term labour for short time duration."
Far from assisting the respondents' case, reference to the award strengthens the inference that the contract was for a four year apprenticeship. Apprentices are specifically dealt with in clauses 7 and 8 of the award. The following provisions are particularly relevant:
· In specified trades minors shall not be employed other than under "contract of apprenticeship" (clause 7(a));
· Every "contract of apprenticeship" shall contain the provisions required by State law (clause 7(c)); and
· The period of apprenticeship is four years (clause 7(d))
Furthermore the detail and nature of the provisions in the apprenticeship clauses lead us to the conclusion that the specific provision for four year apprenticeships overrides the general provision for weekly employment contained in clause 14.
Clause 2 of the Bargaining Agreement does not assist the respondents' case either, because four year apprenticeships do not fit the description of "fixed term labour for short time duration". Indeed, there is nothing in the Bargaining Agreement to suggest it was directed at the terms of clauses 7 and 8 of the award in any relevant way.
For all of these reasons we have concluded that the Vice President's assumption that the contract, as set out in the letters of appointment, was for the term of the apprenticeship was correct. Both before Ross VP and on appeal the respondents contended that the letter of appointment was not conclusive. They referred to oral and documentary material to support the contention. Ross VP dealt with these matters in part in considering whether the terminations were at the initiative of the appellant, but decided that question by reference to the doctrine of estoppel. Because we have reached a different conclusion as to the term of the contracts as contained in the letters of appointment, it will be necessary to examine the other evidence and submissions in order to decide whether regulation 30B(1)(a) applies. We turn to that part of the argument on behalf of the respondents.
Mr Dubler submitted that regardless of the words of the letters of appointment, but consistently with them, there were other matters by which it could be established that as a matter of contract or estoppel the contracts of employment could not be taken to be for a specified period. These submissions were made primarily to support the contention that the employment of the respondents was terminated at the initiative of the employer but adopted by him to support the argument that regulation 30B(1)(a) does not apply to the respondents' contracts of employment. [Exhibit D4, para 33]. To deal with them it is necessary to examine the oral and other evidence relied upon. Before embarking on that examination we note Mr Dubler's concession, which with respect to him was proper, that if on a proper analysis of the facts regulation 30B(1)(a) would operate to exclude the respondents from the relevant statutory provisions, the operation of the regulation could not be defeated by invoking the doctrine of estoppel. It follows, therefore, that unless the respondents can show that the terms of the contracts (as we have found them to be) contained in the letter of appointment are relevantly a sham, or that subsequent conduct amounted to a consensual variation of each of the contracts, question 2 must be answered in the affirmative and the appellant must succeed.
The respondents submitted both before Ross VP and on the appeal that, properly construed, the letters of appointment provided for employment to continue beyond the apprenticeship unless Qantas decided to terminate the employment because of operational requirements [Exhibit A70, paras 63-64]. They also relied on the fact that for at least forty years every mechanical and electrical apprentice had retained employment as a tradesperson at the end of the apprenticeship. For the reasons already given we have rejected this construction of the agreement. We only add that the practice of 40 years cannot override the written agreement unless the agreement is a sham. We see no basis for such a conclusion. We note Mr Dubler also submitted that the custom and practice of 40 years amounted to an implied term. It is not permissible to imply a term which contradicts an express term. It follows from our finding that the letter of appointment provides for a 4 year term that this submission must also be rejected.
The respondents next contended that there was a clear promise of a position as a tradesman at the end of the apprenticeship [Exhibit A70, paras 70-71]. The relevant issue is whether subsequent conduct amounted to a variation of the contract such as to render it no longer for a specified period. It is important to point out that the terms of the several contracts between the appellant and each of the respondents need to be analysed. Whilst some light might be shed on the meaning or intention to be attributed to particular words or conduct by considering transactions between other parties, the question in each case is to be resolved by ascertaining the terms of the separate contracts. This point went largely unacknowledged in the way both the appellant and the respondents chose to deal with their respective cases.
Mr Fetz's contract
Reliance was placed on Mr Fetz's evidence of statements made to him by Qantas employees at various times such as:
"if [we] had a good attendance and workshop reports and were not a troublemaker we would
have a job at the end of our time"
. . .
"they only take out the bad eggs and they normally worm them out well within the 4 years"
. . .
"your group are a good lot and you won't have any problems at the end of your time"
. . .
"at least there is a position for you at the end of your time"
In addition Mr Fetz himself gave oral evidence of his belief that his employment would continue beyond his apprenticeship and of his statement to Qantas officers during the employment interview, which was uncontradicted at the time, that he believed there were good long term employment prospects with Qantas.
None of this evidence is persuasive. The quotations set out are equivocal. At worst, from the respondents' point of view, expressions such as "at the end of your time" and "4 years" confirm that the contract was for a four year apprenticeship. Evidence of Mr Fetz's subjective belief is of little weight because there is a comprehensive written contract. His uncontradicted statement to company officers at a pre-employment interview that he believed that he had good long term employment prospects is perfectly consistent with the past practice of offering ongoing employment to graduating apprentices. But it is not evidence that the employment was not for a specified period.
Mr Hennessy's contract
Reliance was placed upon statements made to Mr Hennessy by other Qantas employees, viz:
"the top three apprentices in your group wil be given work in the final sections of their
. . .
"your final section is where you will work during your career with Qantas"
. . .
"throughout my apprenticeship I was given to understand if my performance and attendance
was good I would get a job"
. . .
"before my intake of apprentices, all apprentices at Qantas were offered jobs unless there
were problems with performance and anyone with such problems knew they would not be
offered a job"
This evidence, taken together, suggests that Mr Hennessy was told that employment at the end of the apprenticeship was not automatic but would only arise if a job was offered. This is quite consistent with the terms of the letter of appointment - a 4 year apprenticeship with an expectation of further employment being offered at the conclusion of the apprenticeship, subject to performance and operational requirements.
Our attention was also drawn to Mr Hennessy's own statements of his subjective understanding of the terms of the contract. We have disregarded that evidence.
Mr Duhigg's contract
Reliance was placed upon statements made to Mr Duhigg by other Qantas employees viz:
"Qantas always maintained that if we worked well and had a good attendance record then
we would be taken on"
. . .
"any discussion I had with Mr Wicks implied to me that there would be permanent
employment after the end of my apprenticeship because of my good performance."
This evidence suggests some step was required by Qantas at the end of the apprenticeship in lieu of which the employment would terminate e.g. "we would be taken on". Far from contradicting the conclusion we have reached about the terms of the letters of appointment, the evidence reinforces that conclusion and militates against a conclusion that the contract of employment was subsequently varied.
The respondents relied upon the fact that by April 1997 each had been allocated to a "final" section where it was anticipated, in accordance with practice, that each would be permanently employed at the end of the apprenticeship. Each respondent was given a form on which to indicate "final allocation preferences". The document included a note: "Some cost centres stated below may not be offered as a permanent section". The company subsequently notified each apprentice of their allocation. The only written notification in evidence did not relate to any of the respondents but to another employee, although it seems to be accepted that each of the respondents received a notification in relevantly the same form. The memorandum says "The Final Training Placements have now been completed. Your final section is [NAME OF SECTION FILLED IN]." A starting date is then specified but no finishing date.
The respondents submitted to Ross VP and to us that these allocations constituted offers of indefinite employment from the date specified, which offers were accepted by the respondents in commencing work pursuant to the memorandum. Reliance was also placed upon the fact that each of the respondents was allocated work as a tradesman rather than as an apprentice.
We do not think this material justifies a conclusion that the terms of the contracts contained in the letters of appointment were subsequently altered. The preference form indicates that some departments might not be offered as a permanent section. The wording of the form suggests that any offer of a permanent section was something distinct and for the future. The material as a whole is consistent with the terms of the letters of appointment being given their full effect. The relevant memorandum does not mention permanent employment but uses terms appropriate to the final stage of the apprenticeship e.g. ... "final allocation", "your final section". When taken with the evidence of statements made to the respondents about their job prospects, there is no reason to conclude that by making the final allocations Qantas waived its contractual position and entered into new contracts for indefinite employment. If there was a promise to make trades work available at the end of the apprenticeship it was by necessary implication predicated on the apprenticeship contracts concluding and other contracts commencing.
For all of these reasons we have concluded that the contracts of employment contained in the letters of appointment were not subsequently varied. It follows that the contracts in each case are for a specified period of time and are contracts within the class specified in regulation 30B(1)(a).
Whilst this conclusion is sufficient to dispose of the appeal, other matters were fully argued and we intend to deal with some of them.
Contract for a Specified Task
The appellant argued before Ross VP that the respondents were all engaged under contracts of employment for a specified task. The specified task was said to be the apprenticeship. Ross VP rejected this argument on the two bases we have noted above; namely, an apprenticeship contract is a mixture of a set training syllabus and the provision of valuable work for the employer; and the provisions of regulation 30B(1)(e).
As to the first matter, it is important to point out that an apprenticeship consists of a range of training and occupational activities. These activities include formal classroom training, on-the-job training, examinations and the performance of work which acquires significant value in the latter stages. The New Shorter Oxford English Dictionary gives the primary meaning of "task" as "a piece of work imposed on or undertaken by a person". The second edition of the Macquarie Concise Dictionary provides the following definitions: "1. A definite piece of work assigned or falling to a person; a duty. 2. any piece of work". It seems to us that there is insufficient particularity involved in an apprenticeship for it to be described as "a specified task". The phrase would normally apply to an identifiable project or job. It is straining language to treat an apprenticeship with all that the concept entails as one "task". We agree with His Honour that the mixture of training and work involved in an apprenticeship makes it difficult to describe an apprenticeship as a task and we respectfully concur with his view.
It is not necessary in the circumstances that we express any view on the second basis for His Honour's conclusion that the contracts are not within regulation 30B(1)(a).
3. Was the employment of the respondents terminated at the initiative of the employer?
We have already concluded that the contracts between each of the respondents and the appellant were for a specified period of time. It follows as a matter of law that the terminations occurred as the result of the effluxion of time in accordance with the parties' agreement and not at the initiative of the appellant: Victoria v Commonwealth [(1996) 187 CLR 416 at 520]. The respondents accept the legal principles involved in the conclusion. Mr Dubler submitted on their behalf, however, that Ross VP correctly concluded that Qantas was estopped by its conduct and/or representations from relying upon the 4 year term of the contracts. He submitted that Qantas had represented to the appellants that it would not rely upon the strict terms of the contracts and it ought be kept to its word. The submission was developed by reference to the doctrine of estoppel and relying upon the following passage from Fisher v Edith Cowan University [(1997) 72 IR 464 at 471]:
"There may also be termination of employment at the initiative of the employer and not pursuant to the mutual will of the parties if the terms of a fixed period contract have been varied in the course of performance of the contract, or the contract has been abandoned and replaced by another agreement, or the employer has engaged in conduct or representations which estop the employer from relying upon the terms of the contract as the means by which the employment relationship has been terminated. In those circumstances an employee may show that reliance by the employer upon the purported effluxion of a period of time for employment is, in fact, termination of the employment at the employer's initiative."
Qantas submitted that no estoppel had been made out. Mr Buchanan relied in particular upon the respondents' own evidence as to the nature of the contract. Mr Fetz gave evidence that he understood at the time he accepted the offer in the letter of appointment and throughout the apprenticeship that if there were no jobs at the end of the apprenticeship, Qantas had no obligation to offer him a job. Mr Hennessy gave evidence that he understood that any employment beyond the term of his apprenticeship was dependent upon jobs being available. Mr Duhigg gave evidence that he also believed that his continued employment depended upon jobs being available at the end of his apprenticeship. On the basis of this evidence Mr Buchanan submitted that no estoppel could arise because whatever express or implied undertakings were given by Qantas it is clear that the respondents did not rely on them.
Ross VP rejected a similar submission, upholding the respondents' argument that the evidence merely referred to their understanding of company documents rather than a statement of belief. We think there is much to be said for the appellant's submission on this question. We acknowledge, however, that we have not heard the evidence ourselves and we may not be in as good a position as Ross VP to evaluate it.
Mr Buchanan also submitted that estoppel cannot be used to found jurisdiction. Where the termination was not at the initiative of the employer, estoppel cannot be used to extend the authority of the Commission beyond that conferred by the Act: Formosa v Secretary, Department of Social Security [(1988) 81 ALR 687 at 695]. Mr Buchanan contended that the dicta of the Full Court in Fisher, set out above, dealt with broad principles and should be interpreted as referring to the true contractual position rather than estoppel in the strict sense. This is a difficult question. Whilst the Full Court's words are clear, it is hard to accept that the Court intended that the Commission could be given powers beyond those conferred by the statute. Such an approach would be clearly contrary to the long accepted principles governing the ascertainment of the limits of the Commission's jurisdiction. These principles were recently affirmed by the High Court in Re State Public Services Federation; Ex parte Attorney-General (WA) [(1993) 178 CLR 249 at 270]. Although that case concerned the Commission's jurisdiction under Part VI of the Act, there is no reason apparent why the principles should not be applied to the ascertainment of the Commission's jurisdiction under subdivision B of Part VIA. We think it likely, therefore, that the Court in Fisher was concerned only to emphasise the point that in every case the true nature of the contract must be discerned and in particular whether the contract originally made has been subsequently varied. Mr Dubler sought to explain the dicta in Fisher by submitting that the question of whether a termination was at the initiative of the employer is not a jurisdictional question. We reject that explanation. In our view, despite Mr Dubler's submission to the contrary, the doctrine of estoppel is not available in a case such as this where the contracts expired by agreement according to their terms and not at the initiative of the employer. We add that we are only concerned with subdivision B of Part VIA. If the elements of an estoppel can be made out some other remedy may be available in another jurisdiction. It is not necessary or desirable that we comment further on the estoppel issue. We note, however, that there does not appear to have been any debate before Ross VP on the availability of estoppel to found jurisdiction.
Finally, it was submitted by Mr Dubler that the respondents' contracts of employment, given the successful completion of their apprenticeships, required Qantas to keep the respondents in employment on 17 May 1997 unless "company operational requirements" intervened. On this construction of the contract, the purported invocation of the "operational requirements" provision amounted to a termination at the initiative of the employer. We understand this ground to have been advanced independently of the argument based on estoppel (Exhibit D1, para 4). Reliance was placed on some dicta of a Full Bench in Australian Railways Union v Public Transport Corporation (Vic) [(1993) 47 IR 119 at 134]. In that passage the Full Bench referred to the possibility of a termination of employment occurring through the non-fulfilment of a contingent condition. Mr Dubler also referred us to Minister for Health v Ferry (1996) 65 IR 374 at 379. Mr Dubler's submission was that Qantas by its own action had ensured that the contingent condition could not be fulfilled. It had done this by revising its staffing plans and deciding to reduce the number of tradespersons employed. This argument, which was advanced in the alternative, cannot be accepted. The factual basis for the submission does not exist. The contracts of employment were at all relevant times contracts for a specified period. Failure to comply with an undertaking (if there was one) to offer further employment is simply not relevant in this case. We do not think this conclusion contradicts anything suggested by the Full Bench in Australian Railways Union v Public Transport Corporation (Vic) or by the Industrial Relations Court in Minister for Health v Ferry.
4. Was there a valid reason for the termination of the respondents' employment, and was
there any basis for a finding that the terminations were harsh, unjust or unreasonable?
The Vice President reviewed a number of authorities concerning the construction of s.170CG(3)(a) and relevant provisions in the Industrial Relations Act 1988 and set out a number of propositions which he said arose from the cases. Having examined the evidence proferred by Qantas' witnesses as to the reasons for the terminations, he concluded that the central reason for the termination of the respondents' employment was "the mistaken belief that they were fixed term employees". Because of this belief, the skills of the employees were not assessed against the skills of other tradesmen employed by Qantas, in fact, no individual reviews were conducted at all. The entire class was selected for redundancy. His Honour found that there was no valid reason for the terminations and in the circumstances that fact meant that the respondents should succeed.
His Honour's finding, that Qantas' belief that the apprentices were not fixed term employees was a mistaken belief, is central to his reasoning. Because we have concluded in effect that the respondents were fixed-term employees, His Honour's finding cannot be sustained. In those circumstances it is not profitable to explore this aspect of the case further. We note in passing, however, that some of His Honour's observations may require reappraisal in light of the recent decision of a Full Court of the Federal Court in Cosco Holdings Pty Ltd v Thu Thi Van Do & Ors (1997) 77 IR 94.
5. Was the Remedy Granted Appropriate?
Because of the conclusions we have arrived at on the other matters, it is not appropriate that we express any view on this question.
For all of the above reasons leave to appeal is granted and the appeal is upheld. The order of 26 November 1997 is quashed.
BY THE COMMISSION:
R. Dubler with S. Penning for S. J. Fetz, W. Duhigg and D. E. Hennessy.
R. J. Buchanan QC with H J Dixon for Qantas Airways Limited.
M. Goodsell for the Metal Trades Industry Association.
B. Nettheim for the Australian Chamber of Commerce and Industry.
January 28 & 29;
Termination of employment - unfair dismissal - jurisdiction - contract for specified period - contract for specified task - whether termination at the initiative of the employer - estoppel - appeal - Full Bench - 3 apprentices, airline operations - Ross VP held apprentices not excluded from operation of Part VIA Div 3 of the Act - were not engaged under contract for a specified period (Reg 30B(1)(a)) as potential for length of apprenticeship to be varied during its currency due to unpaid absences, workers compensation or variation pursuant to Industrial & Commercial Training Act 1989 (NSW) - not engaged under contract for a specified task (Reg 30B(1)(b)) - appellant had engaged in conduct and representations which estopped it from relying on any contractual term that employment would cease at the end of the apprenticeship period - no valid reason for dismissal - appellant's reason for terminating apprentices' employment was the mistaken belief that apprentices fixed term employees - held - (1) apprentices were engaged under contracts of employment for a specified period of time - period of apprenticeship was fixed at four years by letter of appointment, the NSW Act and the relevant award - possibility for extension of length of apprenticeship under NSW Act but this did not change nature of the contract - many contracts are susceptible to variation by outside intervention - (2) 40 year practice of employing apprentices at end of apprenticeship cannot override written agreement unless the agreement is a sham - not permissible to imply a term into a contract which contradicts an express term - (3) whether conduct of employer amounted to terms of each separate contract being varied - in each individual apprentice's case and on common documentary evidence concerning apprentices' placements in "final section", with no guarantee that centres would be offered as permanent section, material does not justify conclusion that terms of contracts contained in original letters of appointment were subsequently altered - (4) contracts were not for specified task - meaning of "task" considered - agreed with Ross VP that mixture of training and work involved in an apprenticeship makes it difficult to describe as a task - (5) given finding that contracts for a specified period terminations occurred as a result of the effluxion of time in accordance with parties' agreement rather than at initiative of employer - where the termination was not at the initiative of the employer estoppel cannot be used to extend the authority of the Commission beyond that conferred by the Act - Fisher v Eidth Cowan University (1997) 72 IR 464 at 471 considered - in every case the true nature of the contract must be discerned and in particular whether the contract originally made has subsequently varied - for purposes of Part VIA doctrine of estoppel is not available in a case where a contract has expired by agreement according to its terms and not at the initiative of the employer - (6) given finding that apprentices fixed-term employees conclusion that terminations harsh unjust and unreasonable cannot be sustained - (7) given above conclusions not appropriate to express view on remedy - leave to appeal granted - appeal upheld.
Appeal by Qantas Airways Limited against a decision [Print P6994] issued by Ross VP on 26 November 1997
C No 24436 of 1997
9 June 1998
Printed by authority of the Commonwealth Government Printer
<Price Code F>
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