Dec 1341/00 M Print T2860

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996
s.45 appeal against decision Print S9111 and order Print S9112
issued by Senior Deputy President Watson on 11 August 2000

V Trigar
(C No. 36748 of 2000)

s.170CE application for relief re termination of employment

V Trigar

and

La Trobe University
(U No. 31824 of 2000)

Termination of employment - Workplace Relations Act 1996 s.170CC(1) - Workplace Relations Regulations reg.30B(1)(a) - contract of employment for a specified period of time - Higher Education Contract of Employment Award 1998 clause 2.3 - construction of contract - interpretation of award.

DECISION

[1] This is an appeal by Ms V Trigar (the appellant) against a decision given by Senior Deputy President Watson on 11 August 2000. The appellant applied to the Commission pursuant to s.170CE for relief in respect of the termination of her employment by La Trobe University (the respondent). The Senior Deputy President found that the appellant's application was incompetent because she had been engaged by the respondent under a contract of employment for a specified period of time. Employees so engaged are a class of employees excluded from the operation of s.170CE by operation of s.170CC(1) of the Act and reg. 30B(1)(a) of the Workplace Relations Regulations. The Senior Deputy President issued an order on the same day dismissing the appellant's application.

[2] At the outset it is appropriate to set out the relevant statutory provisions. Section 170CE(1), which is in Subdivision B - Application to Commission for relief in respect of termination of employment of Division 3 of Part VIA of the Act, reads:

"(1) Subject to subsection (5), an employee whose employment has been terminated by the employer may apply to the Commission for relief in respect of the termination of that employment:
(a) on the ground that the termination was harsh, unjust or unreasonable; or

(b) on the ground of an alleged contravention of section 170CK, 170CL, 170CM or 170CN; or
(c) on any combination of grounds in paragraph (b) or on a ground or grounds in paragraph (b) and the ground in paragraph (a)."

We note at this stage that the ground on which the appellant's application was made was that specified in s.170CE(1)(a). Section 170CC(1) provides in part:

" (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;"

The relevant regulation for the purpose of s.170CC(1)(a) is reg.30B(1)(a) which 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;"

The effect of these provisions is that an employee engaged under a contract of employment for a specified period of time cannot apply for relief in respect of the termination of his or her employment pursuant to s.170CE(1). The question before the Senior Deputy President was whether the appellant had been engaged by the respondent under a contract of employment for a specified period of time. In order to answer that question it is necessary to identify and examine the relevant terms of the contract of employment between the appellant and the respondent.

[3] It is accepted that the appellant commenced employment on 18 January 1999 pursuant to a contract of employment with the respondent dated 19 January 2000. In relation to duration the contract relevantly provides:

"Term of Appointment

This appointment is offered in accordance with the "Replacement Employee Contract" definition, as specified in clause 2.3.3 of the Higher Education Contract of Employment (HECE) Award 1998, for the period 18 January 1999 to 1 July 2001, followed [sic] a further fixed term to 31 December 2001 as agreed by the Head of School."

In order to understand the reference to "Replacement Employee Contract" in clause 2.3.3 of the HECE Award it is necessary to have regard to some of the terms of clause 2.3 of that award.

"2.3 Fixed-term employment

`Fixed-term employment' means employment for a specified term or ascertainable period, for which the instrument of engagement will specify the starting and finishing dates of that employment, (or in lieu of a finishing date, will specify the circumstance(s) or contingency relating to a specific task or project, upon the occurrence of which the term of the employment shall expire), and for which, during the term of employment, the contract is not terminable, by the employer, other than during a probationary period, or for cause based upon serious or wilful misconduct."

........

The use of `fixed-term employment' shall be limited to the employment of an employee engaged on work activity that comes within the description of one or more of the following circumstances:

........

2.3.3 Replacement employee

`Replacement Employee' means an employee undertaking work activity replacing a full-time or part-time employee for a definable period for which the latter employee is on authorised leave of absence."

We note in passing that the clause was varied on 30 November 1999. Neither party drew our attention to the variation and the variation does not appear to us to be material.

[4] Mr Willoughby-Thomas, who appeared on behalf of the appellant, submitted that there are two possible constructions of the words "followed (sic) a further fixed term to 31 December 2001 as agreed by the Head of School." The first construction is that a further term is guaranteed. On this construction the contract does not expire until 31 December 2001. The alternative construction is that there is a guaranteed first term and the possibility of a second. We reject the former construction. Although the word "by" appears to have been omitted, it is clear enough that there is to be no second term unless the Head of School agrees. It follows that a second term is no more than a possibility. We agree with Senior Deputy President Watson's conclusion that the latter construction is the correct one.

[5] It was further submitted on behalf of the appellant that the contract is not one for a specified period of time because of the possibility that it might be renewed for a further term of 12 months. Because of that possibility, it was submitted, the contract does not unambiguously define the time at which the contract is to finish. Reliance was placed on the following passage from the judgment of Von Doussa J in Andersen v Umbakumba Community Council (1994) 56 IR 102 at 106:

"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 is a contract of employment for a fixed term, although this is not the description used in the regulation."

We do not accept the proposition that the possibility of employment for a further fixed term alters the character of a contract which is otherwise one for a specified period of time. Such a contract is to be distinguished from one in which provision is made for alteration of the date of completion. A contract containing provision for alteration of the date of completion, subject to consideration of all of the relevant terms in a particular case, is not one for a specified period of time. In this case, however, the contract is one for a specified period of time and contemplates another contract for a further specified period of time.

[6] It was submitted in a subsidiary argument that the contract embraces various award and personnel management manual provisions which allow for termination of the contract before the expiry of its term and therefore the contract cannot be characterised as one for a specified period of time. We have no doubt that if the contract provided for termination on notice by either party prior to its expiry the contract would not be one for a specified period of time. There may be other termination provisions from which it is to be inferred that the specification of a term serves only to indicate "the outer limit of a period beyond which the contract of employment will not run" (Andersen at 106). Are there any terms in the contract between the appellant and the respondent which give rise to such an inference?

[7] The term upon which the appellant principally relies is:

"Conditions of Employment

Unless otherwise specified in this offer your conditions of employment will be the same as those contained in the applicable academic staff awards and certified agreements as made or varied from time to time the terms of which are set out in the Personnel Policies and Procedures Manual, along with other University policies. (Web address: http://www.latrobe.edu.au/www/personnel/ )"

[8] It is clear from the paragraph of the contract headed "Term of Appointment" that it was agreed the contract would be a "replacement employee contract" for the purposes of the HECE Award. The relevant paragraph and the relevant provisions of the HECE Award are set out earlier in this decision. Senior Deputy President Watson was referred to a number of decisions concerning the HECE Award and relevant passages from some of those decisions are set out in the decision under appeal. For present purposes it is sufficient to refer to the following passage from the decision of the Full Bench in which it gave its reasons for the adoption of cl.2.3 of the HECE Award:

"Fixed-term employment:

... We have therefore specified the circumstances in which the fixed-term type of employment will be available as a departure from the standard indefinite term employment.

We have defined those circumstances after taking account of the NTEU proposals and the evidence overall. However, the circumstances we determine in clauses 2.3.1 to 2.3.6 are less restrictive of a proper use of fixed-term employment than would be the case if the model proposed by the NTEU was adopted. Our decision of 18 August 1997 outlines the main points of our reasons. Fixed-term employment is a distinct type of employment for purposes of relief against unfair termination of employment. We are satisfied there are compelling grounds why a reasonable employer should restrict the use of fixed-term employment to circumstances which warrant the departure from the minimum conditions associated with standard full-time or part-time employment. We accept it will be appropriate for an institution to resort to fixed-term employment to ensure it has flexible staffing arrangements to meet the exigencies covered by the circumstances we have comprehensively defined in clauses 2.3.1 to 2.3.6. Conversely, once the employer elects to use a fixed-term employment, it is reasonable that the employer gives full effect to the consequences of that election. In other words, it is not reasonable to purport to convert fixed-term employment to a less secure, less protected form of indefinite term employment by including provision for ordinary notice of termination prior to the expiration of the contract, or by the systemic rolling over of contracts from term to term. Such practices belie the important differences between the two types of employment and are characteristic of the inappropriate use of fixed-term contracts in the past. The incidents of fixed-term employment, and the duties we have determined to cover serial fixed-term employments, reflect our view of what should be the minimum standards observed by a reasonable employer using that type of employment in this industry. In particular in this context, the relative exemption of fixed-term employment from relief against unfair termination of employment is predicated upon such employment expiring upon the completion of the term." (National Tertiary Education Industry Union v Australian Higher Education Industrial Association [Print Q0702] at p40)

We agree with the Senior Deputy President that the Commission used the expressions "fixed-term contract" and "fixed-term employment" synonymously with the concept of employment pursuant to a contract of employment for a specified period of time within reg. 30B(1)(a). We also agree with the Senior Deputy President's conclusion that it was the clear intention of the Commission in making the HECE Award to limit the use of fixed-term contracts in the higher education institutions to contracts made for purposes specified in the award. One of those purposes was to provide replacement employees. The definitions of "fixed-term employment" and "replacement employee" in clause 2.3 of the HECE Award are incorporated by reference into the contract evincing an intention that the contract is to be one for a specified of period time. Furthermore, the opening words of the term relied upon by the appellant "unless otherwise specified in this offer," should be construed as confirming the normal principle of construction of contracts, that specific provisions prevail over general ones. Whilst other academic awards provide for termination on notice, as do the personnel procedures, there is nothing in the contract to indicate that those provisions are to prevail over the specific provision for a 12 month term contained in the contract in this case.

[9] The final submission advanced on the appellant's behalf was that even if the definition of fixed term employment in clause 2.3 of the HECE Award is incorporated into the contract and governs its termination, properly construed the clause does not describe a contract which is for a specified period of time. The submission focuses upon the concluding words of the definition "fixed term employment", that is: "for cause based upon serious or wilful misconduct."(emphasis added) It is conceded that a contract expressed to be for a fixed term but which is terminable for conduct amounting to repudiation prior to the expiry of the term is still a contract for a specified period of time within the meaning of reg.30B(1)(a). We have no doubt this concession is correct. Even in the absence of such a term it is impossible to contemplate a contract in which repudiation by one party would not give rise to a right in the other to treat the contract as at an end. But the appellant's argument is that the right to terminate provided by clause 3 is one which applies in cases where the conduct falls short of repudiation. It is submitted that repudiation at common law is constituted by "serious misconduct," a narrower concept than "wilful misconduct", and that the use of the expression "wilful misconduct" in clause 3 permits termination of the contract for conduct which is not so serious a breach of contract as to amount to repudiation. It is submitted that in describing a contract which permits termination prior to the specified finishing date on account of conduct not amounting to repudiation clause 3 fails to describe a contract for a specified period of time within the meaning of reg.30B(1)(a).

[10] Mr Willoughby-Thomas relied upon the cases collected in Macken, McCarry and Sappideen's The Law of Employment (North Ryde: LBC Information Services 1997 4th edition at p191 - 192). Those cases deal with the type of conduct by an employee which entitles an employer to exercise the remedy of summary dismissal. We are not persuaded that those authorities establish that at common law wilful misconduct falls short of repudiation. The following passage from the judgment of Denning MR in Laws v London Chronicles (Independent Newspapers) Ltd [1959] 2 All ER 285 at 287 and 289, in which his lordship was speaking of repudiatory conduct, negates that proposition:

" ... the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service ... I ... think ... that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and ... therefore ... the disobedience must at least have the quality that it is "wilful"; it does (in other words) connote a deliberate flouting of the essential contractual conditions."

This passage was cited with approval in North v Television Corp Ltd (1976) 11 ALR 599 per Smithers and Evatt JJ. We think it is clear from this passage that "wilful misconduct" is a term appropriate to describe conduct entitling the employer at common law to terminate the contract of employment. It was not suggested in argument, and nor could it be, that "serious misconduct" is not in the same category. Those conclusions are sufficient to dispose of the appellant's argument.

[11] It is clear from our analysis in the previous paragraph that properly construed the expression "for cause based upon serious or wilful misconduct" entitles an employer to terminate the contract for conduct amounting to repudiation at common law and confers no greater right. We are by no means persuaded, however, that if a greater right were provided the contract would not be one for a specified period of time. In Andersen the feature of the contract which deprived it of the character of a contract for a specified period of time was the unqualified right to terminate without reason. As the following passage illustrates, a provision permitting termination for breach may not have the same effect:

"It is significant that the rights to terminate the contract of employment arising under cl.21(c) and (d) are not conditioned on a breach of any term of the contract. The rights are unqualified. Different considerations may apply where a contract of employment for a period of time fixed by clearly stated dates of commencement and cessation contains a term which permits either side to terminate the contract on breach by the other side. In such a case, it is possible that the contract would be characterised as a contract of employment for a specified period of time notwithstanding the possibility that on breach of its term by one side or the other it may sooner come to an end. In this case, however, the unqualified rights to terminate without reason under cl21(c) and (d) make it clear, in my opinion, that the contract cannot be so characterised." (Andersen at p.107)

In this case, as we have decided, the contract provides that the only circumstance in which the contract may be terminated prior to the specified finishing date is by the employer on account of conduct by the employee which amounts to repudiation. Such a contract is one for a specified period of time. We are inclined to think that if the contract permitted termination for breach, regardless of whether the breach amounted to repudiation, the contract could still be described as one for a specified period of time. A reservation by one or both parties to the contract of a right to terminate the contract, either forthwith or subject to conditions, for breach of an obligation specified in the contract seems quite consistent with the contract being one for a specified period of time. Because of the terms of the contract in this case, however, it is not necessary that we decide the issue.

[12] We are satisfied that the appellant was engaged by the respondent under a contract for a specified period of time. The Senior Deputy President was correct so to decide. We decline to grant leave to appeal.

BY THE COMMISSION:

PRESIDENT

Appearances:

M Willoughby-Thomas for the appellant

A Farr for the respondent

Hearing details:

2000
Melbourne.
October 9.

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