SKELE v KITCHENER MINING NL [1997] IRCA 75

DECISION NO:75/97 CATCHWORDS INDUSTRIAL LAW - termination of employment - whether contract for a specified period of time Workplace Relations Act 1996 (C'th) (formerly Industrial Relations Act 1988 (C'th)) Workplace Relations Regulations Reg. 30B(1)(aa) Andersen v Umbakumba Community Council [1995] 1 IRCR page 457 JENNIFER MAUREEN SKELE v KITCHENER MINING NL WI 1486 of 1996 Before: BOON JR Place: PERTH Date: 5 MARCH 1997

IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) WI 1486 of 1996 B E T W E E N: JENNIFER MAUREEN SKELE Applicant A N D: KITCHENER MINING NL Respondent MINUTE OF ORDERS 5 MARCH 1997 PERTH BOON JR

THE COURT DECLARES AND ORDERS THAT :

1. Ms Skele was not an employee engaged under a contract of employment for a specified period of time within the meaning of Regulation 30B1(aa). 2. The matter be set down for telephone directions at 10:30 am on Friday, 7 March 1997. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) WI 1486 of 1996 B E T W E E N: JENNIFER MAUREEN SKELE Applicant A N D: KITCHENER MINING NL Respondent REASONS FOR DECISION 5 MARCH 1997 BOON JR INTRODUCTION The applicant, Ms Skele, has filed an application in this Court seeking payment of compensation arising out of the alleged termination of her employment by the respondent, Kitchener Mining NL. This matter proceeded to a hearing on 26 February 1997. On that date Mr M. Hawkins for the respondent foreshadowed that after hearing some of the evidence he would make an application for an adjournment as one of the respondent's witnesses was taken ill and was in hospital. The Court heard evidence from Ms Skele and two of the respondent's witnesses. By consent, the parties agreed that this Court should determine a threshold question of jurisdiction before proceeding further with the matter. The respondent contends that Ms Skele is excluded from the operation of the relevant provisions of the Workplace Relations Act by Regulation 30B1(aa) of the Workplace Relations Regulations 1989. Regulation 30B1 reads as follows: "30B1 [Excluded Employees] Subject to subregulation (2), for the purposes of section 170CC of the Act, the following employees are excluded from the operation of subdivisions B, C, D and E of Division 3 of Part VIA of the Act: . . . (aa) an employee engaged under a contract of employment for a specified period of time, being a contract that was entered into on or after 16 November 1994, if the specified period is less than 6 months . . ." Ms Skele has been employed by Kitchener Mining NL for a period of some years. In March 1995 she entered into a written contract with the respondent. It is common ground that the respondent's employees signed similar three-month contracts of employment. The employees would each take two weeks of unpaid leave before commencing a new term of employment under a written renewal of the original contract. Evidence was given by Mr Anthony Roberts, the former registered operations manager of the respondent at the Bamboo Creek Mine site, and Mr Michael Povey, the former general manager of the respondent, about this practice. The Court heard evidence that the respondent had been in financial difficulties for some years before it finally closed down its operations at Bamboo Creek in early 1996. Mr Povey said that the practice of using three-month written contracts for the employees had been introduced to cover the fact that the mine had a high chance of being closed in the foreseeable future. It was only the fact that the chairman of the respondent had poured his own money into the company that had kept it going at that site. Mr Roberts gave evidence that because the mine was in a parlous financial state, the respondent adopted the practice of using three-month written contracts to reduce its liability for termination payments and redundancy in the event of a shutdown of the operation. Ms Skele signed a written contract dated 15 March 1995. One of its terms reads as follows: "TERM OF CONTRACT 15 March 1995 to 18 June 1995 The contract is deemed to be in effect for the term of the contract or until either the contractor or the company terminates the contract as allowed for below. Seven days notice of termination of the contract or a period mutually agreed is required to be given in writing by the contractor. Should this notice not be given, payment for the last full shift worked will be forfeited by the contractor. The contract may be terminated early by the company with no notice if a serious breach of the company's disciplinary code occurs." Ms Skele gave evidence that the practice was that she would sign three-monthly contract renewals, with a two-week break between each contract period. The last contract renewal she signed was dated 11 July 1995 and allowed for a term of contract of 11 July 1995 to 10 October 1995. The contract renewal incorporated the terms and conditions of the original contract. The respondent argues that as the contract renewal dated 11 July 1995 specified a term of contract between 11 July 1995 and 10 October 1995, it was a "contract of employment for a specified period of time" within the meaning of Regulation 30B1(aa). The parties were referred to the case of Andersen v Umbakumba Community Council [1995] 1 IRCR page 457. In that case, the applicant entered into a written agreement, the period of employment of which was expressed to commence on 5 April 1993 and cease on 4 April 1995. In that case, the written contract could be terminated by either side on two weeks notice. Von Doussa J stated at page 462 as follows: "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." His Honour goes on to state at page 462 to 463: "In the present case clause 3 and sch 1 of the employment agreement clearly state both a commencement date for the employment and a cessation date, but in light of the right of either party to the contract arising under clause 21(c) to bring the employment to an end on two weeks notice, and the right of the employer under clause 21(d) to bring the employment to an end without notice on payment of two weeks salary, the cessation date merely records the outer limit of the period beyond which the contract of employment will not run (unless a new agreement is entered into pursuant to clause 29). Within the period stated in Schedule 1, the period of the contract of employment is indeterminate. At any point during the two-year period identified by the commencement and cessation dates neither side could know with any certainty when the period of the contract of employment might come to an end. It is significant that the rights to termination of the contract of employment arising under clause 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 not withstanding 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 clause 21(c) and (d) make it clear, in my opinion, that the contract cannot be so characterised." Counsel for the respondent argued that the Andersen case could and should be distinguished from the present case. It was submitted that in the Andersen case each party had the right to bring the contract to an end, whereas in this case, the applicant only has the right to bring the contract to an end whether or not there has been a breach of its terms . The respondent only has the right to bring the contract to an end before the term of the contract expires if the applicant has been guilty of a serious breach of the company's disciplinary code. Ms Skele agreed to comply with the company's disciplinary code. It was submitted that it was the intention of the Workplace Relations Act to protect employees' rights. It was submitted that this Court has no jurisdiction unless there has been a termination by an employer, and that Regulation 30B1(aa) should therefore be interpreted in light of protecting an employee's rights. Therefore, as the company does not have a unilateral right of termination of the contract before the term of the contract expires, and as this Court is not concerned with circumstances in which an employee terminates a contract, the contract in this case was a contract for a specified period of time. I do not agree with that submission. Although I agree that the provisions of subdivisions (B), (C), (D) and (E) of Division 3 of part VIA of the Act came into force primarily to protect the rights of employees, this Court's jurisdiction is only excluded under the provisions of Regulation 30B1(aa) if the contract is for a specified period of time. The contract entered into by Ms Skele and Kitchener Mining NL either is for a specified period of time or it is not. In my view, the cessation date set out in the contract renewal merely recorded the outer limit of the period beyond which the contract of employment would not run (unless a new contract renewal was entered into) in much the same way as in Andersen. At any point during the three-month period identified by the commencement and cessation dates Ms Skele could have terminated the contract. I do not consider that the facts in this case are sufficiently different from the facts in the Andersen case to enable me to distinguish it in the manner proposed by counsel for the respondent. In these circumstances, I consider that Ms Skele was not engaged under a contract of employment for a specified period of time within the meaning of Regulation 30B1(aa) and Ms Skele is not therefore not excluded from the operation of subdivisions (B), (C), (D) and (E) of Division 3 of part VIA of the Act by virtue of that regulation. In these circumstances, I consider that the following orders are appropriate. The Court orders and declares: 1. Ms Skele was not an employee engaged under a contract of employment for a specified period of time within the meaning of Regulation 30B1(aa). 2. The matter be set down for telephone directions at 10:30 am on Friday, 7 March 1997.