Industrial Relations Commission of New South Wales CITATION: Ngoc-Toan Nguyen -V- Oliveri Transport Services [2005] NSWIRComm 1121 APPLICANT Ngoc-Toan Nguyen PARTIES: RESPONDENT Oliveri Transport Services Pty Limited Trading As Metro-Link Bus Lines FILE NUMBER(S): 5443 of 2004 CORAM: Cambridge C CATCHWORDS: Unfair dismissal - termination of employment - purported fixed term contract of employment - introduction of fixed term employment improper, unfair and invalid - employer unable to rely upon expiry of contract - no proper reason for dismissal - dismissal held as harsh, unreasonable and unjust - reinstatement Ordered. LEGISLATION CITED: Industrial Relations Act 1996[NSW] D'Lima v. Board of Management, Princess Margaret Hospital for Children, (1996) Industrial Relations Court of Australia, [Marshall J ], 64IR @ 19. Fisher v. Edith Cowan University (No 2), (1997) Full Court of the Industrial Relations Court of Australia, [Lee, Marshall and North JJ], 72IR @ 464. CASES CITED: Sanhueza -v- Oliveri's Metro Link Bus Lines, (2003), Industrial Relations Commission of NSW [Connor C], unreported, Decision of 25 Sep 2003. Stevens -v- Nowra - Bomaderry Meals on Wheels Service, (1994), Industrial Relations Commission of NSW [McKenna C], 36AILR 251. HEARING DATES: 02/11/2005 DATE OF JUDGMENT: 07/28/2005 APPLICANT Ms D Leahy, Transport Workers Union of Australia LEGAL REPRESENTATIVES: RESPONDENT Mr C McElroy, solicitor, Marsden Law Group DECISION: - 2 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 28 July 2005 Matter No IRC 5443 of 2004 Ngoc-Toan Nguyen -V- Oliveri Transport Services Pty Limited Trading As Metro-Link Bus Lines Application by N Nguyen re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996. DECISION [2005] NSWIRComm 1121 1 Mr Toan is an immigrant who has limited comprehension of written English. When his employer asked him to sign an employment contract he did. Although later he admitted that he only understood about twenty percent of what was in the document. 2 After two years of continuous employment as a "casual" Bus Driver, Mr Toan was so happy when given a contract for "permanent" employment that he signed the contract document almost without hesitation. One of the terms of the document stipulated that the offer of "permanent" employment was for a fixed period of time, and that on a specified date the contract of employment would come to an end. This was one of the terms of the employment contract document that Mr Toan did not properly understand. 3 Two years later, Mr Toan's employer, Oliveri Transport Services Pty Ltd, trading as Oliveri's Metro-Link Bus Lines (the employer), decided to invoke the fixed term provisions of the contract of employment and Mr Toan's employment came to an end for no stated reason other than the expiry of the fixed term of the contract of employment. 4 Mr Toan, whose full name is Ngoc-Toan Nguyen, (the applicant), has claimed that he was unfairly dismissed when the employer advised that his contract of employment expired on 29 August 2004, and therefore he was not required to work after Friday, 27 August 2004. 5 The Transport Workers Union of Australia, NSW Branch (TWU), made a claim for unfair dismissal on behalf of Mr Toan. The claim was made pursuant to section 84 of the Industrial Relations Act 1996 [NSW], (the Act). Following unsuccessful attempts to settle the claim by way of conciliated agreement, the matter proceeded to a Hearing conducted on 11 February 2005. The evidence was completed on 11 February. However the time-table for written submissions ultimately concluded with the applicant's submissions in reply being filed on 16 June 2005. BACKGROUND 6 The applicant is a man who was some forty three years of age at the time of his alleged unfair dismissal on 27 August 2004. The applicant's Vietnamese ethnicity meant that English was not his first language. However the applicant displayed a reasonable capacity for comprehension and expression of most discussions conducted in English. It appeared that he had some greater difficulty with comprehension of written English, such that his suggestion of understanding only about twenty percent of the contract of employment document would appear to be reasonably accurate. 7 The applicant commenced work for the employer on or about 27 August 2000. The applicant worked as a Bus Driver. He was engaged on a regular, continuous basis, although he was described and paid as a "casual" until about August 2002. In August 2002, the employer's General Manager approached Mr Toan and asked him to sign a contract of employment document dated 21 August 2002. Mr Toan signed and dated the document 27-8-02. The document was varied in handwriting to reflect that it would commence operation on Wednesday 28 August 2002. 8 The document is headed, "OFFER OF EMPLOYMENT: - Fixed term contract-Permanent Bus Driver:" Despite having already been employed on a continuous basis for the preceding two years, the document sought to impose a probationary period upon Mr Toan of three months. Following that probation, a fixed period of employment of a further eight months is specified in the document. The document stated that at the expiration of the total period of eleven months, (three months probation followed by a further eight months), the contract of employment would come to an end. It would appear therefore that this contract was to expire on 28 July 2003, eleven months after its commencement. 9 The applicant signed and dated the acceptance of the offer of employment which included the following typed statement: "I have read, understood and accept the terms and conditions of employment contained in the offer and hereby accept the position as stated." There was little or no issue arising in respect of the applicant's employment for the eleven months of purported operation of the contract signed in August of 2002, (the 2002 contract). 10 Almost one month after the expiry of the stated period of operation of the 2002 contract, the employer wrote to Mr Toan and advised that the "...named contract is drawing is to an end". In late September or early October of 2003, the applicant was provided with a second offer of employment document which was in substantially similar terms to the 2002 contract. 11 The second offer of employment document was dated 26 August 2003, and this 2003 contract sought to introduce another probationary period of employment of three months followed by a further specified period of employment of nine months. Further, the 2003 contract of employment would come to an end at midnight on 29 August 2004. Unlike the elation that Mr Toan experienced when he received the 2002 contract document, he was unhappy about the 2003 contract and he sought the assistance of the TWU to deal with his concerns. 12 The TWU was involved in various meetings with the employer and protested at the introduction of fixed term contracts as a general proposition, and in particular in respect to the employment of Mr Toan. There was an exchange of correspondence between the TWU and the employer in December of 2003. The exchanges between the TWU and the employer did not conclusively resolve the fixed term contract issue and the employer indicated that it would continue the fixed term contracts, and anticipated that the terms of the contracts would continue to be observed. Consequently, by way of correspondence dated August 13 2004, the employer advised Mr Toan that it would observe the terms of the 2003 contract and his employment would effectively cease on 27 August 2004. THE EVIDENCE 13 The evidence of the chronology of relevant events did not reveal issues of significant conflict. Broadly, but for one or two minor matters regarding precise dates, there was a general consistency in respect to the factual circumstances that involved the termination of Mr Toan's employment on 27 August 2004. 14 The applicant and Mr Darcy Waller were called as witnesses to provide evidence in support of the claim. Mr Toan provided evidence with the assistance of a language interpreter. However Mr Toan did not place any unnecessary reliance upon his language difficulties. He displayed a genuine and honest approach and gave evidence directly whenever he could respond without seeking clarification from the interpreter. 15 The employer also called two witnesses, Mr Phillip Baker, the General Manager, and Mr Giuseppe Oliveri, the Chief Executive Officer of the employer. 16 The most notable feature of the evidence in this instance involved the absence of any reason for the dismissal of Mr Toan other than the alleged expiry of the 2003 contract of employment. Logically then the evidence as to why Mr Toan had been placed on a fixed term contract was pursued but unfortunately no coherent or plausible explanation emerged from the evidence. Although various suggestions about apparent uncertainties in the employer's operations were mentioned, the evidence revealed that the introduction of fixed term contracts of employment was not of general application but apparently confined to two or three particular employees including Mr Toan. 17 The difficulties with evidence regarding an explanation for the introduction of fixed term contracts for the employment of Mr Toan was exampled by the answers given by Mr Oliveri during cross-examination. The following example of the testimony of Mr Oliveri typifies the evidence provided generally in respect to the reason or reasons for the introduction of fixed term employment: "Q. So, why then did you put Nguyen Ngoc-Toan on a fixed-term contract? A. Why? Q. Yes. A. Again, decisions like that are not made in isolation, all right? In the context at the time I made decisions to take on two - so I convert two existing casuals into permanent positions who replaced two injured workers I previously terminated within that year. At that same time, or thereabouts, I also addressed a concern of there being a lengthy casual period and I wished to give those casual employees some certainty employment which, to the best that I could provide, extended for only a year." Transcript of proceedings (11/02/05) @ pages 46-47. 18 Consequently, the evidence suggested that the introduction of fixed term employment was targeted to particular employees. However there was an alarming absence of evidence to determine precisely what reason or reasons existed for the introduction of the fixed term employment and importantly, why particular individuals were selected for application of the fixed term contract employment, whilst others were engaged without any mention of fixed term characteristics to the employment. THE CASE FOR THE APPLICANT 19 The written submissions of the applicant commenced by asserting that there was no fixed term contract that had been established between Mr Toan and the employer for the period of employment from 28 August 2003, to 29 August 2004. Therefore according to the applicant's submissions, the termination of employment was without valid reason. The absence of valid reason was said to make the dismissal "inherently unfair". 20 The applicant's submissions alleged that the employment of the applicant on the fixed term contract basis was an attempt to avoid potential injured worker obligations that might arise in respect to Mr Toan. The applicant submitted that the attempted reliance on the 2003 contract was "unreal, unconscionable and oppressive". 21 The applicant made detailed submissions about the alleged invalidity of the fixed term contracts, in particular the 2003 contract. The applicant submitted that the nature of the employment of Mr Toan was inappropriate for any introduction of fixed term contracts. In this respect the applicant submitted that the majority of the employer's Bus Drivers were not engaged on fixed term contracts, and that the targeted introduction of such fixed term characteristics was not appropriate to the industry. The applicant further submitted that there was no proper basis for the introduction of fixed term contract employment for Mr Toan, and that the purported reliance on the expiry of the employment meant that there was no valid reason for the dismissal. 22 The applicant made further detailed submissions about the chronology of events regarding the attempted introduction of fixed term employment. In particular, the applicant submitted that the 2002 contract had not been observed, and that the employer sought to unilaterally impose a second contract after the 2002 contract had expired. According to the applicant's submissions this mean that the contracts were not observed but represented the employer's attempted introduction of conditions which provided for the employer to permit the employment to come to an end unrealistically. 23 The submissions of the applicant urged the Commission to find that the dismissal of Mr Toan had been without substantive basis. The applicant sought Orders that he be reinstated to his former position together with supplementary Orders involving remuneration for lost earnings and also Orders for continuity of employment. THE CASE FOR THE EMPLOYER 24 The written submissions filed on behalf of the employer contended that the termination of the applicant had not been "at the hands" or the initiation of the employer. Therefore according to the submissions of the employer, Mr Toan had not been dismissed within the meaning of that term in Part 6 of the Act. 25 The employer's written submissions asserted that the fixed term contract was valid, and that proper advice in advance of the expiry of the contract had been made and therefore, there was no procedural unfairness visited upon Mr Toan. 26 The employer made detailed written submissions about the purported operation of the 2002 and 2003 contracts. The employer submitted that it was not significant to reflect the stated expiry date of the signed contract, and that the period after the expiry of the 2002 contract and before the provision of 2003 contract, saw the Parties continue to be bound by the terms of the signed contract. Therefore according to the submissions of the employer, the contract that was ultimately established to operate up until 29 August 2004 was valid, and the employer was entitled to rely upon the expiry of that contract of employment. 27 The employer submitted that there was no termination "at the hands of the employer". Further, the employer was not required to give a reason for the termination of the employment, as it came about as a consequence of the fixed term as stated in the contract of employment. The employer was entitled to engage the applicant on a fixed term contract and to rely upon such terms of engagement so that there need not be any other basis for the termination other than the operation of the expiry of the contract. 28 The written submissions of the employer also addressed the question of any appropriate Relief if the applicant was successful in respect to the primary determination of the claim. The employer submitted that there was impracticality in regards to any reinstatement of the applicant. 29 The submissions of the employer stated that the position of the applicant no longer existed. The employer submitted that the work of the applicant may have been covered by any number of other Drivers, but that did not now amount to the applicant's position being available. Further, the employer submitted that the applicant had certain medical incapacities which would render any reinstatement to be impracticable. 30 The employer submitted that the termination of the applicant's employment occurred as a consequence of the passage of time and therefore should not attract any Relief. CONSIDERATION 31 Mr Toan was very happy when he received his first offer of "permanent" employment. However, he did not fully understand the terms of the employment contract document. In particular, he did not realise that he was one of a few employees who were offered fixed term contracts with particular provisions that would have his employment come to an end on a specified date. 32 It was understandable that Mr Toan did not properly comprehend the nature of the employment that was offered to him. However, even if he did understand the fixed term characteristic, he probably would have accepted the offer because it appeared to represent an improvement upon the extended "casual" engagement that he had been employed under for the previous two years. Of course Mr Toan, like many employees, was in no position to properly bargain in respect to the details of the offer of so called "permanent" employment. In practical terms he had to accept whatever the employer was proposing if it represented some basis upon which to retain employment at all. 33 It was particularly disconcerting that the employer imposed fixed term contract arrangements on a targeted basis, and without some coherent operational or other commercial rationale. Any use of fixed term contract employment should have some proper underlying reason. Fixed term contract employment should not be used as a convenient means to dispense with particular employees without having to provide any justification for the termination of the employment. 34 If there was genuine commercial basis underpinning the need for some fixed term characteristic to the employment, then there should be no unexplained targeted application of fixed term employment. There should be clear evidence as to the reason for the requirement to have an anticipated expiry date for the contract of employment. Without clear reason, the introduction of fixed term employment becomes a device to dismiss without proper basis. 35 In this instance the first fixed term contract was not observed. The stated expiry date passed and the employment continued contrary to the stated provisions of clauses 1 and 2 of the 2002 contract. If Mr Toan had appreciated that the contract would expire on 28 July 2003, he had every reason to assume that with the passing of that expiry date he had moved onto more general "permanent" employment as a Bus Driver. 36 It was understandable that when the employer sought to subsequently introduce the 2003 fixed term contract, the applicant protested. Despite these protests, the employer sought to unilaterally apply and then rely upon, the purported fixed term contract and its alleged expiry on 29 August 2004. 37 Regrettably, an examination of the contract of employment documents reveals that they represent an attempt to establish a device to permit the dismissal of particular employees without reason. 38 The malevolent intent of the fixed term contract documents was exampled by the reintroduction of three month probationary periods for the first three months of each fixed term contract. The absurdity of having Mr Toan return to a three months probationary period three years after he first started as a Bus Driver, exposed the contract documents as deceptive and mala fide. 39 The employment contract documents, both the 2002 and 2003 versions, are fundamentally flawed and have been unfairly imposed upon Mr Toan without proper reason. Therefore, the contracts are not capable of providing any proper, substantive reason for the termination of the employment. 40 The invalidity of these fixed term contract documents was well exampled by the evidence that the Parties ignored the stated terms of the 2002 contract. The applicant continued to work after the date that, according to the contract, the applicant would no longer be employed by the employer. 41 In some respects the manner in which the contract documents attempted to operate was plainly impracticable. For instance, Clause 2 of the contract documents includes, in bold italics, that "you will no longer be employed by the employer" after the expiry of the contract. Not only was this term understandably ignored by the Parties after 28 August 2003, it would mean that there could be no further engagement for any subsequent employment be it under a further fixed term contract, or on any other basis. The contract documents are essentially clumsily, impractical, malevolent and invalid attempts to construct a device by which selective and baseless dismissal of employees might be available. 42 Whether or not the real motivation for the employer's attempted reliance upon the 2003 contract involved attempted avoidance of injured worker obligations, or a desire to dispense with an employee who had the audacity to involve the TWU in protest regarding the introduction of fixed term employment, or a combination of both, is a matter which the Commission is unable to properly conclude. In any event, the Commission is not required to conclusively determine what might be the underlying motivation for the dismissal in circumstances where the employer's case relied upon the operation of an invalid fixed term contract without any other stated basis for termination of employment. CONCLUSIONS 43 In this case the dismissal of Mr Toan was alleged to have occurred because of the completion of a fixed term contract of employment. The evidence has disclosed that the fixed term contract was not established for any proper reason. Instead the fixed term contract was imposed upon the employment of Mr Toan unfairly, and as a means to provide capacity to dismiss him without reason. 44 Upon analysis of the fixed term contract of employment documents, the Commission concludes that these documents could not represent valid employment contract conditions that could be relied upon by the employer. Indeed, the terms of the documents are impractical such that they were not observed in one specific instance, and unlikely to be capable of practical application in other respects. 45 If such fixed term employment was capable of general application it is readily conceivable that the fixed term contract could be relied upon by an employer to disguise the real reason for dismissal which would otherwise be unfair or unlawful. For example, an employer could falsely rely upon the fixed term contract when dismissing a pregnant employee. 46 In the absence of proper basis for the use of fixed term employment, the employer is unable to rely upon the purported operation of the fixed term contract. Therefore, there was no valid reason for the termination of the applicant's employment. 47 Therefore the applicant was dismissed from his employment, and that dismissal was without valid reason and consequently it was harsh, unreasonable and unjust. 48 The applicant has sought reinstatement as remedy for his unfair dismissal. Although the employer has asserted that reinstatement would be impracticable, the basis for such assertions cannot be substantiated. 49 There was no evidence to establish any impracticality in respect to an absence of available bus driving work, and any medical difficulties that the applicant may have as a result of being injured in the course of his employment are matters which should be appropriately and properly addressed by way of rehabilitation, and if necessary, workers compensation processes. Therefore the Commission has no evidence upon which to conclude that there would be any impracticality to reinstatement of Mr Toan. Therefore the Commission is prepared to provide for reinstatement and associated Orders. ORDERS In this matter, for the reasons outlined herein, I have Determined that the dismissal of the applicant was harsh, unreasonable and unjust and I hereby make the following Orders: 1. The Commission Orders, pursuant to section 89(1) of the Act, that the employer reinstate the applicant to his former position on terms not less favourable to the applicant than those that would have been applicable if the applicant had not been dismissed. The applicant is to be reinstated as soon as practicable, and within twenty one days from the date of this Decision. 2. The Commission Orders, pursuant to section 89(3) of the Act, that the employer pay to the applicant an amount which equates with the remuneration the applicant would, but for being dismissed, have received in the intervening period between dismissal and reinstatement, less any amounts that the applicant received as payment for remuneration from alternative employment, and or any payments received as workers compensation, in that period between dismissal and reinstatement. This amount is to be paid to the applicant as soon as practicable, and within twenty one days from the date of this Decision, unless dispute arises about the amount that is to be so paid, in which case Settlement of Minutes of Order proceedings will be held upon the written request of either Party. Such request is to be made in writing within twenty eight days from the date of this Decision. 3. The Commission Orders, pursuant to section 89(4) of the Act that the period of employment of the applicant with the employer shall be taken not to have been broken by the dismissal. The intervening period between dismissal and reinstatement of the applicant shall be counted for all purposes as a period of employment. oooOOOooo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.