Industrial Relations Commission New South Wales Medium Neutral Citation: USU on behalf Paul Parker & Newcastle City Council re dismissal [2014] NSWIRComm 1012 Hearing dates: 29 January 2014 Decision date: 17 April 2014 Jurisdiction: Industrial Relations Commission Before: Stanton C Decision: Jurisdictional objection dismissed Catchwords: Unfair dismissal application - jurisdictional objection - series of fixed term contracts - respondent alleged no dismissal - employment ceased through effluxion of time - alleged breach of Award - nature of contracts examined - provision for mutual and unconditional termination of fixed term contract on notice in accordance with the Award - principles underpinning fixed term contracts considered - HELD - no basis for jurisdictional objection - applicant dismissed - unnecessary to consider other matters pressed by Union. Legislation Cited: Industrial Relations Act 1996 Industrial Relations (General) Regulation 2001 Cases Cited: NTEIU v University of Wollongong [2002] FCA 31; United Firefighters' Union of Australia v Country Fire Authority [2007] FCA 853; Ledington v University of Sunshine Coast FBAIRC PR937250; Worthington v Curtin University of Technology [2005] AIRC 357; Davis v RMIT University Student Union [2011] FWAFB 1992. Fisher v Edith Cowan University (1990) 70 IRC 206; Fetz v Qantas Airways Limited (1997) 77 IR 443 D'Lima v Board of Management, Princess Margaret Hospital for Children (1996) 64 IR 19; Minister for Health v Ferry (1996) 65 IR 374; Dadey v Edith Cowan University (1996) 70 IR 295; Clarke v Mid North Coast Health Service [1999] NSWIRComm 435; Victoria v The Commonwealth (1996) 187 CLR 416; Andersen v Umbakumba Community Council (1994) 56 IR 102; Bruce v AWB Pty Limited No 2 (2000) 101 IR 296; National Union of Workers, New South Wales Branch on behalf of Mr Arvin Tubungbanua and Express Data Pty Limited [2005] NSWIRComm 57; Wurth, Ex parte; Re Tully & Craig (1954) 55 SR (NSW) 47; Pacific Waste Management Pty Ltd v Saley (1993) 51 IR 339 Category: Principal judgment Parties: New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union on behalf of Mr P Parker (Applicant) Newcastle City Council (Respondent) Representation: Mr J Murphy (Applicant) Mr A Britt (Respondent) File Number(s): IRC 629 of 2013 DECISION 1This matter concerns an application by Mr Paul Parker (the applicant) pursuant to s.84 of the Industrial Relations Act 1996 (the Act). The respondent employer is Newcastle City Council (the respondent). The application was filed by the New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (the Union). 2The applicant was employed as a Landscape Architect on a series of five "fixed term" contracts between 30 July 2007 and 29 July 2013. The applicant contended his alleged dismissal on 29 July 2013 was harsh, unjust and unreasonable. 3The respondent opposed the application on jurisdictional grounds. Shortly stated, the respondent asserts that the applicant was not dismissed. Rather, his employment ceased at the expiry of his fixed term contract of employment on 29 July 2013. In other words, the applicant's employment ended through the effluxion of time as the contract of employment had reached its nominated end date in accordance with the terms of his fixed term contract. 4The applicant contended that notwithstanding the fact that he was engaged on a series of separate employment contracts, his employment was continuous and a normal employment relationship had been established. Moreover, the respondent had conducted itself in a fashion that was designed to avoid award obligations, particularly with respect to termination of employment. 5The application was subject to two conciliation conferences prior to directions being issued for arbitration proceedings. 6Mr A Britt of Counsel appeared for the respondent. Mr J Murphy appeared for the Union. The Contractual Documents First Contract 7The respondent's offer of appointment to the position of Landscape Architect - Fixed Term Contract Infrastructure Development was dated 26 July 2007. The period of employment provision of the offer stated: Your employment will commence on a date to be negotiated. As discussed with you, it is the intention that the position will be a 2 Year Contract, however, this is dependent on the position securing funding. At this time a 12 month position can be offered, with a possibility for extension to a further 12 months. Your employment may be terminated prior to the cessation of the project in circumstances outlined below - Council may terminate your employment at any time without prior notice if you commit any act of serious misconduct. By you or Council on notice in accordance with the Award. The respondent advised the applicant that his appointment would commence on and from 30 July 2007.The contract was subsequently extended by a further 12 months. Second Contract 8In correspondence dated 3 July 2008, the respondent offered the applicant the position, Temporary Landscape Architect - Fixed Term Project, Infrastructure Development City Services. The relevant period of employment provision stated: Your employment will commence on Monday 4th August 2008 until Friday 31st July 2009 after accepting this offer of appointment. Please note the cessation date may vary if the demand for work changes in this time. Your employment may be terminated at any time in the circumstances outlined below: Council may terminate your employment at any time without prior notice if you commit any act of serious misconduct; By you or Council on notice in accordance with the Award. Third Contract 9The applicant was offered the position, Landscape Architect - Fixed Term Contract, Landscape Architect Services, Liveable City in correspondence dated 17 July 2009. The period of employment clause stated: Your employment will commence on Monday 3 August 2009 until Friday 30 July 2010 after accepting this offer of appointment. Please note the cessation date may vary if the demand for work changes in this time. Your employment may be terminated at any time in the circumstances outlined below: Council may terminate your employment at any time without prior notice if you commit any act of serious misconduct; By you or Council on notice in accordance with the Award. 10The relevant award for the first, second and third contracts was the then applicable Newcastle City Council Award 2006 (the 2006 Award). First Extension of the Third Contract 11The applicant's employment as Landscape Architect was extended to "no later than 29 July 2011" in correspondence date 6 July 2010. The respondent noted: ...the cessation date may vary if the demand for work changes. All other terms and conditions of your employment remain unchanged. Second Extension of the Third Contract 12In correspondence dated 29 July 2011, the applicant was advised his employment as Landscape Architect had been extended "until no later than Sunday, 29 July 2013." The correspondence also noted "the cessation date may vary if the demand for work changes." Moreover, "all other terms and conditions of your employment remain unchanged." Evidence Respondent 13The respondent relied on affidavits filed by Ms Helen Buscombe, Change Manager, Human Resources Services and Mr John Johnson, Service Unit Manager, Infrastructure Management Services. Neither Ms Buscombe nor Mr Johnson were required for cross-examination. 14Shortly stated, Ms Buscombe's evidence principally concerned a claim by the applicant that he was entitled to a redundancy payment following notification during July 2013 that his contract would not be renewed or extended. 15Mr Johnson's evidence dealt with the nature of the work and funding arrangements supporting that work during the various periods the applicant was engaged by the respondent between 30 July 2007 and 29 July 2013. Applicant 16The applicant confirmed that he had been engaged by the respondent between 30 July 2007 and 29 July 2013 as a Landscape Architect. He was terminated on 30 July 2013 without notice. He characterised his employment relationship with the respondent as being one of continuous employment. 17The applicant's evidence dealt with the various contractual documents set out above and he highlighted the work undertaken whilst engaged by the respondent that was project based and subject to external funding and other work of a more general routine nature that was funded internally. In that regard, the applicant cited a number of projects that he had worked on that were project-based or were subject to internal funding. 18With reference to the First Extension of the Third Contract in July 2010, the applicant deposed that at the time: I was unsure whether I had a contract or not, or whether they were just offers of employment. I was grateful that I had employment, and that it was of an ongoing nature." 19In cross-examination, the applicant distinguished between fixed term projects and "standard projects" of a more general routine nature. In that regard, he explained that a fixed term project was one such as a street master plan which required him to apply his skills to finalise and finish the project "from the start to the end." Fixed term projects were funded under the Council's Major Asset Preserve Program. The applicant said "normal projects" were varied and might take a few days or a number of weeks to complete depending upon their particular complexity. 20It was the applicant's evidence that he was told in 2011 that his employment would in fact come to an end in July 2013. However, he suggested that the respondent had informed him that he would be entitled to an extension. He later qualified that expectation and agreed that it was "a possibility." The applicant also agreed that he was able to calculate the start and expected termination date with respect to his final contract assuming there was no extension. He further agreed "there was a mechanism to calculate the date of termination." Submissions Respondent 21Shortly stated, the respondent contended the applicant was engaged on a fixed term contract and as such, was exempt from the scope of the unfair dismissal provisions set out under Part 6 - Unfair Dismissals of the Act on the grounds that he was engaged under a contract of employment for a specified period of time or a specific task as provided under s.83(2) of the Act. 22The respondent's position was that s.83 of the Act requires that an employee must be dismissed by an employer to give the Commission the necessary jurisdiction to consider the application. In this case, the applicant was engaged on a fixed term contract. The applicant's employment ceased on 29 July 2014 through the effluxion of time as the contract of employment had reached its nominated end date. Accordingly, there was no dismissal and the application is beyond the jurisdiction of the Commission. 23The respondent contended that the decisions in Fisher v Edith Cowan University (1990) 70 IRC 206 and Fetz v Qantas Airways Limited (1997) 77 IR 443 support the proposition that when a fixed term contract comes to an end, it is said to be automatic and the termination of employment had not occurred at the behest of the employee nor the employer. 24In response to the applicant's allegation that he was engaged by the respondent in breach of the award, the respondent asserted this allegation, if proven correct, did not mean that the applicant was no longer a temporary employee. In that regard, the respondent referred to a line of cases under Commonwealth industrial law which have determined that the failure to observe provisions of an award or enterprise agreement would not have the effect of bringing about an alteration in the nature of the contractual relationship between the parties by converting temporary employment to permanent employment: NTEIU v University of Wollongong [2002] FCA 31; United Firefighters' Union of Australia v Country Fire Authority [2007] FCA 853; Ledington v University of Sunshine Coast FBAIRC PR937250; Worthington v Curtin University of Technology [2005] AIRC 357 and Davis v RMIT University Student Union [2011] FWAFB 1992. 25The respondent considered the duration of the applicant's fixed term contract may be extended by consent and still remain a contract for a fixed or specified period. Applicant 26The applicant contended he was able to press his application without restriction. In that regard, the Union argued Clause 6(1)(a) of the Industrial Relations (General) Regulation 2001 provides that employees are excluded from the provisions of Part 6 - Unfair Dismissals only where the specified period of time under the fixed term contract is less than six months. It must therefore follow that the legislature did not intend to prevent employees from seeking redress after six years of employment on a series of employment contracts. 27The Union further contended that by entering into fixed term contracts with employees, the respondent had conducted itself in a fashion that was designed to avoid award obligations particularly with respect to termination of employment. 28The applicant's employment was continuous and upon termination he was entitled to the applicable severance pay. 29The Union referred the Commission to the First Contract which stated: The offer of employment is made in accordance with and subject to the terms of the Newcastle City Council Award 2006. Under the 2006 Award, clause 14, Types of Employment relevantly states: 14.4 A Fixed Term of Project employee is a Full Time or Part Time employee engaged for a fixed term or project. An employee will only be engaged for a fixed term in positions which are of a fixed term or non continuous nature. 30The Union's position was that irrespective of the intention of the parties at the time the First Contract was executed, that is an initial 12 month position with a possible extension of a further 12 months, the applicant was not "engaged for a fixed term in positions which are of a fixed term or non-continuous nature" as required by the 2006 Award. The Union asserted that given the contract was subject to the provisions of the 2006 Award, the applicant's employment ceased to be of a fixed term nature and became ongoing employment. 31The Union considered that the applicant's employment contracts were inconsistent with the notion of fixed term employment by providing that the contracts could be terminated upon the giving of notice by the applicant or respondent in accordance with the 2006 Award. 32The Union contended the First Contract and subsequent contracts were in breach of the relevant prevailing Awards. Contracts entered into by the parties and subsequent extensions in 2010 and 2011 supported the proposition that the applicant's employment with the respondent was continuous. 33The 2006 Award was the relevant industrial instrument governing the terms and conditions of employment of the respondent's employees when the applicant was first engaged commencing 30 July 2007. The 2006 Award specifically excluded the operation of the Local Government (State) Award 2007 (the 2007 Award). 34The Union noted the City of Newcastle Enterprise Agreement 2010 (the 2010 Agreement) commenced operation on 1 July 2010. That Agreement rescinded and replaced the 2006 Award. The operation of the Local Government (State) Award 2010 (the 2010 Award) which came into operation in November 2010 was not excluded by the 2010 Agreement. The 2007 Award contained different provisions dealing with fixed term contracts to those set out under the 2010 Award. 35The 2010 Award set out specific conditions where a Council can enter into fixed term employment contracts. In that regard, correspondence from the respondent to the applicant dated 29 July 2011, extending his contract to 29 July 2013 was inconsistent with Clause 30, Term Contracts of the 2010 Award: 30. Term Contracts (i) A council may only employ a person on a term contract of employment in the following situations: (a) for the life of a specific task or project that has a definable work activity, or (b) to perform the duties associated with an externally funded position where the length of the employment depends on the length of the funding, or (c) to perform the duties associated with a vacant position until the vacant position is filled on a permanent basis, provided that the duration is not longer than is reasonably necessary to undertake recruitment for the vacant position, or (d) to temporarily replace an employee that is on approved leave, secondment, workers compensation or acting in a different position, or (e) to undertake training and work as part of an apprenticeship, traineeship or student work experience program in conjunction with an education institution, or (f) to trial a new work area, provided that the duration is not longer than is reasonably necessary to trial the new work area, or (g) to perform the duties associated with a vacant position during the intervening period between when a council has made a definite decision to introduce major changes in production, program, organisation structure or technology that are likely to have significant effects on the employment in the vacant position and the date that the changes are implemented; (h) to accommodate time limitations imposed by law or sought by the employee (e.g. visa restrictions). (ii) Notwithstanding the above, all term contracts of employment entered into prior to 1 November 2010 may continue until the expiry of their fixed or maximum term. 36The Union contended the Second Extension to the Third Contract from 6 July 2011 to 20 July 2013 was in breach of the 2010 Award on the grounds that the extension clearly fell outside the criteria established by Clause 30, Term Contracts. The Union also submitted the Second Extension was a unilateral decision of the respondent and did not require formal acceptance by the applicant. 37The Union considered that the applicant had been engaged in a range of duties and those duties were not limited to project-driven tasks. In that regard, the Union contended the respondent had allocated funds internally to support the work priorities that existed from time to time during the applicant's tenure. 38The Union considered there were a number of factors in this case which underpin an ongoing employment relationship, including the fact that the applicant had been employed on a series of contracts which were entered into with minimal discussions between the parties and were repeatedly renewed without negotiation. 39The Union sought to rely upon the decisions in D'Lima v Board of Management, Princess Margaret Hospital for Children (1996) 64 IR 19, Minister for Health v Ferry (1996) 65 IR 374, Dadey v Edith Cowan University (1996) 70 IR 295, Fetz v Qantas Airways Limited and Clarke v Mid North Coast Health Service [1999] NSWIRComm 435 and the tests therein to assess and support the proposition that the applicant's employment was continuous and permanent nature. Consideration 40The applicant's evidence, whilst somewhat limited, was that he remained employed with the respondent with a reasonable expectation of continuing employment and that expectation was confirmed by the First and Second Extensions to the Third Contract which followed three earlier contracts of employment. 41The Union placed particular reliance on Clarke v Mid North Coast Health Service and D'Lima v Board of Management, Princess Margaret Hospital for Children and Minister for Health v Ferry to press its case that a series of contracts for a fixed or specified period of time may amount to a single continuing contract and a continuous employment relationship. The respondent's position was that the applicant was employed on a series of fixed term contract. The applicant's final contract of employment, the Second Extension of the Third Contract expired on 29 July 2013 by the effluxion of time. 42The position at common law is unequivocal. Shortly stated, the nature of a fixed term contract is that such a contract cannot be terminated by the giving of notice. 43The evidence in this matter is that the suite of fixed term contracts entered into between the applicant and respondent gave each party an unconditional right to terminate the contract by the giving of notice thereby rendering the duration of the contract uncertain. The right to terminate the employment contract is not expressed to be conditional upon a breach. 44In Victoria v The Commonwealth (1996) 187 CLR 416 at 520, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ observed: As a matter of ordinary language, an employer does not terminate an employee's employment when his or her term of employment expires. Rather, employment comes to an end by agreement, or, where the term is fixed by award or statute, by effluxion of time. 45In this particular matter, the unconditional right of either party to terminate the employment contract is inconsistent with the notion that fixed term contracts must contain a specified beginning and end date. In such circumstances, the employment comes to an end by the effluxion of time. It therefore follows that a properly constructed contract of employment for a fixed or specified period of time should not contain a provision that enables it to be terminated for reasons unrelated to conduct that would legitimately bring the contract to an end, for example, wilful misconduct or poor performance. 46In Andersen v Umbakumba Community Council (1994) 56 IR 102 at 107 Von Doussa J examined a contract of employment which afforded either party a right to terminate by giving two weeks' notice. The Community Council contended that Mr Andersen was employed under a contract of employment for a fixed or specified period of time and was therefore excluded from making a claim for unfair dismissal under the then prevailing Commonwealth industrial laws. 47His Honour found the right to terminate was unqualified and was not conditional upon a breach of the term of the contract. This aspect of the contract provided a basis for the finding by his Honour that the contract could not be characterised as one of employment for a specified or fixed period of time. His Honour considered the meaning of the phrase "a specified period" at 106: "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 Edition ... 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 ... 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." 48Andersen was cited with approval by Sundberg J in Bruce v AWB Pty Limited No 2 (2000) 101 IR 296 and Backman J in National Union of Workers, New South Wales Branch on behalf of Mr Arvin Tubungbanua and Express Data Pty Limited [2005] NSWIRComm 57. Conclusion 49The applicant's contracts contain a term conferring an unqualified right to terminate by either party on notice in accordance with the Award. Such arrangements are inconsistent with the notion of a contract for a fixed or specified period of time. 50The respondent's basis for the jurisdictional objection must fail taking into consideration all the material considered by the Commission in determining this matter. The applicant was therefore dismissed from his position on 29 July 2013. His services as a Landscape Architect were terminated not by the effluxion of time but by the respondent without his consent: Wurth, Ex parte; Re Tully & Craig (1954) 55 SR (NSW) 47; Pacific Waste Management Pty Ltd v Saley (1993) 51 IR 339. Accordingly, the jurisdictional objection is dismissed. It follows that the Commission is not required to determine whether the applicant's series of contracts of employment constituted a continuous employment relationship or whether those contracts were executed contrary to the relevant industrial instruments as pressed by the Union. I so order. 51This matter is set down for conciliation and directions in Newcastle on 1 May 2014 at 3.30pm. JD Stanton Commissioner 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. Decision last updated: 17 April 2014