Appeal - s.170CE(1) - termination of employment - s.170CC(1)(b) - reg.30B(1)(c) - probationary employee - whether employment terminated before expiry of probationary period - whether termination operative before communicated to the employee - Public Service Act 1999.

[1] This is an appeal, for which leave is required, by the Commonwealth of Australia (the Commonwealth) against a decision made by Commissioner Hoffman on 31 October 2000 [Print T2762]. In that decision the Commissioner refused to dismiss an application made by Ms P.T. Wilson (the respondent) pursuant to s.170CE(1) of the Workplace Relations Act 1996 (the WR Act) for relief in relation to the termination of her employment by the Australian Taxation Office (the ATO). The ATO appeared before the Commissioner and opposed the application. At that hearing the ATO raised a threshold jurisdictional objection which the Commissioner declined to uphold. The Commonwealth submits that the Commissioner's decision is wrong, should be quashed and that we should in lieu of his decision dismiss the respondent's application under s.170CE(1).

[2] The jurisdictional objection raised both before the Commissioner and on appeal is that at the time her employment was terminated the respondent was a probationary employee. In order to understand the objection it is necessary to have regard to the relevant statutory provisions and to the facts.

[3] As has already been mentioned the respondent's application was brought under s.170CE(1). That section permits an application for relief by an employee whose employment has been terminated. The section is in subdivision B of Division 3 of Part VIA of the WR Act. Subdivision B is entitled "Application to Commission for relief in respect of termination of employment". Subdivision A of Division 3, which is entitled "Object, application and definitions", governs the scope of subdivision B. Section 170CC, which is in subdivision A, provides for the exclusion of certain classes of employees from specified provisions of Division 3. Relevantly the section 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:

(b) employees serving a period of probation or qualifying period;

Regulation 30B(1)(c) of the Workplace Relations Regulations (the Regulations) deals with the exclusion of probationary employees. It provides:

"30B. Certain employees excluded from requirements for termination of employment

(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:

(c) an employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case may be, is determined in advance and, either:

(i) the period, or the maximum duration, is 3 months or less; or

(B) is reasonable, having regard to the nature and circumstances of the employment;

[4] The question which arises is whether the termination of the respondent's employment occurred prior to the expiry of the 3 month probationary period or after. If the termination occurred before the probationary period expired, it is conceded by the respondent that she is an employee of the kind described in reg.30B(1)(c) and her application is invalid.

[5] The respondent was engaged by the ATO as an ongoing employee on 21 February 2000. Her engagement was subject to a 3 month probationary period. It follows that the period of probation expired on 21 May 2000. On 12 May 2000 the ATO wrote a letter to the respondent in which it advised her that it was reviewing her continuing employment and that there was to be a meeting with her on 19 May 2000 to discuss her employment. On 19 May 2000 the respondent left work at about 10.30am to go to her doctor. The ATO intended to dismiss the respondent on that day. As she was absent, the ATO sent her a letter of termination by registered post. The letter indicated that the termination was to take effect at 9.30am the same day, 19 May 2000. The letter is as follows:

I refer to my letter dated 12 May 2000 where I advised you I was reviewing your continuing employment with the Australian Taxation Office (ATO).

I have now carefully considered the matter based on all the information available to me including:

ii) a report from Ms B. Blines and a subsequent conversation with her

I have concluded that you have not demonstrated a sufficient level of ability in your position of EL1 Senior Advisor in essential criteria such as technical expertise, analytical skills and leadership/mentoring skills.

I believe I have no alternative but to terminate your employment to the ATO, under the provisions of Sections 29(1) and (3) of the Public Service Act 1999. A copy of the notice of termination is attached.

The Personnel section will arrange payment of final monies due.

[6] The document accompanying the letter purported to be a formal instrument under s.29 of the Public Service Act 1999. The instrument reads:

Public Service Act 1999 - Section 29(1)

I, Geoffrey William Hatfield Mills, being a person delegated to exercise powers under Section 29 of the Public Service Act 1999;

GIVE NOTICE TO YOU, Pamela Wilson, Executive Level 1. GST Rulings Unit that:

1. Your engagement as an employee with the Australian Taxation Office was subject to the condition that you would be on probation for a period of 3 months; and

2. Having had regard to your work since your engagement, it has been determined that you are considered unsuitable for the duties you are undertaking; and

3. In accordance with the provisions of section 29(1) and section 29(3)(f) of the Public Service Act 1999, your employment is terminated on the ground that you have failed to meet one of the conditions of your employment.

Termination of your employment will take effect at 9.30am on 19 May 2000.

If the date of effect is less than 14 days after the day on which you are given this notice of termination, you will be paid compensation in lieu of the notice required.

Notice posted by registered mail to officer at PO Box 663

[7] For completeness the terms of s.29(1) of the Public Service Act 1999 should be set out:

(1) An Agency Head may at any time, by notice in writing, terminate the employment of an APS employee in the Agency."

[8] The respondent did not attend for duty after 19 May 2000. She received the letter of termination, including the document under s.29, on 22 or 23 May 2000. It is common ground that the contents of the termination letter were not communicated to her prior to the expiry of the probationary period, which was on 21 May 2000.

[9] The issue the Commissioner was required to decide was whether when the respondent's employment was terminated she was "serving a period of probation". The answer to this question depends upon when the employment was terminated. If the termination occurred on 19 May 2000, when the letter of termination and the s.29 document were executed, the respondent was still on probation. If the termination occurred on 22 May or later, the respondent's period of probation had expired. The Commissioner proceeded on the basis that notice of termination is not effective until it is communicated. He concluded that the termination took effect when the respondent received the termination letter, which at the earliest was on 22 May 2000. Accordingly, the Commissioner found that the respondent was not serving a period of probation at the time of termination and was not an employee of the kind excluded from the operation of Subsection B of Division 3 by s.170CC(3)(b) and reg.30B(1)(c).

[10] The Commonwealth submits that the Commissioner made two errors. The first error is that the Commissioner should have found that the date of termination was 19 May 2000 - 2 days before the probationary period expired. The second error is that the Commissioner failed to consider the effect of s.29 of the Public Service Act 1999. That section permits an Agency Head to terminate the employment of an ongoing employee at any time. The two alleged errors can be dealt with together.

[11] Counsel for the Commonwealth referred us to a number of authorities but conceded that there are few on point. One decision which appears to us to bear directly on the issue is Transport Workers' Union of Australia v National Dairies Limited (1994) 57 IR 183. In National Dairies Keely J, sitting in the Industrial Relations Court of Australia, was required to decide whether the employment in question terminated before or after the date on which legislation providing statutory remedies for unfair dismissal commenced to operate. In the course of his judgment His Honour said:

"It was accepted by the respondent's counsel, for the purpose of the present hearing, that the employer's letter of purported termination was not received by the applicant until 30 March 1994. In my opinion the mere posting of the letter of termination does not in itself amount to a termination of the employment of the employee concerned until its contents are communicated to the employee. I am unable to uphold the respondent's submission that the intention of the legislature was to make it a contravention of the Act for an employer to perform actions "pursuant to which the employer seeks to terminate an employee even if that wish is never communicated to the employee ie even if a letter of termination posted by an employer is never received by the employee.""

With respect we agree with His Honour's conclusion. Whilst it is clear that a contract can be terminated unilaterally, it is beyond contemplation, unless there is special provision in the contract to the contrary, that a contract could be terminated without communication of the termination to the other party. We think that at common law, where termination occurs by letter, generally the termination is not effective until the letter is received. There may be a qualification to that general position. It may be that, in some circumstances, a termination is effective when its communication could ordinarily be expected to have been received. If an employer has attempted in good faith to communicate the termination and the Commission forms the view that the employee has deliberately avoided receipt of such communication, it may be arguable that in such circumstances termination occurred despite the fact that it has not physically been communicated to the employee. Those circumstances did not, however, exist in this matter and we therefore refrain from further discussion of the point.

[12] The Commonwealth seeks to meet this argument. It submits that while the termination could not occur until the respondent received the termination letter, once the letter was communicated the termination operated according to the terms of the letter. Relevantly the letter specified Friday 19 May 2000 as the date of termination. The Commonwealth submits that while the termination did not operate until at least 22 May 2000, once it operated it was effective from 19 May 2000 and within the probationary period.

[13] We reject this submission. We do so primarily because its adoption has the potential to frustrate the operation of the legislation. It would permit a party to select an operative date for termination which bore no relationship to the date on which the termination was to be communicated to the other party. A range of examples could be constructed but it is sufficient to mention only one. We are not prepared to construe the statutory provisions in a way which would permit an employer to deprive an employee of a right of action pursuant to s.170CE (subject to the discretion in s.170CE(8) to receive an application lodged out of time) by delivering a letter purporting to terminate the contract 3 weeks earlier. Whilst this may be thought a fanciful example, the meaning of the word "termination" in s.170CE(1) is a legal question which must be answered consistently regardless of the facts of the case. It seems to us that in a case of this kind "termination" must be construed to refer to the date on which the termination is communicated to the employee. The same conclusion was reached by Senior Deputy President Williams in Grzelka v Peel Training and Employment (Inc) [Print T3393] at para [13].

[14] We note that a similar conclusion was reached by a Full Bench of the Commission in Burns v Aboriginal Legal Service of Western Australia (Inc) [Print T3496 esp. at para 24]. That case was concerned with the question of whether to accept an application which had been lodged out of time. The date of termination was relevant in order to calculate the number of days by which the application was out of time. It is submitted by the Commonwealth that cases involving a consideration of whether an application lodged out of time should be accepted are to be distinguished from the present case because of the terms of s.170CE(7). That section reads:

"An application under subsection (1) or (3) must be lodged within 21 days after the day on which the termination took effect."

While we doubt whether any relevant distinction can be made between the meaning of the expression "termination" in s.170CE(1) and the meaning of the expression "termination took effect" in s.170CE(7) this is not a matter which requires resolution in this case. We have reached our decision independently of the decision in Burns by construing the expression "termination" in s.170CE(1).

[15] We turn now to the submission based on s.29 of the Public Service Act 1999. We can find nothing in the terms of the section to support the suggestion that an Agency Head may terminate employment in such a way as to render the termination effective prior to its communication to the employee. It is to be inferred, therefore, that the legislature was using termination in its usual sense at common law. But even if it were supposed that the letter took effect according to its terms and that the termination occurred for the purposes of the Public Service Act 1999 on 19 May 2000, that could not effect the outcome here. For the purposes of s 170CE(1) of the Workplace Relations Act 1996 the termination occurred when the notice was received on 22 May 2000.

[16] We wish to make it clear that our decision does not deal in any way with cases involving communication of an intention to terminate a contract of employment from a date in the future.

[17] In the circumstances it is not necessary to deal with the respondent's objection to the Commonwealth's competence to prosecute the appeal.

[18] We grant leave to appeal but for the reasons we have given we dismiss the appeal.

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