Custovic v State of New South Wales

Industrial Relations Commission (NSW)|2013-12-10

Overview 1This is a decision made in the context of an application pursuant to s.84 of the Industrial Relations Act 1996 ('the Act') brought by Mrs Behka Custovic against the Department of Family and Community Services - Housing NSW. 2The application, initially advanced by the Public Service Association and Professional Officers' Association Amalgamated Union of NSW on Mrs Custovic's behalf, came before Tabbaa C who directed that the question of the Commission's jurisdiction to hear and determine the application, called into question by the respondent, be determined as a preliminary matter. 3The matter came before the Commission for that purpose on dates in December 2013 and February 2014, followed by additional written submissions. Transcript of the oral submissions made on the final day of hearing became available on 18 March 2014.

Facts 4The relevant facts were largely not in contest. They can be summarised as follows. 5Ms Custovic was first offered employment by the respondent on 11 July 2007. 6That offer was in writing. The employment offered was said to be temporary employment pursuant to s.27 of the Public Sector Employment and Management Act 2002, ('the PSEM Act') for the period 30 July 2007 to 26 October 2007. 7Ms Custovic accepted the offer on 15 July 2007 and commenced work with the respondent at its Blacktown office on the terms offered on 30 July 2007. 8On or about the end date of the initial contract to which I refer above, on 26 October 2007, she was offered and she accepted a further contract of temporary full-time employment for a period of 3 months, on relevantly similar terms to the initial contract. 9That process of offer and acceptance of short-term contracts continued for a number of years. On Ms Custovic's evidence during that time she was allocated four weeks' recreation leave each year and twelve days' study leave each year; she was paid accrued annual leave on the termination of her employment in 2013. 10The effect of this arrangement was that Ms Custovic carried out work uninterruptedly for the respondent, although she changed the location of that work from Blacktown to Liverpool in August 2010, until 27 August 2013, on which day she was told in writing that her employment would end on that day. 11At the date of her dismissal from employment, 27 August 2013, Ms Custovic had most recently been provided with a letter of offer of temporary employment for a period of three months from 27 July 2013 to 23 September 2013. That letter was provided to her only on 18 August 2013, although she had continued to work for the respondent from 27 July 2013, on which date her previous temporary contract had expired, onward. 12The evidence discloses that Ms Custovic was provided with a series of back-to-back contracts of temporary employment of three months' duration each. It is not certain from the evidence whether in each case those further temporary contracts were offered and accepted before the expiry of the existing temporary contract. In some cases they were; in some cases they certainly were not; for example, the respondent offered Ms Custovic a temporary contract extending from 2 August 2010 to 31 October 2010 by way of a letter dated 5 August 2010. Ms Custovic nevertheless worked and was treated as an employee for all purposes on 2, 3 and 4 August 2010, which were working days. 13The question is confused by the respondent placing in evidence, by way of attachments to an affidavit of Grant McClafferty, copies of letters to Ms Custovic which bear dates that the Department later submitted were not the correct dates of the letters, but the dates on which copies were printed for the purposes of making the affidavit. This carelessness in record-keeping does not assist in accurate findings of fact, although it has not ultimately served to obscure the facts here. 14The factual circumstances immediately preceding the termination of Ms Custovic's employment were as follows. 15On 29 June 2013 Ms Custovic was offered in writing a temporary contract extending from 28 June 2013 to 26 July 2013. 16After the expiration of that contract - that is, on and from 27 July 2013 - Ms Custovic continued to carry out work for the respondent and be paid for her work. On 18 August 2013 Ms Custovic was advised in writing that 'approval has been given' for her temporary employment from 26 July 2013 to 27 September 2013. Having received that letter Ms Custovic continued to carry out her duties. 17As I note above, on 27 August 2013 Ms Custovic was told in writing that her employment would end on that day. This decision does not inquire into the merits of that decision to end the employment and accordingly I do not here address the reasons given for that termination. I observe that it is common ground that the contract was brought to an end by the respondent; it is not said that it ended by effluxion of time.

Legislative position 18As I note above, this is an application brought pursuant to s.84 of the Act. The Commission's jurisdiction to hear and determine the application is contested by the respondent. 19Not every dismissed employee may bring an application pursuant to s.84 before the Commission. The Act and the Industrial Relations (General) Regulation 2001 ('the Regulation') combine to exclude certain classes of employees from making such an application. 20In particular, s.83 of the Act relevantly provides: 83(2) This Part does not apply to an employee who is exempted from this Part by the regulations. Any such regulation may only exempt specified classes of employees included in any of the following classes: employees engaged under a contract of employment for a specified period of time or a specific task, .... 21The exclusionary regulation which s.83(2) contemplates is to be found at Regulation 6(1)(a), which excludes from the capacity to bring s.84 proceedings: 'employees engaged under a contract of employment for a specified period of time, if the specified period is less than 6 months.' 22Accordingly, the combined operation of s.83(2) of the Act and Regulation 6(1)(a) of the Regulation is to exclude employees who were at the time of their dismissal engaged under a contract of employment for a specified period of less than 6 months from bringing an application pursuant to s.84 before the Commission. 23The words 'employees engaged under a contract' appearing in the Regulation are significant. I say above that the Regulation concerns itself with the contractual position 'at the time of their dismissal'. In my view there can be no doubt from the plain language of the Regulation that it operates with regard to the contractual status of an employee at the time of the challenged dismissal.

Status of Ms Custovic's employment at the date of termination 24It is accordingly apparent that the determinative jurisdictional issue in these proceedings is the status of Ms Custovic's employment at the date of its termination. 25If at that time Ms Custovic was 'engaged under a contract of employment for a specified period of time' and the specified period in that contract was less than 6 months, her application is necessarily excluded by effect of the Regulation. 26At the date of the termination of employment, 27 August 2013, Ms Custovic's circumstances were that she had on 18 August 2013 been offered in writing and had accepted - by working according to the terms of the offer without reservation or objection, if nothing else - a short-term temporary contract for a period of employment of three months. She was dismissed while working under that contract. 27Absent anything else, on that basis Ms Custovic had, by the effect of the Regulation, no capacity to bring an application under s.84 of the Act in relation to the termination of that employment. 28The applicant, however, contends that there are a number of bases on which that prima facie position should be held not to apply. 29The applicant's fundamental submission is that the substratum of fact is that the work performed by the applicant was performed in the context of a continuing employment relationship running over six years, and that the contract at the date of termination should be so viewed. 30The applicant relevantly calls in aid the provisions of the PSEM Act dealing with employment. 31As the applicant points out, s.7(1) of the PSEM Act provides that staff may be employed by, here, the respondent in any of three categories: "(a) officers - being persons employed in chief or senior executive positions or other staff positions in the Department, (b) temporary employees-being persons employed to carry out work in the Department on a temporary basis, (c) casual employees-being persons employed in the Department on a casual basis." 32Section 7(2) further distinguishes between the following sub-categories of temporary employees: "(a) Departmental temporary employees-being persons employed under Part 2.4 to carry out work in a Department, (b) special temporary employees-being persons employed under Part 2.5 to carry out work for a political office holder." 33It is uncontested that the applicant was not a 'special temporary employee'. 34The applicant then submits, correctly, that a staff member must fall into one of the categories provided by the PSEM Act. The PSEM Act provides, as the respondent properly conceded, a comprehensive code concerning the nature of employment that may be validly entered into by, relevantly, the respondent. 35The applicant then asserts that from that, it follows that a staff member who is not validly employed as a casual employee, or as a temporary employee under Part 2-4 or 2-5 of the PSEM Act, must be an 'officer' as defined by s.7(1)(a) of the PSEM Act. 36That conclusion does not however follow. It does not follow because the PSEM Act provides that an officer may only be appointed pursuant to a specific statutory prescription and not otherwise. 37The process required by the statute for an officer to be appointed generally is to be found within Part 2.3 of Chapter 2 of the PSEM Act. However, the PSEM Act also addresses specifically the means by which a long-term temporary employee may become an officer. That process is set out at s.31 of the PSEM Act. It requires, inter alia, an 'appointment' in terms and the approval of the Commissioner. It is common ground that that process was not followed in the applicant's case. 38The PSEM Act sets out a comprehensive code for the appointment of an officer. Absent compliance with that code, a person does not become an officer. 39That position is not altered by the fact that the PSEM Act at s.7(3) provides that "[t]he usual basis for employment of staff in a Department is to be the employment of officers". That there is a presumption of the usual form of employment does not at all mean that an employee employed without compliance with the requirements of the PSEM Act for the appointment of an officer becomes an officer by default. 40Ms Custovic had not at the time of her employment being terminated become an 'officer' within the meaning of the PSEM Act. 41And there was not, as the applicant points out, any other basis under the PSEM Act upon which she might have been employed at that time by the respondent as a full-time employee. 42The applicant argues that she could not have been engaged as a temporary employee within the meaning of s.27 of the PSEM Act as her employment does not fit the categories there set out. I am not persuaded that that is so; in my view the contracts of employment she was offered and accepted could each of them be characterised as 'employment for a specified task of project' within the meaning of subs.27(3)(a); alternatively, the employment could properly be seen as being 'for any other temporary purpose' within the meaning of subs.27(3)(f). 43The applicant pointed to the period between 27 July and 16 August 2013, in which Ms Custovic worked for the respondent, after her previous temporary fixed-term contract had expired on 26 July 2013. 44That employment was not within a category of employment recognised by the PSEM Act. The respondent had no capacity to employ Ms Custovic in that way, without appointment and without contract. The fact that that period of employment was therefore pursuant to a contract invalidly formed - through no fault of Ms Custovic - does not make its character permanent. 45Indeed, and very properly, counsel for the applicant submitted that that period of work did not mean that there was as a matter of law ongoing continuous employment established from 27 July onward. What the applicant submitted was that that period of employment was 'consistent with her expectation of continuing employment' and represented the parties' substantive expectation that the work was, subject to operational requirements, continuous. 46It was put for the respondent that the series of fixed-term contracts that had gone before gave rise to an assumption that the work on and from 27 July 2013 was pursuant to a further fixed term contract. 47I do not accept that submission. Put shortly, the requirements necessary for such a term to be implied into the contract of employment that was on foot on 27 July were not present: BP Refinery Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20.

Contract to be considered for the purposes of the Regulation 48As I say above, in my view, the Regulation necessarily as a matter of construction requires the Commission to have regard to the contract of employment that was actually on foot at the date of the dismissal. It cannot be read otherwise. 49The respondent says that contract in fact was at the time of the termination a short-term contract for a period of less than six months, and points to its letter of 18 August 2013 which so provided. 50It is of course the case that Ms Custovic was already employed when that contract was offered. Further, the contract purported to offer employment on a fixed-term basis in part retrospectively, for a period which Ms Custovic had already worked. 51In my view the contractual position on and from 18 August 2013, and therefore on the date of the termination, was that Ms Custovic was employed pursuant to a fixed-term contract providing for temporary employment for a period ending on 23 September 2013. 52That is because on 18 August 2103 Ms Custovic was offered employment on that basis and accepted it by working in accordance with the offer, without, it should be noted, in any way placing in contest the contractual terms including the short-term nature of the contract or its end date. There was therefore mutual assent to the existence of a contract in those terms: Damevski v Giudice (2003) 133 FCR 438; Wilton v Coal and Allied Operations Pty Ltd (2007) 162 IR 264 at 325. 53I am not required for the purposes of determining the application before the Commission to express a view on the nature of the employment between 27 July and 18 August 2013 and beyond the remarks I make above I do not do so, save to say that it was not employment of a character that conferred an unalterable right to continuing permanent employment on Ms Custovic. 54Against that position, the applicant says that whatever the paper form of the contract that the employer sought to impose on the contractual relationship, the fact is that there was, as a matter of substance, an employment relationship extending continuously over six years, and that whatever contractual form the employer sought to impose on the relationship ought be disregarded. 55In support of that proposition the applicant relied on D'Lima v Board of Management, Princess Margaret Hospital for Children (1995) 64 IR 19. In that case the then-Industrial Relations Court of Australia held that an employee employed under a series of month-long contracts was not excluded from a Federal statutory scheme limited similarly to the Act, because the employee was 'in substance and in truth' employed continuously. The legal basis for that conclusion is not set out; it is to be remembered that that case was decided under different legislation and in circumstances where the provisions of the PSEM Act, and its limitations on the ability to grant permanent employment, did not apply. 56The applicant also called in aid the decision of this Commission in Clarke v Mid-North Coast Health Service (Cambridge C, unrep, 1 October 1999). 57That was a case in which the termination of a contract of employment was alleged to be by effluxion of time. The learned Commissioner found that the employment had not truly ceased for reason of effluxion of time because, essentially, the employer had manipulated the use of fixed-term contracts unconscionably to misrepresent the true nature of the employment and further that the employee's position had actually continued after the termination of the individual employee, demonstrating that the use of a fixed-term contract was essentially bogus. The Commissioner was, of course, concerned with whether the termination itself was unfair. 58Those were not the facts here. In the present case the respondent unarguably dismissed the applicant. No question of a claim of effluxion of time being used as a disguise for a termination on another basis, which is what directed the decision in Clarke, here arises. Nor does the evidence here disclose a wilful manipulation of short-term contracts, for the use of which no proper reason was disclosed, so as to permit dismissal without challenge. 59A similar consideration arose in Nguyen v Oliveri Transport Services [2005] NSWIRComm 1121; in that case the learned Commissioner found that one of the parties to the asserted fixed-term contract did not understand the contract's relevant terms at all, and that there had been a targeted use of fixed-term contracts to permit the dismissal of particular employees. Again the Commission was concerned with the fairness of the dismissal on that basis. Even leaving that latter point aside, those features are not present here. 60The decision of the Industrial Relations Court of Australia in Fisher v Edith Cowan University (No 2) (1997) 72 IR 464, was called in aid by the applicant. That appeal decision referred adversely, albeit citing obiter from the first instance decision, to the use of a short-term contract which was (in one of the curious sententiously-phrased formulations so characteristic of that now-defunct Court) 'unreal, unconscientious or oppressive as against an employee of any special vulnerability'. Leaving aside that the remark was made in the context of a case focussed, like Clarke and Nguyen, on the question of the fairness of termination at the end of such a contract, none of those features are present here. 61I do not find on the evidence that the short-term contracts were here used as a device, to create a factual situation that would exclude the applicant from redress for termination. Even were I to find that the respondent had offered contracts for that purpose, however, that would not lead to the contract as at the date of termination being found as a matter of law to be other than in its contractual terms. 62In my view the Commission's attention must necessarily be upon the contract at the date of its termination. On my reading of the evidence and the law, at the date of the termination of her employment the applicant was employed under a fixed-term contract for a period of less than six months. 63The applicant submitted that the Commission would not, even if it found that the contract on foot at the date of termination was a fixed-term contract, find that the application was excluded by the Regulation because 'if that were the case it would be open to employers to use inappropriate technical forms to contract out of the Act.' 64In a matter heard under the Act I regard myself as being bound by the Act and the Regulation. I am not able, in order to give effect to a preconceived notion of fairness, to read the Act and the Regulation other than in their terms; Kucks v CSR Limited (1996) 66 IR 182. 65Certainly the proper approach to interpreting the Act and the Regulation is a purposive one, and one having regard to the aims of the Act; Certain Lloyd's Underwriters and Underwriters Subscribing to Contract No IHOOAAQS v Cross (2012) 293 ALR 412; Director of Public Employment by her agent the Commissioner of New South Wales Fire Brigades and New South Wales Fire Brigades Employees' Union [2008] NSWIRComm 158. Further, the Act is beneficial legislation. That does not mean that the Regulation can be read otherwise than in its precise and plain words, in circumstances where no unintended or inappropriate result is thereby obtained. 66Given what I find above about the terms of the contract as at the date it was terminated, it necessarily follows that the application is excluded by effect of Regulation. I am bound to dismiss the application. 67I observe that the respondent raised another limb of argument, based in part on reasoning drawn from the decision in Commissioner of Police v Eaton [2013] HCA 2; (2013) 87 ALJR 267, going to an alleged inconsistency between the Act and the PSEM Act. Given the conclusions I have formed and set out above it is not necessary to determine that question and I do not take the time of the parties with my necessarily obiter views on the issue. 68Lastly, the Commission invited the parties to address it on the effect, if any, on the consideration of this application of the legislative regimen in Part 7 of Chapter 2 of the Act. Both counsel provided cogent written submissions on the point. It will be apparent that, as the matter has emerged, the provisions of that Part have ultimately had no effect on the outcome.

Orders 69The application made pursuant to s.84 by Ms Behka Custovic is dismissed.

Amendments 27 March 2014 - The word 'legalisation" amended to read "legislation". Amended paragraphs: 65 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: 27 March 2014

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