s.45 appeal against decision Print Q5610

issued by Commissioner Raffaelli on 3 September 1998

s.170CE application for relief in respect of termination of employment

[1] This decision deals with an appeal by the University of Newcastle (the University) against a decision of Commissioner Raffaelli which concerned the question whether regulation 30B made under the Workplace Relations Act 1996 (the Act) precluded Dr Nikulin from pursuing an application he had lodged pursuant to s 170CE of the Act.

[2] The appellant was represented before us by Mr Argall and Dr Nikulin appeared for himself. The appeal proceeded by way of oral submissions however written submissions were subsequently lodged. Dr Nikulin filed written submissions additional to those he had put on appeal and also submissions in reply to those lodged on behalf of the appellant. Later Dr Nikulin lodged further submissions.

[3] We should first deal with an issue that was argued in the written submissions lodged after the hearing. As we understand one of the submissions put by Dr Nikulin the use of the word "may" in s 170CC of the Act is significant and gives us (and presumably gave Commissioner Raffaelli) a discretion in relation to the application of regulation 30B. To understand this argument it is necessary for us to reproduce the relevant parts of both s 170CC and regulation 30B.

[4] The relevant part of s.170CC provides as follows :

"(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 :

(a) employees engaged under a contract of employment for a specified period of time or a specified task . . . ".

[5] Regulation 30B in so far as it is relevant to this case is in the following terms:

_"_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 :

(a) an employee engaged under a contract of employment for a specified period of time . . . ".

[6] The submission of Dr Nikulin misunderstands the context in which the word "may" is used in s 170CC and the nature of the restraint placed by regulation 30B on the Commission entertaining an application under s.170CE. Section 170CC identifies certain classes of employees in respect of whom regulations may be made which have the effect of excluding such employees from the operation of certain provisions of Division 3 of Part VIA of the Act. This is the division which deals with termination of employment. Regulations have been made. Of relevance to the issues before this Full Bench is regulation 30B. That regulation provides that certain kinds of employees are excluded from certain sub-divisions of Division 3 of Part VIA. Regulation 30B(1)(a) describes one of those kinds of employees as being an employee engaged under a contract of employment for a specified period of time. A person engaged under a contract of employment of that nature is not entitled to pursue a claim under s.170CE and the Commission has no jurisdiction to entertain it. The Commission has no discretion in this regard.

[7] The reference by Dr Nikulin to the decision of a Full Bench in Print Q0702 is also not relevant to the Commissions consideration and application of regulation 30B. The observation made by the Full Bench related to an arbitration about certain conditions in a higher education industry award. In the context of that award arbitration the comments about what may normally be the expectation of parties to fixed term contracts are not surprising. They do not however assist us with whether, in this case, Commissioner Raffaelli's decision was one which should be disturbed on appeal.

[8] In order to understand the findings made by the Commissioner at first instance and his conclusion that Dr Nikulin's contract of employment with the University was not of the type which came within regulation 30B we should refer to a number of factual matters.

[9] On the 29 January 1997 a document called a staff appointment form was signed by Dr A Pope, Head of the Department of Statistics. At the top of the form the following appears:

"Staff cannot commence duty until approval from Human Resource Management Branch is obtained".

"I recommend the appointment of the above applicant".

It is under that entry that there appears a signature and the name "A Pope". The form related to the appointment of Dr Nikulin as a research academic. Part of the form refers to a "Suggested period of employment". A number of hand written entries have been made next to that part of the form. A commencement date of "7/1/1997" appears to have been first entered. A hand written alteration to the "7" has been made. It reads "10/1/1997". There is an initial next to that alteration. The completion date contains one entry of "7/7/1997". All of this entry has been struck out next to which appears some initials. Those initials are similar to the initials which appear next to the change from 7 to 10 January 1997. Above that there is another entry of "31/12/97". The "12" is struck out and next to that are initials which appear to be "AP". Above that entry is the number "3". The effect of these alterations is that the completion date is to be read as 31 March 1997. Next to the change from the "12" to the "3' are initials which appear to be "AP". We should observe that in relation to this document there was no evidence led from Dr Pope, any person from the Human Resource Management branch of the University, or any other person who could identify the initials next to the various alterations. There was no evidence as to who was likely to have made the various entries and the changes, the date upon which any of them were made and the circumstances or reasons for the changes. This document was relied upon by Dr Nikulin as comprising a contract of employment. The appellant challenged that and argued that any contract of employment would be offered by a subsequent letter offering appointment with a request for the recipient to accept that offer. It argued the staff appointment form was not a contract of employment. We return to the status of this document later in this decision.

[10] Dr Nikulin signed the staff appointment form. It is unclear on the evidence as to the date he did so. There is no evidence about what entries appeared on the form next to "Suggested period of employment" when he signed it. Dr Nikulin asserts that although he recalls the "7" entry (representing July) he relied at all times on the "12" entry representing December as the completion date. He did not see anyone insert the "3" entry and did not consent to that change occurring.

[11] On 5 February 1997 a letter was sent by the University to Dr Nikulin. It offered him appointment as a research academic within the Department of Statistics. It recorded that his employment would be covered by certain awards and a certified agreement. It recorded that "This appointment will be for a fixed term period from 10 January, 1997 to 31 March, 1997". It requested that Dr Nikulin sign and return a copy of the letter as an acceptance of the terms and conditions. No part of that letter contained within it any reference to the basis upon which either party could terminate the contract of employment within the fixed term period. No point was made by any party before Commissioner Raffaelli or us that this observation was in any way compromised by the reference in the letter to the awards and the certified agreement. Dr Nikulin signed a copy of that letter next to the typewritten entry: "I accept all of the conditions contained in this letter". He signed it on 10 February 1997. This letter will hereafter be referred to as the January/March 1997 contract.

[12] The University sent a letter to Dr Nikulin dated 28 February 1997. It contained the following; "This letter is to serve as a reminder that your employment contract with the University of Newcastle expires on 31 March 1997". Employment ceased on 31 March, 1997.

[13] Dr Nikulin instituted proceedings first in the Industrial Relations Commission of New South Wales and upon realising that was the inappropriate place to do so he lodged an application in this Commission. Time to do so has been extended in an earlier decision made by Commissioner Raffaelli.

[14] We refer now to the Commissioner's decision. In it he refers to decisions of both the Industrial Relations Court of Australia and the Commission dealing with the reference in the Act to a termination of employment being at the initiative of the employer and the terms of regulation 30B. We are also aware of and have considered the decision of Commissioner Whelan in Coy v CB's Entertainment Network [Print Q4373) (Coy). We should add for completeness that there have to our knowledge been three decisions subsequent to the decision here under appeal each of which have dealt with regulation 30B. As will always be the case when considering if the regulation applies each case will turn on its own facts. In this respect we refer to Howarth v Mornington Peninsula Shire Council, Williams SDP [Print R0859] (Howarth), Daba v University of Technology Sydney, Drake DP [Print R4520] (Daba) and Primus v State Rail Authority Munro J, MacBean SDP and Redmond C [Print R6136] (Primus). Coy was referred to in submissions before us. Deputy President Drake followed that case in Daba. In both Howarth and Primus the contracts were found to not be for a specified period of time. In Howarth the contract allowed for the employee to terminate it "by giving 30 days notice to the Council at any time during the term" of the contract. In Primus the terms of the contract provided that it was "expected to continue" until a certain date. The Full Bench found "with some reluctance", those terms were not compatible with a finding the contract was for a fixed term.

[15] We return to the Commissioner's reasons for decision. In relation to the January/March 1997 contract, even though he referred to it as "the so called contract" he said "That contract made it clear that it is for a fixed term from 10 January, 1997 to 31 March, 1997". He relied on the fact that Dr Nikulin had signed that contract and said "I am satisfied that the contract of employment was one specifically excluded from the operation of Part VIA Division 3 of the Act (see regulation 30B(1)(a))". The University accepts and agrees with that finding. It is not appealed against. In our opinion it is clearly correct.

[16] The University submits on appeal that this should have been the end of the matter before the Commissioner. It argues that there was no proper basis upon which the Commissioner should have then proceeded to consider the staff appointment form and whether that constituted a contract of employment and if so whether that was a contract of employment for a period of time subsequent to 31 March, 1997.

[17] The Commissioner considered Dr Nikulin's contention that irrespective of the January/March 1997 contract there was at all material times a contract of employment entered into on 29 January 1997 which extended until 31 December 1997. He said:

"True it is that such a supposed contract is equally for a fixed term. However, its termination on 31 March 1997, being some nine months before its termination date and such a termination possibly being at the initiative of the employer may need to be considered should it be found that there was a contract of employment entered into on 29 January 1997".

[18] The Commissioner then made a number of findings about the staff appointment form. He found it was signed by Dr Pope and it concerned a temporary appointment in a research funded position. He found in the case of such positions (ie research funded positions) a signature of the grant holder was sufficient to effect appointment. He made this finding based on the wording of a University bulletin and because Dr Nikulin had already commenced work and been paid in January 1997. He found that someone must have considered the staff appointment or as sufficient to commence an employment relationship. He noted the words on the staff appointment form "Suggested" period of employment and "I recommend the appointment of the above applicant". He made some comments about these words saying "it might be considered that the words `suggested' and `recommend' should be overlooked".

[19] He expressed concern about the fact the completion date on the staff appointment form had been altered without Dr Nikulin's consent. He then found:

"All in all, I consider that an employment relationship did come into existence on 29 January 1997, its terms being employment for a little less than 12 months until 31 December 1997.

It was a contract of employment for a specified term".

[20] He said he accepted the submission of Dr Nikulin that he signed the January/March 1997 contract after having being assured by Dr Pope it was merely a formality. He said he did so because Dr Pope could have been called to give evidence and was not. He drew the inference his evidence would not have assisted the University. He was not persuaded the January/March 1997 contract vitiated or cancelled the staff appointment form contract. He said:

"That still leaves of course Dr Nikulin with a fixed term contract albeit one going to 31 December 1997. It was however unilaterally terminated by the University on 31 March 1997, an act not contemplated by the contract.

The University argued that notwithstanding such action by the University, the employment was for a specified term and the Act therefore denied jurisdiction to the Commission, irrespective of the fact that the University may have breached the contract of employment.

At the outset, I consider that it would be a curious effect of the Act if the entering into a fixed term contract would inhibit the Commission from intervening notwithstanding a deliberate and clear breach of such fixed term contract by the effecting of a termination prior to the agreed expiry date. Surely the exclusion is only in respect of a termination that occurs at the end of the fixed term.

My view is fortified by Northrop J's decision in the Industrial Relations Court of Australia in Cooper v Darwin Rugby League Club Inc 57 IR 238. The provisions of the Industrial Relations Act 1988 were for these purposes identical to those now being considered in the Workplace Relations Act 1996. In that case Northrop J said at p.241(8):

`There is much to be said for the view that the exclusion of the operation of the provisions of the Act specified by the regulation made under s.170CC arises only where the term specified by the contract of employment has ended by effluxion of time. The relevant provisions cannot apply where the employment is terminated by agreement or by the unilateral action of an employee. In these events, the employer has no remedy and the exclusion provisions cannot apply.'

I note that Parliament has seen fit to refer to this decision in the notes accompanying regulation 30B(1)(a).

I reject therefor the University's contention that notwithstanding that the termination occurred nine months prior to the agreed expiry time, the Commission is precluded from dealing with the matter as a consequence of regulation 30B(1)(a).

I also consider that the termination that occurred on 31 March 1997 was at the initiative of the employer.

[21] We regret we are unable to agree with this part of the Commissioner's decision. The decision of Justice Northrop does not support the finding made by the Commissioner. The contract his Honour there considered was one which contained a provision that at least one calendar months notice was to be given by either party to terminate employment. Justice Northrop found that although the contract referred to an employment period of three years it could be terminated before the expiration of that period by either party on notice or by the employer, for the misconduct of the employee. The contract was therefore not one excluded by regulation 30B.

[22] Justice Northrop then made several observations about s.170CC and regulation 30B and how they may apply to different factual circumstances. He said that he had not considered these facts. However he then went on to make the observations Commissioner Raffaelli reproduced in his decision and relied on to support his view regulation 30B did not apply to Dr Nikulin's contract of employment. The comments of his Honour were obiter and should be seen in the above context.

[23] The failure by the University to lead any evidence but in particular evidence about the staff appointment form and its various entries is surprising and it is understandable that resulted in the Commissioner drawing the inference he did. However even on Dr Nikulin's submissions we are unable to agree that the staff appointment form in itself ever established a contract of employment and even less so could it have had any such status after the February/March 1997 contract was offered and accepted. As we have earlier observed that contract was offered and accepted after at least Dr Pope had signed the staff appointment form. We say "at least" as we have earlier observed that Dr Nikulin was unable to identify a date when he had read and completed part of that form himself.

[24] The employment practice of the University throughout the time Dr Nikulin was engaged was to offer employment by way of a letter of offer. In both 1995 and 1996 Dr Nikulin had received such letters from the University appointing him to a position of Research Academic. Each letter referred to a term of appointment. Importantly the 1996 letter referred to a period of 9 January 1996 to 9 January 1997. That letter however contained the following sentence; "This employment may be terminated by either party at any time by the giving of one month's notice". It is unlikely that contract would be considered to have been for a fixed term in the regulation 30B sense. However it does explain why in January 1997 Dr Nikulin was working at the University and being paid. The February/March 1997 contract then operated in respect of the period immediately thereafter, commencing as it did in respect of service on or after 10 January 1997.

[25] We also respectfully disagree with the Commissioner's discounting the University's submission about the function of the staff appointment form signed by Dr Pope in January 1997. The terms used in that form are not consistent with it being considered to comprise a contract of employment. The words "suggested" and "I recommend" cannot be overlooked. There was no evidence upon which the Commissioner could rely to justify his so doing.

[26] In our opinion nothing in the bulletin concerning research funded positions compromises our decision in the above paragraph. The fact that only certain signatures are required in respect of such positions does not compromise the relevance of the references in the form to it being a recommendation for a suggested period of employment only.

[27] Assuming however the Commissioner was correct in his findings about the status of the staff appointment form and that it did comprise a contract of employment then as that too was for a fixed term the Commissioner should have found that contract was of the type comprehended by regulation 30B.

[28] We can understand the sympathy one may have for an applicant, having entered into a fixed term contract and having that contract terminated prior to its completion date, being able to seek relief under s.170CE. That however in our respectful opinion should not affect the proper application of regulation 30B. The exclusion there operates in relation to persons whose contracts of employment fall within the class therein specified. The contracts of employment of Dr Nikulin were, on the Commissioner's finding, of the class specified in regulation 30B. This was the case whether one was considering the January/March 1997 contract or the staff appointment form. If, contrary to our view, the staff appointment form was a contract of employment it was nonetheless a fixed term contract. It does not change its character if, whilst it is being performed, it is terminated. Its character remains the same; it was and is for a fixed term. Undoubtedly relief arising out of a breach of such a contract may be pursued elsewhere. The legislation does not however accommodate an employee party to such a contract pursuing a claim for an unfair dismissal under s.170CE of the Act.

[29] For the above reasons we have formed the view that the matter is of such importance that in the public interest leave should be granted. We are also of the opinion that the provisions of regulation 30B applied to the February/March 1997 contract of employment of Dr Nikulin. In the alternative if there was a contract established by the staff appointment form that was a contract for a fixed term and also attracts regulation 30B. In either case the Commission has no jurisdiction to entertain Dr Nikulin's application under s.170CE.

[30] The appeal is upheld and the decision of Commissioner Raffaelli is quashed.

Termination of employment - unfair dismissal - regulation 30B - appeal - full bench - appellant claimed Commission erred in finding applicant not precluded by regulation 30B from seeking relief pursuant to s170CE - applicant signed appointment form suggesting 12 month employment period then received letter of appointment specifying 2 months employment - applicant submitted appointment form was prevailing contract - applicant submitted s170CC gave Commission discretion in applying regulation 30B - held - both appointment form and letter of appointment specified fixed term contracts - contract established by letter prevailed - in either case Commission has no jurisdiction under s170CE - regulation 30B applied - leave granted - appeal upheld - decision of Rafaelli C quashed.

Appeal by The University of Newcastle against decision of Raffaelli C of 3 September 1998 [Print Q5610]

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