What happened

This was an unfair dismissal application under s 394 of the Fair Work Act 2009. The applicant, Ms Iresha Rathnayaka, was employed as an Early Childhood Educator by the YMCA WA. Her employment contract expressly required employees to maintain a valid visa or legal entitlement to work in Australia (see the contract clause quoted at [5]). Her visa was due to expire on 6 February 2020. She raised sponsorship and visa options with the employer in late January 2020. The YMCA declined to sponsor her in a formal letter of 24 January 2020 and reminded her that maintaining a valid visa was solely her responsibility (paras [11]–[15]).

On 5 February the applicant informed her supervisor by email that her migration lawyer had advised her not to work on 6 February without a bridging visa (para [16]). The employer performed VEVO checks on 7 February which indicated no visa was identified for her (para [18]). The employer phoned the applicant on 7 February, asked for documentation of any lodged visa application or grant, and when none was produced, terminated her employment the same day by letter which reiterated the contractual condition and the VEVO outcome (paras [19]–[22]). The applicant later obtained a bridging visa with an effective grant date of 14 February and sought reconsideration (para [24]). She lodged an unfair dismissal application; conciliation did not resolve the matter and the case proceeded to arbitration. Commissioner Williams heard evidence and dismissed the unfair dismissal application, concluding the dismissal was not harsh, unjust or unreasonable (paras [1]–[3], [61]–[62]).

Why the court decided this way

The Commission applied the statutory framework in s 387 of the Fair Work Act which lists the factors the Commission must take into account in deciding whether a dismissal was harsh, unjust or unreasonable (paras [40], [41]–[44]). The decision turned on three linked legal and factual propositions:

Valid reason related to capacity: The Commission found the applicant lacked the legal capacity to work at the time of dismissal because she did not hold a valid visa. That lack of lawful entitlement to work was treated as a valid reason related to capacity (paras [41]–[44]). The employment contract expressly made the holding of a valid visa a condition of continued employment ([5], [51]).
Notification and opportunity to respond: The applicant knew in January about the impending expiry, the employer wrote to her on 24 January declining sponsorship and reminding her of her obligation, and the employer conducted VEVO checks and spoke to her on 7 February to invite evidence of any new visa before terminating. The Commission considered these steps sufficient both to notify the reason and to provide an opportunity to respond (paras [11], [12], [18]–[20], [45]–[47]).
Statutory constraints and frustration: Continuing to employ someone who no longer has lawful right to work would likely breach the Migration Act and might result in frustration of the employment contract. The Commission treated that legal reality as a relevant matter under s 387(h) and as reinforcing the employer's lack of discretion to continue employment (paras [52]–[54]).

Weighing these factors the Commission concluded the employer had a legitimate, non-capricious reason for termination, had provided procedural fairness sufficient in the circumstances, and that continuation of employment without lawful right to work was untenable. Accordingly the dismissal was not harsh, unjust or unreasonable (paras [41]–[44], [61]).

Before and after state of the law

Before this decision the Fair Work Commission and authorities had recognised that loss of lawful right to work can be a decisive factor in an unfair dismissal analysis. The decision explicitly cites earlier FWC authority, Subash Giree v Jewels Restaurants [2020] FWC 1055, which concluded that a visa expiry that removes legal work entitlement can result in frustration of the employment contract and therefore may be outside the Commission's jurisdiction as a dismissal (para [53]).

This decision confirms and applies that established approach at least within the context of an employer who acts promptly, follows internal procedures, performs VEVO checks, notifies the employee and gives an opportunity to respond. It reinforces three points:

Contractual clauses making employment conditional on maintaining a valid visa are legally significant (paras [5], [51]).
Statutory constraints under the Migration Act operate as a practical and legal limitation on an employer's ability to continue to employ someone who no longer holds work entitlement (paras [12], [54]).
The s 387 factors continue to govern assessment of harshness, with particular attention to notification and opportunity to respond given the employer's obligations and risks (paras [40], [45]–[47]).

After this decision, practitioners should treat the absence of lawful work entitlement as a strong legitimate reason for termination where the employer's process is reasonable and properly documented.

Key passages with plain-English translation

Selected passages from the decision, with plain-English translations and references:

Paragraph [5]: "Your employment is conditional upon maintaining a valid visa or legal entitlement to work in Australia."
- Plain English: The employee's contract says she must keep a valid visa to keep the job. This written condition is central to the employer's lawful basis to end employment if no visa exists.
Paragraph [42]: "This in my view is a valid reason related to the Applicant's legal capacity to work in Australia."
- Plain English: The Commission explicitly holds that not having a valid visa counts as a valid reason connected to the employee's ability to work.
Paragraph [52]: "Had the Respondent not terminated the employment the fact the Applicant did not have a valid visa after 6 February 2020, arguably would have brought the employment contract to an end automatically by virtue of frustration."
- Plain English: If the employer had kept employing someone with no legal right to work, the contract might have ended automatically anyway because the worker could no longer legally do what the job required.
Paragraph [61]: "In all the circumstances the Applicant has not persuaded me that her dismissal was either harsh, unjust or unreasonable."
- Plain English: After weighing the facts and law, the Commission found the dismissal lawful and fair in the relevant sense, so the unfair dismissal claim fails.
Paragraphs [18]–[20] (summary): VEVO checks showed no visa; employer telephoned and asked for proof; employer terminated when none was produced.
- Plain English: The employer checked the government's system, called the employee to get any proof of a new visa, and terminated when no proof was shown.

What fact patterns trigger this precedent

This decision will be directly relevant where the following fact patterns occur:

The employment contract expressly conditions ongoing employment on maintaining a valid visa or work entitlement (para [5]).
The employee’s visa expires and the employer checks VEVO or other official systems confirming the absence of a valid visa (para [18]).
The employer informs the employee in writing before expiry that sponsorship will not be provided and that maintaining a visa is the employee’s responsibility (paras [11]–[15]).
The employer contacts the employee after expiry to ask for evidence of any pending or granted visa and then terminates when none is produced (paras [19]–[22]).
The employer is concerned that continuing employment would breach the Migration Act or expose it to statutory penalties (paras [12], [54]).

Where those elements are present, this decision supports the proposition that dismissal is likely to be treated as not harsh, unjust or unreasonable.

How later courts have treated it

This judgment does not discuss subsequent appellate treatment or later authorities. The decision cites an earlier FWC decision (Subash Giree v Jewels Restaurants [2020] FWC 1055) as authority for frustration and the effect of loss of a visa ([53]). The present decision applies that reasoning rather than distinguishing or overruling it (para [53]). If practitioners need to know appellate or High Court treatment subsequent to 15 June 2020, they must search reported decisions and AustLII or other databases; this decision itself does not identify any later treatment.

Still-open questions

The decision is fact-specific and leaves several issues for future development:

Bridging visas and temporal nuances: The decision turned on the absence of any evidence of a lodged application or bridging visa at the time of termination, and the VEVO check indicating no visa (paras [18]–[20], [24]). A different factual matrix, where an employee had a bridging visa in place before termination or where there is clear contemporaneous evidence of an application and compelling reasons to await the outcome, may attract a different result. The decision does not set a bright-line rule about how long an employer must wait beyond expiry in every case.
Procedural expectations for different employers: The Commission noted the employer was large and had HR specialists, and that the process it followed was consistent with that status (para [50]). For small employers with limited HR resources, procedural expectations under s 387 may be different. The decision does not attempt to set out precise adjustments based on employer size beyond noting the factor's relevance.
Interaction with natural justice in closer cases: Where the VEVO record is ambiguous, delayed, or where the employee produces contemporaneous documentation showing an application was lodged, the balance between employer's regulatory risk and an employee's right to procedural fairness may be more finely balanced. This decision does not delineate the contours of that balance beyond the facts at hand.
Frustration as an automatic termination: The Commission observed that continuation of employment might result in frustration of the contract (para [52]) and cited an FWC decision to similar effect (para [53]). The precise circumstances in which frustration will be found in employment contracts due to visa issues may require further authoritative treatment, particularly on appeal.
Remedies where employer failed to check or gave no opportunity: The decision assumes an employer undertaking VEVO checks and engaging with the employee. A situation where the employer fails to check or fails to allow any opportunity to respond may produce a different result; the decision underscores that procedural fairness (notification and opportunity to respond) matters (paras [45]–[47]) but does not catalogue all procedural failings that would make a dismissal unfair.

Practical takeaway: Employers should document visa status communications, perform VEVO checks, give the employee an opportunity to produce evidence, and act promptly where no lawful entitlement exists. Employees should take care to apply for substitute visas well before expiry and provide contemporaneous evidence to employers. Where cases depart from the facts here, outcomes may differ and further judicial clarification may emerge.

Judgment (50 paragraphs)

[1]

Iresha Rathnayaka v Young Men's Christian Association of Western Australia Incorporated [2020] FWC 3076 (15 June 2020)

[2]

[2020] FWC 3076

[3]

Fair Work Act 2009

[4]

s.394 - Unfair dismissal

[5]

Young Men's Christian Association of Western Australia Incorporated

[6]

[1] This decision concerns an application made by Ms Iresha Rathnayaka (Mrs Rathnayaka or the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy. The application was lodged on 21 February 2020. The Respondent is the Young Men's Christian Association of Western Australia Incorporated (the YMCA or the Respondent)

[2] The application was the subject of a conference with a Fair Work Commission conciliator however the matter was not resolved and so was referred for arbitration.

[3] At the hearing of this matter Mrs Rathnayaka gave evidence on her own behalf and called Mr Mervin Neththikumara to give evidence. For the Respondent evidence was given by Ms Melinda Perry (Ms Perry), HR Manager at the YMCA.

[7]

[4] Mrs Rathnayaka says she started work with the YMCA on 31 March 2017. She first worked in the Newman centre and then transferred to the YMCA Port Hedland Early Learning Centre from 15 June 2017.

[5] Mrs Rathnayaka was employed as an Early Childhood Educator. Mrs Rathnayaka's contract of employment with the YMCA includes the following clause.[1]

[8]

Your employment is conditional upon maintaining a valid visa or legal entitlement to work in Australia."

[9]

[6] The Applicant was aware this was a term of her contract of employment.

[7] In fact, on 22 January 2020, Mrs Rathnayaka raised the issue of her visa soon expiring in a phone call with Ms Perry. Mrs Rathnayaka in her evidence agreed she was aware her visa was due to expire on 6 February 2020.

[8] In this phone conversation Mrs Rathnayaka asked the YMCA to sponsor her for a visa.

[9] By email later the same day Ms Perry confirmed to Mrs Rathnayaka that her current visa was due to expire on 6 February 2020. Ms Perry went on to explain that the request that the YMCA sponsor her under a subclass 491 visa was not possible because her understanding was that this visa class required Mrs Rathnayaka to be nominated by an Australian state or territory government agency.

[10] I am satisfied that Mrs Rathnayaka understood that a new visa was required for her to continue in her employment after 6 February 2020.

[11] On 23 January 2020, Mrs Rathnayaka replied to Ms Perry by email advising she had contacted her migration lawyer who had passed on details of a different visa, a subclass 482 visa. The same day Ms Perry replied by email advising Mrs Rathnayaka she would review her further request in relation to visa sponsorship.

[12] The next day 24 January 2020, Ms Perry wrote a letter formally to Mrs Rathnayaka that referred her to the Migration Act 1958 (Cth) (the Migration Act) and referring to the YMCA as having a legal obligation to ensure that all employees who were not Australian citizens hold a valid visa permitting them to work in Australia.

[13] The letter explained that it is the sole responsibility of the employee to ensure that they maintain a valid visa permitting work for the term of their employment.

[14] The letter advised that they had considered her request for sponsorship and decided that the YMCA will not be proceeding to sponsor her for a visa.

[10]

"This letter is confirmation of our discussion on 7 February 2020 where we advised you that your employment with YMCA WA has been terminated effective immediately.

[11]

On 24 January 2020 we wrote to you regarding your request for YMCA WA to support your application for Australian visa sponsorship.

[12]

In this letter we advised you that under the Migration Act 1958, YMCA WA has a legal obligation to ensure that all employees who are not Australian citizens hold a valid visa permitting them to work in Australia.

[13]

In accordance with the above legislation, we refer to the YMCA WA Visa and Sponsorship Policy, which provides that YMCA WA requires all employees to hold and maintain legal rights to be employed in Australia by being an Australian Citizen, Resident, or possessing an appropriate and current visa status as outlined by the Department of Home Affairs.

[14]

Your existing visa expired on 6 February 2020 and subsequently we have conducted a check of your visa status which has advised that there is no visa identified for you.

[15]

You contract of employment with YMCA WA dated 2 June 2017 states in clause 2 that your employment is conditional upon maintaining a valid visa or legal entitlement to work in Australia.

[16]

YMCA WA has no other option than to terminate your employment immediately as you no longer hold the right to work in Australia."

[17]

[23] The Applicant some time later was paid in lieu of notice for the termination.

[24] After the termination of employment, on Monday, 15 February 2020 the Applicant emailed Ms Perry informing her that she had now obtained a bridging visa and sought reconsideration of her dismissal. A further VEVO check confirmed a visa grant date of 14 February 2020. [4]

[18]

[25] The Applicant submits that if the YMCA was really working according to the law and their policies, they should have notified her at least one week prior and specifically stated that on a particular day they will terminate her employment if she cannot provide a valid visa. But they had not done this.

[26] The Applicant submits that she had 28 lawful days from the visa expiry date which provided her all working rights as she had before. She says she had already applied for another visa and was waiting for the Department of Immigration to respond. She says the Respondent did not want to give her more time, suspend her or send her on leave without pay for some time, to allow time for her to provide the visa documents. Instead they terminated her straight away.

[27] The Applicant submits that because she had not received any kind of notice about possible termination she assumed the Respondent would not do anything to her job, because she worked as a full-time employee for a long time and they were aware of her family situation and that her job is important to her.

[28] The Applicant submits that for a long time the YMCA has been trying to get rid of her.

[29] She submits that she had to lodge complaints with the Human Rights Commission regarding flexible working hours.

[19]

[30] The Respondent submits that it had no discretion in this matter. Under the Migration Act it was unlawful for the Respondent to employ a person who did not have valid work rights.[5]

[31] It is submitted the Respondent had a valid reason for terminating the Applicant's employment because under the Migration Act the Respondent has a legal obligation to ensure that all employees, including the Applicant, hold a valid visa permitting them to work in Australia (and any breach of these obligations attract serious penalties for the Respondent).

[32] At all relevant times, the Applicant's employment was conditional upon maintaining a valid visa to work in Australia and on 22 January 2020 Ms Perry verbally corresponded with the Applicant regarding the upcoming expiry of her existing visa, and on 24 January 2020, wrote to the Applicant regarding the same.

[33] The Respondent submits that at no time did the Applicant advise the Respondent that she had obtained a new or bridging visa.

[34] On 6 February 2020, the Applicant's existing visa expired and on 7 February 2020 the VEVO check confirmed the Applicant did not hold a valid visa to work in Australia and because the Applicant no longer held a valid visa to work in Australia, the Respondent was left no other option than to immediately terminate the Applicant's employment, and it did so on 7 February 2020.

[35] By reason of the letter sent to the Applicant on 24 January 2020, the telephone correspondence between the Applicant and Ms Perry on 7 February 2020, and the subsequent termination of employment letter dated 7 February 2020, the Applicant was notified of the reasons for the dismissal.

[36] The Applicant was provided an opportunity to respond to those reasons, by way of providing the Respondent with the details of any new visa the Applicant held (permitting her to work in Australia beyond 6 February 2020), and failed to do so prior to her dismissal.

[20]

[40] Section 387 of the act prescribes matters that the commission must take into account when considering whether a dismissal was harsh, unjust or unreasonable. This section is set out below.

[21]

"387 Criteria for considering harshness etc.

[22]

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

[23]

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

[24]

(b) whether the person was notified of that reason; and

[25]

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

[26]

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

[27]

(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and

[28]

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

[29]

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

[30]

(h) any other matters that the FWC considers relevant."

[31]

[41] The reason the Respondent dismissed the Applicant was that at the time of the dismissal she did not hold a valid visa that permitted her to work in Australia.

[42] This in my view is a valid reason related to the Applicant's legal capacity to work in Australia.

[43] If I am wrong in viewing the Applicant's legal capacity to work as falling within the reference to "capacity" in section 387(a) of the Act, then the fact the Applicant at the time of her dismissal did not hold a valid visa that permitted her to work in Australia most definitely is a relevant matter for the Commission to take into account under section 387(h) of the Act.

[44] Regardless of whether the reason for dismissal properly falls within section 387(a) or 387(h) of the Act the Respondent had an entirely legitimate reason for the dismissal, which was not capricious, fanciful, spiteful or prejudiced.

[32]

[45] The Applicant herself clearly knew in January 2020, that she needed to have a valid visa to continue her employment beyond 6 February 2020, when hers was due to expire. The Applicant initiated a conversation with the Respondent about this issue herself.

[46] At hearing the Applicant says, and argues in her submission, that she was never notified prior to the day she was terminated that she would be terminated if she did not have a valid visa permitting her to work. Whilst I accept that is strictly the case that is not to say that the Applicant had not been notified of the consequence of her not having a valid visa. It is clear the Applicant understood that her continued employment relied on her having a valid visa that allowed her to work in Australia.

[33]

[47] There was a discussion with the Applicant on the telephone before the Respondent made the decision to dismiss her on 7 February 2020. It was made plain to her in that discussion that without a valid visa to work in Australia her employment was going to be terminated.

[34]

[48] There was no refusal to allow the Applicant to have a support person present during any discussions regarding her dismissal.

[35]

[49] The dismissal was nothing to do with the Applicant's performance.

[36]

The size of the Respondent's enterprise and the existence of Human Resources Specialists

[37]

[50] The Respondent is a large employer and does have dedicated Human Resource managers and specialists and the process followed from the 20 January 2020 through to 7 February 2020 is consistent with this.

[38]

[51] The Applicant had from the commencement of her employment been aware that her continued employment was expressly conditional upon her maintaining a valid visa or legal entitlement to work in Australia. She had also been expressly advised by the Respondent in writing on 24 January 2020, that the obligation was solely hers to ensure that she had a new visa in place when her visa expired on 6 February 2020.

[52] Had the Respondent not terminated the employment the fact the Applicant did not have a valid visa after 6 February 2020, arguably would have brought the employment contract to an end automatically by virtue of frustration.

[53] This has been held to be the result in other such cases concerning employees requiring visas to lawfully work. For example, in the case of Subash Giree v Jewels Restaurants T/A Restaurant[6] Deputy President Bull concluded that:

[39]

"[26] For the purposes of his unfair dismissal application, Mr Giree was unable to fulfil his obligation to lawfully continue employment with his 457 sponsor. He had advance notice in September 2019 of the expiration of the two-year period of the visa and advised that it could not be renewed. He took time off to seek migration advice and, unfortunately, was not able to provide his employer with any evidence of his legal right to continue to work as a full-time cook in Australia on the expiration of his skilled visa. This is through no fault of Mr Giree, but unfortunately results in the frustration of his employment contract. An employer is not able to employ persons unless they have the relevant working rights."

[40]

[27] As his work visa rights ended as at 11 October 2019, he is unable to fulfil a fundamental employment obligation being the right to work full-time as a cook in Australia. There has been no dismissal either by Jewel Restaurants Pty Ltd or Jewel of India Enterprises Pty Ltd or Jewel of India Admin Pty Ltd of his employment and on this basis the Commission lacks jurisdiction to deal with the matter, and the application for an unfair dismissal remedy must be dismissed."

[41]

[54] Another relevant matter in this case is the fact that to continue to employ the Applicant after her visa expired on 6 February 2020, would likely have been a breach of the Migration Act and potentially exposed the Respondent to legal sanction.

[55] The dismissal of the Applicant, as is commonly the case, has regrettably had significant negative consequences for her and her family.

[42]

[56] Considering all of the matters above this is an unfortunate case where the Applicant did not act sufficiently early to put in place a new visa that would have allowed her to lawfully work in Australia after the expiry of her original visa.

[57] The Applicant was aware that her continued employment was, expressly under her contract, conditional upon her having such a visa granting her working rights.

[58] The YMCA responded promptly to the Applicant's enquiries about alternative types of visas and about employer sponsorship when she first raised this with them 14 days before her visa was to expire. On 24 January 2020 the Respondent also reminded the Applicant in writing of the expiry date of her visa and reinforced that it was her sole responsibility to ensure that she continued to hold a visa that permitted her to work in Australia.

[59] The Applicant however only applied for another visa on Tuesday, 4 February 2020, knowing her existing visa expired on Thursday, 6 February 2020.

[60] The proposition that the YMCA should have continued to employ the Applicant knowing she did not have a valid visa is entirely unreasonable.

[61] In all the circumstances the Applicant has not persuaded me that her dismissal was either harsh, unjust or unreasonable.

[62] The Applicant's dismissal was not unfair. An order [PR720132] will now be issued dismissing this application.

[43]

Seal of the Fair Work Commission with member's signature.

[44]

[1] Applicant's Employment Contract, FWC Court Book at pages 50-52.

[45]

[2] Witness Statement of Ms Perry, Attachment 11, FWC Court Book at page 135.

[46]

[3] Ibid, Attachment 3, FWC Court Book at pages 112-113.

[47]

[4] Ibid., Attachments 5 and 6, FWC Court Book at pages 117-120

[48]

[5] Ibid., Attachment 7, FWC Court Book at pages 121-122.

[49]

[6] [2020] FWC 1055.

[50]

Printed by authority of the Commonwealth Government Printer

Iresha Rathnayaka v Young Men's Christian Association of Western Australia Incorporated [2020] FWC 3076

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Cited legislation

Deep Dive