Naulty v Shoalhaven City Council

Industrial Relations Commission (NSW)|2020-03-17

Solicitors: Carroll & O'Dea Lawyers (applicant) File Number(s): 2019/266886

DECISION

This matter concerns an application by Ms Viola Naulty ("the applicant") pursuant to s 84 of the Industrial Relations Act 1996 ("the Act") filed on 20 August 2019 by the New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union ("the Union") pursuant to sub-s 84(2) of the Act ("the Application"). The respondent employer is Shoalhaven City Council ("the respondent"). The applicant contends that the termination of her employment on 30 July 2019 was a "dismissal" for the purposes of s 84 of the Act and that the dismissal was harsh, unjust and unreasonable.
The respondent opposes the Application on the ground that the applicant was not dismissed within the meaning of "dismissal" under the Act. The respondent says that the applicant's employment ended through the effluxion of time on the nominated end date of the applicant's contract of employment, 30 July 2019. Therefore, there was no "dismissal".

Evidence

The respondent relied on: 1. a statement of Carmen Spreitzer dated 3 December 2019; a statement of Patricia Hoerlein dated 4 December 2019; a statement of Melissa McCoy dated 4 December 2019; and a statement of Anthony Holmes dated 4 December 2019.
The applicant tendered two statements made by her, the first dated 8 November 2019 and the second, 10 December 2019.
The statements and affidavits were all accepted into evidence. A number of objections were dealt with on the basis that the Commission would hear from the parties as to the weight to be attached to aspects of the evidence. Other objections in respect to specific parts of the written material were upheld.
All of the witnesses were cross-examined.
The applicant filed a summary of her case dated 25 November 2019 ("Applicant's Summary") and filed final written submissions after the hearing on 3 April 2020 ("Applicant's Final Submissions").
The respondent filed: a summary of its case on 5 December 2019 ("Respondent's Summary"); handed up submissions at the hearing ("Respondent's Submissions"); and filed further written submissions dated 21 April 2020 ("Respondent's Reply Submissions").

Background

The applicant was initially engaged as an Accounts and Debt Recovery Officer on a "fixed term" contract for a period of 12 months commencing 23 October 2017 [1] to 26 October 2018 to cover the parental leave absence of Ms Sarah Higgins ("First Contract").
In June 2018 Ms Higgins returned to work on a flexible work arrangement, working three days per week. The respondent says that Ms Higgins was not returned to her permanent position but placed in a temporary position to assist with customer service during implementation of a new system. [2]
On 18 September 2018 the respondent offered, by way of letter headed "Variation to Term of Contract" an extension to the First Contract until 18 January 2019 ("Variation to the First Contract"). The applicant accepted the Variation to the First Contract in writing on 21 September 2018. The respondent says that Variation to the First Contract was "granted on the understanding and with the intention that Ms Higgins would in January 2019 return to her permanent positon, and [the applicant] would no longer be required to temporarily replace her" [3] .
In January 2019, Ms Higgins increased her hours to work on a four days per week basis [4] .
In December 2018, the applicant was offered a further fixed term contract to work in the role of Administration Officer for the period 2 January 2019 to 3 May 2019 ("Second Contract"). The applicant accepted the Second Contract in writing on 17 December 2018. The respondent says that the applicant's employment pursuant to the Second Contact was to replace Ms Di Pollard who was on secondment at the time at the Ulladulla office during a critical transition in billing systems. The applicant says that she performed various duties that were largely not the duties that Ms Pollard had undertaken in the Administration Officer role [5] .
On 5 April 2019 the respondent offered, by way of letter headed "Fixed Term Employment Extension - Administration Officer - R06284" an extension to the Second Contract until 30 July 2019 ("Variation to the Second Contract"). The applicant accepted the Variation to the Second Contract in writing on 8 April 2019. The respondent says that "[t]he reason for offering the [Extension to the Second Contract] was due to the extension of Ms Pollard's sick leave/secondment and consequent ongoing uncertainty as to whether Ms Pollard would relinquish her role at the end of her sick leave" [6] .
On 30 July 2019, the applicant's employment ceased.

The Award and the contractual documents

It is convenient at this point to set out the relevant terms of the Local Government (State) Award 2017 ("Award") and the contractual documents.

The Award

Clause 34(i) of the Award - Term Contracts provides: (i) The employer 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 no longer than is reasonably necessary to undertake recruitment for the vacant position, or (d) to temporarily replace an employee who is on approved leave, secondment, workers compensation, acting in a different position or working reduced hours under a flexible work and leave arrangement, 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 no 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 the employer 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; or (h) to accommodate time limitations imposed by law or sought by the employee (e.g. visa restrictions); or (i) to perform seasonal work (also see subclause 21E(xi) of this Award). (Emphasis in original)

First Contract

The First Contract states: 3. Term 3.1 This Contract shall commence operation on Monday, 23 October 2017 ("date of commencement'). 3.2 Subject to clause 15 [sic, 13] of this Contract, the Contract shall terminate Friday, 26 October 2018 (the "date of expiry'). 3.3 The parties acknowledge that the employment under this Contract is non-continuous. 3.4 The parties acknowledge that the Contract is made in accordance with Clause 34, Term Contracts, of the Award and that the employment meets the requirements established in Clause 34, Term Contracts. 3.5 On the day of expiry or upon termination of this Contract pursuant to clause 15 of this Contract the Employee's employment with Council shall cease unless the parties have entered into a new contract of employment. … 13. Termination of Contract 13.1 This Contract may be terminated before Friday 26th October 2018 in the event of any of the circumstances specified in this clause: … 13.1.3 By the General Manager (or delegate) in accordance with Clause 38, Termination of Employment, of the Award. … 19. Variation of Contract 19.1 Any variation of this contract shall be by agreement and in writing and signed by the parties.

Variation to the First Contract

The Variation to the First Contract relevantly provides: Variation to Term of Contract I am pleased to offer you an extension to the Contract of Employment which you commenced with Council on 23 October 2017. Under Clause[s] 3 and 19 of the contract the parties can make a variation to the contract by agreement and in writing. The contract is due to terminate on Friday 26 October 2018 and I would like to offer you an extension until Friday 18 January 2019. If you agree to this variation, the remaining clauses within the contract remain extant as applicable. …

Second Contract

The Second Contract relevantly provides: 1. Appointment You are appointed as Administration Officer (the "Position") in accordance with the terms and conditions of this Contract. This position is in the Water Customer and Business Services Section of the Shoalhaven Water Group. … 3. Term This contract shall commence on Wednesday, 2 January 2019 (the "date of commencement"). Subject to Clause 4 of this Contract, the Contract shall terminate on Friday, 3 May 2019 (the "date of expiry"). The parties acknowledge that the employment under this Contract is non-continuous. The parties acknowledge that the Contract is made in accordance with Clause 34, Term Contracts, of the Award and that the employment meets the requirements established in Clause 34, Term Contracts. On the date of expiry or termination of this Contact pursuant to Clause 4 of this Contract the Employee's employment with Council shall cease unless the parties have entered into a new contract of employment. 4 Termination of Contract This contract may be terminated before Friday, 3 May 2019 in the event of any circumstances specified in this clause:

By the General Manger (or delegate) and the Employee agreeing in writing.
By the Employee in accordance with Clause 38, Termination of Employment, of the Award.
By the General Manager (or delegate) in accordance with Clause 36, Disciplinary Procedures and/or Clause 38, Termination of Employment, of the Award.
By the General Manager (or delegate) where the funding for this position is withdrawn or redirected to another project, your employment may be terminated with at least 2 weeks' notice. Council may consider offering alternative duties for a period up to the term of the temporary appointment.
By the General Manager (or delegate) in accordance with Clause 38, Termination of Employment, of the Award or such other period of notice required by any relevant Act, whichever is the greater, where: o The Employee has been incapacitated for a period of not less than 3 months and the Employee's entitlement to sick leave has been exhausted; and o The duration of the Employee's incapacity remains indefinite. …

Variation to the Second Contract

The Variation to the Second Contract relevantly provides: I am pleased to advise you that your employment in this Fixed Term position has been extended from Friday, 3 May 2019 to Tuesday, 30 July 2019. Your duties will be those advised in your original letter of employment for this position. This extension of employment is made in accordance with the provisions outlined in your original letter dated 10 December 2018. Your days and hours of duty will remain unchanged. You are reminded that this temporary appointment may be terminated with at least 2 weeks' notice. Council may, where appropriate and by agreement, offer you alternative available duties for a period up to the term of the temporary appointment. Your employment is fixed term and further extensions beyond the date specified in this letter should not be anticipated or relied upon. …

Was there a dismissal?

The respondent does not rely on the exemptions to the operation of s 84 of the Act contained within sub-cl 6 of Industrial Relations (General) Regulation 2015 (NSW).
The respondent opposes the Application on the ground that the applicant was not dismissed within the meaning of "dismissal" under the Act. The respondent says that the applicant's employment ended through the effluxion of time on the nominated end date of the applicant's contract of employment, 30 July 2019. Therefore, there was no "dismissal".
The applicant contends that her employment was continuous and a normal employment relationship had been established, and that there was a dismissal for the purposes of s 83 of the Act on the basis that: 1. the nominal expiry dates of the contracts of employment are separate to the continuation or termination of the employment relationship; 2. the termination of the employment relationship was conditional upon a decision by the parties as to whether a further contract would be entered into; and 3. the contracts of employment were non-compliant with cl 34 of the Award and so the contracts should be "read down as contracts for ongoing employment".

Construction of the contract

Both the applicant and respondent rely on the decision of the Full Bench of the Fair Work Commission: Khayam v Navitas English Pty Ltd t/as Navitas English [2017] FWCFB 5162 ("Khayam") to support their contentions.
The applicant submits that the contract of employment creates an employment relationship and the termination of a contract of employment does not necessarily terminate the employment relationship, particularly in circumstances where a new contract of employment may be made. In her instance, the employment relationship continues notwithstanding the termination of the prior contract because there is a continuous employment relationship: Khayam.
The applicant says the use of the following clause is significant and relevant to the application of Khayam in her case: On the day of the expiry or upon termination of this contract pursuant to clause 15 [7] of this contract, the employee's employment with Council shall cease unless the parties have entered into a new contract of employment. (emphasis added)
The applicant says this clause is significant firstly, because the clause makes a clear, explicit distinction between the term of an applicant's "employment with Council" and the "expiry or ... termination of this contract".
The applicant contends further, that the qualifying commentary "unless the parties have entered into a new contract of employment" makes it very clear that there is only a nominal, conditional date on which the employment relationship will cease, rather than a fixed locked in day of termination. On the applicant's contention, the termination of the employment relationship upon a decision between the parties whether they will enter into a further contract not on the nominal termination date of this specific contract.
The applicant sets out at paragraph 26 of the Applicant's Final Submissions the behaviour of the parties that she says is consistent with the interpretation of the contract asserted by her: (a) The Applicant commencing employment under the First Contract; (b) The Respondent considering and deciding, prior to the expiry of the First Contract, to offer an extension of the First Contract to the Applicant so as to facilitate the flexible working request of Ms Higgins; (c) The positive consideration and decision by the Respondent, prior to the expiry of the Extended First Contract, to offer a further contract to the Applicant to replace Ms Pollard during secondment; (d) The continuation of the employment relationship (noting continuity of service and the absence of any payment of entitlements) after the expiration of the First Contract; (e) The positive consideration and decision by the Respondent, prior to the expiration of the Second Contract, to offer an extension of the Second Contract as a result of uncertainties relating to Ms Pollard and the future of her position; (f) The Respondent's multiple discussions with the Applicant regarding the Applicant's future at Council, including offering support for other positions and encouraging the Applicant to wait for better opportunities at Council to arise; and (g) The positive consideration and decision of the Respondent, prior to the expiry of the Extended Second Contract, not to offer a new contract or variation to the Applicant on account of uncertainties relating to Ms Pollard and the future of her position.
The respondent says that where the terms of a time-limited contract reflect a genuine agreement on the part of the employer and employee that the employment relationship will not continue after a specified date, and the employment relationship comes to an end on the specified date, then, absent a vitiating or other factor, the employment relationship will have been terminated by reason of the agreement between the parties and there will be no termination at the initiative of the employer, and no "dismissal" for the purposes of s 84 of the Act: Khayam.
The respondent submits that the decision not to offer further employment or, where there is a series of contracts, offer re-employment, is separate and distinct from the earlier agreement between the parties to end the employment relationship. This will only alter if the contract does not represent a genuine agreement that the employment relationship will end at a particular time, and the decision not to offer a further contract will then be one of the factual matters to be considered in determining whether the employer has been the principal contributing factor to the cessation of the employment relationship: Khayam at [75(4)]. A failure to offer re-employment does not, of itself, amount to a dismissal: York v NSW Department of Education and Communities [2015] NSWIRComm 1011.
The respondent sets out its response to the applicant's interpretation extracted above at [31] in the Respondent's Reply Submissions as follows: 27. In essence, Ms Naulty seeks to counteract the points raised in the RS as to why there was no dismissal by relying on two matters. First, the exception provided for at the end of cl 3 in the Second Contract governing Ms Naulty's employment relationship with the Council (being the words "unless the parties have entered into a new contract of employment") (AS [20]-[27]). Second, and related to the first, by relying on the proposition that as the Council made a conscious decision to not offer further employment, the termination of the employment relationship with Ms Naulty was caused by a decision of the Council rather than the automatic operation of the contract, i.e. the effluxion of time (AS [7(t)], [43]-[44]). 28. Thus stated the fundamental flaw in Ms Naulty's case is clear. It seeks to collapse a point of principle emphasised as separate in their own cited authorities. That is, the principle, confirmed in Khayam and set out in RS [20], that a decision to not offer further employment is separate and distinct from an earlier agreement between the parties to end the employment relationship. In truth, Ms Naulty's case comes down to an assertion that she was dismissed because she could have been offered more employment. That is not the state of the law. 29. A further critical problem is the fact that Ms Naulty seeks to focus on the exception in cl 3 to the exclusion of all other relevant factual matters, most prominently: the fact that at all times Ms Naulty understood her employment relationship would end in July 2019 and consequently was looking at other forms of employment inside and outside the Council; the fact that she knew in advance of the 2 July 2019 meeting that the Council was not going to offer further employment; and the fact that Council employees told her on repeated occasions her future at the Council was dependant on a position becoming available, and her having to apply for it and her being successful in that application. That is, there was never anything communicated to Ms Naulty to counteract the express terms of the Second Contract or Ms Naulty's own understanding of when and how her employment relationship was going to end. 30. Moreover, the legal characterisation Ms Naulty seeks to place on cl 3 of the Second Contract is unsupported by the actual words that appear in the clause. The AS state that by reason of the words "unless…" at the end of cl 3 the clause is "conditional" in nature. This is not the natural meaning of the word "unless". That is a word of exception not conditionality. If clause 3 was truly conditional it would read "but only if the parties have not entered into a new contract of employment". 31. On its plain and ordinary meaning, the clause confirms the employment relationship is to end at the expiry of a set date and the words following "unless…" only seek to reinforce and confirm that position. Put another way, the clause simply states what is correct as a matter of law. That is, per Khayam, the employment relationship will end as set out in the terms of the contract unless a further offer of employment is made and accepted. In that case, obviously the employment relationship will not have ended by the specified date. That is, contrary to AS [25] and [41], the clause has work to do in confirming the current state of the law. 32. Its inclusion is not indicative of the characterisation Ms Naulty seeks to impose upon the entire clause (cf. AS [41]- [42]). The suggestion that the words at the end of the clause are the same "in substance" to the words appearing in the decision of USU [on behalf Paul Parker v Newcastle City Council [2014] NSWIRComm 1012] (AS [40]) is fanciful, inconsistent with the actual words used and their ordinary English meaning. In truth, such a submission constitutes an attempt to completely rewrite, stretch and strain the words actually used into what appeared in USU. 33. The construction of cl 3 contended for by Ms Naulty is also incorrect in so far as AS [20] asserts the third paragraph in cl 3 "makes a clear, explicit distinction between" the employment with Council occurring by reason of termination of the contract or the day of expiry. This presumably is predicated on the words "or upon". Yet, it ignores the content of cl 4 which simply provides for termination, including for reasons that ordinarily justify breach at common law. Properly construed, therefore, the clause simply states the employment relationship will end on the day of the expiry unless the parties agree to something different, or, breach the contract. It has always been acknowledged that the ability in a contract for a party to terminate for breach does not detract from the characterisation of it as a fixed or outer limit contract. This does not render it a "conditional" contract of employment. 34. The factors set out at AS [26] do not change the position either. For the reasons set out in PART A the fact at AS [26(f)] should not be found. The other points rise no higher than saying because Ms Naulty had been employed on a fixed or outer limit contract in another role once before and had experienced in each role one extension, that should, therefore, override her own understanding as to when her employment relationship would end, fostered by express communications from within the Council and the express terms and operation of the Second Contract. 35. The fact is the number and nature of contractual extensions in this case are, even without the other surrounding circumstances, insufficient in themselves to rise as high as amounting to a deviation from the position otherwise understood and documented between the parties. Put simply, the facts here are far removed from those in the other authorities relied upon by Ms Naulty. Similarly, with respect to the reliance placed in AS [35] on the decision of USU, in that case the individual had been employed for six years over five contracts. Additionally, the caveats in the contracts as set out in AS [35(a)-(e)] are very different in nature to cl 3 in the Second Contract. Unlike in this case, they may appropriately be characterised as conditional. For the reasons explained above, that is simply not a characterisation open with respect to cl 3 of the Second Contract given the actual words used. Further, in USU the applicant had been informed of a "possibility" of further extension. The applicant hadn't been seeking other employment as is the case here. In short, the case is factually distinguishable in all respects from the present case. 36. Similarly, the sort of textual features in the contract of employment in the decision of Fetz v Qantas, relied upon by Ms Naulty, are self-evidently not present in the Second Contract. By comparing the sets of contracts in those cases, the true nature of cl 3 in the Second Contract becomes all the more apparent.
The hearing on 17 March 2020 proceeded on the basis of the question before the Commission was whether there was a "dismissal" for the purposes of the Act including how the relevant contractual relationship should be construed, and whether the employment relationship ended by reason of the effluxion of time or a decision of the respondent. In the Applicant's Final Submissions the applicant asserts, in addition to the matters dealt with at the hearing, that a dismissal arose by reason of breach of the Award: 47. The Applicant submits the requirements of clause 34 have not been satisfied and accordingly the Applicant cannot have been employed pursuant to that clause. As a matter of construction under subclause (i)(d), in relation to temporary replacing "an employee", it is not simply a case of replacing an employee but in addition it must be replacing the employee, in the employee's "position". 48. Each subclause is intended to deal with different factual circumstances. In subclause (d), there are fixed sets of grounds for replacement. It is submitted that those grounds cannot be intermingled or changed and rather they are fixed. The onus is on the employer at the time of the appointment of the temporary replacement to identify the specific ground and it is bound at the outset to identify the ground it relies upon and there is no scope to change that ground or rely on multiple grounds. 49. The Respondent has not complied with clause 34 of the Award in the manner by which they employed the Applicant. Specifically, the Respondent has breached the Award by: (a) Unilaterally altering the rationale for employing Ms Naulty under clause 34 of the Award part way through the term of the First Contract; (b) Having the Applicant commence performing an alternative position prior to the expiration of the First Contract as extended; (c) Changing the Position Description referable to the Second Contract, such that the Applicant was not performing the duties of an existing position; and (d) Having the Applicant perform duties involving more than one position. 50. The clearest breach of the requirements of clause 34 of the Award arises in relation to the position of Ms Pollard, and specifically the decision of the Respondent to alter the Position Description for Ms Pollard's role prior to Ms Naulty commencing the Second Contract. This is beyond the scope of the provisions of clause 34. There is a prohibition on any change being made to the position description for the position being filled, it is not for the Respondent to decide the change is "minor'' and therefore acceptable. … 54. The facts in this matter, the Respondent admits that it has: (a) Secured the services of the Applicant to temporarily replace Ms Higgins who was on approved leave, being maternity leave. During the course of the fixed term, the Respondent sought to unilaterally change the rationale for Ms Higgins being absent from her "position", in that Ms Higgins requested flexible working hours on her return from maternity leave. Clause 34 makes no provision for such an alteration. It is not a case of mixing and matching. A temporary replacement has been made under a specific allowed ground and that is the end of it. (b) The Respondent is not entitled to change the position by varying the position description of the employee who is being temporarily replaced. It has no right to change or vary the position description and merely keep the position title. This is inconsistent with the intent of Clause 34.
The applicant submits that "clause 3.2 of the First Contract and clause 3 of the Second Contract must be severed ... [and t]he provision in the Second Contract and the variation thereto must be read down to sever the express reference to 30 July 2019" [8] as a consequence of the asserted breach of the Award which the respondent says is unlawful.
The respondent submits that the applicant, in seeking to resist the respondent's jurisdictional challenge on a broader basis than previously foreshadowed, has placed the respondent in an unfair position and prejudiced its position. The respondent says, had it known the case it had to meet, and the particulars of the same, cross-examination of the applicant and, more relevantly, the evidence in chief led by the respondent would have been different. The applicant's conduct in failing to make the basis of resistance to the jurisdictional point clear prior to the respondent's forensic decisions on cross-examination and leading of evidence in its own case, has caused irremediable prejudice to the respondent.
In any event, the respondent submits that a breach of cl 34 of the Award has not been established and sets out why this is so in the Respondent's Reply Submissions: 39. Turning to each of the alleged breaches as set out in AS [49], it is readily apparent that [49(a) and (b)] concern the First Contract, whilst [49(c) and (d)] concern the Second Contract. To the extent that breach is used as a basis for alleging there was no dismissal, this will only flow if it is found the Second Contract breached the Award, was unlawful and thereby Ms Naulty was actually (as at 30 July 2019) employed on a full time basis with no operative time limit. As such, these submissions address the alleged breaches in [49(c) and (d)] first. Although the Council submits it is not relevant to the dismissal question, these submissions then address why there has been no breach as alleged at [49(a) and (b)]. 40. There has been no breach as alleged at par [49(c) and (d)] because, for the reasons set out above at PART A [of the Respondent's Reply Submissions], those factual matters should not be found to have been established on the evidence. 41. Moreover, as a matter of construing the Award, when considering whether Ms Naulty was performing the duties of an existing position one must have regard to the duties of that position - not whether as a matter of subjective reality the previous incumbent was adequately or satisfactorily complying with those duties (by reason of talent or the locality of where she was working). Any divergence in tasks found by the Commission ought be attributed to the standard of performance of Ms Pollard and not a change in duties required of Ms Naulty. 42. AS [50] assumes the Award speaks of a "position description" (and seeks at AS [54(b)] to draw a distinction between "position description" and "position title"). The Award actually speaks of a "position" and the "duties associated" with that position. To suggest that a modification to a position description is in breach of the Award is unsupported by the text in the Award. Moreover, no authority is identified for the proposition at AS [50] that there "is a prohibition on any change being made to the position description". The text of the Award contains no such prohibition. As such, the Council is at a loss to what is meant by this submission. 43. There has also been no breach as alleged at AS [49(a)] as a matter of fact. As Ms Naulty herself wishes the Commission to find, the variation of the First Contract was caused by Ms Higgins return to work in a different role but on reduced hours (AS [7(h)]). The variation of the First Contract was, at law, a new contract, consented to by Ms Naulty and supported by consideration. It does not, therefore, constitute a "unilateral altering of the rationale for employing Ms Naulty". It was a new contract. The Council was, therefore, entitled to rely on, afresh, any aspect delineated within cl 34 of the Award. 44. In any event, this breach is predicated on a construction of the Award that the circumstances set out in cl 34(i)(d) cannot be "intermingled or changed" "rather they are fixed" (AS [48]). This is incorrect. Clearly, as conceded in the first sentence of AS [48], cl 34(i) sets out different subclauses and each subclause deals with different factual circumstances. It follows that there has been a deliberate decision in drafting cl 34(i)(d) to group the circumstances within that subclause together. If, as Ms Naulty contends, the Award was intended to be construed so that each of the matters set out in cl 34(i)(d) could not be intermingled, they would not have been grouped together within the subclause (d) but would have been set out separately as (d), (e), (f) etc. Therefore, the alleged breach at [49(a)] is wrong not just as a matter of fact, but as a matter of legal construction. 45. There equally has been no breach as alleged at AS [49(b)]. The wording in the variation to the First Contract makes clear that the operation of the variation is to begin immediately after the termination date under the First Contract. That is, it constitutes an agreement to commence a new contract, with the same terms from the date of expiry under the First Contract until the new nominated end date. Similarly, the variation to the Second Contract is to be construed in the same vein. There can be no criticism that this set up was arranged five days in advance of expiration of the First Contract. Indeed, if the Council had done the opposite-and waited until after the expiration of the First Contract, that would support a finding of an ongoing employment relationship (as it did in Lunn). 46. More generally, Ms Naulty's submissions at AS [49] have an air of unreality to them. The notion that an alleged (but wholly unsubstantiated) minor tweaking of a bullet point in a position description of an otherwise unchanged position, can reduce a contract of employment to being in breach of the Award seems incongruous. Equally so, the suggestion that an arrangement to enter into a new contract, in the form of a variation, arising out of a change in circumstances of the vacant position the individual is replacing, amounts to a breach of cl 34(i)(d). The alleged breaches are artificial in nature and devoid of any appreciation of the practical realities of running a business.

Consideration

The Act does not define "dismissal", other than to the extent of specifying, in s 83(5), certain circumstances which the word will be taken to encompass.
Both parties contended that the decision of the Full Bench of the Fair Work Commission in Khayam was relevant and supported their contentions. The applicant also relied on USU on behalf of Paul Parker & Newcastle City Council re dismissal [2014] NSWIRComm 1012 ("Parker").
I agree with the respondent that the words at the end of: 1. cl 3.5 of the First Contract: 3.5 On the day of expiry or upon termination of this Contract pursuant to clause 15 of this Contract the Employee's employment with Council shall cease unless the parties have entered into a new contract of employment and 1. cl 3 of the Second Contract: On the date of expiry or termination of this Contact pursuant to Clause 4 of this Contract the Employee's employment with Council shall cease unless the parties have entered into a new contract of employment are not the same "in substance" as the words appearing in Parker. In Parker the relevant clause provided: 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.
I do not accept, as submitted by the applicant, that it is clear the respondent, similar to the approach in Parker, was keeping its options open or was using language of the same effect as in Parker, that language being in substance being "the cessation date may vary if the demand for work changes in that time". Such a submission, as the respondent contends, "constitutes an attempt to completely rewrite, stretch and strain the words actually used into what appeared in [Parker]".
The majority of the Full Bench in Khayam (Hatcher VP and Saunders C), in considering the meaning of "dismissed" in s 386 of the Fair Work Act 2009 (Cth), determined that where the terms of a time-limited contract reflect a genuine agreement on the part of the employer and employee that the employee relationship will not continue after a specified date, then, absent any vitiating factors such as those outlined below at [44], the employment will be terminated by way of agreement and not at the initiative of the employer: at [75].
The majority concluded that, when assessing if a termination was at the initiative of the employer, consideration must be given to a number of factors, stating at [75(5)]: (a) The time-limited contract itself may be vitiated by one of the recognised categories by which the law excuses parties from performance of a contract. The categories potentially relevant in an employment context include the following: ● the employee entered into the contract as a result of misrepresentation or misleading conduct by the employer; ● the employee entered into the contract as a result of a serious mistake about its contents or subject matter; ● there has been unconscionable conduct associated with the making of the contract, which may relevantly include that the employer took advantage of a disability affecting the employee such as lack of education, lack of information, lack of independent advice or illiteracy; ● the employment contract was entered into by the employee under duress or coercion (which might include the types of coercion prohibited in ss 343(1)(a), 348 and 355) resulting from illegitimate pressure on the part of the employer; ● the employee lacked the legal capacity to make the contract; or ● the contract was a sham in the sense that it was not intended by the parties to give legal effect to its apparent terms or in the broader sense dealt with in Pt 3-1 Div 6 of the FW Act. If any of the above applies there will be no legally effective time-limit on the employment (Fisher). (b) The time-limited employment contract may be illegal or contrary to public policy (for example, it contains relevantly objectionable terms as defined in s 12 of the FW Act or has the purpose of frustrating the policy or operation of the FW Act or preventing access to the Commission's unfair dismissal jurisdiction 82). Whether the employment was constituted by successive short term contracts or the use of time-limited contracts was appropriate in the relevant field of employment may be some of the considerations relevant to an examination of the employer's purpose for entering into such contracts (D'Lima/Fisher). (c) The contract may have been varied, replaced or abandoned by way of a separate agreement, whether in writing and/or orally, such that its ostensible time limit no longer applies (Fisher). (d) The employment contract may not be limited to the terms of a written document and may, for example, be one of a series of standard-form contracts which operated for administrative convenience and did not represent the reality or the totality of the terms of the employment relationship (Fisher/D'Lima). (e) During the term of the employment relationship the employer may have engaged in conduct or made representations (for example, representing to the employee that the employment will continue subject to conduct and performance notwithstanding a contractual time limit on the employment) which provide a proper legal foundation to prevent the employer from relying upon the terms of the contract as the means by which the employment relationship has been terminated (Fisher). (f) The terms of the contract time-limiting the employment may be inconsistent with the terms of an award or enterprise agreement given effect by the FW Act which prohibit or regulate fixed-term employment, in which case the terms of the award or agreement will prevail over the contract (Fisher).
The applicant has not asserted that any of the matters at [75(5)(a)] of Khayam apply to her circumstances. Other than the alleged breach of cl 34 of the Award, nor has the applicant asserted matters which would fall within [75(5)(b)] of Khayam. I have considered whether the respondent acted in breach of cl 34 of the Award below at [53] - [65].
In respect of the other matters set out in [75(5)] of Khayam, I have given consideration to the following: 1. the totality of the employment relationship, not merely the terms of the contract that operated immediately prior to the cessation of employment; 2. whether the contract was varied, replaced or abandoned by way of a separate written or oral agreement; 3. whether the contract was limited to the terms of a written document, or was simply a series of agreements which operated for administrative convenience and did not represent the reality of the employment relationship; and 4. whether the respondent made representations or engaged in conduct that would prevent it from relying upon the terms of the agreement as the means by which the relationship was terminated.
In weighing the evidence of the applicant and the respondent's witnesses about the matters set out in [46], I have preferred the evidence of the respondent's witnesses where the respondent's witnesses' evidence diverges from the applicant's for the reasons set out in paragraphs 10-19 of the Respondent's Reply Submissions. Of particular relevance to my determining this balance was that the applicant, under cross-examination, was unable to explain the inherent tension between her assertion that she expected future extensions of the Second Contract, with the fact that in early 2019 and in the months leading up to the end of the term of the Variation to the Second Contract, she was looking for other forms of employment inside and outside the respondent because she knew her contract was going to expire on the nominated end date.
The applicant and the respondent mutually agreed that the employment contract would end on 30 July 2019. The terms of the written contracts and extensions are set out at [19] to [22]. The variations of the contracts were made with consideration and in accordance with the terms of the First and Second Contracts. There is nothing on the face of the documents that would, on its own, lead to the conclusion that there was an ongoing employment relationship.
The applicant asserts that throughout her employment there were multiple informal discussions between Ms Hoerlein, Mr Holmes and herself regarding her employment and her future with the respondent. The applicant refers to the discussions with Ms Hoerlein in her Statement dated 8 November 2019: 19. On a consistent basis my supervisor Trish alluded to ongoing fulltime employment. She alluded to me gaining full time employment within Shoalhaven Water around March. Her words were to the effect "everyone else aside from you and I now have permanent roles". [9]
Ms Hoerlein, a witness for the respondent, confirmed this evidence to be correct. However, under cross-examination by Ms Hall, the applicant gave the following evidence: Q. The reason you were asking Ms Hoerlein what was going to happen was because you had had no guarantee that your contract of employment was going to be extended. A. That's right, but that was the same week, with every contract that was extended, I would ask the question. And that's the same reason why I was looking for other jobs. Because if the question was answered with a "No," then I had to find myself another position. Q. You always understood that if the position of the administration officer was to be made available on a permanent basis, you always understood that that was going to be externally advertised, and you'd have to apply for that. Is that correct? A. That's correct.
The terms of the written agreements were consistent with the evidence of the respondent's representatives about their behaviour and conversations with the applicant about ongoing employment. As noted above at [47] the evidence of the applicant on this matter was contradictory. Nevertheless, it is relevant that the applicant gave evidence that she was looking for alternative employment because she had a "feeling" or "sixth sense" her contract would not be rolled over [10] . On the evidence before the Commission, there was no promise or indication of continued employment beyond the fixed term which could be said to have demonstrated an intention to continue the employment relationship.
Considering the applicant's circumstances, looking at the documentation and the totality of the relationship, including the evidence of the applicant, I agree with the respondent's submissions set out at [32]. The applicant's circumstances do not involve the additional factors which remove the traditional protection afforded by the expiry of a maximum term contract, such that the applicant's employment would be deemed terminated "at the initiative of the employer" despite her employment ending due to the expiry of the term specified in the Variation to the Second Contract.

Award breach

The applicant alleges the respondent has breached the Award by: 1. unilaterally altering the rationale for employing the applicant under cl 34 of the Award part way through the term of the First Contract; 2. having the applicant commence performing an alternative position prior to the expiration of the Variation of the First Contract; 3. changing the Position Description referable to the Second Contract, such that the applicant was not performing the duties of an existing position; and 4. having the applicant perform duties involving more than one position.
The fact that the applicant seeks, in the Applicant's Final Submissions, to give evidence as to the history of the Award, a matter not the subject of any evidence or addressed by either party at hearing, illustrates that the issues in relation to breach of cl 34 of the Award were not matters the parties considered were issues in dispute at the hearing. However, it is unnecessary for me to consider the respondent's submissions in relation to prejudice as I consider that there has been no breach of cl 34 of the Award for the reasons set out below.
The Variation to the First Contract was offered so as to accommodate Ms Higgin's request to work under a flexible work and leave arrangement in a different role on reduced hours [11] . The applicant asserts this resulted in the respondent unilaterally changing the rationale for the applicant's employment under a term contract. This change of rationale was not part of any contract variation. I do not accept this assertion.
In my view, the Variation to the First Contract was, at law, a new contract, consented to by the applicant, and supported by consideration. It does not constitute a "unilateral altering of the rationale for employing" the applicant in breach of the Award. As this was a new contract, the respondent was entitled to rely on, afresh, any aspect delineated within cl 34 of the Award.
There has been no breach, as asserted by the applicant, in having the applicant commence performing an alternative position, prior to the expiration of the Variation to the First Contract. The wording in the Variation to the First Contract makes clear that the operation of the variation is to begin immediately after the termination date under the First Contract. That is, it constitutes an agreement to commence a new contract, with the same terms from the date of expiry under the First Contract until the new nominated end date. Similarly, the variation to the Second Contract is to be construed in the same vein. I agree with the respondent that there can be no criticism that this was arranged five days in advance of expiration of the First Contract. If the respondent had waited until after the expiration of the First Contract, that would have supported a finding of an ongoing employment relationship as it did in Lunn v Department of Justice [2006] AIRC 301.
The applicant asserts that the respondent is not entitled to change the position by varying the position description of the employee who is being temporarily replaced as it is inconsistent with the intention of cl 34.
The applicant asserts that the role she performed under the Second Contract was not the role as performed by Ms Pollard, the substantive occupant of the role, and that her work under the Second Contract involved performing duties of "a mash up of all the tasks the wider team didn't want to do" or that "the only task that [she] continued to do that [Ms Pollard] did was to create invoices" [12] .
The evidence of Ms Hoerlein, particularly under cross-examination, established that the applicant was not carrying out duties previously performed under the First Contract, when she was employed under the Second Contract. The roles were distinct (depending on whether a debt was younger or older than 90 days). I agree with the respondent that this evidence is supported by the evidence of Mr Holmes under cross-examination. This is a reasonable and understandable distinction to be made for employees tasked in debt recovery management. The fact that the two roles required consultation and collaboration between employees is a feature of working in an organisation which sometimes requires communication with members in other teams. I accept Ms Hoerlein's evidence in cross-examination to the effect that whatever Ms Higgins did not achieve in her role within the four days was a matter between her and the respondent.
When considering whether the applicant was performing the duties of an existing position I have had regard to the duties of that position, not whether as a matter of subjective reality, the previous incumbent was adequately or satisfactorily complying with those duties. I accept that the divergence in tasks ought to be attributed to the standard of performance of Ms Pollard.
I have taken into consideration the evidence of Mr Holmes and Ms McCoy about the Administration Officer position. Mr Holmes gave evidence about the position at the time it was performed by the applicant: At the time, the future long term need for the Administration Officer position and the nature of the role was in a state of flux [as there was] .. a new billing system which we had just gone live ... meant although someone was needed, whether the role would be required in the future was unclear, and if so, whether its nature would change or not" [13] and not a change in duties required of the applicant.
Ms McCoy gave evidence about the position after it was relinquished by Ms Pollard: Following Ms Pollard's decision to relinquish her role there was a review of the Administration Officer position. This resulted in the positon having a different job title and slight variations in a job description.
A significant change to the duties of a position may result in a position of the same title no longer being the same position and this could result in a breach of cl 34. However, this is not the circumstance here, either while the new billing system was being implemented and the applicant performed the role of Administration Officer or later once the system was implemented. There is nothing in the text of the Award to support the submission that a small modification to a position description is in breach of the Award. Nor has authority been identified for the applicant's proposition that there "is a prohibition on any change being made to the position description". The text of the Award contains no such prohibition.
The applicant was properly employed pursuant to sub-cl 34(i)(d) of the Award.

Summary of decision

The applicant's employment came to an end through the effluxion of time on the nominated end date of her contract of employment, 30 July 2019. Accordingly, there was no dismissal for the purposes of s 84 of the Act, the respondent's jurisdictional objection is upheld, and the Application must be dismissed.

order

The Commission makes the following order: 1. The application by Ms Viola Naulty pursuant to s 84 of the Industrial Relations Act 1996 filed on 20 August 2019 is dismissed for want of jurisdiction. Nichola Constant Chief Commissioner

Endnotes

The applicant's statement dated 8 November 2019 at paragraph 1 says she "worked … from September 2017 to July 2019" but the relevant documents annexed to the statement reflect a start date of 23 October 2017 (see for example Annexure "A" - Recruitment Approval Form).
Statement of Anthony Holmes made 4 December 2019 at paragraph 7.
Statement of Anthony Holmes made 4 December 2019 at paragraph 9.
Tcpt 17 March 2020, XXN of Patricia Hoerlein p 48 at 14 - 16.
The applicant's statement dated 8 November 2019 at paragraph 12.
Statement of Anthony Holmes made 4 December 2019 at paragraph 17.
Clause 4 in the Second Contract.
The Applicant's Final Submissions at paragraph 66.
The applicant's statement dated 8 November 2019 at paragraph 19.
The applicant's statement dated 8 November 2019 at paragraph 19 and Tcpt 17 March 2020, XXN of the applicant pp 62 - 63.
Statement of Anthony Holmes made 4 December 2019 at paragraph 7.
Statement of Viola Naulty made 8 November 2019 at paragraph 12.
Statement of Anthony Holmes made 4 December 2019 at paragraph 15. 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: 11 February 2021

Industrial Relations (General) Regulation 2015(NSW)

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Judgment (18 paragraphs)

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Cited By (1)