s.170CE application to the Commission re: termination of employment

Appeal re termination of employment - qualifying period - jurisdiction.

[1] This is an appeal by the NT Friendship & Support Inc. (the appellant) against the decision and order of Commissioner Eames on 29 August 2002.[1]

[2] The respondent (Mrs McCarthy) commenced employment with the appellant on 11 June 2002 and her employment was terminated on 2 July 2002.[2] Mrs McCarthy subsequently filed an application for relief in respect of the termination of her employment.

[3] The decision subject to appeal dealt with the appellant's motion under s.170CEA of the Workplace Relations Act 1996 (the WR Act) that Mrs McCarthy's application for relief be dismissed on the basis that it was outside the Commission's jurisdiction.

[4] On appeal the appellant submitted, in essence, that the Commissioner erred in his characterisation of the motion before him. It is said that the motion for dismissal was not based on Mrs McCarthy's status as a probationary employee but rather on the fact that she had commenced employment after 30 August 2001 and that at the time her employment was terminated had not completed the `qualifying period of employment' referred to in s.170CE(5A)(b).

[5] We agree with the appellant in that it seems to us that the Commissioner did err in his characterisation of the matter before him. Having regard to the nature of the case put by the applicant we can appreciate how the Commissioner made such an error.

[6] Subrule 38(2A) of the Commission's Rules provides that a motion to dismiss an application for relief for want of jurisdiction must be made in accordance with Form R21A. The respondent filed an application in accordance with Form R21A. The application states:

"The respondent moves for the dismissal of the application on the following grounds:

In the case of an employee who had commenced employment on or after 30 August 2001, the applicant had not completed the qualifying period of employment (see ss 170CE(5A)."

[7] Ms Embery, who appeared for the appellant in the proceedings at first instance, relied on the duration of Mrs McCarthy's employment and submitted that the application be dismissed pursuant to s.170CE(5A).[3]

[8] In reply, Mr Matarazzo, who appeared for Mrs McCarthy, addressed a different point. He argued, in essence, that Mrs McCarthy was not a probationary employee within the scope of Reg. 30B(1)(a). It was contended that the applicant's employment was governed by the terms of the Social and Community Services Industry - Community Services Workers - Northern Territory Award 1996 (the Community Services Workers Award). Clause 4.1.3 of that award provides:

"4.1.3 All employees other than a casual or fixed term employee [as defined in this Award] will serve a period of probation if the duration of the period or the maximum duration of the period, as the case may be, is determined in advance, in writing and either:

4.1.3.1 the period, or the maximum duration, is 3 months or less; or

4.1.3.2 in special circumstances where it is reasonable, having regard to the nature and circumstances of the employment, for employees in grades 6 to 8 inclusive, the probation period may be up to a maximum of 6 months."

[9] It is apparent from the Commissioner's decision that he treated the jurisdictional objection as being based on reg. 30B(1)(c)(i). That is, at the time her employment was terminated the applicant had been serving a period of probation or a qualifying period of employment which had been determined in advance.

[10] The Commissioner concluded that the probationary period had not been determined in advance and hence the applicant was not excluded from the jurisdiction. Mrs McCarthy's application for relief was referred to conciliation.

[11] As we have said we are of the view that the Commissioner erred in his characterisation of the motion before him. On this basis we have decided to grant leave to appeal. We now turn to consider for ourselves the jurisdictional objection advanced by the appellant.

[12] The appellant contends that the application for relief should be dismissed for want of jurisdiction. It is not contested that Mrs McCarthy commenced her employment with the appellant on 11 June 2002 and that employment was terminated on 2 July 2002. The duration of Mrs McCarthy's employment was 22 days. The appellant submits that as Mrs McCarthy had not completed the three month qualifying period referred to in s.170CE(5B)(a) there is no jurisdiction to entertain her application for relief.

[13] The respondent submits that the Commissioner was correct in concluding that the applicant was not a probationary employee within the scope of Reg. 30B(1)(c). In particular Mrs McCarthy asserts that:

"· prior to 11 June 2002 neither Ms Embery nor any committee of management member ever indicated to me either verbally or in writing that I would be on a probationary period;

· neither Ms Embery nor any committee of management member ever indicated to me either verbally or in writing prior to 2 July 2002 and/or at the meeting of 2 July 2002 that I was and/or would be on a probationary period of employment; and

· neither Ms Embery nor any committee of management member ever indicated to me either verbally or in writing prior to my termination on 2 July 2002 that I was and/or would be on a probationary period of employment."[4]

[14] The respondent also relies on the terms of the Community Services Workers Award in support of her contention that she was not employed on a probationary basis. As we have mentioned clause 4.1.3 of that award says that all employees - other than casual or fixed term employees - will `serve a period of probation if the duration of the period ... is determined in advance, in writing ...'. In this case it was conceded that Mrs McCarthy's probationary period had not been `determined in advance, in writing'.

[15] The respondent contends that the Community Services Workers Award requires any period of probation to be determined in advance and in writing and that as this did not occur in respect of Mrs McCarthy's employment she was not employed on a probationary basis. The respondent also submits that the WR Act and Workplace Relations Regulations (the WR Regulations) use the expressions `probationary period' and `qualifying period' interchangeably. In this regard the respondent relies on:

¬ s.170CC(1)(c) which states `employees serving a period of probation or qualifying period';

¬ reg. 30B(1)(c) which states `an employee serving a period of probation or a qualifying period of employment'; and

¬ schedule 10 "Convention concerning termination of employment at the initiative of the employer" Part 1, Article 2(b) which states `workers serving a period of probation or a qualifying period of employment'.

[16] The respondent also relied on the decision of Commissioner Grainger in Conway v Norman G. Clark (Australasia) Pty Ltd.[5] At paragraph 20 of that decision the Commissioner says:

"I further find that wherever an employer and employee have negotiated a probationary period shorter or longer than three months in writing before the commencing of employment that will be a "qualifying period of employment" for the purposes of s.170CE(5A) and (5B) because a probationary period is a period of time over which an employee is tested or trialled to assess their suitability or qualifications for permanent employment [see "probation", the Shorter Oxford Dictionary Vol. II, p.1676] and is therefore a form of "qualifying period". I refer to the decision of the Full Bench of this Commission in Henderson v Mainpoint Enterprises Australia Pty Ltd (Print Q3750) in which the terms probation, qualifying and evaluation period are used interchangeably. Article 2.2(b) of the Termination of Employment Convention (Schedule 10 of the Act) also appears to use the terms `period of probation' and `qualifying period' interchangeably."

[17] The respondent's submissions on this point are set out at paragraphs 14 to 18 of her written submissions.[6] The essence of the respondent's argument is that the expressions `probationary employment' and `qualifying period' mean the same thing in the WR Act, the WR Regulations and in the Community Services Workers Award. This means, it is argued, that the effect of clause 4.1.3 of the Community Services Workers Award is that any probation or qualifying period must be determined in advance and in writing. In the absence of determination in advance and in writing no qualifying period applies.

[18] For the respondent's argument to succeed we must be persuaded that clause 4.1.3 of the Community Services Workers Award has the legal effect of requiring any qualifying period of employment to be determined in advance and in writing. Further, the Community Services Workers Award provision must be taken to override the terms of ss.170CE(5A) and (5B) of the WR Act to the extent of any inconsistency.

[19] We are not so persuaded. It seems to us that clause 4.1.3 of the Community Services Workers Award and ss.170CE(5A) and (5B) of the WR Act deal with different things.

[20] Clause 4.1.3 effectively provides that an employee will not be regarded as being on probation unless the duration of the probationary period is `determined in advance, in writing'. The respondent contends that the expression `a period of probation' in clause 4.1.3 means the same thing as the expression `a qualifying period of employment' as that expression appears in ss.170CE(5A) and (5B) of the WR Act.

[21] We see no proper basis for adopting the respondents construction of clause 4.1.3. Clause 4.1.3 was inserted into the Community Services Workers Award on 23 July 1996[7] - well in advance of the amendment to the WR Act which inserted ss.170CE(5A) and (5B). In these circumstances it would not be reasonable to conclude that at the time the Community Services Workers Award was varied to insert clause 4.1.3 the parties intended that it would apply in the manner contended for by the respondent. Even if we were to accept the respondent's contention that clause 4.1.3 extends to cover a `qualifying period of employment', that does not assist the respondent's case, having regard to the terms of the relevant statutory provisions.

"(5A) An application under subsection (1) must not be made on the ground referred to in paragraph (1)(a), or on grounds that include that ground, unless the employee concerned had completed the qualifying period of employment with the employer at the earlier of the following times:

(a) the time when the employer gave the employee the notice of termination;

(b) the time when the employer terminated the employee's employment.

(5B) For the purposes of subsection (5A), the qualifying period of employment is:

(b) a shorter period, or no period, determined by written agreement between the employee and employer before the commencement of the employment; or

(c) a longer period determined by written agreement between the employee and employer before the commencement of the employment, being a reasonable period having regard to the nature and circumstances of the employment."

[23] The new subsections were inserted into the WR Act by the Workplace Relations Amendment Termination of Employment Act 2001 and commenced operation on 30 August 2001. The effect of these provisions is to create a new statutory bar to applications being made on the ground, or on grounds that include the ground, in s.170CE(1)(a) i.e. that the termination was harsh, unjust or unreasonable.

[24] The respondent contends that the effect of clause 4.1.3 of the Community Services Workers Award is that no qualifying period of employment applies to employees within the scope of the Community Services Workers Award unless such a period has been determined in advance, in writing. It seems to us that such a provision would clearly be inconsistent with the expressed intent of ss.170CE(5A) and (5B).

[25] The effect of ss.170CE(5A) and (5B) is to impose a `qualifying period of employment' before an employee is entitled to apply for a remedy in respect of the harsh, unjust or unreasonable termination of their employment. Paragraph 170CE(5B)(a) establishes a `default' qualifying period of three months. Paragraph 170CE(5B)(b) allows for a shorter or no qualifying period to apply by written agreement between the employer and employee before the commencement of employment. Paragraph 170CE(5B)(c) provides for a qualifying period of longer than three months by written agreement before the commencement of employment - however any such longer period may be reasonable.

[26] Paragraphs 170CE(5B)(b) and (c) provide the only circumstances in which the `default' three months qualifying period may be varied or waived. On the respondent's argument clause 4.1.3 of the Community Services Workers Award would provide an additional prerequisite before any qualifying period (including the three month default period) would apply, namely such a period must be determined in advance, in writing.

[27] Such an outcome is obviously inconsistent with the intention of ss.170CE(5A) and (5B) and the Commission has no power to make an award which is inconsistent with the expressed will of the legislature.[8] The Commission's jurisdiction to hear and determine applications for relief in respect of termination of employment is governed by the WR Act and the Workplace Relations Regulations made under that act. The Commission cannot, by the making of an award, give itself either powers or functions that the Parliament has not authorised.[9]

[28] It follows that if the respondent's construction of clause 4.1.3 is correct then it would be beyond power and should be read down accordingly. In our view clause 4.1.3 of the Community Services Workers Award has no application to the matter before us.

[29] For the sake of completeness we wish to briefly refer to the decision in Conway. We note that the Commissioner's decision in that matter is said to be based, in part, on Henderson v Mainpoint Enterprises Australia Pty Ltd. The Commissioner says that in Henderson the Full Bench used `the terms probation, qualifying and evaluation period ... interchangeably'. We disagree. In Henderson the Full Bench was dealing with an appeal from a decision and subsequent order for costs. It was not, directly at least, a decision about probationary employment. At no point in the decision does the Full Bench use the terms `probation, qualifying and evaluation period' interchangeably. Reference was made to the evidence in earlier proceedings where the terms were used interchangeably but that is a very different thing to the Full Bench adopting the same course.

[30] For our part we doubt the correctness of the Commissioner's conclusion that `whenever an employer and employee have negotiated a probationary period shorter or longer than three months in writing before the commencing of employment that will be a qualifying period of employment for the purposes of s.170CE(5A) and (5B).' If the legislative intent was for ss.170CE(5A) and (5B) to extend to both qualifying and probationary periods then it could easily have so provided. But it is unnecessary for us to express a concluded view on this point in the circumstances of this case.

[31] At the hearing of the appeal Mr McCarthy, who appeared on behalf of the respondent, developed an additional argument based on the terms of reg. 30B(1)(c). He submitted that the effect of the regulation is to require qualifying or probation periods to be determined in advance. It was argued that the terms of the Community Services Workers Award are consistent with such an interpretation and add an additional requirement namely that the qualifying or probationary period be determined in advance and in writing.

[32] We are not persuaded by the arguments put in respect of this point. The relevant regulation states:

"reg. 30B(1) For subsection 170CC (1) of the Act, the following kinds of employees are excluded from the operation of Subdivisions B, C, D, E and F of Division 3 of Part VIA of the Act:

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

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

(B) is reasonable, having regard to the nature and circumstances of the employment." [emphasis added]

[33] Three things may be said about reg. 30B(1)(c). First, the regulation is made pursuant to s.170CC - it is not made pursuant to ss.170CE(5A) or (5B) and does not purport to qualify or expand those provisions.

[34] Second, the regulation provides a basis for excluding employees from the operation of the relevant provisions of the WR Act. Employees will be excluded by reg. 30B(1) if, among other things, they are serving a qualifying period of employment the duration of which has been determined in advance and is either three months or less, or if longer the duration is reasonable. The regulation does not say that all qualifying periods of employment must be determined in advance. The need for such a period to be determined in advance only arises if the respondent seeks to exclude the applicant from the jurisdiction on the basis of regulation 30B(1)(c). That is not the case here.

[35] The final point is that if we accept the construction of the regulation advanced by Mr McCarthy then the regulation would be inconsistent with the provisions of the WR Act - namely ss.170CE(5A) and (5B) - and void to that extent.

[36] Despite our conclusion as to the proper construction of reg. 30B(1) we do wish to make the observation that the retention of the expression `or a qualifying period of employment' in the regulation seems to serve no practical purpose in light of ss.170CE(5A) and (5B) and, as this case has shown, has the potential to give rise to some confusion.

[37] We also note that the decisions relied on by the respondent do not advance the argument put. The decisions in question[10] deal with motions to dismiss applications for relief on the basis of reg. 30B(1). They are not authority for the proposition that the `default' qualifying period in ss.170CE(5A) and (5B) must be determined in advance.

[38] In determining the jurisdictional objection before us it is important to note that the following facts are uncontested:

¬ Mrs McCarthy commenced her employment with the appellant on 11 June 2002 and her employment was terminated on 2 July 2002;

¬ the duration of Mrs McCarthy's employment was 22 days; and

¬ the `default' three month qualifying period in s.170CE(5B)(a) has not been varied or waived by any written agreement between Mrs McCarthy and the appellant.

[39] In these circumstances it is apparent that at the time the appellant terminated Mrs McCarthy's employment the three month qualifying period of employment had not been completed. Accordingly Mrs McCarthy was not entitled to apply to the Commission for relief in respect of the termination of her employment on the ground that such termination was harsh, unjust or unreasonable.[11] We grant the appellant's motion to dismiss.

[40] For the foregoing reasons we have decided to grant leave to appeal, uphold the appeal and quash Commissioner Eames' decision of 29 August 2002. We dismiss the respondent's application for relief for want of jurisdiction.

M. Blandy for NT Friendship and Support Incorporated.

Printed by authority of the Commonwealth Government Printer

3 See paragraphs 13 to 36 of the Transcript of 28 August 2002.

8 See The Federated Seamen's Union of Australia v Commonwealth Steamship Owner's Association [1922] HCA 7; (1922) 30 CLR 144 per Knox CJ and Gavan Duffy J at 152, Higgins J at 162 and Starke J at 164.

9 CFMEU v AIRC [2001] HCA 16; (2001) 178 ALR 61 at 68-69; R v Portus; Ex parte City of Perth [1973] HCA 64; (1973) 129 CLR 312.

10 Including Sabeto v Waterloo Car Centre Pty Limited, Print PR924001, 25 October 2002 per Spencer C which was drawn to our attention after the conclusion of the proceedings on 25 November 2002.

11 See s.170CE(5A).