[1] This matter concerns a motion for dismissal of an application lodged by Mr Banchit (the Applicant) on 4 August 2003 under s.170CE of the Workplace Relations Act 1996 (the Act). It is brought by St Mina's Global Restaurants Pty Ltd (the Employer or Respondent) pursuant to s.170CEA(1) of the Act on the basis that the Applicant was engaged under a contract of employment for a specified period of time and thereby excluded from the operation of the termination of employment provisions by virtue of the combined effect of s.170CC(1)(a) of the Act and Regulation 30B.

[2] This jurisdictional matter was heard in Canberra on 16 October 2003. On that occasion Mr T. Williams appeared for the applicant and Mr R. Barnett represented the respondent.

"The regulations may exclude from the operation of specified provisions of this Division, specified classes of employees included in any of the following classes:

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

[4] Pursuant to section 170CC, Regulation 30B provides:

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

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

(b) an employee engaged under a contract of employment for a specified task;....

(2) Subregulation (1) does not apply to an employee of a kind engaged under a contract of a kind mentioned in paragraph (1)(a) or (b) if a substantial purpose of the engagement under a contract of that kind is or was at the time of the employee's engagement, to avoid the employer's obligations under Subdivision B, C, D or E of Division 3 of Part VIA of the Act."

[5] The effect of these provisions is that an employee engaged under a contract of employment for a specified period of time cannot apply for relief in respect of the termination of his or her employment pursuant to s170CE(1) of the Act. It is important to note that an employee excluded from the provisions of the Act specified in subregulation 30B(1) may still however be eligible to apply for a remedy in relation to the termination of employment under a State law, or in this case pursue his/her contractual rights of redress in a civil jurisdiction.

[6] Mr Banchit was an employee of Kentucky Fried Chicken (KFC) from April 1984 and worked at the same outlet for over 19 years. The business changed ownership numerous times throughout his employment and was eventually transferred over to St Mina's Global Restaurants Pty Ltd.

[7] During Mr Banchit's period of 19 years' employment at KFC. he was engaged under a series of fixed term employment contracts. Both the Applicant and Respondent agree that on 12 October 2003 a contract entitled "Assistant Manager's Agreement' was signed by Mr Banchit and St Mina's Global Restaurant Pty Ltd.

This Agreement shall continue for a period of 4 years commencing on the 12th day of October 1999 and terminating on the 11th day of October 2003 or such further extended date as may be mutually agreed upon between the parties during the course of this Agreement."

[9] Counsel for the respondent contended that the applicant was engaged under a contract of employment for a specified period of time, namely four years from 12 October 1999 until 11 October 2003, within the meaning of Regulation 30B(1)(a), and thus Mr Banchit was not entitled to the remedies conferred by the Act.

[10] This was contested by Counsel for the applicant. Mr Williams submitted that although the franchisees changed and there were numerous transmissions of business during the applicant's time working at the outlet, his employment relationship with the KFC organisation was a long-term relationship exceeding the four years referred to in the contract with this, the latest of the business owners. He further tendered into evidence the applicant's final pay certificate which indicated a commencement employment date of March 1984, which was the start of his employment with the KFC organisation, and included mention of work-related claculations accruing since that time. This, he submitted demonstrated, as a question of fact, that the relationship between the applicant and the respondent was part of an ongoing long term employment relationship, rather than a relationship based on a finite contractual period.

"I think that the terms of the contract should be looked at as objectively construed and in the absence of ambiguity, their plain meaning is to be applied unless there would be clear injustice. The circumstances of employment, the 20 year employment, the imposition of this by a new employer coming in following a transmission of businss, in my respectful submission, would indicate that all the facts need to be looked at and not just the terms of the contract in order to determine whether or not there is clear injustice in this case.

Again on the question of jurisdiction, we would be saying then, you shouldn't oust the matter on the basis of jurisdiction until such time as that determination is made. A series of fixed term contracts may give rise to an understanding that the employment is in fact ongoing and not genuinely fixed in nature. Again I am going to repeat myself Commissioner. We have a 20 year employment relationship with Kentucky Fried Chicken/KFC and its various franchisees from time to time. What we have here is whether they are in writing or not.

Either we have a series of fixed term contracts all through that period or we have an ongoing employment relationship which should not be limited in a way that prejudices my client by the imposition at the late stage of a fixed term contract of employment."[1]

[11] Mr Williams' urged the Commission to take into account the entirety of the employment relationship between the applicant and the KFC organisation when construing the provisions of this particular ostensibly `fixed-term' contract.

[12] Furthermore Mr Williams submitted the following subsidiary arguments in support of his claim, that the contract was not for a specified period:

· The terms of the contract, namly those falling under the heading `Security of Tenure', were inconsistent with an intention to create a fixed term of four years, as they provided for early termination of the contract by the employer in circumstances where the employee was engaged in criminal behaviour, dishonesty, was not performing satisfactorily or was failing to meet targets. These provisions, empowering the employer to terminate the contract prior to its expiry, he claimed were inconsistent with the dates set out in the term clause of the contract, rendering the contract ambiguous and therefore indeterminate.

· The Commission should give careful consideration to sub-regulation 30B(2) of the Act when examining this contract to determine whether a substantial purpose of the use of a fixed term contract by the Respondent in this instance was to avoid its obligations as Employer, with respect to the unfair dismissal provisions. In this regard, Mr Williams made the following comments:

"...[A]nother submission, which I don't press too significantly but I think it is worthy of the Commission's consideration and that is, under regulation 30B(2), a contract that is designed to avoid the effects of wrongful dismissal to release an employer from the obligations under wrongful dismissal, is a provision that the Commission has power to find an unenforceable contract and to enable the party to come before the Court.

Given the contents of paragraph 9 [Security of Tenure Clause] which as I say are contents which otherwise and in most contracts would be under the heading `Termination of Employment', one might ask the question, is the employer in fact trying to do precisely that? That is, get out of his obligations in relation to wrongful dismissal applications, enabling him to dismiss any employee who executes a contract such as this, any time within the four year period, with immunity from the eyes of the Commission and with immunity therefore to the concepts of harsh, unjust and unreasonable treatment of its employees when it comes to the termination of employment." [2]

[13] Counsel for the respondent rejected the suggestion that an inference could be drawn that there was an ongoing employment relationship based upon references to inclusion of long service leave and superannuation entitlements mentioned on the applicant's final payslip. It was contended that these entitlements were an ordinary incident of the transfer of the business and its associated obligations towards employees continuing with the business.

"The facts of the matter are that our client undertook to honour its obligations in relation to the previous employees' rights in respect of superannuation, long service entitlements etcetera. And, for that reason, he [Mr Banchit] received those emoluments at the time of his dismissal. There was no - and that is a contractual matter between the former owner and the current owner and, in those circumstances, an inference cannot be fairly drawn that there was a series of contracts between our client and Mr Banchit. The facts of the case are that the only contract ever existing between our client and Mr Banchit, was the contract which you have before you."[3]

[14] Both parties agreed that this unfair dimissal claim from a dispute over whether the contract was justifiably ended prior to its expiry. It was not in dispute therefore that there was a termination of employment at the initiative of the employer, rather than as a result of effluxion of time and the ultimate expiry of the contract.

[15] The applicant contended that the employment relationship encompassed the entire 19 year period, and not simply the most recent contract in a series of fixed term constracts spanning this time and that therefore, the Australian Industrial Relations Commission (AIRC) was the appropriate forum for addressing the question of whether the dismissal was harsh, unjust or unreasonable. By contrast, the respondent argued that any claims that the employment relationship had been terminated unfairly should be dealt with in a civil court as a claim for damages for breach of contract, and that the AIRC had no jurisdiction to hear the matter.

[16] The question here is one of construction of the contract and its surrounding context to determine if it indeed is a contract for a fixed term, thereby excluding the Applicant from pursuing a claim within this jurisdiction. The circumstances leading up to his dismissal are irrelevant for the purposes of determining jurisdiction in this instance.

[17] Having heard the above submissions I have identified the following issues for determination:

· Was the contract between Mr Banchit and the Respondent prima facie, a contract for a `specified period of time'? That is to say, was the contract stated to run through a nominated period?

· Does the contract contain any provisions, including provisions to terminate or extension of the existing contract, which would seem inconsistent with an intention to provide for a fixed term or create ambiguity as to the term of employment?

· Is there any reason to view any of its contained provisions as to term as an attempt by the Employer to evade its obligations in relation to unfair dismissal under the Act?

· What bearing, if any, does the series of fixed term employment contracts under which Mr Banchit has been engaged for a 19 year period have on that stated `fixed term' contractual relationship and can it more properly be regarded as an ongoing employment relationship?

[18] A `contract for a specified period of time' has been defined as a contract whose time of commencement and time of completion is unambiguously identified either with a clear statement of fixed times, dates or events upon which the contract will end or by stating the duration of the contract as a number of days, weeks, months or years. This is recognised in the case of Andersen v Umbakumba Community Council.[4]

[19] The relevant principles in the construction and application of Regulation 30B(1)(a) were usefully set out by Hampton DP in Ogilvie v Warlukurlangu Artists Aboriginal Association Incorporated[5] and I respectfully adopt and apply this statement in this context:

"[T]he following broad principles of potential application to this matter appear to arise:

· A specified period of time is a period of employment that has certainty as to its commencement and time of completion.

· A contract which provides that after a specified period of time it may be reviewed and extended by consent, may still be a contract for a specified period.

· Where a contract provides for termination during its life on grounds that are analogous to the common law right to terminate an agreement for misconduct or other breach, such may still be a contract for a fixed period.

· Where a contract provides for a broad or unconditional right of termination during its term, the period of the contract is indeterminate and thus not for a specified period of time.

· The terms of the contract are to be objectively construed and in the absence of ambiguity their plain meaning is to be applied unless such would result in absurdity or clear injustice.

· A series of fixed term contracts may give rise to an understanding that the employment is in fact ongoing and not genuinely fixed term in nature.

· The whole of the contract is to be taken into account and provisions that are inconsistent with an intention to provide a fixed term (such as references of long service or entitlement beyond the stated period) may create ambiguity and need to be taken into account."

[20] It is important to note that the cases, particularly Fisher v Cowan UIniveristy (No 2),[6] Cooper v Darwin Rugby League Inc.,[7] emphasise that the mere fact a contract contains a term that provides for the premature termination of the contract by one or both parties in the case of breach, or a term that allows for the extension of the contract of employment,[8] does not necessarily preclude a contract from being characterised as a contract for a `specified term'. However the Full Bench in Howarth v Mornington Peninsula Shire Council,[9] has also found that a contract which gives an employee an unqualified right to terminate the contract by giving notice will render the period of the contract indeterminate as any stated specified period will be uncertain.

[21] Similarly the authorities are instructive as to the sorts of provisions which are inconsistent with an intention to provide for a fixed term of employment. A contract which makes references to:

· annual leave accruing once a minimum continuous period of employment has been completed;

· long service leave being available upon the completion of a certain number of years' continuous service; and or

· a probationary period applying in the first year of employment,

may be viewed as being contrary to the construction of the contract as being for a specified period.[10]

[22] Particular phrases or words may also create ambiguity over the certainty of the period of employment such as to negate a contract being found to be for a `specified period'. For example, in Swan v Ballarat & District Division of General Practice Inc.[11] it was found that a letter stating "at this stage the appointment is not expected to continue" beyond a certain date and other references to "further contracts of employment" indicated the contract's term was not definite or certain. The Full Bench decision of Primus v State Rail (Passenger Fleet Maintenance)[12] where it was held that a letter of appointment which stated the contract "was expected to continue" did not constitute a contract for a specified period, reinforces this view.

[23] A series of fixed term employment contracts may also be found to be in reality an ongoing employment relationship, rather than consecutive contracts for specified periods in certain contexts. In the matter of Kavanagh & NTEU v University of Melbourne [13] the applicant's employment of some 17 years, was governed by a series of fixed term contracts, each of whose content and timing was consistent with an understanding that renewal of the contract would be automatic and a mere formality. The Commission in this instance found that the contracts gave effect to what was in substance a continuing employment relationship and in such circumstances, the applicant's employment was held not to be subject to a contract for a `specified period' in the strict sense. This decision was upheld by the Full Bench on appeal.[14]

[24] With these principles in mind I now turn to the particular facts of this case and apply them.

Was the contract between Mr Banchit and the Respondent prima facie a contract for a `specified period of time'?

[25] There is no contest between the parties that the contract signed by Mr Banchit is expressly stated to run for four years commencing on 12 October 1999 and terminating on 11 October 2003. Prima facie it would seem this is a contract for a specified period of time.

Does the contract contain any provisions which seem inconsistent with an intention to provide for a fixed term or create ambiguity as to the term of employment?

[26] At issue here is whether there are some terms of the contract which perhaps mean the contract is not for a specified period of time.

[27] Mr Williams, argued that the contract signed by Mr Banchit contained provisions empowering the employer to terminate on the basis of demonstrated criminal behaviour, dishonesty, performance deficiencies or failure to meet targets by the employee. On this ground he argued that the contract was not merely determinable by the effluxion of time or serious misconduct amounting to repudiation of the contract, and therefore the contract's `specified period' was uncertain.

[28] Certainly the authorities give strength to the argument that a contract giving a broad right of termination to either or both the employer and employee is not a contract for a specified term. However I am not satisfied in the circumstances of this case that the employer's right to terminate the contract is unqualified.

[29] Both sides acknowledge that the contract does not allow for the termination of the contract by either party for any reason simply by `giving notice' before the expiration of the specified time. The contract explicitly provides that the employer is entitled to terminate employment where the worker is found guilty of criminal behaviour or has not attained satisfactory levels of achievement.[15]

[30] Mr Williams contended for the Applicant that the grounds for terminating the contract prior to the specified finishing date deprived the contract from being characterised as a contract for a specified term. He submitted that the provisions in the contract permitted premature termination of the contract for conduct amounting to something less than a breach or `repudiation' of the contract. Furthermore he contended that the alleged conduct for which Mr Banchit was dismissed was not the sort to show a disregard (wilful or otherwise) for the essential conditions of the contract of service and thus did not amount to a breach warranting either the termination of his contract or his dismissal.

[31] The contract here is for a period of time clearly fixed by stated dates of commencement and cessation. Although it contains a term which permits the employer to terminate the contract for cause (not merely breach of contract) and which may, if relied upon, mean the contract comes to an end prior to its expiry, I am not persuaded that this changes its status from a contract for a `specified period'. In Pacific Rim Employment Pty Ltd v Lloyd & Clarke [16] the Full Bench held that a contract which allowed the employer to terminate an employee for absenteeism or excessive sick leave, for not being willing and able to perform work and or for disorderly conduct contrary to its codes, was still a contract for a `specified period'. Furthermore I am persuaded by comments made most recently by the Full Bench in Trigar and La Trobe University [17]:

"In this case, we have decided, the contract provides that the only circumstance in which the contract may be terminated prior to the specified finishing date is by the employer on account of conduct by the employee which amounts to repudiation. Such a contract is one for a specified period of time. We are inclined to think that if the contract permitted termination for breach, regardless of whether the breach amounted to repudiation, the contract could still be described as one for a specified period of time. A reservation by one or both parties to the contract of a right to terminate the contract, either forthwith or subject to conditions, for breach of an obligation specified in the contract seems quite consistent with the contract being one for a specified period of time..."

[32] Had the contract provided for termination on notice by either party prior to its expiry, it would not have been one for a `specified period'. The mere fact it contains termination provisions for conduct not necessarily amounting to breach of contract, serves only to indicate that the specification of term is the outer limit of a period beyond which the contract of employment will not run. I am not satisfied these qualifications to the length of the contract alter the character of the contract which is otherwise one for a specified term, as they are clearly outlined and certain in nature and identify recognisable events which could effect the termination of the contract.

[33] I note the comments made by Northrop J in Cooper v Darwin Rugby League Inc[18] and again raised by Mr Williams, urging for a reading of s170CC which would not entitle the respondent to immunity from the provisions of the Act by reason of its having terminated the applicant's employment prior to the term specified in the contract. I have had regard to the argument that s170CC could be interpreted to operate only where where the term specified by the contract of employment has ended by effluxion of time or by the unilateral action of an employee. I am not however, strongly persuaded by this submission. I favour the views expressed in Dadey v Edith Cowan University[19] as follows:

"That a contract which does specify, and primarily looks to, a term for the duration of its performance might, in some circumstances, at the instance of one party, be brought to a premature termination, does not necessarily require the conclusion that the contract was not one `for a specified term'. As Dr Jessup QC for the respondent put it, the period does not need to be `set in concrete'. As a matter of ordinary language one would quite comfortably, call the contract here, in its industrial setting, a `contract for a specified term'. No absurdity or injustice results from such an interpretation, Nor is there any conflict between this reasoning and that of von Doussa J in Andersen v Umbakumba Community Council (1994) 56 IR 102 - in that case, once the contract was properly understood, it simply could not be characterised as a contract `for' a specified period: it was merely a contract which would, in no circumstance, run beyond the specified period. It was contemplated in that case that either party might, before the expiration of the period specified, terminate it on short notice for any reason whatsoever. Hence, absent something unforeseen, the employer was bound to continue the employment for the specified period. In my view, that is enough. Just as in the case of an award right to resign, it would be a strange conclusion that those who contractually can resign should get the Convention's and the Act's protection, but those who cannot resign should not get it.".[emphasis added]

[34] I am not satisfied that there is any substance in the applicant's contention that the premature termination of his employment contract preclude it from being characterised as a contract for a specified period of time. The question of whether the Respondent has breached its obligations by breaking the contract of employment when it did or for the reasons it did is immaterial to the question of jurisdiction in this matter. Thus it is not for me to rule whether the alleged conduct of the Applicant in dealing with an occupational health and safety incident arising on the premises warranted the action taken by the Respondent or amounted to breach and or unfair dismissal.

[35] On the face of a contract it is a contract for a `specified period'. Its provisions do not, in my view, contradict its `fixed term' character.

Is there any reason to view any of its contained provisions as to term as an attempt by the Employer to evade its obligations in relation to unfair dismissal under the Act?

[36] As noted earlier employees engaged under a contract of employment for a specified period of time may still be able to have recourse to the Commission for remedying unfair dismissals where a `substantial purpose' of the employee's engaged under such a contract is to avoid the employer's obligations under the Act in this regard. The authorities are silent as to what amounts to a `substantial purpose' on the employer's part and it is unclear how a worker might establish that he/she was put on a fixed term contract merely for avoidance purposes, given that there are many plausible reasons for such an arrangement.[20] It would seem however to the extent that federal awards may now restrict or regulate the use of fixed term contracts, and that the courts have ruled that a contract of fixed duration which can also be terminated on notice at any time is not a contract for a `specified period', some of the injustices of excluding employees under such contracts, have been mitigated.

[37] On the facts there is insufficient evidence to satisfy me that the underlying motives for employing Mr Banchit on a fixed term contract was for the respondent to evade its legislative responsibilites towards him with respect to unfair dismissal. I am not persuaded by the applicant's argument that the ambiguous titling of the termination clause contained in the contract as `Security of Tenure' is sufficient proof that this was the intention behind engaging Mr Banchit on a contract for a specified period of time. I note however it is not essential for the determination of this matter for me to make a finding on this point and only observe the difficulties in mounting a case based on a submission of this kind.

Does the fact Mr Banchit has been engaged under a series of fixed term employment contracts for a 19 year period alter the stated `fixed term' contractual relationship and convert it to an ongoing employment relationship?

[38] This is a case of serial renewal of a fixed term contract over a 19 year period. No evidence was presented as to whether the terms of the Applicant's employment changed significantly or at all upon each transmission of business and or whether the contract signed at the end of each specified period was identical or similar in terms.

[39] The length of the Applicant's employment with the same organisation, albeit not with the same employer, is of significance to the question of whether the contract, was in reality a `fixed term contract' or whether its renewal was a mere formality to what was in substance an ongoing employment relationship. The Court has looked beyond the contract terms to the reality of the employment relationship where a series of specified period contracts are entered into merely for administrative convenience.[21]

[40] This matter may be distinguished on the basis that in those instances the Court was dealing with an employee engaged under a series of fixed term contracts with the same employer. Here, whilst the Applicant had been working for the same organisation for a considerable number of years, he is placed in the less fortunate position of having been employed by different employers following each transmission of business. Thus whilst there is continuity of employment with the organisation, the same cannot be said of his relationship with the current owner of the business, with whom this was the first contract for a specified period entered into. Upon each transmission of business there would have always been some equivocation as to whether his contract would be renewed with the new owner. In these circumstances, it could not be said that the renewal or indeed offer of a contract would be `automatic' or a simple administrative detail. Each written contract represented a stand alone contract with that particular employer. Whilst the Applicant had a reasonable expectation of continuing to work and was engaged on a regular and systematic basis, in the same roles and same premises, with the same organisation, he had not yet been employed with the particular employer, the Respondent, on a continuous basis.

[41] I note that the Applicant, upon his dismissal received a final pay certificate indicating a commencement employment date of 13 March 1984, the date of commencement of employment with the KFC organisation, rather than the date of commencement with this most recent franchisee of 1999, and that all employment-related and payout calculations included on that certificate were referable back to this date. However I accept Mr Barnett's submissions that this was a fulfilment of the Respondent's undertakings made to honour their obligations in relation to rights to superannuation, long service leave and other entitlements. This was a contractual matter between the Respondent and the former franchisees as part of the transactions for the transmission of business, and not a fair basis upon which to infer there was an ongoing employment relationship between it and Mr Banchit.

[42] I do not regard the context of Mr Banchit's employment with the Respondent as displacing the clear words and intention of the contract in this instance. For these reasons I remain of the view that Mr Banchit's employment with this particular employer, was not `ongoing', despite his continuous and evidently loyal service to the same organisation.

[43] The question here is one of jurisdictional fact and it turns upon the construction of the contract as one for a fixed term or as an incident of an ongoing employment relationship. In my opinion, the contract on its face is clearly one for a `specified period'. There is no provision contained within it that operates to convert the contract's character to one of continuing employment. Even if the respondent has failed to discharge its obligations under the Agreement with respect to the termination of the applicant, or by ending the contract of employment with him prior to its expiry, this does not alter the fact that the applicant was in this instance employed under a fixed term contract and is thereby excluded from a remedy under the provisions of the Act by virtue of subregulation 30(1)(a). This application is hereby dismissed. The applicant's rights are preserved in respect of State law and under the contract itself. Given the applicant's length of service, it is regrettable that this matter could not have proceeded to conciliation.

Printed by authority of the Commonwealth Government Printer

4 121 ALR 121 at 125-126.

6 (1997) 72 IR 464 at 472.

7 (1994) 57 IR 238 at 241 per Northrop J.

8 Trigar v La Trobe University, Print T2860 1 November 2000.

10 Parkes v John Bertram & Associates Print P6363, 30 October 1997 per Whelan C; Swan v Ballarat & District Division of General Practice Inc., Print Q5915, 7 September 1998 per Gay C.

12 Print R6136, 21 June 1999 per Munro J, MacBean SDP and Redmond C.

14 Print P6354 oer Ross VP, Duncan DP and Eames C, 31 October 1997.

15 See Assistant Manager's Agreement between St Mina's Global Restaurant Pty Ltd and Sengaroun Banchit dated 12 October 1999, Clause 9 `Security of Tenure'.

16 PR912882 4 January 2002 per Giudice J, Kaufman SDP, O'Connor C.

17 Print T2860 1 November 2000 per Giudice J, Acton SDP, Gay C at [11].

18 (1994) 57 IR 238 at 241.

20 For further comment on this point see Creighton, B., Stewart, A. Labour Law - An Introduction. 3rd Edition Federation Press, Sydney, 2000 at 316 to 317.

21 D'Lima v Board of Management, Princess Margaret Hospital of Children (1995-1996) 64 IR 19; Kavanagh & NTEU v University of Melbourne Print P1374, 28 May 1997.