s.365 - Application to deal with contraventions involving dismissal

Centenary Institute of Cancer Medicine and Cell Biology and Prof. Marc Pellegrini

Application to deal with alleged contraventions involving dismissal - whether Applicant employed by First Respondent and "dismissed" within the meaning of s.386(1)(a) - employment relationship and contract of employment - secondary employment - intention to enter binding legal relations - offer and acceptance

• [1] The question for determination in these proceedings is whether Professor John Rasko (the Applicant) was "dismissed" by the first respondent, the Centenary Institute of Cancer Medicine and Cell Biology (Centenary, or the First Respondent) within the meaning of s.386 of the Fair Work Act 2009 (Cth) (Act). That question arises because Centenary has objected to Prof. Rasko's application under s.365 of the Act for the Fair Work Commission (Commission) to deal with a dispute involving the Applicant's alleged dismissal which, the Applicant contends, was carried out in contravention of the general protections provisions in Part 3-1 of the Act. Centenary's objection is that there was no relevant dismissal because the Applicant was never employed by them. That is an issue which must be determined before the Commission can deal with the dispute by conducting a conference under s.368 of the Act.[1]

• [2] The Applicant is a clinical haematologist, pathologist and scientist who works in the areas of gene and stem cell therapy, experimental haematology and molecular biology. In 1999, he commenced employment with the Sydney Local Health District (SLHD) as a Staff Specialist in Gene Therapy and Haematology.

• [3] Centenary is a medical research organisation based at the Camperdown campus of the University of Sydney. It has formal affiliations with the University of Sydney, the University of Technology and the SLHD. As a consequence of those affiliation arrangements, researchers and other staff performing work at Centenary's premises consist of employees or students of the universities or the SLHD, as well as those who are directly employed by Centenary. Centenary is governed by a board that includes representatives of the SLHD and the University of Sydney.

• [4] From 1999, and as part of the Applicant's role as an employee of SLHD, he was also carrying out work as head of the Gene and Stem Cell Therapy Programme with Centenary. In that role he supervised a team of Centenary's research staff at Centenary's laboratories. He was also responsible for grants that were awarded for the purpose of carrying out medical research. Prior to 2014, Prof. Rasko worked with Centenary and its staff at Centenary's premises without any formal agreement in place. In January 2014, a tripartite affiliation agreement (affiliation agreement) was entered into between Prof. Rasko, Centenary and SLHD. Following the making of that agreement, the Applicant continued to be employed by SLHD.

• [5] In or about June 2023 the Executive Director of Centenary, Professor Marc Pellegrini, held discussions with the Applicant and one other person, Professor Semsarian, about two new Deputy Director positions that were being created by Centenary. Insofar as the Applicant was concerned, the discussions related to his interest and suitability to fill the role of Deputy Director - Research Development and Partnerships (the Deputy Director role) at Centenary.

• [6] On 28 June 2023 Prof. Pellegrini sent an email to Prof. Rasko regarding his potential appointment to the Deputy Director role. On 6 July 2023 Prof Pellegrini sent a further email to the Applicant and Prof. Semsarian inviting them to submit expressions of interest for the two positions. On 14 July 2023 Prof. Rasko sent an application for the Deputy Director role to Prof. Pellegrini. No other persons applied for the position.

• [7] On 20 July 2024 Prof. Pellegrini sent Prof. Rasko a letter relating to the Deputy Director role. The letter included the following:

It gives me great pleasure to offer you the role of Deputy Director- Research Development and Partnerships at Centenary.

Your appointment to this position will be for a period of 2 years, starting from 1st August 2023 and ending on 1st August 2025 with an opinion (sic) to renew after this date.

In addition, you will also receive an allowance of $20,000 per annum.

A review of your overall progress, performance and suitability for the role will be conducted within the first 12 months of your appointment.

You will be issued with an employment contract in the coming week with further details regarding the above, which you will be asked to read, sign and return to HR.

Congratulations on your appointment. I look forward to your contribution and success in this exciting new role with Centenary.

• [8] Thereafter the parties engaged in discussions and correspondence over the terms of a written contract of employment. The discussions continued during the remainder of 2023 and extended into January 2024. The exchanges related to proposed amendments to the contract that had been provided to the Applicant and involved interactions between the parties and SLHD. Prof. Rasko had sought permission from SLHD as his employer to engage in secondary employment with Centenary.

• [9] The written contract of employment, originally issued to the Applicant on 2 August 2023, was never ultimately executed and the allowance referred to in the letter of offer was never paid.

• [10] In late January 2024 Centenary became aware of certain allegations against Prof. Rasko made by a former staff member. The matter was the subject of an investigation. A further complaint was made by a second complainant in late March 2024. Centenary decided that it would not progress the discussions with the Applicant about the contract while the allegations were being considered.

• [11] On 1 April 2024 Centenary suspended the Applicant's access to its premises.

• [12] On 11 June 2024 Prof. Pellegrini sent a letter to Prof. Rasko and SLHD giving notice of the termination of the affiliation agreement effective 8 September 2024.

• [13] On 11 September 2024 Prof. Pellegrini sent an email to Centenary staff advising that Centenary had decided to bring "the arrangement under which Professor Rasko works at Centenary" to an end.

• [14] The Applicant said that he commenced in the Deputy Director role on 1 August 2023 on the basis of the discussion with Prof. Pellegrini about the scope of the role, the application process which he successfully completed, the announcement that he had been appointed to the role, public representations that he occupied the role and the ongoing work he performed for Centenary from 1 August 2023 in that role.

• [15] The Applicant said he met with Prof. Pellegrini in late June 2023 and, in the course of the discussions, determined the position title for the Deputy Director role and the scope of the duties associated with it. The Applicant said that at or around the same time he also spoke with Dr. Teresa Anderson, the Chief Executive of SLHD about the role and sought her approval to take the role forward as a form of secondary employment, a course that Dr. Anderson approved.

• [16] The Applicant also relied on the evidence that he said demonstrated that the position of Deputy Director was created with the Applicant in mind and after discussions with him about what the role would involve. The Applicant referred to the evidence of Prof. Pellegrini to the effect that the position description had been 'more or less' agreed by early August 2023.[2]

• [17] The Respondent referred to documentary evidence to show that the position description, along with other key terms, were the subject of ongoing negotiation and were never settled between the parties. There was evidence that the draft position description was not provided until the Friday before 18 August 2023 and that a different version was provided in January 2024 which included changes to the term of contract from 2 to 5 years and the addition of a reference to the staff to be supervised by the Deputy Director. Centenary said the evidence did not support a conclusion that the position description had been agreed by 1 August 2023.

• [18] Evidence was given relating to the announcement to Centenary staff that the Applicant had been appointed to the Deputy Director role effective from 1 August 2023. The announcement of the appointment was made to a 'townhall' staff meeting on 26 July 2023.[3] The Applicant did not attend the meeting. Dr. Pierce, Centenary's Chief Operating Officer, gave evidence that information provided at such meetings was important and accepted that there was a need for such information to be correct and accurate. Prof. Pellegrini accepted in cross-examination that the announcement was not qualified by any condition or statement that the appointment would only take effect at some later point in time.[4]

• [19] The Applicant said Prof. Pellegrini's (and Dr. Pierce's) evidence confirmed that his appointment to the Deputy Director role had been communicated to Centenary's board later on the same day as the townhall meeting and that the three directors were part of the senior leadership and executive group.[5] It was accepted that Dr. Anderson was a member of Centenary's board.

• [20] Dr. Pierce gave evidence that the date 1 August 2023 coincided with the date on which two former deputy directors were to step down.[6] Dr. Pierce gave evidence that at the Leadership and Executive meeting on 1 August 2023, it was noted that the Applicant had been allocated particular responsibilities relating to the Deputy Director role.[7]

• [21] Centenary accepted that the announcements were made on 26 July but pointed out that this occurred in advance of 1 August on the basis of the expectation of the parties that a contract would be concluded, an expectation that did not eventuate.

Dealings relating to a contract of employment

• [22] Prof. Rasko's evidence was that he understood the position that was being created was an employed position and that there would be an employment contract associated with the position.[8]

• [23] On 2 August 2023 Centenary first provided the Applicant with a version of a written contract of employment. On the same day the Applicant responded by email in the following terms:

Thank you for progressing this. As you might be aware, there is a formal process that needs to be followed, which begins with me reviewing the contract and identifying any issues. At this stage all I have is an automated DocuSign system which does not allow me to review the contract prior to signing it. If you could please send me the contract as a word document, I will be able to review it.

After that, I then need to prepare a brief and application to the chief executive of SLHD, for permission to undertake secondary employment.

Once that approval has been granted (which should not take too long), I can then sign the contract using the DocuSign system.[9] (emphasis added)

• [24] On 18 August 2023 there was a further email exchange between the Applicant and Centenary. The Applicant's email included the following:

Thank you for sending the Position Description last Friday.

I've reviewed the documents "Deputy Director-Research Development and Partnerships. Position Description" and "EMPLOYMENT AGREEMENT" dated 28 Jul 2023 and referred them to my employer SLHD for advice and approval as required for secondary employment.

As there are pre-existing agreements and contracts concerning my obligations and employment, I have assumed in the following that there was no intention to change existing agreements.

I've been advised that SLHD intends to write a response letter to CI addressing IP concerns and the following is my response provided in good faith as a basis to proceed.

The Position Description is acceptable and should be appended to the EMPLOYMENT AGREEMENT e.g. as a Schedule or Annex.

Regarding the EMPLOYMENT AGREEMENT, there are issues that I set out as follows:

1.2 Your appointment will commence on 1st August 2023

The commencement date should not predate the presentation of the agreement document, which was received after that date. Time should be allowed to clarify aspects and resolve issues arising. Backdating should be avoided.

Is acceptable, subject to resolving the issues set out below and reaching final agreement on the terms of the EMPLOYMENT AGREEMENT.

• [25] The email from the Applicant also sought significant changes to the intellectual property clause in the proposed agreement as well as other proposed changes. An amended version of the proposed contract was sent to the Applicant on 29 August 2023.

• [26] By letter dated 9 October 2023 Dr. Anderson wrote to Prof. Pellegrini in relation to the secondary employment of the Applicant by Centenary. The Applicant was copied to the correspondence which appears to have been emailed on 25 October 2023 and which included the following:

Sydney Local Health District (SLHD) is supportive of the appointment of Prof John Rasko as the Deputy Director, Research Development and Partnerships with the Centenary Institute....

In conducting the necessary reviews for obtaining Secondary Employment Approval from SLHD it has come to our attention that there are clauses in the Centenary employment contract that Prof Rasko has been asked to sign which might conflict with his duties and obligations to SLHD. These are:

Prof Rasko is a full-time staff specialist at SLHD. Per the provisions of the Staff Specialists (State) Award, a requirement for approval is that it must not conflict with the Staff Specialist's commitments to SLHD or obligations under the Code of Conduct issued by the NSW Ministry of Health.

To realise the opportunities and mutual benefits for Centenary, SLHD and Prof. Rasko undertaking this new capacity, we kindly request that Centenary revise the noted clauses to remove confusion and resolve potential conflicts.

• [27] On 25 October 2023 there was a brief email exchange between Prof. Pellegrini and the Applicant about the SLHD correspondence. Prof. Rasko said, "Tripartite negotiations are always a pain in the buttocks, and of course I will need to read what is proposed from my own personal point of view as well when the opportunity presents."[10]

• [28] On 8 December 2023 the Applicant emailed Centenary and provided Centenary with a version of the contract which he had edited and reviewed. The email included the following:

I have conceded the moral rights item 7.4 and set out terms acceptable to me. 'Executive Director' appears to have been used interchangeably with CEO so I have reverted to the latter throughout. As the role includes performing in an acting capacity as CEO if required, I'd appreciate a copy of the delegations.

I hope there is little further to negotiate and look forward to executing after my return on 18th December.

• [29] On 11 December 2023 Dr. Pierce emailed the Applicant in the following terms:

Thanks for changing Executive Director to Director.

The document sent back to Alison Kent had additional changes in it. Some have been accepted. Others not.

1. Reference to the Affiliation Agreement between yourself, Centenary and SLHD has been removed as the document expired a number of years ago. At about that time Centenary Legal Counsel indicated the drafting posed in his view unacceptable risks to the parties. This view was given to the SLHD.

2. the start date of the DD position is 1 August. This has been inserted

3. It was discussed with Marc that the length of the contract has been increased

4. The insertion of additional remuneration when travelling has been removed

5. The PD was previously circulated for comment. Some changes have been

• [30] Prof. Rasko sent a further email to Dr. Pierce on 14 December 2023 in the following terms:

Taking your email comments on board, I'll need to seek further understanding of the existing current relationships viz a viz myself CI and SLHD.

Until that's completed it would be premature to further progress the Deputy Directorship formalities. It would assist me in moving things forward if you could please email the executed Affiliation Agreement and related material for review.

Meanwhile I will continue to act in the capacity Marc has requested - first described and proposed to me in person and by email in early May. The work commenced well before 1 August 2023 but either way I would appreciate the back pay owing before the shutdown and take this opportunity to wish you a happy Festive Season.

• [31] On the same day, Dr. Pierce responded by email which included the following:

As the now expired Affiliation Agreement was executed by SLHD, yourself and Centenary. All three parties have copies.

In the absence of an executed agreement no payment can be made as you are not an employee.

I am on leave after 15 December and look forward to resolving the matter in 2024 on everyones return from leave.

• [32] The Applicant sent a further email to Dr. Pierce on 17 December about the purported expiry of the affiliation agreement. The email included the following:

Unfortunately I should not continue to work in the Deputy Director role unpaid and without contractual arrangements agreed indefinitely, so will discuss with Marc and SLHD to determine the fairest approach while the contractual aspects are being resolved. Meanwhile I remain committed to continuing my other important roles at Centenary and hope to strengthen the vision that Marc has outlined with our support.(emphasis added)

• [33] On 27 December 2023 the Applicant wrote to SLHD seeking confirmation of the status of the affiliation agreement. The correspondence included the following:

As you and Joy are aware, since about May 2023 the new Director of Centenary, Prof. Marc Pellegrini, has invited me to become a Deputy Director of Centenary, which involves an employment contract and a small salary. Teresa supports this and Joy has reviewed and approved an earlier draft of the Employment Agreement...

• [34] Centenary submitted that the Applicant's own evidence made it clear that he knew that his employment with Centenary required the formal approval of his employer, SLHD, and had set about to obtain that approval. Prof. Rasko said that he needed support, or at least 'in principle' support, from SLHD before he could undertake secondary employment.

Duties undertaken by the Applicant as Deputy Director

• [35] Centenary accepted that the Applicant attended seven Deputy Director meetings, two board meetings[11] and some leadership team meetings. It was also accepted that the Applicant had not attended meetings of this kind prior to 1 August 2023. There was no evidence of attendance by the Applicant at any meetings, or of any other work being done by the Applicant after February 2024.

• [36] Professor Pellegrini's evidence was to the effect that one week after the Deputy Director role was announced, he had his assistant organise fortnightly 'deputy director meetings' which included the Applicant, to discuss matters of importance to Centenary. The seven deputy director meetings attended by the Applicant occurred in the period August 2023 to February 2024. The meetings each ran for approximately one to one and a half hours.

• [37] There was conflicting evidence as to the extent of the Applicant's participation in the various meetings. Prof. Pellegrini said the Applicant attended in an 'observational' capacity and that he allowed the Applicant to attend Deputy Director meetings in good faith while the parties worked towards finalising an agreement. He said the Applicant was invited to board meetings as a courtesy and he was not directed or obliged to attend. Both Prof. Pellegrini and Dr. Pierce said that where the Applicant did attend meetings he did not make 'substantive' contributions. This version of events was disputed by Prof. Rasko who maintained that he undertook work in the Deputy Director role for about 15-20 hours per month from August 2023, provided substantive input into meetings and supported Prof. Pellegrini in managing the strategic objectives of Centenary in his capacity as Deputy Director.

• [38] It was uncontroversial that the meetings involved sharing confidential and sensitive information, though Prof. Pellegrini gave evidence that the Applicant had a confidentiality agreement with Centenary that applied irrespective of the Applicant's Deputy Director position.[12]

• [39] Under cross-examination, Prof. Pellegrini was asked about an email sent by Centenary's Chief Strategist Ms. Ludoff, to persons including Prof. Rasko, seeking feedback on an agenda for a proposed meeting in September/October 2023. Prof. Pellegrini accepted that the request for feedback was made of the Applicant and that he was aware that the request had been sent.

• [40] Dr. Pierce gave evidence that he attended most of the fortnightly meetings between August 2023 and February 2024 and was aware that Prof. Rasko had not signed a contract for the Deputy Director role. He accepted that he did not say to Prof. Rasko that he was not required or expected to attend these meetings. Dr. Pierce also accepted that the Applicant was privy to confidential information, such as the cash position of Centenary, and that he was provided with papers for a Director/Deputy Directors meeting which he was expected to read and discuss at the meeting, and which was a task associated with a deputy director role.

• [41] Dr. Pierce gave evidence that the Applicant had been designated the responsibility by Centenary of attending events with third parties.[13] Unlike Dr. Pierce, Prof. Pellegrini denied[14] that the Applicant's attendance at a conference in October 2023 was on behalf of Centenary even though he asked the Applicant to attend, the Applicant 'may have' used the title of Deputy Director at the conference and certain costs of attendance were met by Centenary.

• [42] Prof. Pellegrini accepted that certain tasks had been assigned to the Applicant[15] such as 'creating lab head connections within the theme.' Minutes of Director's meetings indicated that Prof. Rasko had been designated to attend a meeting with another institute in early 2024.[16]

• [43] There was also evidence that Prof. Rasko had written to Dr. Pierce[17] and Prof. Pellegrini[18] asserting that he had been carrying out work in the Deputy Director role, or that he would continue to do so and that such assertions were not disavowed by either Dr. Pierce or Prof. Pellegrini. The Applicant submitted that this evidence showed that Dr. Pierce and Prof. Pellegrini were both of the view that the Applicant was in fact undertaking duties in the Deputy Director role and that Centenary was more than willing to accept the benefit of that work. There was correspondence in evidence dated as late as March 2024 from Prof. Pellegrini addressed to the Applicant as Deputy Director, which Prof. Pellegrini said simply expressed his preparedness to use the honorific title even though a formal contract had not been signed.

• [44] The Applicant contended that the evidence clearly demonstrated that he had been carrying out work in his capacity as Deputy Director since August 2023. The Respondent maintained that the evidence did not establish that Prof. Rasko had commenced and carried out work at the stipulated number of hours per month in accordance with an agreed position description. The Respondent said the interactions had to be considered in the context of the Applicant's longstanding relationship with Centenary and were simply consistent with a trusted person being brought into the leadership fold with the expectation that a contract would be finalised imminently.

Public representations as to the Applicant's status

• [45] The Applicant referred to the evidence about public representations as to his position within Centenary. There was an email dated 6 September 2023 from the head of Centenary's communications section to another staff member that referred to a meeting with Prof. Pellegrini about a website update that included a reference to the Applicant in the Deputy Director role. Prof. Pellegrini confirmed that such a meeting had taken place.[19]

• [46] Prof. Pellegrini accepted that from November 2023 he was aware that the Applicant was referred to on Centenary's website as being in the Deputy Director role[20] and that he was content for that situation to prevail at that time. There was evidence that the senior leadership team heard a report about the updated website on 14 November 2023[21] and that the website made reference to the appointment of the Applicant as Deputy Director.[22] Dr. Pierce also gave evidence that he was authorised to approve website content, that he had received an email from the Applicant requesting his position as Deputy Director be referred to and had not taken any steps to qualify the website content relating to the Applicant's position.[23]

• [47] Further, there was evidence that the Applicant was permitted to engage in media interactions using the Deputy Director title and that Centenary monitored such interactions through a media monitoring service. The Applicant accepted that he did not give notice to Centenary about the change to his email signature[24] but said the change was readily apparent and no-one within Centenary took exception to it. Dr. Pierce also gave evidence that he did not have any difficulty with the Applicant being associated with Centenary in relation to email correspondence about media coverage.

• [48] The Applicant also relied on evidence to the effect that Centenary permitted grant applications by and nominations for awards relating to Prof Rasko which referred to his title of Deputy Director.[25]

• [49] The Respondent accepted that no steps had been taken by them to 'correct' the use of the Deputy Director title on their website but that the change had been initiated by Prof Rasko himself and that any failure to address the matter could be explained by the expectation that an agreement would be finalised imminently.

• [50] Prof. Pellegrini gave evidence, which was not disputed, that in contrast to Prof. Semsarian, who executed and returned his employment contract, no 'onboarding' paperwork such as superannuation choice forms or tax file number declarations were ever issued to or completed by the Applicant.[26]

• [51] There was also evidence from Prof. Rasko that he took annual leave in December/January 2023-24 and in doing so, sought and obtained leave from SLHD in accordance with their processes but did not seek permission to take leave from Centenary. He said that Dr. Pierce was aware that he was overseas in this period and that he told Prof. Pellegrini that he would be away. Centenary submitted that the evidence in relation to leave was consistent with the proposition that Prof. Rasko did not consider himself bound by the obligations associated with an employment relationship.

• [52] It was accepted that no payments in the nature of wages were ever made by Centenary to the Applicant. The issue of payment was not raised by the Applicant until December 2023. Prof. Pellegrini accepted that he had told the Applicant that he would be back paid to 1 August 2023 once the contract was signed even though he maintained that the Applicant had not been performing duties in the Deputy Director role.[27]

• [53] The Applicant contended that all of the circumstances surrounding the relationship between the parties, including conduct, had to be considered and that an analysis of the evidence would support a conclusion that the Applicant was ultimately dismissed from his employment by the Respondent on 11 September 2024. The Applicant also submitted that the evidence supported the view that the essential aspects of the employment had been agreed between the parties. This included the commencement date, term, and the remuneration and duties relevant to the position. The Applicant said that a contract of employment existed pursuant to which Prof. Rasko was engaged in the Deputy Director role on and from 1 August 2024. The Applicant said that the contract was an oral and/or implied contract based on the words and conduct of the parties.

• [54] The First Respondent disputed that any contract of employment had ever be brought into existence. They said that it was clear that the parties understood that the relationship had to be formalised, that authority had to be provided by SLHD and that the final terms had never been agreed.

• [55] Section 386 of the Act sets out when a person is taken to have been dismissed for the purposes of s.365. It provides, relevantly:

(a) the person's employment with his or her employer has been terminated on the employer's initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

• [56] The Applicant relied on subclause (a) of s.386(1) and contended that the reference in that subclause to the termination of a person's employment on the employer's initiative was to be taken as a reference to the termination of the employment relationship not the contract of employment. Reliance for that proposition was placed on the often-cited Full Bench decision in Khayam v Navitas English Pty Ltd t/a Navitas English[28] (Khayam). The Applicant said that the Respondent's reliance on the absence of a finalised and executed written contract of employment was misplaced and had been considered and rejected by the majority in Khayam.

• [57] After a detailed consideration of the history of legislative provisions relating to termination of employment and the case law in which those provisions had been considered, the majority in Khayam said:

The analysis of whether there has been a termination at the initiative of the employer for the purpose of s 386(1)(a) is to be conducted by reference to termination of the employment relationship, not by reference to the termination of the contract of employment operative immediately before the cessation of the employment. This distinction is important in the case of an employment relationship made up of a sequence of time limited contracts of employment, where the termination has occurred at the end of the term of the last of those contracts. In this situation, the analysis may, depending on the facts, require consideration of the entire employment relationship, not merely the terms of the final employment contract.[29]

• [58] The Respondent pointed out that Khayam was concerned with a factual scenario in which a series of fixed term contracts had operated and an employer had advised the employee that they would not be renewing the contract when the last of those contracts came to an end. The Respondent said there was nothing in Khayam to suggest that there could be an examination of an employment relationship in isolation or in the absence of any employment contract at all. The Respondent said that the case concerned a situation where a contract had come to end but the overarching employment relationship had remained on foot but that no consideration as to whether there had been a termination of the employment relationship could arise in this instance because the parties did not ever execute an employment contract and the analysis in Khayam was therefore of no assistance.

• [59] In NSW Trains v. James[30] the Full Bench was considering the circumstance in which an employee had been demoted but remained in an employment relationship with the employer. In concluding that the demotion was a dismissal for the purposes of s386(1)(a) the majority said:

We agree with the proposition that the expression 'employment ... has been terminated' in s.386(1)(a) means termination of the employment relationship and/or termination of the contract of employment. Contrary to the Deputy President's view at first instance, on this construction, unless the circumstances in s.386(2)(c) apply, an employee may be dismissed within the terms of s.386(1)(a) if the employer has repudiated the employee's contract of employment by demoting the employee and the employee has accepted that repudiation but has continued to be employed by the employer under a new employment contract.

• [60] It is apparent from the above authorities that in different circumstances, the termination of employment referred to in s.386(1)(a) can embrace the bringing to an end of either the employment relationship or the contract of employment, or both. More recently, and in the context of considering whether the termination of an 'outer limit' contract at the expiry of its term could constitute a dismissal, a Full Court of the Federal Court of Australia in Alouani-Roby v. National Rugby League Ltd[31] said:

[63] ....At least for present purposes, distinctions between employment relationships and employment contracts are artificial: the termination of an employment relationship and the termination of an employment contract are the same thing. Employment relationships can be created, changed and brought to an end; but (leaving aside possible exceptions involving repudiatory breach, as to which see Visscher v Giudice [2009] HCA 34; (2009) 239 CLR 361) only ever upon the execution, variation or termination of an employment contract. That being so, the reference in s 386(1)(a) of the FW Act to "the person's employment with his or her employer [having been] terminated" can only be understood as a reference to the person's contract of employment being brought to an end (or, perhaps in some cases, repudiated).

• [61] Clearly, employment contracts and employment relationships are, as the Applicant put it, related but distinct concepts. In Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA1 the High Court observed as follows:

In Commonwealth Bank of Australia v Barker, French CJ, Bell and Keane JJ said:

"The employment relationship, in Australia, operates within a legal framework defined by statute and by common law principles, informing the construction and content of the contract of employment."

An employment relationship will not always be defined exclusively by a contract between the parties. Historically, the employment relationship was recognised and regulated by the law before the law of contract came to govern the relationship. An employment relationship, though principally based in contract, may be affected by statutory provisions and by awards made under statutes.[32]

• [62] In the same decision, their Honours Gaegler and Gleeson JJ said:

105. Typically, although not universally, the relationship of employment is established and maintained under a contract between the employer and the employee....

110. The relationship of employment is, however, not to be conflated with the contract under which the relationship is established and maintained. The two are "distinct". "The employment is the continual relationship, not the engagement or contracting to employ and to serve." "It is the service ... carried on."

111. Whether a continual relationship for which a contract might make provision actually exists at any given time is a question of fact. Whatever the contract might say about the obligations of the parties, a relationship of employment does not exist until the relationship is in fact formed, and the relationship of employment ceases to exist when the relationship is in fact broken. Thus, "[i]t does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract". One consequence is that a wrongfully dismissed employee can refuse to accept the dismissal and can "[keep] the contract open" by remaining ready and willing to work. If the employer can then be induced to retract the dismissal, the employment relationship can be re-established without need for a new contract. (footnotes omitted)

• [63] Just as an employment relationship and a contract of employment might end at different times, it is also accepted that a contract can come into existence before work,[33] and the employment relationship,[34] commences. Commonly however, the contract of employment and the employment relationship co-exist and begin and end at or about the same time. It is also typically the case that the employment relationship has its origins in, and rests upon, a contract of employment.[35]

• [64] In the present case the Applicant did not contend that there had been a termination of the employment relationship on the initiative of the employer and that the relationship had existed and been brought to an end in a contractual vacuum. Instead, it was put that there had been an employment relationship and a coexisting contract of employment. In closing submissions, the Applicant said that there was an oral and/or implied contract between the parties which commenced at the same time as the employment relationship, namely 1 August 2023. The Applicant said that the parties had, by their words and conduct, objectively assessed, clearly evinced an intention that they intended to assume binding contractual obligations to each other[36] and the essential terms had been agreed by this time. Thus, even though it was accepted that a written contract was never concluded and signed, there was, on the Applicant's view, a contractual basis for an employment relationship that was brought to an end by Centenary on 11 September 2024.

• [65] As with other contracts, an intention to enter into binding contractual relations is one of four essential elements for a contract of employment. The others are that the parties have capacity to contract, that there is offer and acceptance and that there is consideration in the form of mutual promises by the parties.[37]

• [66] Both parties referred to and relied on the decision of the Full Court of the Federal Court of Australia in EFEX Group Pty Ltd v. Bennett[38] where the Court considered the inferences that might be drawn from post-contractual conduct in circumstances where the terms of the contract were not reduced to writing. The plurality in the case said:

In the absence of a written contract and no evidence of a particular conversation during which the contract was made, "evidence of the parties' conduct must necessarily be considered in order to draw inferences as to whether the meeting of minds necessary to create a contract has occurred and what obligations they have thereby undertaken": Personnel Contracting at [177] per Gordon J (Steward J agreeing), as summarised in Chiodo v Silk Contract Logistics [2023] FCA 1047 at [9].[39]

Put another way, in the absence of a written contract, the established principles of inferring a contract from the acts and conduct of parties (as well as in the absence of their words), come into play, and such conduct may be considered not only for the purpose of inferring whether a binding agreement had been reached at some point in time, but also for the purpose of identifying its necessary terms.[40]

• [68] In Ermogenous v Greek Orthodox Community of SA Inc[41] the High Court said the following about the issue of the intention to create contractual relations:

Because the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.[42]

• [69] I do not think that the evidence here supports a conclusion that objectively considered, the words and conduct of the parties demonstrates an intention to assume binding contractual obligations between themselves or that a binding employment contract had been entered into commencing on 1 August 2023.

• [70] First, it was clear from the outset that the obligations that the parties were proposing to assume were to be included in a written contract of employment. The correspondence of 20 July from Prof. Pellegrini said 'You will be issued with an employment contract in the coming week with further details regarding the above, which you will be asked to read, sign and return to HR.'[43] In cross-examination Prof. Rasko said:

And I put to you on two occasions that you had discussed that this was an employed position and that there would be an employment contract?---That's correct.

And you agreed with me that that was discussed?---I do. I do agree.

Okay. And so you accept that that was discussed with Professor Pellegrini?---A

Yes. And so what you're being told now on the 20 July is entirely consistent with those discussions, that is, that with the role came an employment contract?---That's right.

And so you understood that what you were required to do was read it, sign it and return it to HR?---It says, 'I will be asked to read it, sign it, and return to HR.'

Yes. And that was part of the offer. Part of the offer was that you will be issued with an employment contract. It will contain further details, that is, more information is coming and you will be asked to read, sign and return to HR. Correct?---That's what I will be asked.

Okay. Are you having difficulty with my question? You were told that that's what was part of the offer. Part of the offer is that you will receive a contract in the coming week and you will be asked to read that contract, sign it and return to HR?---I don't have any difficulty.[44]

• [71] Second, Prof Rasko made it clear from early August 2023 that he believed that there was a formal process to be followed and that he wanted to have input into the draft terms of the contract that had been proposed by Centenary and be satisfied as to those terms. On 18 August 2023 Prof. Rasko wrote to Centenary providing comments on the contract of employment that had been provided to him. The commentary included a reference to a clause being acceptable subject to final agreement on the terms of the employment agreement.[45]

• [72] Further, the Applicant was not only pointing Centenary to the need to follow formal processes but referring them to the need for him to obtain permission from SLHD to undertake secondary employment. The correspondence went on to say:

After that I then need to prepare a brief and application to the chief executive of SLHD for permission to undertake secondary employment.

Once that approval has been granted (which should not take too long), I can then sign the contract using the DocuSign system. (emphasis added)

• [73] In cross-examination Prof. Rasko accepted that he was in the process of obtaining secondary employment approval and that he needed that approval before undertaking any secondary employment.[46]

• [74] In submissions it was put by the Applicant that there were early indications that SLHD supported the appointment, including the fact that Dr. Anderson as a board member of Centenary was made aware of it, and that in any event, whatever limitations may have applied because of the Applicant's employment relationship with SLHD, this did not vitiate any contractual arrangement entered into between the Applicant and Centenary.[47] At most it was said this may have 'created an issue' between Prof Rasko and SLHD but it did not stop the Applicant from forming a contractual relationship with Centenary.[48] However, the following evidence was given by Prof. Rasko in cross-examination:

Is it your understanding that you needed - or was it your understanding at the time that you needed to obtain secondary employment approval from Sydney Health in order just to sign the contract. But if you were doing a job without a contract that didn't require the same processes?---I had a large degree of flexibility in deciding what I did undertake. However, if it was paid employment, then that was necessary to get secondary employment approval.

Yes. You couldn't undertake paid employment without the formal approvals?---That's right.[49]

• [75] The correspondence from the Applicant to Centenary on 18 August 2023, referred to at paragraph [24] above, says that the employment agreement and the position description has been referred by the Applicant to his employer SLHD 'for advice and approval as required for secondary employment.' That formal approval had not been obtained by 1 August 2023. I do not accept that objectively considered, the evidence supports the view that the Applicant was conveying to Centenary that he was able to enter, and had entered into a binding contractual arrangement with Centenary absent the formal approval of SLHD.

• [76] In the 18 August correspondence the Applicant also took issue with a number of the proposed clauses in the employment contract, including the commencement date, the use of social media and intellectual property arrangements. The Applicant said that in relation to clause 2.2 that the proposed clause was acceptable subject to the resolution of the issues set out in the correspondence 'and reaching final agreement on the terms of the EMPLOYMENT AGREEMENT' (original capitalisation). The Applicant then also proposed the deletion of 4 other clauses in the proposed agreement. Important terms such as commencement date and intellectual property, were not agreed by the Applicant on 18 August. It was acknowledged that another clause was acceptable to the Applicant subject to final agreement on the terms as a whole. Both the employment agreement and the position description had been sent by the Applicant to SLHD for 'advice and approval'. In my view this correspondence is inconsistent with the proposition advanced by the Applicant that the parties had already entered into a binding employment contract which had commenced on 1 August 2023.

• [77] The correspondence from SLHD of 9 October 2023 and signed by Dr. Anderson indicates that whilst SLHD was supportive of the appointment, insofar as SLHD was concerned, there were outstanding matters that needed to be resolved before Prof. Rasko's contractual arrangements with Centenary could be finalised and approval for secondary employment given. The correspondence was copied to Prof. Rasko and there was no evidence that he disavowed it contents - by suggesting that there was already a contract of employment that had been in existence for over 2 months, or otherwise.

• [78] There is also the correspondence[50] from Prof. Rasko to SLHD in December 2023 in which the Applicant says that Centenary was 'offering' an employment position as a Deputy Director and that Prof Pellegrini had 'invited (him) to become' a Deputy Director which involved an employment contract and salary. Although this is not correspondence directed to Centenary, and notwithstanding the signature line including the reference to the Deputy Director role, it must objectively be seen as the Applicant conveying that he was not at that time employed in that position.

• [79] On 17 December 2023, Prof. Rasko wrote[51] to Dr. Pierce saying that he could no longer work in the Deputy Director role unpaid without contractual arrangements agreed.

• [80] It was not disputed that the negotiations relating to the finalisation of the written contract were ongoing even as late as February 2024 and were never concluded. The evidence as to the non-payment of the 'allowance' referred to in the contract and the issue of back-pay is, in my view, consistent with the idea that the parties had not assumed binding obligations between themselves. I accept the Respondents' evidence[52] that the discussion about back-pay was to the effect that it would be paid once the contract was entered into rather than as Prof. Rasko put it, that there were no qualifications[53] attached to the proposed payment. The non-completion on 'onboarding' forms and the fact that Prof. Rasko did not seek permission from Centenary to take leave at the end of 2023 lend further support to the conclusion that the parties' conduct, objectively assessed, was not consistent with a mutual intention to create binding legal relations.

• [81] There are also difficulties with the Applicant's argument that a binding contract had been entered into as of 1 August 2023 on the basis of a clear offer and acceptance of the terms of a contract by that date. Firstly, the evidence does not, in my view, go so far as to establish that there was an oral contract created by discussions between the Applicant and Prof Pellegrini.

• [82] There was limited evidence as to a discussion in June between the Applicant and Prof. Pellegrini about the role. According to the Applicant, he and Prof. Pellegrini determined the position title and the scope of duties during this discussion. The documentation showed that Prof. Pellegrini was refining the details of the role as at 28 June 2023.[54] There was later an invitation for an expression of interest and an application for the role. A letter of offer of 20 July followed. It was not suggested that the letter of offer was a written contract. The letter of offer contained limited information. It referred to the allowance to be paid, the title of the position, the period of the appointment, the fact that there would be a performance review within the first 12 months and, importantly, said that a contract would issue in the coming week that would have to be signed and returned. There was no evidence of any discussion between Prof. Pellegrini and the Applicant after the letter of offer was issued whereby the terms of the letter were orally accepted. Prof. Rasko did not disagree with the proposition that nothing had been agreed by 26 July 2023:

Okay. But at that point in time, by 26 July you hadn't actually formally accepted

anything. That is, you hadn't responded to this letter of the 20 July, you were

awaiting the contract. Correct?---I was awaiting the contract.[55]

• [83] Generally, the terms of the offer and the acceptance must coincide. Had it been the case that the Applicant performed duties consistent with the letter of offer without demur, it may have been possible to argue that the acceptance of the offer could be inferred from the conduct of the Applicant. However, it is readily apparent from what followed that there were significant features of the written contract that was provided after 1 August which were the subject of disagreement, negotiation and referral to SLHD for approval. The Applicant took issue with the terms of the contract from the outset and made it plain that there was a process to be followed and finalised before he considered himself bound. Objectively considered, his words and conduct would convey that view to a party in the position of Centenary. I also consider it relevant to the issue of acceptance that the position description was not provided to the Applicant until after 1 August i.e. Friday 11 August 2023,[56] after which, on 18 August, although Prof. Rasko indicated his own acceptance of it, he also referred the position description to SLHD for review and approval, and told Centenary he was doing so.

• [84] It is of course possible for contracts of employment to be created even though the circumstances might not neatly accord with conventional notions of offer and acceptance. Damevski v. Guidice[57] is one such case. It is also not exceptional in an employment context for employees to commence work before formalising and finalising the terms under which the work is to be performed. In many cases the work might be performed without controversy and be regarded as acceptance by conduct for a contract the final terms of which is later concluded. However, an inference of acceptance by conduct, in this case the performance of duties consistent with the Deputy Director role, such as attendance at meetings, is difficult to draw in circumstances where parties are disputing and/or actively negotiating the finalisation of written terms.

• [85] In Sayed v Construction, Forestry, Mining and Energy Union[58] the Court was considering whether a concluded contract had been brought into existence in June 2013 where no written contract was executed by the parties. The Court considered the evidence and concluded that there was no such contract. Mortimer J (as she then was) said:

In my opinion, what the evidence reveals is an advanced stage of negotiations between the parties about the terms of the applicant's second employment contract, largely brought on by the applicant himself wishing to check the terms and then modify at least one of them. There was clearly an expectation in late June 2013 by both parties that a second employment contract would be finalised, but in my opinion that event did not occur.[59]

• [86] In McKay v. Abbey Vale Estate[60] the Supreme Court of Western Australia rejected an argument that an agreement, including a description of duties, contained all of the terms of a binding agreement between the parties even though it had not been signed by the plaintiff. The plaintiff had argued that he had objected to a particular clause and rejected the agreement even though he had continued to work and be paid by the defendant. The Court concluded:

In my view, there was no agreement reached in terms of the second agreement. Following discussions at the July 2001 meeting, it was clear that, at the very least, the plaintiff was dissatisfied with one clause in the second agreement and I do not think it can be said that there was at that stage an agreement. There were no further discussions regarding the non‑solicitation clause and that issue remained outstanding. Whilst the plaintiff provided a job description to Thomas who then incorporated it into a further draft of the second agreement and there were other discussions regarding the plaintiff's position with the defendant in the form of handwritten notes on correspondence from Tottle Christensen to the plaintiff dated 17 July 2001, I do not think that that results in any concluded agreement. It seems more likely than not that the position adopted by the parties was that there was little need for the negotiations to be pursued with any urgency as the plaintiff was continuing to work at the vineyard on terms as to salary and the like that would remain the same under any subsequent agreement. Further, it seems that Thomas was preoccupied with the financial difficulties suffered by the defendant. Finally, and as I have indicated above, I do not believe that it can be said that the plaintiff indicated an intention to accept the second contract by his conduct in performing duties referable only to the second agreement.

• [87] In Jago v. Coastalwatch Pty Ltd[61] the Supreme Court of New South Wales said:

If a contract is said have arisen from discussions between the parties, the Court must be satisfied that a consensus as to essential terms was achieved. In R.T. & Y.E. Falls Investments Pty Ltd v The State of New South Wales & Ors [2001] NSWSC 1027 at [50] Palmer J said that where an informal contract arising from discussions or negotiations between the parties is alleged, the Court must be satisfied that the parties arrived at a consensus as to the terms of the agreement, that the terms were sufficiently certain to be capable of forming a binding contract and that the parties, by their words and conduct taken in the context of the surrounding circumstances, evinced a common intention that the consensus at which they had arrived should constitute an immediately binding contract.

• [88] The Applicant urged that there was sufficient certainty and agreement on essential terms as to constitute a binding agreement as at 1 August 2023. Reliance was placed on the decision of the New South Wales Court of Appeal in Helmos Enterprises Pty Ltd v. Jaylor Pty Ltd[62] where the Court referred to an earlier decision of McLelland J in Baulkham Hills Hospital Pty Ltd v. GR Securities Pty Ltd[63] which discussed a fourth class of circumstances in addition to the three identified by the High Court in Masters v Cameron.[64] McLelland J said:

"There is in reality a fourth class additional to the three mentioned in Masters v Cameron ... namely, '... one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.' "

• [89] The Applicant said that Helmos supported the view that it was unnecessary to take an 'in toto' approach to a contract and identify a comprehensive agreement before a contract could be said to exist at all. However, I do not think the evidence supports a conclusion that 'the parties were content to be bound immediately and exclusively by the terms which they had agreed upon', or that there was in fact any agreement at all.

• [90] The first response of Prof. Rasko on receipt of the draft contract was to say that a formal process had to be followed which included his own review of the terms, followed by the preparation of a brief and an application to SLHD for permission to undertake secondary employment. On 18 August 2023 Prof. Rasko was disputing the commencement date and raising issues with other terms. He said that one clause was acceptable subject to reaching final agreement on the terms of the employment agreement. He said he would be happy to proceed if all of his proposed changes were acceptable. By as late as 17 December 2023, he was asserting that there were no contractual arrangements agreed.

• [91] In the end, the existence of at least some matters relied on by the Applicant as indicating that the Applicant was employed by Centenary was largely uncontroversial. An announcement about the 'appointment' was made, albeit before any appointment was said to have commenced. The title of Deputy Director was used and communicated to third parties. Some work was undertaken by the Applicant in the Deputy Director role although the extent of that work was in dispute. In the circumstances it is unnecessary to determine the full extent of work undertaken that may ultimately have remained unpaid. However, overwhelmingly, the evidence shows that there was no binding employment contract between the parties upon which an employment relationship could rest. Even in the context of a longstanding existing relationship between Prof. Rasko and Centenary, the interactions between the parties, who were all sophisticated actors, conveyed an intention to postpone the creation of binding contractual relations until the terms were finalised, reduced to writing and executed.[65] The conduct of the parties is to be considered in circumstances where the regulation of an employment relationship of this kind would likely require detailed contractual terms, particularly given that the relationship was to be one of secondary employment and there was a pre-existing tripartite relationship. The parties by their conduct accepted this to be the case from the outset and continued in their attempts to finalise that contract, ultimately without success.

• [92] I do not think that the documentation or the words and conduct of the parties evince an intention that the parties be immediately bound by the terms of an agreement that was to commence on 1 August 2023. Nor do I think that the words and conduct objectively convey an offer and acceptance of terms resulting in a contract that had commenced to operate on 1 August 2023.

• [93] I conclude that the Applicant was not employed by the First Respondent. There was no "employment" for the purposes of s.386 of the Act and the Applicant was not "dismissed" by the First Respondent. The Commission does not have jurisdiction to deal with the application as it was not validly made under s.365 of the Act.

In-person at the Fair Work Commission Sydney at 10am AEDT on Monday 21 January 2025 and Tuesday 22 January 2025.

Oral final submissions heard in-person at the Fair Work Commission Sydney at 10am AEDT on Friday, 7 March 2025.

[1] Coles Supply Chain Pty Ltd v. Milford [2020] FCAFC 152; (2020) 279 FCR 591.

[7] PN 795 and following. See also Pellegrini at PN1125.

[11] On 30 August and 29 November 2023 (Exhibit R4 paragraph 32). The Applicant was invited to six board meetings - PN1808.

[13] PN 724 -732. See also PN 439, 469-471.

[28] [2017] FWCFB 5162.

[30] [2022] FWCFB 55.

[31] [2024] FCAFC 161.

[32] At [40] and [41] per Kiefel CJ, Keane and Edelman JJ, footnotes omitted.

[33] Turner v Australasian Coal & Shale Employees Federation [1984] FCA 275; (1984) 6 FCR 177.

[34] AFAP v Jetstar Airways Pty Ltd [2014] FCA 15.

[35] Barnett v Territory Insurance Office [2011] FCA 968; (2011) 196 FCR 116 at [24].

[36] Evans v. Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81; (2012) 289 ALR 237, Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95.

[37] The Modern Contract of Employment, I Neil, D Chin and C Parkin, 3rd ed (2023), at [3.003].

[38] [2024] FCAFC 35.

[39] Per Katzmann and Bromwich JJ at [7].

[41] [2002] HCA 8; (2002) 209 CLR 95.

[44] PN 2344-2347, 2351-2353. See also PN 2296.

[47] Helmos Enterprises Pty Ltd v. Jaylor Pty Ltd [2005] NSWCA 235.

[48] PN238 and following - 7 March 2025.

[58] [2015] FCA 27.

[60] [2003] WASC 2.

[61] [2009] NSWSC 594.

[62] [2005] NSWCA 235.

[63] (1986) 40 NSWLR 622.

[64] [1954] HCA 72; (1954) 91 CLR 353.

[65] Masters & Anor v. Cameron [1954] HCA 72; (1954) 91 CLR 353 at 360.

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