Shrestha v City of Ryde Council

Industrial Relations Commission (NSW)|2024-01-30

EX TEMPORE decision

Before the Commission is a notice of motion seeking dismissal of an unfair dismissal application filed on 7 November 2023 by Mr Shrestha.

The substantive application

Briefly, Mr Shrestha said that his dismissal was harsh, unjust and unreasonable because there was a: "(1) Lack of preliminary consultation, (2) Non-negotiation of accumulation work-related stressors, (3) Lack of orientation and induction, (4) Lack of any review or information regarding concerns of work performance, (5) Lack of procedure in relation to the lead up to the dismissal (6) [he had] been dismissed to cover bad management practices and procedures not because of his own performance."
Attached to his application was his letter of dismissal which, relevantly, was headed "Re termination of employment in probation" and stated, in summary, that his employment contract dated 17 July 2023 specifically included a clause headed "Probation period", which stated that he was under a six-month probationary period from the date of commencement of 14 August 2023.
The letter briefly summarised a number of alleged failures and underperformance by the applicant, and said that, "[i]n view of the above, please be advised that your employment contract with City of Ryde will be terminated effective Friday, 20 October 2023", which was the date of the letter.

Employer objects to jurisdiction

By the employer's response to the unfair dismissal application, filed on 17 November 2023, the employer set out its position. This was that the applicant commenced employment with the respondent on 14 August 2023, that he was engaged pursuant to a contract of employment which included a probation period of six months, that the employment was terminated on 20 October 2023, within three months and during the probation period and that the applicant was paid two weeks in lieu of notice pursuant to the terms of the Local Government State Award 2023.
It further set out jurisdictional objections to the application. Firstly, that the respondent objected to the applicant's claim for unfair dismissal pursuant to the combined operation of s 83(2)(b) of the Industrial Relations Act 1996 and reg 6(1)(c) of the Industrial Relations (General) Regulation 2020; that the respondent submits the applicant's employment was terminated within three months and during the probation period, in which case the applicant does not have jurisdiction to obtain relief; and, in any event, the probation period of six months was reasonable in the circumstances.
Conciliation of the matter was unsuccessful, so the Commission programmed the matter for hearing of the respondent's jurisdictional objections. The objections related to the exclusion of the Commission's jurisdiction pursuant to reg 6 of the Regulations.

Regulation excluding employees during probationary period

Regulation 6 provides: 6 Other exemptions from unfair dismissal (1) For the purposes of section 83(2) of the Act, the following classes of employees are exempted from Part 6 of Chapter 2 of the Act - … (c) employees serving a period of probation or qualifying period if - (i) the period, or the maximum duration of the period, is determined in advance, and (ii) the period, or the maximum duration of the period, is either - (A) 3 months or less, or (B) if the period, or the maximum duration, is more than 3 months - reasonable, having regard to the nature and circumstances of the employment, … (2) This clause applies only with respect to dismissals under contracts of employment entered into on or after 1 October 1997.
In short, the respondent's objection is put on two distinct bases. The probationary period was determined in advance to be six months, and this is reasonable, or reg 6 should be read such that if an employee is on probation, and is dismissed within three months, the employee is excluded from the Commission's jurisdiction.
In short, the applicant says (1) it agrees that the period was determined in advance at six months, so the respondent cannot invoke the three month period as they have set six months; and (2) because the applicant was dismissed after nine weeks, slightly more than two months into a six month probation period, and based on the respondent's evidence that six months was needed to assess the applicant's performance, it was not possible to fairly dismiss the applicant; and (3) the Commission needs to assess the circumstances of the dismissal to determine the reasonableness of the probation period.

Task of the Commission

Given that what is before the Commission for determination is a challenge to the jurisdiction of the Commission, two things flow: 1. Firstly, those objections must be determined before consideration can be given to the substantial merits of the claim. This is because the Commission is exercising a power wholly created by statute, so can only act within the power or jurisdiction conferred by that statute. And further, the jurisdictional objection is clearly one which is neither frivolous or vexatious and so cannot be summarily dismissed. 2. And secondly, the Commission will address the objections in the order they have been made by the respondent.
Accordingly, the Commission will first determine if the six-month probationary period is "reasonable having regard to the nature and circumstances of the employment".
The Commission will next address the question of whether the correct way to understand the totality of reg 6(1)(c) is that an employee serving a period of probation is excluded from the Commission's jurisdiction if dismissed within three months, even if the pre-determined probation period is longer than six months.

Respondent's submissions

In primary submissions, the respondent's case was as set out in its written submissions: "5. The Respondent relies on the judgment of Wilcox CJ in Nicholson v Heaven & Earth Gallery Pty Ltd [1994] 57 IR 50, which contemplates the way in which the reasonableness of a probationary period ought to be determined. Relevantly at [58]-[59] Wilcox CJ opined: Whether or not the stipulated period is reasonable, is a matter that has to be determined by the person hearing the case, as an exercise of judgment. The judgment should be based on the proved objective facts, not on someone else's opinion. Probably the most important consideration, in determining what is a reasonable period, will be the nature of the job. In the case of a person employed to carry out repetitive duties under close supervision, a reasonable period may not extend beyond a week or two. In the case of a person employed in a marketing or managerial position, working with little or no direct supervision, and whose quality of performance cannot be immediately apparent, it may be reasonable for an employer to specify a probationary period measured in months. Circumstances will vary from case to case; the size, location and mode of operation of the employer being relevant factors, along with the personal characteristics and circumstances of the employee. The legislature has not prescribed the maximum extent of a reasonable period. It is not for me to do so... 6. The Respondent notes that the obiter of Wilcox CJ in Nicholson is modified by virtue of the operation of r 6(1) of the Regulation. At the time of the judgment, the operative section which was considered by His Honour was section 30B(1) of Industrial Relations Regulations (Cth), which did not infer a probation period of 3 months was reasonable. His Honour's comments are instructive but must be distilled through the lens of regulation 6(1) of the Regulation. 7. The Respondent submits that all circumstances of the employment are relevant in determining whether the period of probation is reasonable, as stated by Connor C in Levy v. New South Wales Fire Brigades [2009] NSWIRComm 1011 at [41]: When Reg. 6(1)(c)(ii) speaks of the reasonableness of the probationary period being considered "...having regard to the nature and circumstances of the employment..." it dictates that all the circumstances of the particular employment of the dismissed employee should be borne in mind. 8. The Respondent contends that the maximum period of probation as agreed between the parties ought not be altered unless the Commission finds that there is a substantial reason to do so. 9. This position is supported by Harrison DP in Smith and Corrective Services 2012 NSWIRComm 30, where his honour stated at [42]: The Commission will not lightly intrude upon the exercise of a statutory right or the agreement of the parties. 10. This aligns with the legislative intent of the probation period, which, in the view of Kirby P in Director General of the Department of Corrective Services v Mitchelson (1992) 42 IR 38 was: ...to consider, by observation of the probationer's work performance under trial, whether he or she is suitable to enjoy the privileges attaching to permanency. 11. Further, in Jeanette Elizabeth Creedon and Clarvon Limited t/as Footrest Shoes [1999] NSWIRComm 269 (hereafter referred to as "Creedon") DP Sams considered that in answering whether the probationary period in this case was reasonable, consideration ought to be had for whether the employee was aware of the period, and if their agreement had been sought in advance of the commencement of the employment relationship. … 14. Flowing from the judgment of Wilcox CJ, the Commission must turn its mind to several factors in forming a view as to the reasonableness of the probation period. Most importantly, the Commission must have regard to the nature and circumstances of the Applicant's role. 15. The Applicant's position is complex in nature. The engineering positions that report to the Applicant's position require expert engineering design knowledge. The Applicant's position is required to sign off on engineering designs as being compliant with Australian Standards and Council's Business Process Manuals. 16. The evidence of Meroeh Suesser shows that the Engineering and Project Delivery department undertake projects (referred to being made up of designs) which take at least several months to produce. … 19. The Applicant's position has six reports that develop civil engineering designs (par 7 & 12 of MS Statement and MS-1). 20. At par 12-23 of MS Statement, Ms Suesser details that the design process can broadly be characterised as consisting of the planning phase, where the design brief is assessed by civil engineers (who report to the Applicant) and all the relevant pre-approvals are sought; the concept phase, where stakeholder consultation is undertaken in conjunction with computer design software; and the detail design phase which produces even more detailed design drawings to finalise the project for construction. 21. The Team Leader position is responsible for overseeing each of these phases of the design process. As is evidenced in MS-1, the Team Leader is responsible for leading "a design team to deliver designs for capital projects in Council's plans..." 22. As is evident in the MS Statement, leading a design team includes reviewing proposals, design works, and where appropriate, making revisions and requesting that the civil engineering team make changes to their work. Each of the three phases stated at par 20 above ordinarily take more than three months combined to complete (Statement of MS). 23. Further to the above, the evidence of MS suggests the phases of the design process require work to be completed by other stakeholders. This includes work to be performed by Council's procurement team to outsource design work. This ordinarily takes more than one month to outsource (par 16-19 of MS Statement). 24. As a matter of fact, designs that were ongoing on 21 August 2023 (around the time the Applicant commenced employment) were estimated to be completed in 19 weeks and 22 weeks respectively (par 25 MS Statement). 25. The Applicant's role as team leader means that the key elements of their position description cannot be assessed appropriately until the work of the employees reporting to it has been produced (Par 27 Statement of MS). 26. The department within which the Applicant's position sits comprises of 41 staff. The incumbent of the Applicant's position needs to become oriented with its team and the department within which it sits, which would reasonably take three months alone (par 32 MS Statement). 27. It is not possible for the Respondent to form a view, let alone a comprehensive one, about the Applicant's performance in three months as it is likely that many critical elements of the position would not yet be undertaken. 28. In these circumstances, the Respondent submits that six months is an appropriate probationary period as it provides enough time for an assessment to be undertaken at each stage of the design process, which calls for the application of distinct skills at each phase. … 31. It is uncontroversial that the purpose of a probation period in the context of employment is to trial whether the person serving the probation period is qualified and apt to undertake the duties associated with the position on a permanent basis, and that the employee can make an assessment of whether the position is what was expected. As Sams DP noted in Creedon, the probationary period also allows the employee to make an assessment of the employer. … 34. Section 33 of the Interpretation Act provides: "In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule is made) shall be preferred to a construction that would not promote that purpose or object." 35. Brennan CJ, Dawson, Toohey and Gummow JJ in CIC Insurance Limited v Bankstown Football Club Limited [1997] HCA 2 state: "...the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statue was intended to remedy" [88]. 36. Only one purpose can be discerned from the combined operation of subsection 83(2) of the Act and regulation 6(1)(c) ii)(A) of the Regulation; to cure the mischief that an employee terminated within three months of serving a probation period would, but for its combined operation, have access to the unfair dismissal jurisdiction set out under the Act. 37. In Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 ("Project Blue Sky"), McHugh, Gummow, Kirby and JJ of the High Court of Australia opined (in agreeance with Brennan CJ: "A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve the result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court to determine which is the leading provision and which the subordinate provision, and which must give way to the other.' Only by determining the hierarchy of provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme" [70]. 38. The operation of regulation 6(1)(c)(ii)(B) must not be construed in a way which invalidates the intended operation of regulation 6(1)(c)(ii)(A). Doing so would not give effect to the harmonious goals intended by the operation of regulation 6(1)(c) in its entirety. 39. To use the language in Project Blue Sky, the leading provision of regulation 6(1)(c) (il) is sub regulation (A) such that an employee dismissed while serving a probation period of three months or less will be precluded from claiming relief under Part 6 of Chapter 2 of the Act. To give effect to regulation 6(1)(c)(ii) (A) requires regulation 6(1)(c)(1)(B) to be read as subordinate. 40. The Respondent submits that only the period in addition to the first three months of probation ought to be scrutinised. To accept that the entire probation period can be scrutinised would call into question the reasonableness of the initial three-month period which the Regulation determines under regulation 6(1)(c)(ii)(A) to be reasonable and a bar to jurisdiction without qualification. 41. Such an acceptance would not only be illogical but would read into the Act and Regulation an intention to punish an employer for determining an unreasonable period of probation, as opposed to merely setting the boundaries upon which an employer may terminate an employee's employment within a trial period. Such an intention ought not be imported into the Commission's reading of the Regulation without cogent reason or contemporaneous evidence substantiating this view." [Emphasis in original.]
The Commission has carefully read the written statement of Ms Meroeh Daniella Suesser, referenced in the submissions of the respondent and the statement supports the respondent's submissions in the way set out in that submission.
The statement also supports the summary of Mr Duffy from Local Government NSW, who appeared for the respondent, who verbally summarised the reasons the six-month probation period was reasonable as: 1. the applicant was leading a design engineering team; 2. the applicant required a degree to perform the role; 3. the applicant led a team of six engineers; 4. the applicant was unsupervised on a day-to-day basis, and had ultimately responsibility for design sign off; and 5. the design life span of the projects on which he worked exceeded six months.

Applicant's submissions that jurisdiction is established

The applicant's submissions were as set out in his written submission.
Responding first to the respondent's second ground, the applicant submitted: "6. Firstly, they try to argue that because he was dismissed within 3 months he is denied arguing any case. This is wrong because they have incorrectly argued that the regulation creates this prevention. Their submission incorrectly twists Regulation 6. … It is clear that 6(1)(c)(i) the probation period must be determined in advance, ......and then 6(1)(c)(ii) "the maximum duration of the period, is either - (A) 3 months or less, or (B) if more than 3 months is reasonable having regard to the nature and circumstances of the employment. 7. Mr Shrestha's probation was known in advance, in fact it is contained in this letter of appointment. It was 6 months. Therefore it is not possible for the respondent to draw on the dismissal being before 3 months and covered by R.6(1)(c)(i)(A)." [Emphasis in original.]
The applicant then turned to responding to the respondent's first ground and, in that respect, set out: "9. In the evidence submitted by the respondent the submissions from clause 15 to clause 27 detail why a probation period of 6 months is important for this role. This arises significantly from the evidence submitted by Meroeh Suesser who details all reasons why it would not be possible to assess Mr Shrestha's suitability for the role any sooner. 10. However, Ryde Council dismiss Mr Shrestha at 9 weeks. Based on Ms Suesser's evidence it is argued this would not be possible to assess his suitability for the role, nor to decide he is unfit for the role. 11. This is compounded by the fact he wasn't inducted properly, nor performance managed correctly under the Council policy. Further Council did not follow the Award dealing with "performance' nor disciplinary and termination matters. 12. Therefore, it is submitted that the Commission must allow these proceedings to be heard to address the reasonableness of the probation period and whether the dismissal was fair and just or otherwise. 13. We rely upon the judgement of Connor C. in Levy v. New South Wales Fire Brigades [2009] NSWIRComm 1011. 14. Mr Levy commenced employment on Monday, 1 May, 2006 and commenced full time employment (as a Recruit Firefighter) on Friday, 15 February, 2008. He was a member of the New South Wales Fire Brigade Employees Union. The letter of appointment under which Mr Levy was engaged provided for a six month probationary period for him as a Recruit Firefighter. And, in accordance with Clause 13, at the satisfactory conclusion of that probationary period, Mr Levy was to progress to a Firefighter Level 1. That did not occur. Mr Levy's services were annulled by the NSWFB from Friday, 15 August, 2008, ie at the conclusion of the six month probation. It was claimed due to his inability to complete the training required of him for his firefighting duties. However, the issue was more complicated than simply his failure to complete the necessary training. It was due to issues arising following a driving conviction and his inability to complete his training on time. 15. The FBEU filed a claim in GREAT which was declined for jurisdictional reasons and they subsequently filed in the IRC NSW two matters a dispute under s.130 and Unfair Dismissal proceedings under Pt 6 Ch. 2. 16. These applications were opposed by the Respondent on three grounds, one of which is relevant to these proceedings: the fact Mr Levy was in a period of probation and therefore excluded by Reg 6. … 19. Connor C. deals with this part of the regulation in his decision. "To that extent the comments of Wilcox J in Nicholson's Case are undermined by Reg. 6(1)(c) which clearly automatically excludes from the unfair dismissal jurisdiction employees serving a period of probation of three months or less if the duration of the probation period was determined in advance of the employment [Reg 6(1)(c)(i)]. However, I do not believe that the situation is so clear with cases where the probation period extends for more than three months as was the case with Mr Levy [Reg. 6(1)(c)(ii)]". 20. He goes on to rely on several cases and finds: 'The gist of the various precedents to which I have referred earlier in this decision, together with the wording of Reg. 6, therefore suggests to me the following: 1. that notwithstanding the comments of Wilcox J in Nicholson, Reg. 6(1)(c)(i), as a matter of jurisdiction, clearly excludes from the Part 6 jurisdiction a dismissed employee engaged on a probation period of three months or less (when the duration of that probation period was known by him prior to employment commencing); and 2. that where the employee was dismissed during a probationary employment in excess of three months, in assessing the reasonableness of the probationary employment in terms of Reg. 6(1)(c) (ii) it is necessary for the member of the Commission to have ".. regard to the nature and circumstances of the employment..." and, as suggested by the Full Benches of the Commission in the Sanity Music Case, Buckman's Case and the Box Valley Case, the task before the member is still to determine the fairness or otherwise of the dismissal - whether it was "harsh, unreasonable or unjust" for the purposes of S.84(1); included in the deliberations of the member of the Commission is the probationary nature of the employment), ie it is a matter going to the merit of the claim and not as to jurisdiction. In short, as a matter of jurisdiction, I do not believe that a Part 6 claim by an employee whose services were terminated on a probationary period of in excess of three months may be dismissed without the member of the Commission hearing the matter and addressing the merits of the claim. It is only in that manner that the reasonableness of the probationary period may be properly assessed. When Reg. 6(1)(c) (ii) speaks of the reasonableness of the probationary period being considered "...having regard to the nature and circumstances of the employment..." it dictates that all the circumstances of the particular employment of the dismissed employee should be borne in mind. The merits of the FBEU claim on behalf of Mr Levy is not before me at this stage in the proceedings. … 23. Ryde Council has breached the award in this matter as it didn't follow the requirements and stated processes contained in the Award. (Local Government (State) Award 2023, specifically clauses 38. D iii), 'where there is re-occurrence of unsatisfactory work performance the employee shall be warned formally in writing by the appropriate officer of the employer and counselled', and 38. D (iv) 'If the employees unsatisfactory work performance or conduct continues or resumes following the formal warning and counselling, the employee shall be given a final warning in writing giving notice of disciplinary should the work performance or conduct not cease immediately'. Neither of these events occurred, Mr. Shrestha was neither warned of unsatisfactory performance, not given any final warning. 24. In Bowen v City of Ryde Council (No 2) [2020| NSWIRComm 1076, finds the dismissal 'unreasonable' due to the lack of Council following the award. In fact, he finds that Council may be precluded from dismissing an employee if they have not followed the award. 'To my mind, it follows in a practical sense that to the extent that the Council has failed to comply with cl 36, it lies in its failure to expressly articulate and record in writing warnings which might otherwise have been implicit. That being said, the repeated use of the word 'shall' in cl 36(D) makes it clear that the disciplinary process it sets out is mandatory. Further, the employer may only proceed to dismissal after 'complying with the requirements' of cl 36(D): cl 36(E)(i). Clause (36D)(v) similarly suggests that disciplinary action may only be taken if the employee's performance fails to improve after the final warning. An argument might arise as to whether, in the absence of full compliance with cl 36(D), an employer is precluded by the Award from proceeding to termination....I am also mindful that one of the objects of the Act is to provide for the resolution of industrial disputes 'in a prompt and fair manner and with a minimum of legal technicality': s 3(g). The Commission 'is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms': s 163(1)(c). These provisions, given the facts of this case and the findings I have made, particularly as to the impracticability of reinstatement to which I will come, support me in the view that it is not appropriate to further consider the implications of the Council having failed to comply with cl 36(D). To do so would be to run the risk of inequitably advancing Mr Bowen's interests in preference to those of the Council...... This case is brought under s 84 of the Act. The Commission cannot properly find that a dismissal carried out other than in compliance with the Award is 'fair'. On this basis, I find that the dismissal was unreasonable.' 25. Further, Ms Ranji Nadarajah gives a statement on her experiences at Council which has led to her resignation. We will also present further evidence of the change in management at Ryde Council and the negative impact this has had on the teams one of which was Mr Shrestha's team. We can demonstrate the loss of many staff mainly through resignation due to these changes and the attitude of management to staff. We submit this is very relevant to the "reasonableness" of Mr Shrestha's dismissal. Especially when the evidence of Meroeh Suesser gives evidence that it would be impossible to assess Mr Shrestha within 3 months and gives great detail about all the reasons external to his operation and ability that must be worked within to allow a proper assessment of his work. … 27. Therefore, the decision of Connor C. must hold, and this matter should proceed and an issue to be determined will be the 'reasonableness' of that period as well as the dismissal itself. [Emphasis in original.]

Respondent's submission in reply

The respondent's submission in reply was accurately reflected in the written submissions in reply: "2. The Respondent submits that the conclusion reached in Levy is erroneous and has not been substantively applied in the jurisprudence of this Commission since its determination. 3. The decision of Connor C in Levy suggests that the totality of circumstances of the probation period, inclusive of the circumstances of dismissal must be considered in forming a view as to whether the period of probation was reasonable. The Respondent submits that this is inconsistent with the language of the Industrial Relations (General) Regulations 2020 (Reg 6(c)). 4. Regulation 6(c) requires an assessment of the reasonableness of the period of probation and that such a period is determined in advance of the commencement of the employment relationship between the parties. This is supplemented by the decision of Wilcox CJ in Nicholson v Heaven & Earth Gallery Pty Ltd [1994] 57 IR 50 (hereafter referred to as Nicholson), which sets out several criteria which may be relevant in assisting the Commission to form a view as whether the length of a particular period of probation is reasonable.
In para 5 of the respondent's submission in reply there is a reference to part of Wilcox CJ's reasoning in Nicholson. His Honour's reasoning is set out more fully below at [33]. The Commission observes that the Commissioner Connor cited the same parts of Wilcox CJ's reasoning in Levy.
Continuing the respondent's submissions in reply: "6. The Respondent notes that the factors as endorsed by Wilcox CJ are able to be readily determined prior to the employment relationship commencing. This aligns with the requirements contained in Regulation 6(1)(c)(i) to determine such a period in advance. These factors are based on the complexity of the position, and once a suitable candidate for the position is identified, an assessment of their skills and experience against the aforementioned requirements of the position. Following this assessment, a reasonable period is set in advance and agreed by the parties. … 8. The reasonableness of the length of the probation period cannot be determined with adherence to factors and information gathered after the commencement of employment. Moreover, it certainly does not call for the Commission to exercise an assessment of the merits of the case in circumstances where it may not have jurisdiction to hear the matter entirely. It is trite to observe that the question of whether a dismissal is harsh, unjust or unreasonable falls within Pt 6 Ch 2 of the IR Act, which only applies to claims for relief covered by section 83. The matters to be considered in determining a claim under section 84 which are set out at section 88 are irrelevant to the assessment as to whether the Commission has jurisdiction to hear a claim under Part 6 of Chapter 2 of the IR Act."
The respondent then set out certain parts of a decision of Commissioner Murphy in Beadman v NSW State Emergency Services [2020] NSWIRComm 1043, in which Commissioner Murphy, it is accepted, applied the reasoning of Commissioner Connor in Levy, albeit Commissioner Murphy came to a different conclusion from the one reached by Commissioner Connor in Levy. The submission in reply continued: "11. An assessment of the dismissal, as suggested by Connor C and later Murphy C would allow any employee on a probation period of more than three months to have the merits of their substantive case assessed in the context of a jurisdictional argument. This is contrary to the express language of the Regulation, which provides that a probation period may be reasonable even in circumstances where the duration exceeds three months. … 13. In the alternative, if the Commission does accept that the circumstances of the dismissal are relevant in determining the reasonableness of the probation period, the Respondent submits that such a factor pales in comparison to the significance and relevance of the criteria identified by Wilcox J in Nicholson (primarily the nature of the position). 14. In Beadman, Murphy C affirms that the nature and circumstances of the role are the primary consideration for the Commission in determining if the length of the probation period is reasonable. The Respondent relies on the evidence of Ms Suesser, affirmed on 1 December 2023 which attests to the complexity of the role of the Applicant, and the circumstances which gave rise to the Council's decision that a six-month probation period was appropriate. 15. The Applicant's submissions at par [11], [21]-[27] do not challenge the evidence of Ms Suesser in determining whether the length of the probation period was reasonable. Those submissions speak to the merits of the case and call for the Commission to assess the facts in the context of s 84 and 88 of the IR Act. This does not aid the Commission in an assessment of whether a pre-determined probation period of 6 months was reasonable in the circumstances of the Applicant. 16. Further, the Respondent contends that the decision of Commissioner Sloan in Bowen v City of Ryde Council (No 2) [2020] NSWIRComm 1076 involves an employee who was found not to be on probation at the time of his termination and as such the matter was heard on its merits. Those facts differ significantly from what is currently before the Commission."

Consideration of the regulation (Ground 1)

It was uncontroversial that the probation period was determined in advance at six months. Accordingly, limb (i) of reg 6(1)(c) was satisfied.
As to limb (ii) of reg 6(1)(c), the Commission turns first to an analysis of the words of sub-limb (B).
At the highest level, the question is whether the period is reasonable. That is the only test set by sub-limb (B). Sub-limb (B) then sets out that determining whether a period is reasonable is answered by having regard to the nature and circumstances of the employment.
On its face, it is a straightforward question. Is the period reasonable, and no other question. Have regard to the nature and circumstances of the employment, and again, have regard to no other matters.
Wilcox CJ in Nicholson was dealing with a regulation that provided: "For the purpose of s 171CC of the Act, the following employees are excluded from the operation of sub-divs (b), (c), (d) and (e) of div 3 of pt 6A of the Act: … (c), Employees serving a period of probation for a qualifying period of employment if the duration of the period or the maximum duration of the period is as requires (1) is determined in advance; and (2) is reasonable having regard to the nature and circumstances of the employment."
The only substantive difference from here is that Wilcox CJ was addressing a regulation without a statutory safe harbour up to three months.
Two things flow from this. One, general principles as to determining reasonableness, in the context of the nature and circumstances of the employment, retain the force of the logic of his Honour. Two, reasoning of his Honour as to the maximum periods that might be reasonable must to be read in the context of the legislature adding a three-month safe harbour in reg 6 of the Industrial Relations (General Regulations) 2020.
It should also be observed that his Honour was Chief Justice of the Federal Court of Australia, ruling on the interpretation of a Commonwealth Act. Nevertheless, in the absence of a decision of the New South Wales Supreme Court on the same provision, clearly his Honour's reasoning is, at the very least, highly persuasive and, in my view, probably binding to the extent that it deals with exactly the same words.
His Honour said, and this was set out by Commissioner Connor in Levy: "Whether or not the stipulated period is reasonable is a matter that has to be determined by the person hearing the case as an exercise in judgment. The judgment should be based on the proved objective facts, not on someone else's opinion. Probably the most important consideration in determining what is a reasonable period will be the nature of the job. In the case of a person employed to carry out repetitive duties under close supervision, a reasonable period may not exceed a week or two. In the case of a person employed in the marketing or managerial position, working with little or no direct supervision and his qualitative performance cannot be immediately apparent, it may be reasonable for an employer to specify a probationary period measured in months. Circumstances will vary from case to case. The size, location and mode of operation of the employer being relevant factors, along with personal characteristics and circumstances of the employee. The legislature has not prescribed the maximum extent of a reasonable period; it is not for me to do so, but I suspect that an employer would rarely be able to justify a period exceeding two or three months in the case of an award employee or a non-award employee, whose wages do not exceed the prescribed monetary ceiling prescribed for unfair dismissal claims."
His Honour's words are consistent with the words of the regulation. The words are "the nature and circumstance of the employment".
The regulation does not use the word "dismissal". This could not be more significant in the context of a regulation which is headed "Other exemptions from unfair dismissal procedures".
To the extent that Commissioner Connor has concluded to the contrary and considered events related to the dismissal, and he has done so expressly, I consider his reasoning is plainly wrong.
I also observe that Commissioner Connor's facts were markedly different, they related to an entry level fire employee and in the current case the applicant is a senior, degree-qualified engineer.
Both based on the text of the regulation and based on his Honour's interpretation of the relevantly identical regulation, to the extent that it might be possible to use events after the employment commences or events involved in the circumstances of the dismissal, to undermine the reasonableness of the period, this would be confined to undermining the credibility of the reasons advanced as to constituting the reasonableness of the period.
Such events cannot, if at all, be themselves fundamental to the reasonableness of the period. In the present case, circumstances such as whether the employer followed its award obligation and whether the employer failed to provide adequate support are not relevant to the test in reg 6(1)(c) and, therefore, cannot form part of the question of reasonableness.
Whether the employer exercised its contractual rights to dismiss the applicant only two months into a six-month probationary period are of a different character. At one level, they can undermine the credibility of a six-month probation period. That said, against that, contractually, a probationary period need not run its course and can be brought to an end at any point. That is the point of probation.

Application of the regulation to the applicant (Ground 1)

As already articulated, the applicant was employed as a senior employee. He was unsupervised on a day-to-day basis, led a team of six engineering staff, not low level themselves, was required to hold a degree qualification in engineering, a serious qualification, had ultimate responsibility for engineering design sign offs and worked in an environment where project or tasks life cycles exceeded six months.
None of this was contested by the applicant.
Based on this, and applying the test formulated by Wilcox CJ in Nicholson, objectively given the nature of the job and in the circumstances of it being generally unsupervised, the six months probationary period was reasonable.
I do not conclude that the fact that the applicant was dismissed two months into a six-month period undermines that reasonableness. Largely, this is because it is quite possible to understand that while it might take up to six months to give an employee a chance to show that they are up to the full duties of a role, it is also possible for an employee to demonstrate earlier that they cannot perform the role properly.
The respondent's first ground is upheld, and the applicant is excluded by reg 6(1)(c) from being able to make an application pursuant to pt 6 of ch 2 of the Industrial Relations Act.

Harmonious reading of three-month safe harbour (Ground 2)

For completeness, the Commission considers the respondent's second ground, should also be addressed.
The Commission accepts the respondent's submission that interpretation of statutory provisions which give a harmonious whole to the intent should be preferred over other interpretations. This, however, must be subservient to the words of the provision being capable of holding that meaning.
The respondent submits that it would be perverse for an applicant who is dismissed within three months of employment bringing an unfair dismissal application because the Commission determined a longer period of probation was unreasonable, in circumstances where the legislature had created a safe harbour at three months.
There is some force to this argument. However, that force cannot, in the Commission's view, overcome two matters. One, the express wording of reg 6(1)(c) and, two, the legislature choosing that wording when it could have chosen wording that would have clearly adopted the respondent's position.
On the first of these, it seems to the Commission that the totality of reg 6(1)(c) cannot support any interpretation other than the three-month safe harbour being one option and a longer period being the second option.
If the second option is chosen, the three months option is effectively not adopted and cannot apply.
As Mr Turner of the LGEA for the applicant submitted "you cannot claim option B and then fall back to A". The Commission agrees. The process is not supported by the wording of reg 6(1)(c).
The second ground of the respondent's objection cannot be sustained.

Outcome

The Commission finds that pt 6 of ch 2 of the Act does not apply to the applicant. The application should accordingly be dismissed.

Order

The application is dismissed. C Muir Commissioner

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 February 2024

[1999] NSWIRComm 269

At a glance

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Decision date

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Judgment (14 paragraphs)

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Cases Cited (7)

Cited By (2)