Australian Federation of Air Pilots v Becker Helicopter Services Pty Ltd
[2019] FWC 561
•31 JANUARY 2019
| [2019] FWC 561 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Federation of Air Pilots
v
Becker Helicopter Services Pty Ltd
(C2018/4738)
COMMISSIONER SPENCER | BRISBANE, 31 JANUARY 2019 |
Alleged dispute about any matters arising under the modern award and the NES; [s146] – redundancy payment applicable.
INTRODUCTION
[1] An application pursuant to s.739 of the Fair Work Act 2009 (the Act) was made by the Australian Federation of Air Pilots (AFAP; the Applicant) in relation to a dispute arising under the Air Pilots Award 2010 (the Award), with Becker Helicopter Services Pty Ltd (the Respondent). The parties sought the matter be resolved by consent arbitration, pursuant to clause 10 ‘Dispute resolution’ procedure of the Award. The dispute relates to redundancy pay, in accordance with the Award and the National Employment Standards (NES).
[2] The Applicant alleged that several pilots employed by the Respondent (the Relevant Pilots) are entitled to be paid redundancy pay (pursuant to s.119 of the Act), when the Respondent informed the Relevant Pilots that their employment would end by reason of their positions being made redundant prior to the specified end date in their respective contracts.
[3] The dispute affects a number of Pilots. To aid the efficient assessment of the dispute, it was agreed by the parties that the case of Captain Colin Miles, a pilot employed as a Flight Instructor by the Respondent, would be considered in the consent arbitration, as a representative case. Captain Miles agreed to this and assisted the arbitration process by preparing a witness statement.
[4] The Parties reached an agreed statement of facts and questions for arbitration. The agreed Statement of Facts and Circumstances is as follows:
“1. The Respondent is Becker Helicopter Services Pty Ltd (the Respondent).
2. The Respondent’s business includes that of providing training to persons (students) to become helicopter pilots to a universal or military standard (the training).
3. For the purposes of the provision of the training, the Respondent employs helicopter pilots as Flight Instructors to train the students.
4. The Air Pilots Award 2010 applies to the Respondent and to the Flight Instructors pilots employed by the Respondent.
5. Captain Colin Miles was employed by the Respondent:
(a) pursuant to a first written contract (the First Contract); and
(b) as a Flight Instructor for the period from 11 January 2016 to 1 September 2017 pursuant to the First Contract.
6. Captain Colin Miles was employed subsequently by the Respondent:
(a) pursuant to a second written contract (the Second Contract);
(b) as a Flight Instructor from 2 September 2017 pursuant to the Second Contract.
7. On 17 July 2018, Captain Colin Miles attended a general meeting held by the Respondent and was notified that due to a lack of students, there would be a decrease in availability of work to be performed.
8. On 20 July 2018, Captain Colin Miles received a letter from the Respondent which informed him that due to major changes to operational requirements and the consequent reduction in Flight Instructors required by the Respondent, his employment would end on 24 August 2018.
9. On 24 August 2018, Captain Colin Miles’ employment ended.
10. Captain Colin Miles was not paid any amounts in relation to redundancy pay following his employment ending on 24 August 2018.”
[5] The agreed Questions for Arbitration are:
“1. Was Captain Miles employed “for a specified period of time” or “for a specified task” within the meaning of subsection 123(1)(a) of the Fair Work Act 2009 (Cth) (FW Act)?
2. If the answer to question 1 is no, then:
(a) is the Respondent obliged to pay redundancy pay to Captain Colin Miles in accordance with subsection 119(2) of the FW Act?
(b) does Captain Miles’ “period of continuous service with the employer on termination” include his service under the First Contract and under the Second Contract for the purposes of subsection 119(2) of the FW Act?”
[6] In summary terms, Captain Miles was employed by the Respondent under two contracts that each provided for a maximum term. The first of these was for the period from 11 January 2016 to 1 September 2017 (the First Contract) and the second from 2 September 2017 until his employment ended on 24 August 2018 (the Second Contract). The end date stipulated in the Second Contract was 31 August 2020 (the Expiry Date).
[7] The Respondent submitted that Captain Miles was employed for a “specified period of time” by reason of the maximum term stipulated in each of his employment contracts. For that reason, the Respondent stated that the exclusion in s.123(1)(a) of the Act applies and Captain Miles is not entitled to be paid redundancy pay. The Applicant considered, pursuant to the contracts, that the Captain was entitled to redundancy.
[8] The matter was listed for conference but was unable to be resolved. The parties agreed the matter should be arbitrated as per the above Questions for Arbitration. Directions were set for the filing of material and the matter was heard in Brisbane. The Applicant was represented by Mr Andrew Molnar and Mr James Lauchland of the AFAP, and the Respondent was represented by Mr John Merrell, Counsel, instructed by Mr Chris Campbell of Aitken Legal, with permission to appear granted pursuant to s.596 of the Act.
[9] Whilst this decision does not refer to all of the material filed in this matter, all of such has been considered.
RELEVANT PROVISIONS OF THE ACT
[10] Pursuant to s.739 of the Act:
“739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
[11] An employee’s entitlement to redundancy pay is dealt with under s.119 of the Act:
“119 Redundancy pay
Entitlement to redundancy pay
(1) An employee is entitled to be paid redundancy pay by the employer if the employee's employment is terminated:
(a) at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.
Amount of redundancy pay
(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee's base rate of pay for his or her ordinary hours of work…”
[12] However, the entitlement to redundancy pay is limited by the operation of s.123:
“123 Limits on scope of this Division
Employees not covered by this Division
(1) This Division does not apply to any of the following employees:
(a) an employee employed for a specified period of time, for a specified task, or for the duration of a specified season;…”
[13] Further, s.22 of the Act provides:
“22 Meanings of service and continuous service
General meaning
(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2)...”
RELEVANT PROVISIONS OF THE AWARD
[14] The dispute resolution procedure is set out in cl.10 of the Award:
“10. Dispute resolution
10.1 In the event of a dispute about a matter under this award, or a dispute in relation to the NES, in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the employee or employees concerned and the relevant supervisor. If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee or employees concerned and more senior levels of management as appropriate.
10.2 If a dispute about a matter arising under this award or a dispute in relation to the NES is unable to be resolved at the workplace, and all appropriate steps under clause 10.1 have been taken, a party to the dispute may refer the dispute to the Fair Work Commission.
10.3 The parties may agree on the process to be utilised by the Fair Work Commission including mediation, conciliation and consent arbitration.
…”
[15] Entitlement to redundancy is set out in cl.13 of the Award:
“13. Redundancy
13.1 Redundancy pay is provided for in the NES.”
SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE
Question 1
[16] The Applicant’s submissions in relation to Question 1 centred on the proper meaning of the phrases “specified period of time” and “specified task” for the purposes of s.123(1)(a) of the Act. Evidence was provided at the hearing by Captain Colin Miles.
“Specified Period of Time”
[17] The Applicant stated that the phrase “specified period of time” is used throughout the Act in relation to redundancy, unfair dismissal, notification and consultation relating to certain dismissals and notification and consultation relating to certain terminations of employment. The Applicant submitted it is to be presumed that the phrase has the same meaning wherever it appears in the Act. 1 The Applicant submitted further that there is nothing about the various iterations of the phrase, or the circumstances in which the phrase arises, that would indicate that it has different meanings for different parts of the Act.2
[18] The Applicant submitted that in order for a contract to be for a “specified period of time”, the period of time must have certainty. The Applicant referred to cases that consider the phrase in the context of termination of employment, they submitted that the phrase has not been judicially considered in the context of redundancy. 3
[19] The Applicant gave evidence that those cases provide, that where the parties to a contract of employment have rights to terminate the contract that are not conditioned on a breach of the contract’s terms, then the period of the contract is indeterminate and not for a “specified period of time”. 4 The Applicant submitted that for a contract to be one for a “specified period of time”, the period of time must have certainty.5
[20] The Applicant stated Captain Miles’ Second Contract had an Expiry Date of 31 August 2020, unless terminated earlier, as provided for in cl.2.1 of Captain Miles’ Letter of Appointment: 6
“2 Appointment
2.1 You will be employed under this separate and distinct Agreement for a maximum term of three (3) years. Your employment under this Agreement will commence on 2nd September 2017 and will continue for a period of three (3) years end on 31st August 2020 (Term) unless terminated earlier in accordance with clause 9 of this Letter of Appointment (and as repeated at clause 22) of the Terms and Conditions document).
2.2 Although the Company enters into this maximum term Agreement with you due to its particular contractual arrangements with its clients, the period of any contract the Company has with a client bears no relationship to the period of the maximum term agreement with you, as the terms of the contracts with clients can be altered as required pursuant to their individual terms, and can run in individual blocks of time…
…
2.4 You acknowledge that your employment under this Agreement is for the Term (subject to its termination provisions) and that upon the expiration of the Term your employment will cease unless the Company offers you a further maximum term contract of employment in accordance with clause 2.5. You further acknowledge that whilst this is the second contract you have entered into with the Company for a maximum term with regard to the Position, you have no expectation, nor has the Company made any representation to you, that a further contract will be offered to you upon the expiration of the Term of this Agreement with you.”
[21] The Applicant submitted that cl.9.2 and 9.7 of the Letter of Appointment provide that the Second Contract may be terminated prior to the Expiry Date for any reason subject to required notice being given:
“9 Termination
9.1 This Agreement with you is a Maximum Term Contract and your employment, subject to an earlier use of this clause 9 (as repeated as clause 22 in the Terms and Conditions document), will automatically cease on the date three (3) years from your commencement date as set out in clause 2.1 (‘Expiry Date’) of this Letter of Appointment. The Company will review this contract 28 days prior to the Expiry Date to determine whether or not a further maximum term separate and distinct contract should be offered to you, or some other employment arrangement, following the expiry of this Agreement. In this period prior to the Expiry Date the provisions of this clause 9 will continue to apply. If one is to be offered the Company will provide you with a further separate and distinct contract for consideration at least 7 days prior to the expiry of this agreement.
…
9.2 Subject to clauses 9.1, 9.3 and 9.7, either party may terminate youremployment by giving the following notice in writing to the other party in accordance with the following schedule:
Length of Service | Employee under 45 years of age |
0 – 1 year | 2 weeks |
1 – 5 years | 4 weeks |
9.3 Where the Company terminates your employment and you are over 45 years and have 2 or more continuous years of service with the Company, the Company will provide you with an additional 1 weeks’ notice of termination.
…
9.7 Your employment may be terminated by the Company at any time without notice if you are found to have committed an act of serious misconduct.
9.8 The Company may terminate the maximum term contract due to genuine redundancy reasons related to the role that you are filling through that maximum term contract. You acknowledge and agree that if your contract is brought to an end at an earlier time due to a redundancy reason then you will be paid or work through the notice provided for within this contract, but you will not be entitled to a redundancy payment as you are engaged pursuant to a maximum term contract and redundancy payments are not made in respect of such maximum term contract arrangements.”
[22] The Applicant therefore submitted that termination of the Second Contract is not conditional on a breach of terms of the Second Contract, such that the Second Contract cannot be for a “specified period of time”. 7
“Specified Task”
[23] The Applicant submitted that the phrase “specified task” is also used throughout the Act. The Applicant again noted that consideration of the phrase is limited in the context of redundancy, and that the case authorities dealing with the phrase in the context of termination of employment, should inform the Commission’s interpretation. 8
[24] The Applicant submitted that contracts which may be terminated prior to the completion of the task in question cannot be contracts for a specified task, 9 and that the specified task must be stated with sufficient particularity in that there must be an identifiable project or job.10
[25] The Applicant submitted further that Captain Miles’ Second Contract cannot be a contract for a “specified task” for the following reasons: 11
• clause 2.2 of the Letter of Appointment provides that the employment relationship and its length is not connected with any particular client or the services that client requires;
• clause 4 of the Letter of Appointment provides that Captain Miles “will undertake such duties as determined by [the Respondent] from time to time” and that the Respondent “may vary the duties by adding or subtracting particular requirements or accountabilities at any time”;
• schedule B of the Letter of Appointment (Position Description) does not limit the duties of Captain Miles with any particularity and provides that Captain Miles is to perform “other duties associated with the Company’s activities and interests as requested from time to time”; and
• Captain Miles states that under both the First and Second Contracts, he was mainly required to train student pilots but would sometimes be asked to perform other work such as search and rescue for other clients on an ad hoc basis. Captain Miles says he also volunteered to perform other work such as hurricane relief and fire starting. 12
[26] The Applicant therefore submitted that the answer to Question 1 should be “no”. That is, the contract, for the reasons set out, is neither for a specified period of time, or for a specified task.
Question 2(a)
[27] The Applicant argued that, as Captain Miles does not fall within the class of employees excluded by Division 11 of the Act, Captain Miles has an entitlement to redundancy pay under s.119(1) of the Act.
[28] The Applicant noted that cl.9.8 of the Letter of Appointment in respect of the Second Contract provides that redundancy pay is not payable in any circumstance. The Applicant submitted that this provision is unenforceable, as made clear by the Explanatory Memorandum to the Fair Work Bill 2008: 13
“[207] No specific rule is provided about the relationship between the NES and contracts of employment. That relationship is governed by well-established principles (e.g., a term in the contract of employment that is less favourable than a statutory entitlement is not effective) and does not require additional legislative elaboration.”
[29] The Applicant therefore submitted that the answer to Question 2(a) should be “yes”, that the Respondent is obliged to pay redundancy pay.
Question 2(b)
[30] The Applicant submitted that Captain Miles’ service with the Respondent was continuous from 11 January 2016 to 24 August 2018.
[31] The Applicant stated that Captain Miles’ employment with the Respondent under the First Contract commenced on 11 January 2016 and ended in accordance with its terms on 1 September 2017. The Applicant noted that there was no break between the First Contract and the Second Contract commencing. 14
[32] The Applicant submitted further that the following, supports Captain Miles’ continuous service with the Respondent:
• at the end of the First Contract, Captain Miles’ annual leave accrual was not paid out, rather the accrual was carried over into the Second Contract; 15 and
• at the end of the First Contract, Captain Miles’ personal leave accrual was not deleted; rather the accrual was carried over into the Second Contract. 16
[33] The Applicant therefore submitted that the answer to Question 2(b) should be “yes”; the period of continuous service with the Respondent also includes the service under the first contract.
SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE
Question 1
[34] The Respondent submitted that Question 1 requires determination on the proper construction of s.123(1)(a) of the Act and the proper construction of the Second Contract. Evidence at the hearing for the Respondent was provided by Mr Michael D’Ott Becker, Chief Executive Officer of Becker Helicopter Services.
Construction of s.123(1)(a)
[35] The Respondent also acknowledged the authorities relating to the “meaning of dismissed” under s.386 of the Act and the phrases “for a specified period of time” and “for a specified task”. However, the Respondent stated that there is good reason not to give the same meaning to those phrases, as they had been given in the contexts of s.386(2)(a) and s.123(1)(a) of the Act.
[36] The Respondent submitted that in interpreting section 123(1)(a) of the Act, a consideration of its context in the Act is required including a consideration of its general purpose and policy objective. 17 The Respondent submitted further that it is clear from the words used in s.123(1)(a) of the Act and the context in which the provision appears, that s.123(1)(a), without qualification, lists the categories of employees that are excluded from the entitlements to redundancy pay.18
[37] The Respondent acknowledged the rule of construction as stated by Mason J in Registrar of Titles (WA) v Franzon, 19 as referred to by the Applicant, but stated that it is clear the rule may be displaced in appropriate circumstances. The Respondent submitted that the presumption that a word is used with the uniform meaning in a statute is not one “of very much weight...it all depends on the context”,20 and that “the presumption readily yields to the context”.21
[38] In this regard, the Respondent noted that s.386(2)(a) of the Act provides:
“(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season;
...”
[39] While s.123(1)(a) of the Act states:
“(1) This Division does not apply to any of the following employees:
(a) an employee employed for a specified period of time, for a specifiedtask, or for the duration of a specified season;
...”
[40] The Respondent therefore submitted that, as the words and purposes of ss.386(2)(a) and 123(1)(a) are different, there is a strong basis to give the phrases in each section, different meanings, resulting from their context.
Construction of the Second Contract
[41] The Respondent submitted that Captain Miles was employed for a ‘specified period’ of time within the meaning of s.123(1)(a) of the Act.
[42] The Respondent submitted further that clauses 2.1 and 2.4 of the Second Contract evince objective intentions of the parties, namely the Respondent and Captain Miles, to employ Captain Miles for a specified period of time. The Respondent stated the parties agreed, in the Letter of Appointment to the Second Contract, to cl.9.8 regarding redundancy pay:
“9.8 The Company may terminate the maximum term contract due to genuine redundancy reasons related to the role that you are filling through that maximum term contract. You acknowledge and agree that if your contract is brought to an end at an earlier time due to a redundancy reason then you will be paid or work through the notice provided for within this contract, but you will not be entitled to a redundancy payment as you are engaged pursuant to a maximum term contract and redundancy payments are not made in respect of such maximum term contract arrangements.”
[43] The Respondent submitted that the fact that the contract could be terminated earlier, in accordance with clause 9 of the Letter of Appointment, does not mean that Captain Miles was not employed for a specified period of time, having regard to the very express terms used by the parties in clauses 2.1 and 2.4.
[44] In the circumstances, the Respondent submitted that the parties expressly agreed that Captain Miles’ appointment was for a specified period. The Respondent stated the common intentions of the parties to the contract, understood by what a reasonable person would understand by the language in which the parties have expressed their agreement, is that the contract was one for a specified period of time, 22 and that if the contract was brought to an end by a redundancy reason, redundancy pay was not payable.
“Specified Task”
[45] The Respondent submitted in the alternative that Captain Miles was employed for a “specified task” as referred to in the Second Contract, namely:
“1.3 The reason why the Company offers separate and distinct maximum term contracts is that the Company has specific contracts with clients providing for student training and those contracts are for specified terms and on-going specified performance parameters. The Company’s ability to offer employment to employees is governed in accordance with client’s maintaining and renewing contracts for student training, and is the reason why the company offers separate and distinct maximum term contracts.”
[46] The Respondent submitted further that Captain Miles’ specified task was to train pilots of the Respondent’s client while those students were being ‘supplied’. It was argued that when those students stopped being supplied, Captain Miles’ task, which was intimately linked to the training of those clients, ceased. 23
[47] The Respondent stated that clause 4 and Schedule B of the Letter of Appointment referred to what Captain Miles did when he was performing the specified task, but the provisions do not define the specified task.
Question 2(a)
[48] The Respondent submitted that if the answer to Question 1 is “yes”, then there is no obligation on the Respondent’s part to pay redundancy pay to Captain Miles in accordance with s.119(2) of the Act.
[49] The Respondent has filed an Affidavit of Mr Michael D’Ott Becker that deposes to the circumstances surrounding the termination of Captain Miles’ employment, in the event that the answer to Question 1 is “no”, 24 but makes no further submission on the effect of this.
Question 2(b)
[50] The Respondent submitted that if the answer to Question 2(a) is “yes” then the answer to Question 2(b) is also “yes” by operation of s.22 of the Act. Section 22 provides, relevantly:
22 Meanings of service and continuous service
General meaning
(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period ) that does not count as service because of subsection (2).
(2) The following periods do not count as service:
(a) any period of unauthorised absence;
(b) any period of unpaid leave or unpaid authorised absence, other than:
(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or
(ii) a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee's contract of employment; or
(iii) a period of leave or absence of a kind prescribed by the regulations;
(c) any other period of a kind prescribed by the regulations.
(3) An excluded period does not break a national system employee's continuous service with his or her national system employer, but does not count towards the length of the employee's continuous service.
…”
[51] The Respondent confirmed that in circumstances where it was deemed redundancy was payable, they affirmed that the aggregate periods of the contracts could be taken into account.
CONSIDERATION
[52] An assessment of the nature of the contract is to be considered taking into account all matters. 25 All the circumstances of the engagement and the contract must be considered, as follows:
“Specified Period of Time”
[53] In terms of assessing the nature of the contract, it was noted in Crawford v Steadmark Pty Ltd (No 2), 26 that the question of whether an employee has been engaged under a contract of employment for a “specified period of time” has been addressed in a number of cases. In that case, the phrase was considered in the context of an adverse action claim, against an employer who terminated the employment, in accordance with the end date specified on the contract of employment.
[54] The Crawford decision made reference to Cooper v Darwin Rugby League, 27 and Andersen v Umbakumba Community Council.28 Those cases both considered the phrase “specified period of time” in the context of s.170CC of the Industrial Relations Act 1988 and Reg 30B(1) of the repealed Industrial Relations Regulations which dealt with the class of employees who are excluded from the requirements for the termination of employment provisions.
[55] Further, in Attwood v Wangka Maya Pilbara Aboriginal Language Centre, 29 an employee claimed unpaid employment entitlements accruing under a fixed term contract in circumstances where it was alleged the contract was terminated unlawfully, prior to the fixed term, on the grounds of discrimination.
[56] These cases, and the body of case law that has developed in consideration of employment contracts for “specified periods of time”, demonstrate the caveat placed upon the presumption of interpretation, as in Registrar of Titles (WA) v Franzon as expounded by their Honours in Murphy v Farmer, 30 and Clyne v Deputy Commissioner of Taxation.31 That is, as the Respondent submitted, that the construction of the phrase “specified period of time” should begin by examining the context of the provision, is accepted. However, the Respondent’s submission that the phrase as it appears in s.123(1)(a) should be given a different meaning to that which appears in s.386(2)(a) is at odds with Project Blue Sky Inc v Australian Broadcasting Authority:32
“[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Ajalianos, Dickson CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus the process of construction must always begin by examining the context of the provision that is being construed.
[70] 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 to the competing provisions to achieve that 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 is the subordinate provision, and which must give way to the other. Only by determining the hierarchy of the 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.”
(Emphasis added)
[57] Andersen v Umbakumba Community Council, 33 (Andersen) as referred to by the Applicant, concerned an application for relief from termination under the predecessor unfair dismissal provisions in the Industrial Relations Act 1988.The Applicant in that case was engaged by the Respondent Council to provide for the operation and maintenance of water and electricity supply equipment to a remote Aboriginal community. The Respondent Council contended that the Applicant was excluded from the relief provisions, as the Applicant was engaged “under a contract of employment for a specified period of time”.34
[58] In Andersen, the Industrial Relations Court said: 35
“In the present case cl 3 and Sch 1 of the employment agreement clearly state both a commencement date for the employment and a cessation date, but in light of the right on either party to the contract arising under cl 21(c) to bring the employment to an end on two weeks notice, and the right of the employer under cl 21(d) to bring the employment to end without notice on payment of two weeks salary, the cessation date merely records the outer limit of a period beyond which the contract of employment will not run (unless a new agreement is entered into pursuant to cl 29). Within the period stated in Sch 1 the period of the contract of employment is indeterminate. At any point during the two year period identified by the commencement and cessation dates neither side could know with any certainty when the period of the contract of employment might come to an end.
It is significant that the rights to terminate the contract of employment arising under cl.21(c) and 21(d) are not conditioned on a breach of any term of the contract. The rights are unqualified. Different considerations may apply where a contract of employment for a period of time fixed by clearly stated dates of commencement and cessation contains a term which permits either side to terminate the contract on breach by the other side. In such a case, it is possible that the contract would be characterised as a contract of employment for a specified period of time notwithstanding the possibility that on breach of its terms by one side or the other it may soon come to an end. In this case, however, the unqualified rights to terminate without reason under cl 21(c) and cl 21(d) make it clear, in my opinion that the contract cannot be so characterised.”
(Emphasis added)
[59] In Cooper v Darwin Rugby League, 36 a contract of employment that allowed for termination before the expiration date by either party on notice or by the employer for misconduct of the employee, was similarly found not to be a contract for a “specified period of time”.
[60] In Captain Miles’ case, the terms of the Second Contract and accompanying Letter of Appointment read together provide a commencement date and expiration date for his engagement with the Respondent. However, both parties have rights to end the employment on notice by operation of cl.9.2 and the Respondent has the specific right to end the employment for misconduct by operation of cl.9.7. Neither of these rights to terminate is conditioned on a breach of the agreement between the parties, they are unqualified, or ‘at large’.
[61] The Respondent also has the right to terminate Captain Miles’ employment under the Second Contract “due to genuine redundancy reasons” as provided for in cl.9.8 of the Letter of Appointment. The Respondent referred to cl.1.2 of the Second Contract which provides that “The Company’s ability to offer employment to employees is governed in accordance with client’s maintaining and renewing contracts for student training.” The Respondent also argued that there had been a ‘meeting of the minds’ of the parties to the contract, regarding the application of the clause in the contract, that excludes redundancy payments.
[62] Mr Michael D’Ott Becker’s statement deposed to the Respondent’s reliance on a regular influx of student pilots, the supply of which had ceased, as the reason for Captain Miles’ redundancy. Mr Becker stated: 37
“…we made a decision that we would introduce contractual employment terms making it very clear to quite a number of our helicopter instructor pilots that we were very much dependent on the contracts that we had with our clients…
Numbers came off gradually and then it got worse and worse again. We realised that we had quite an acute problem on our hands, but it was gradual and it became acute this year 2018. We tried to work out what was going on with the contract and the students. The problem clearly was related to this independent English language college not releasing the students and we were advised based on the students not being able to meet the new standard that was being applied…
Ideally, we have six new students coming in every ten weeks. This year to the date of my swearing this affidavit we have had only ten students across the whole year. We aim really to have forty students in a year…
We just have been absolutely decimated by these students not turning up. We had to take drastic steps of giving a significant number of our helicopter pilots notice for the ending of their employment and Colin Miles was one of those…”
[63] The letter Captain Miles received from the Respondent informing him that his employment would end also recorded that: 38
“…Becker Helicopter Services Pty Ltd needs to consider organisational changes due to major changes in regard to the flight training contract and the flow on affect [sic] to operational requirements. As a result there are a number of considerations needed.
Reason for Workplace Change
• Timing of students’ arrival from English is unknown and uncertain
• Slowdown of flight training and subsequent reduction in Flight Instructors required.”
[64] In relation to such a supply provision underlying a contract, in J Grycan v Table Tennis Australia Incorporated, 39 it was a term of an employment contract that the contract could be terminated by the employer in the event the employer’s funding from an external entity was withdrawn or restricted. The term was found to be too broad to permit the contract to be characterised as one for a “specified period of time”.40 The Respondent’s dependence on students for the regular employment of its pilots, and the viability of its business, can be seen as analogous to this.
[65] Both parties have unqualified rights to terminate the employment, exercisable at any point in time from the start of the Second Contract on 2 September 2017 up until the Expiry Date on 31 August 2020. It is in the context of these rights, along with the right of the Respondent to similarly end the contract prior to the Expiry Date “due to genuine redundancy reasons”, that the examination of whether the Second Contract is for a “specified period of time” is considered.
[66] The terms of the Second Contract and Letter of Appointment clearly provide options available to both parties to end the employment prior to the Expiry Date recorded in the contract. In these circumstances, the effect of the Expiry Date is merely to “record the outer limit” of the employment period, 41 which can be finalised earlier.
[67] The Respondent argued the interpretation of the contract terms, ‘specified period of time’ and ‘specified task’, as they appear in the legislative context of s.386(2)(a) and s.123(1)(a) must be examined. The Applicant traced the operation of the provisions, with reference to Drummond v Canberra Institute of Technology: 42
“[48] Despite a slight alteration to the wording, the legislation is unchanged in respect of the requirement that for there to have been a dismissal within the meaning of the relevant provisions there must be a termination at the initiative of the employer. In that respect the legislation is unchanged. What has changed in substance is the manner in which the legislation deals with contracts for a specified period of time. Under the previous legislation, where there was a termination of the employment of an employee employed for a specified period, that termination could not be the subject of an unfair dismissal application irrespective of whether the contract terminated with the effluxion of time or otherwise. Under the current legislation the jurisdictional bar operates only where a contract for a specified period terminates with the effluxion of time.
[49] The respondent has argued that the changes to the treatment of contracts for a specified period under the current legislation does not alter the position of a contract for a fixed period which terminates at the end of that period, i.e. the decision in Lunn remains good law. The applicant disputes this, arguing that if the legislature intended there to be a jurisdictional bar in relation to all contracts which have terminated with the effluxion of time, the position would have been clearly stated in the same way it is in s.386(2)(a) in relation to contracts for a specified term.
[50] In these circumstances it is appropriate to refer to the Explanatory Memorandum which accompanied the Fair Work Bill 2009 for guidance. The Explanatory Memorandum relevantly provides the following explanation of that clause of the Bill which became s.386 of the Act:
Clause 386 – Meaning of dismissed
1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person’s employment with his or her employer was terminated on the employer’s initiative. This is intended to capture case law relating to the meaning of termination at the initiative of the employer (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).
1529. …
1530. …
1531. Subclause 386(2) sets out circumstances in which a person is taken not to have been dismissed. These are where:
the person was employed for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, task or season; or
…
…
1532. Paragraph 386(2)(a) reflects the common law position that termination in these circumstances would not be a dismissal. The fact that an employment contract may allow for earlier termination would not alter the application of this provision as the employment has terminated at the end of the period, task or season. However, if a person engaged on this sort of contract is terminated prior to the end time specified in the contract, they may seek an unfair dismissal remedy if they satisfy the other requirements.”
[51] In my view the intention of the legislature is clear. Paragraph 1532 of the Explanatory Memorandum, in dealing with the new provisions relating to contracts for a specified term, notes that “(t)he fact that an employment contract may allow for earlier termination would not alter the application of this provision as the employment has terminated at the end of the period, task or season”. An employment contract which allowed for an earlier termination would encompass a contract for a fixed term. The intention of the legislature appears to be to retain the common law position that a contract which ends with the effluxion of time does not terminate at the initiative of the employer. The only change to the operation of the relevant provisions that is intended is to provide that an employee employed under a contract for a specified period of time, whose employment is terminated other than at the expiration of that contract, may make an application under the unfair dismissal provisions of the legislation.”
(Emphasis added)
[68] For all of the aforementioned reasons (relating to the ability to terminate prior to the expiration of the contract), the Applicant’s submission that the Second Contract was not for a “specified period of time” is therefore accepted.
“Specified Task”
[69] The Applicant referred to the decision in SPC Ardmona Operations Ltd v Esam, 43 (SPC Ardmona) where the Australian Industrial Relations Commission considered the impact of an unconditional right of termination on a contract for a “specified task”. In that case, the respondent employees were employed by the appellant to work in one of the appellant’s two fruit processing plants. Those plants were only operated at full capacity for two to four months of the year in conjunction with the fruit growing season. The employees were terminated upon a decision by the appellant to close one of the fruit processing plants mid-way through the season due to the amount of fruit being delivered to the plant.
[70] The Commission in SPC Ardmona found that the employment was not for a “specified task” and the appeal was dismissed. The Commission reasoned that:
“[108] The contracts in question cannot be said to be for a "specified task" in circumstances where they may be terminated by the employer on a whim, merely upon the giving of two days notice, or payment in lieu, prior to the completion of the task in question.
[109] The existence of termination with notice provisions in awards is consistent with the view we have reached. The standard redundancy provisions for federal awards expressly exempt employees engaged for a "specified task" from the notice of termination provisions. Such award usage may suggest that a right to terminate on notice is inconsistent with "specified task" employment.
[110] We wish to make it clear that it is the broad and effectively unconditional, nature of the right to terminate the contracts in this case which robs these contracts of having the characteristic of being for a "specified task"...”
(Emphasis added)
[71] The case of Hewitt v ACTek Custom Engineering Pty Ltd , 44 (Hewitt) considered the case of a software programmer that was engaged by letter to develop a specific piece of point-of-sale software for an estimated duration of six to twelve months. The letter described the engagement as “initially just a project job” but with the possibility of extension for an undisclosed period. In finding that the applicant programmer was engaged for a “specific task” Senior Deputy President Lacy reasoned:45
[22] The phrase “a specified task”, as it relates to reg 30B(1)(b), has been defined narrowly in the relevant authorities. In Qantas Airways Limited v Fetz, the Full Bench of this Commission stated that the phrase “a specified task” would “normally apply to an identifiable project or job.” The Full Bench cited three dictionary definitions which define “task” as being, “[1] a piece of work imposed on or undertaken by a person ... [2] A definite piece of work assigned or falling to a person; a duty ... [3] any piece of work.”
[23] Another definition which may provide assistance in understanding the meaning of the phrase “a specified task” can be found in The CCH Macquarie Dictionary of Employment and Industrial Relations. In it, the word “task”, relevantly, is defined as being, “an element or group of elements of work by which a specific result is achieved.”
[24] I agree that the phrase “a specified task” should be interpreted narrowly so as to cover only situations where an employee has been engaged under a contract to perform a project or job which is distinct or identifiable in its own right. The task to which the original employment contract relates should be self-contained and not leave open the possibility of the employee performing any work outside the realm of the specific task for which the employee is being employed. That is not to say that an employee engaged under a contract for a specified task could not agree, during the performance of the contract, to undertake some other work for the employer that was peripheral to the original contract. In those circumstances, a question might arise as to whether there has been a variation of the terms of the original contract.
(Emphasis added)
[72] It is recognised in the current matter, that the Respondent argued that Captain Miles undertook some other work, which was peripheral to the original contract. The relevant terms of the Second Contract and Letter of Appointment that define the duties as forming part of Captain Miles’ engagement with the Respondent include; cl.2.2, cl.4 and Schedule B.
[73] Whilst the evidence is acknowledged, that Captain Miles was employed as a flight instructor, the Respondent’s submission that Captain Miles’ “specified task” was to train pilots of the Respondent’s client while those students were being supplied is rejected, on the contract. Clause 2.2 provides that the Respondent’s contracts with its clients were not linked to the period of employment offered to Captain Miles:
“2.2 Although the Company enters into this maximum term Agreement with you due to its particular contractual arrangements with its’ clients, the period of any contract the Company has with a client bears no relationship to the period of the maximum term arrangement with you, as the terms of the contracts with clients can be altered as required pursuant to their individual terms, and can run in individual blocks of time (eg most tend to run for 8-9 months).”
[74] The terms of the engagement are otherwise quite broad such as to allow the Respondent scope to vary the duties performed by Captain Miles, subject to operational requirements. The Respondent had an unfettered right to vary Captain Miles’ duties “at any time” within the bounds of his position as is provided for under cl.4.1:
“4.1 You will undertake such duties, under this Agreement, as determined by the Company from time to time. A general description of the requirements of your Position, including your accountabilities, is set out in the Position Description at Schedule B. The Company may vary the Position by adding or subtracting particular requirements or accountabilities of the Position at any time as long as it does not (without your consent) substantially change the nature of the Position or require you to do things which are beyond your competence.
…”
[75] Schedule B also lists Captain Miles’ duties and responsibilities which appear to be much broader than a self-contained project or job distinct or identifiable in its own right, as described in Hewitt. However, it is conceded that, Captain Miles’ evidence was that he predominantly undertook training and only covered some emergent circumstances for search and rescue.
[76] However, critically, as mentioned earlier in these reasons, both parties have unqualified rights to terminate the employment, exercisable at any point in time from the start of the Second Contract on 2 September 2017 up until the Expiry Date on 31 August 2020. Consistent with the case of SPC Ardmona, it is the unconditional nature of the right to terminate the contract, exercisable by either party, prior to the completion of any “specified task” in the contract, that means that Captain Miles was not engaged by the Respondent under the contract for a “specified task”.
[77] Further, the Second Contract does not identify a “specified task” with “sufficient particularity” to enliven s.123(1)(a) of the Act. The Applicant’s submission that the Second Contract was not for a “specified task” is therefore accepted.
CONCLUSION
[78] For convenience, the Questions for arbitration are repeated here:
“1. Was Captain Miles employed “for a specified period of time” or “for a specified task” within the meaning of subsection 123(1)(a) of the Fair Work Act 2009 (Cth) (FW Act)?
2. If the answer to question 1 is no, then:
(a) is the Respondent obliged to pay redundancy pay to Captain Colin Miles in accordance with subsection 119(2) of the FW Act?
(b) does Captain Miles’ “period of continuous service with the employer on termination” include his service under the First Contract and under the Second Contract for the purposes of subsection 119(2) of the FW Act?”
Question 1
[79] For the aforementioned reasons, the answer to Question 1 is “no”.
Question 2(a)
[80] In addition, as set out, it is the case that Captain Miles was not engaged for a “specified period” or “specified task” under s.123(1)(a), therefore he is entitled to redundancy pay under s.119, as he is not excluded from the section by s.123 – despite the terms agreed to in the Contract which state no redundancy pay is payable. These terms, excluding redundancy payment, are inconsistent with the Award and the Fair Work Act regarding the NES entitlement to redundancy pay. Section 44(1) of the Act sets out that “An Employer must not contravene a provision of the National Employment Standards”. The Employer cannot in the contracts exclude an employee’s entitlement to redundancy pay; therefore, the answer to Question 2(a) must be “yes”.
Question 2(b)
[81] With reference to question 2, the Respondent referred to s.22 of the Act and conceded that Captain Miles’“period of continuous service with the employer on termination” includes his service under the First Contract and under the Second Contract for the purposes of s.119(2) of the Act.
[82] The Applicant submitted that Captain Miles’ accrued entitlements from the First Contract were also “rolled over” into the period of employment under the Second Contract. The Applicant also submitted that there was no break in continuity between the Expiry Date of the First Contract and the Commencement Date of the Second Contract.
[83] In any event, in relation to question 2(b), the Respondent conceded that if it was determined that redundancy pay was owing it would be applicable for the period from 11 January 2016 to 24 August 2018, being the aggregate period discharged for the two contracts. Further to this concession, Captain Miles’ “period of continuous service with the employer on termination” includes his service under the First Contract and under the Second Contract for the purposes of s.119(2) of the Act. The answer to Question 2(b) is therefore “yes”.
[84] The questions have been answered in relation to Captain Miles as being representative of the Pilot group.
[85] I Order accordingly.
COMMISSIONER
Appearances:
Mr A Molnar and Mr J Lauchland on behalf of the Applicant.
Mr J Merrell, Counsel (as he then was), and Mr C Campbell of Aitken Legal on behalf of the Respondent.
Printed by authority of the Commonwealth Government Printer
<PR704429>
1 Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J; Regional Express Holdings Limited v Australian Federation of Air Pilots [2017] HCA 55 at [21].
2 Applicant’s Submissions filed 9 October 2018 at [9]-[10].
3 Applicant’s Submissions filed 9 October 2018 at [12]-[13].
4 Andersen v Umbakumba Community Council (1994) 126 ALR 121 at pp 125-126; SPC Ardmona Operations Ltd v Esam PR957497 (AIRCFB, Ross VP, Hamilton DP, Hingley C, 20 April 2005) at [107]; Nesci v The Playford Hotel T/A The Playford Hotel Pty Ltd[2018] FWC 5777 at [16].
5 Applicant’s Submissions filed 9 October 2018 at [13]
6 Witness Statement of Colin Phillip Miles signed 9 October 2018 at Annexure CPM-1.
7 Applicant’s Submissions filed 9 October 2018 at [15]-[18].
8 Applicant’s Submissions filed 9 October 2018 at [19].
9 SPC Ardmona Operations Ltd v Esam PR957497 (AIRCFB, Ross VP, Hamilton DP, Hingley C, 20 April 2005) at [107].
10 Qantas Airways Limited v Fetz Print Q1482 AIRCFB, Giudice J, Harrison SDP, Lawson C, 9 June 1998 at page 12.
11 Applicant’s Submissions filed 9 October 2018, at [22].
12 Witness Statement of Colin Phillip Miles signed 9 October 2018, at [9] and [10].
13 Applicant’s Submissions filed 9 October 2018, at [34] -[35].
14 Witness Statement of Colin Phillip Miles signed 9 October 2018, at [6].
15 Witness Statement of Colin Phillip Miles signed 9 October 2018, at [7].
16 Witness Statement of Colin Phillip Miles signed 9 October 2018, at [8].
17 Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500 at [41].
18 Respondent’s Submissions filed 2 November 2018, at [26] referring to the explanatory memorandum to clause 123 of the Fair Work Bill 2009at [487].
19 [1975] HCA 41; (1975) 132 CLR 611.
20 Murphy v Farmer [1988] HCA 31; (1988) 165 CLR 19 at 27.
21 Clyne v Deputy Commissioner of Taxation [1988] HCA 31; (1988) 165 CLR 19 at 27.
22 Referring to Katzmann J in Coghill v Indochine Resources Pty Ltd (No2) [2015] FCA 1030 at 49-50.
23 Respondent’s Submissions filed 2 November 2018, at [54]-[61].
24 Affidavit of Michael D’Ott Becker sworn 1 November 2018.
25 [2017] FWCFB 5162.
26 [2015] FCCA 2697 at [75].
27 (1994) 57 IR 238.
28 (1994) 126 ALR 121.
29 [2010] FMCA 342.
30 Above n 19.
31 Above n 20.
32 [1998] HCA 28; (1998) 194 CLR 353.
33 Andersen v Umbakumba Community Council (1994) 126 ALR 121.
34 Referring to s.170CC of the Industrial Relations Act 1988 and Reg 30B(1) of the repealed Industrial Relations Regulations.
35 Ibid at 126-127.
36 (1994) 57 IR 238 at 241.
37 Affidavit of Michael D’Ott Becker sworn 1 November 2018, at [10], [21], [23], [24].
38 Witness Statement of Colin Phillip Miles signed 9 October 2018, at Annexure CPM-2.
39 [1999] AIRC 576.
40 J Grycan v Table Tennis Australia Incorporated 1999] AIRC 576 at [5], [9]-[12].
41 Andersen v Umbakumba Community Council (1994) 126 ALR 121 at 127.
42 [2010] FWA 3534.
43 SPC Ardmona Operations Ltd v Esam PR957497 (AIRCFB, Ross VP, Hamilton DP, Hingley C, 20 April 2005).
44 [2001] AIRC 500.
45 Ibid at [22]-[24].
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