Dadey v Edith Cowan University

[1996] IRCA 308

DECISION NO:  308/96 

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - alleged UNLAWFUL TERMINATION - whether CONTRACT for SPECIFIED PERIOD - whether termination at the initiative of the employer.

Industrial Relations Act 1988 Ss 170EA, 170EE.
Industrial Relations Regulations, Reg 30B.

APESMA v Skilled Engineering Pty Ltd (1994) 1 IRCR 106, 54 IR 236.
Cooper v Darwin Rugby League Inc (1994) 1 IRCR 130, 57 IR 238.
O’Neill v Australian National University IRCA No. 486 of 1995, Linkenbagh JR, 29 August 1995, unreported.
Strecker v Metropolitan Cemeteries Board (1995) 64 IR 109.
Siagian v Sanel Pty Ltd (1994) 1 IRCR 1, 54 IR 185.
Anderson v Umbakumba Community Council (1994) 56 IR 102.
Byrne & Frew v Australian Airlines Limited (1995) 61 IR 32.

Patrick DADEY -v- EDITH COWAN UNIVERSITY 
WI 1062 of 1996

BEFORE:        R. D. FARRELL JR
PLACE:           PERTH
DATE:             8 July 1996

IN THE INDUSTRIAL RELATIONS     )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )         No. WI 1062 of 1996

BETWEEN:  Patrick DADEY
  -         Applicant

AND:   EDITH COWAN UNIVERSITY
  -         Respondent

MINUTE OF ORDERS

BEFORE:                R. D. FARRELL JR

PLACE:                   PERTH

DATE:  8 July 1996

THE COURT ORDERS THAT:

1.         The application is dismissed.

NOTE:           Settlement and entry of Orders is dealt with by Order 36 of the   Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY

WI 1062 of 1996

BETWEEN:

Patrick DADEY
Applicant

AND:

EDITH COWAN UNIVERSITY
Respondent

REASONS FOR DECISION

8 July 1996  R. D. FARRELL JR

1. This is an application under Section 170EA of the Industrial Relations Act 1988 for reinstatement or, in the alternative, compensation arising from the alleged unlawful termination of the employment of the applicant, Patrick Dadey (“Mr Dadey”), by the respondent, Edith Cowan University (“the University”).

1. The University, by Notice of Motion heard at the commencement of the hearing, sought to have the application dismissed on the grounds that no reasonable cause of action was disclosed. Most of the statements of fact set out in the affidavit in support of the Notice of Motion were not in contention.

1. The primary submission of Mr Shelton, who represented the University, was that the termination of Mr Dadey’s employment was not a termination at the initiative of the employer. It would follow that Division 3 of Part VIA of the Act would not therefore apply to the termination and that the application must be dismissed.

1. Mr Shelton also submitted that Mr Dadey was excluded from the operation of Section 170EA of the Act by Regulation 30B(1)(a) of the Industrial Relations Regulations, because Mr Dadey was engaged under a contract of employment for a specific period of time, being a contract that was entered into before 16 November 1994.

1. Mr Hodgson, who represented Mr Dadey, contended that this was in fact a termination at the initiative of the employer, and that Mr Dadey’s employment contract was not a contract of employment for a specified period of time. Mr Hodgson relied upon Affidavits sworn by Mr Dadey and by Mr Warwick Claydon, the President of the Edith Cowan Branch of the National Tertiary Education Industry Union.

1. He opposed my deciding the issues raised by the Notice of Motion until the conclusion of the case when I would have heard all the evidence on all the possible issues in the case. I invited Mr Hodgson to advise me of any evidence which he expected would be led in the full hearing of the application which might be relevant to the issues raised by the Notice of Motion.

1. Having heard the submissions of the parties’ representatives, I was satisfied that the issues raised by the Notice of Motion were threshold issues of a predominantly legal nature which could and should conveniently be separated from a full hearing of the claim. I do not believe that any evidence evidence of the sort foreshadowed by Mr Hodgson could affect the outcome on the issues raised by the Notice of Motion. I have therefore decided to determine those issues as preliminary matters. It will not always be appropriate to do so where an application of this character is made.

Findings as to the Facts.

1. Mr Dadey began his employment with the University as Lecturer in Dance (Classical) in the University’s Academy of Performing Arts on 1 January, 1993. He signified his acceptance of an Offer of Appointment by signing the offer document on 30 December 1992.

1. The relevant terms of the Offer of Appointment are as follows:

   “1.This offer of appointment is made by Edith Cowan University as of today’s date, 16 December 1992, to Mr Patrick Dadey.

   2.The appointment offered is for a three year contract commencing 1 January 1993. While it may be that your appointment will be extended to a further contract, or that you may apply for and obtain a tenured position, there is no entitlement to continued employment beyond the date of completion of the contract as set out above.

   3.The appointment is on a full-time basis, commencing on 1 January 1993.

   4.You are offered appointment as Lecturer in Dance (Classical) at an annual salary rate of $44,075 which is step 3, Lecturer Level B in line with the Australian Universities Academic and Related Staff (Salaries) Award 1987, which is reviewed from time to time.

   5.The industrial awards applicable to your award (sic) as an academic are:

   Academic Staff (Western Australian College of Advanced Education) Award 1988.
   Australian Universities Academic and Related Staff (Salaries) Award 1987
   Australian Universities Academic Staff (Conditions of Employment) Award 1988
   Australian Universities Academic Staff (Contract of Employment and other Matters) Interim Award 1988

   6.Copies of these awards are held by the Office of the Director and are available on request.  ...

   7.The University will enter into no undertaking regarding your employment and associated conditions beyond the terms of this offer of appointment and the attachment.  ...

   8.It is University policy that on receipt of this offer of appointment you normally have not more than fourteen days to consider it before making a reply. If you accept the offer of appointment you should sign one copy of the offer as supplied, so as to confirm that you have accepted the offer of appointment and the conditions of appointment, and that the associated documents have been read and accepted. Your acceptance of this offer should reach the Director’s office not later than 30 December 1992.”

1. It was agreed between the parties that the attachment referred to at clause 8 of the Offer of Appointment was the first award named in clause 5. A copy of that award, now called the Academic Staff (Edith Cowan University) Award 1988 (“the Award”) was provided to me.

1. The Award includes a clause providing for resignation of staff members, including fixed-term academic staff, by giving of six month’s notice (Clause 16) and a c;ause providing for termination by the University’s Council of staff members’ appointments for grave professional misconduct or a wilful breach or continued neglect of duties (Clause 17). 

1. By 30 July 1993, the University had in place a policy known as the “Advance Notice of Contract Renewal” policy.

1. The relevant terms of the policy are as follows:

“Contract Renewal - Advance Notice - Academic Staff

1.This advance notice of contract renewal is intended to reduce the level of uncertainty experienced by staff on contracts.

2.The Dean of the Faculty in consultation with the Head of School and Chairperson of Department will determine whether the position is ongoing. The Dean of Faculty will ensure this action occurs with sufficient time to allow the incumbent to be advised of the decision at least 6 months prior to the expiry of his/her contract.

3.If the position is not ongoing the Dean of Faculty will give the incumbent at least 6 months notice of termination of contract. The Director, Human Resource Management Division will confirm that advice in writing.

4.If the position is ongoing:

4.1The Dean of Faculty, Head of School, Chairperson of Department and one member drawn from the relevant Department (appointed by the Dean of Faculty on the recommendation of the Head of School and Chairperson of Department) will recommend to the Vice-Chancellor whether the incumbent be offered a further contract or position to be advertised externally.

4.2On acceptance of the recommendations by the Vice-Chancellor, the Dean of Faculty will give the incumbent six months written notice of the decision. The Director, Human Resource Management Division, will confirm that advice in writing.

4.3If the position is identified as ongoing the position will continue at the same level.

5.Where the incumbent has not been given written notice in accordance with these provisions, the University will extend the incumbent’s contract until such time as six months notice has been given.   ...”

1. On 23 June 1995, Mr Dadey received a Memorandum on the subject of his contract from Mr Duncan Ord - Dean, School of Dramatic Arts in the following terms:

   “You will be aware that your three year contract with the Dance Department expires at the end of this year and in line with University and Academy Board policy, the position you currently occupy will be readvertised for a new contract period of three years.

   I am writing to advise you that we will be preparing the selection criteria for the position and I imagine it will be advertised in August/September, with the selection process being undertaken throughout October.

   I would strongly encourage you to reapply for the position and continue to contribute to the development of the dance programme at the Academy.”

1. On 26 June 1995, Mr Dadey received a letter from Mr Jeff Bateman - Acting Director Human Resources in the following terms:

   “In accordance with the University’s Advance Notice of Contract Renewal policy, I need to advise you that your contract which terminates on the 31st December 1995 will not be renewed. I understand that you will have already been advised of this.

   I understand that you were also advised that the decision to readvertise your position is in no way a reflection on your ability or the contribution you have made while an employee of the Academy. Rather it is the policy of the Academy that all contracts that expire are routinely readvertised.

   Therefore you should not feel reticent in reapplying for the position. When the advertisement for the position appears shortly in the newspapers, it is hoped you will again consider seriously applying for the vacancy.”

1. Mr Dadey applied for the vacancy. On 31 October 1995, Mr Dadey received a letter from Dr Geoffrey Gibbs, the Director of the University’s WA Academy of Performing Arts, in the following terms:

“Thank you for participating in the interview process for the position of Lecturer in Dance (Classical).

I am sorry to advise you that your application on this occasion has not been successful. The selection panel was very impressed with the quality of your application and the supporting documentation you provided.

We see the Academy as being a growth area and are optimistic that in the not too distant future a further position would be available. We sincerely hope that if and when that is advertised you will be prepared to consider a further application.

We thank you once again for your interest in the Western Australian Academy of Performing Arts.”

1. Mr Dadey’s last day of employment was 31 December 1995.

Whether Termination at the Initiative of the Employer

1. It is well established that in Sections 170EA and 170EE, “termination” of the employee’s employment refers to termination at the initiative of the employer, meaning an act done by an employer terminating or purporting to terminate the employment: APESMA v Skilled Engineering Pty Ltd (1994) 1 IRCR 106; 54 IR 236 per Gray J; Cooper v Darwin Rugby League Inc (1994) 1 IRCR 130 per Northrop J; and Mohazab v Dick Smith Electronics (No. 2) (1995) 62 IR 200 per the Full Court.

1. The respondent contends that in this case, Mr Dadey’s employment came to an end by the effluxion of time. It says there was no act done by the University to terminate the employment. The contract ended at the time the parties had agreed from the outset that it should end. Reference was made to O’Neill v Australian National University (unreported, IRCA No. 486 of 1995, Linkenbagh JR, 29 August 1995), a case involving a series of back-to-back fixed-term contracts over 15 years, where it was held that there was no termination at the initiative of the employer on the basis that the contract had come to an end by the effluxion of time.

1. However, Judicial Registrar Boon in Strecker v Metropolitan Cemeteries Board (1995) 64 IR 109 at 120 suggests another possibility. In that case, there were a series of back-to-back short-term contracts. On the issue of whether there was an act done by the employer terminating the contract, the Judicial Registrar said:

   “In this case, the evidence shows that the respondent did not simply allow the fixed-term written contract to expire by effluxion of time. Before the term of each written contract was due to expire, the respondent actively considered whether or not Ms Strecker’s employment was to continue. A decision, based primarily on Ms Strecker’s performance, was made as to whether or not the employment relationship was to continue. The respondent acted to bring to an end the employer-employee relationship by making this decision and communicating it to the applicant by letter of 9 June 1995. I find that in this case there was a termination at the initiative of the employer...”

1. The applicant in this case contends that the correspondence sent to Mr Dadey by representatives of the University in late June 1995, advising him that his contract would not be renewed and that the position was to be readvertised, similarly constituted an act done by the employer terminating the employment.

1. The correspondence was sent by the University in the context of the “Advance Notice of Contract Renewal” policy. The University was required under that policy to make decisions. Assuming the position was to continue, the first decision required by clause 4.1 of the policy was whether the incumbent, Mr Dadey, should be offered a further contract or whether the position should be advertised externally.

1. It was common ground that this aspect of the policy had been overtaken by a later University policy which required that all such contracts be readvertised. This was reflected in the terms of Mr Bateman’s letter of 26 June 1995. I am therefore satisfied that there was no specific consideration in Mr Dadey’s case of whether or not the position should be readvertised.

1. However, by 31 October 1995 there was a decision taken by the University not to offer a further contract of employment to Mr Dadey. By that time the University had decided to instead offer a contract to the successful candidate.

1. While Mr Dadey’s contract of employment ended by effluxion of time on 31 December 1995, it may be argued that the employment relationship between Mr Dadey and the University was terminated because of the University’s decision to offer the next contract for the position to someone else.

1. I note at this point that whether or not there can be said to have been an decision which constitutes an act done by the employer terminating the employment will be a matter for evidence in each case. In this case, the University made it clear that it followed its policy, which required a decision to be taken. In another case, the employer may never have considered the possibility of offering a new contract to the employee, so that there could be no question of the employment relationship extending beyond the particular employment contract. The Court would usually be more likely to find, as a question of fact, that the employer considered renewing the policy where there has been a history of back-to back contracts.

1. The difference between the decisions in Strecker v Metropolitan Cemeteries Board and O’Neill v Australian National University in my view reflect a difference in interpretation of Section 170EA. Section 170EA confers jurisdiction with respect to termination of employment, but the terms of the section do not expressly address whether it extends to termination of the employment relationship or merely termination of a particular employment contract. They are not always the same thing.

1. Chief Justice Wilcox, in Siagian v Sanel Pty Ltd (1994) 1 IRCR 1 at 19; 54 IR 185 at 201, opts for the view that “employment” means employment relationship:

   “Bearing all these matters in mind, and given that the Courts have sometimes recognised the possibility of a difference between a termination of employment and a termination of the contract of employment, it seems preferable to treat the words ‘termination of ... employment’ in Div 3 of Part VIA of the Industrial Relations Act as including any act that brings to an end the employer-employee relationship, whether or not the act, or any acceptance of it, so brings to an end the contract of employment.”

1. Justice Gray, in APESMA v Skilled Engineering Pty Ltd did not follow Siagian v Sanel Pty Ltd. He held that the legislation applied where “an employer has done some act terminating or purporting to terminate the employment”. He expressed the view that the construction of the Act he had adopted in that case “absolved the Court from determining difficult questions, such as whether a contract of employment, or some separate relationship of employer and employee, has been brought to an end.” Unfortunately, it seems my adoption of Justice Gray’s construction has not prevented that very question arising on the facts of this case.

1. I note that in Mohazab v Dick Smith Electronics (No. 2) a Full Court of the Industrial Relations Court confirmed that:

   “Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the iniative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘termination of employment’: Siagen v Sanel...”

1. There would be absurd consequences if Section 170EA were construed to apply only to terminations of contracts of employment, rather than terminations of employment relationships. For example, the section would not apply where a fixed-term employment contract has expired through effluxion of time, on the grounds that there was no termination at the initiative of the employer, even where the main purpose of engagement under a fixed-term contract was to avoid the employer’s obligations under the Act. As Judicial Registrar Boon pointed out in Strecker v Metropolitan Cemeteries Board, such an interpretation would render Regulation 30B(2), to which I refer below, unworkable

1. I propose to follow the approach in Siagian v Sanel Pty Ltd. In finding that the University’s decision not to offer a further contract of employment to Mr Dadey was an act done by the employer which resulted in the termination of the employment relationship, I therefore find that there was a termination at the initiative of the employer to which Section 170EA and 170EE of the Act can apply.

Whether Mr Dadey is an Employee Excluded by Regulation 30B

1. Regulation 30B(1)(a) of the Industrial Relations Regulations provides that “employees engaged under a contract of employment for a specified period of time, being a contract that was entered into before 16 November 1994” are excluded from the operation of Subdivisions B, C, D and E of Division 3 of Part VIA of the Act.

1. The applicant contends that Mr Dadey is not so excluded, because his contract was not a contract for a specified period of time.

1. In Andersen v Umbakumba Community Council, Justice von Doussa states at 462D that:

   “A contract for a specified period of time would be one where the time of commencement and the time of completion are unambiguously identified by a term of the contract, either by the contract stating definite dates, or by stating the time or criterion by which one or other end of the period of time is fixed, and by stating the duration of the contract of employment.”

1. Mr Dadey’s contract falls into the latter category, with 1 January 1993 fixed as the time of the beginning of the contract period, and with the duration of the contract stated to be three years.

1. The applicant points out that the contract in Andersen v Umbakumba Community Council was held not to be a contract for a specified period of time because it conferred the unqualified right on either party to bring the employment to an end on two weeks notice. Justice von Doussa therefore held that the cessation date set out in that contract merely recorded the outer limit of the period beyond which the contract of employment will not run, and that within that period, the contract was indeterminate. Regulation 30B did not therefore apply.

1. The applicant submitted that Clauses 16 and 17 of the Award, which confer rights to resign and to terminate upon the employee and the employer respectively, have the effect of making the contract in this case similarly indeterminate.

1. In my view, the University Council’s right to terminate the appointments of staff members’ for grave professional misconduct or a wilful breach or continued neglect of duties could not have the effect of making the period of employment indeterminate. The University’s right to termination is dependent upon the breach of the contract by the employee, and is not inconsistent with its being a contract for a specified period of time: see von Doussa J in Andersen v Umbakumba Community Council at 463B.

1. If the unqualified right to resign conferred on employees by Clause 16 of the Award could be said to form part of Mr Dadey’s contract, then it would have the effect of making the period of the contract indeterminate.

1. However, if Mr Dadey’s right to resign derives solely from the award, it would not have the effect of making the period of the contract indeterminate. The fact that the award, in conferring that right, over-rides the employee’s obligations under the contract by force of statute does not affect the proper characterisation of the contract of employment.

1. It is now clear that the terms of applicable awards are not automatically imported or implied into employment contracts: Byrne & Frew v Australian Airlines Limited (1995) 61 IR 32.

1. The applicant contends, however, that I should find, in the particular circumstances of this case, that the terms of the Award are either implied terms of Mr Dadey’s contract, or incorporated by reference into the contract.

1. It is not necessary for the reasonable and effective operation of the employment contract to imply a right to resign by notice into the contract. I see no basis on which this case can be distinguished from Byrne & Frew v Australian Airlines Limited on that issue.

1. In support of the contention that the terms of the Academic Staff (Edith Cowan University) Award 1988 (“the Award”) are incorporated by reference into the contract, reference was made to:

   ·Clause 5 of the Offer of Appointment, where the Award is one of a number of awards listed;

   ·the fact that the Award, as at 16 December 1992, was an attachment to the Offer of Appointment; and

   ·the reference to the attachment in Clause 8 of the Offer of Appointment.

1. I was referred to no authorities on this issue. It was not argued in Byrne & Frew v Australian Airlines Limited that it was the intention of the parties to incorporate the relevant term of the award into the contract. Rather, it was argued in that case that the term was imported into the contract independently of the parties’ intentions.

1. I am satisfied that Clause 4 of the Offer of Appointment, which provides:

   “You are offered appointment as Lecturer in Dance (Classical) at an annual salary rate of $44,075 which is step 3, Lecturer Level B in line with the Australian Universities Academic and Related Staff (Salaries) Award 1987, which is reviewed from time to time.”

has the effect of incorporating by reference a particular award rate of pay, as reviewed from time to time, into the contract.

1. However, Clause 5 of the Offer of Appointment merely refers to a list of applicable awards. The language of the clause does not suggest that the terms of those awards were to be incorporated into the contract. The mere fact that the existence of those awards is recognised and referred to in the Offer of Appointment is not enough in my view to indicate an intention to give the terms of those awards contractual force, in circumstances where the awards already have statutory force. Any argument to the contrary would have no firmer foundation than the “crystallised custom” argument, which was discussed and rejected in Byrne & Frew v Australian Airlines Limited.

1. The fact that the Award, as it was at 16 December 1992, was attached to the Offer of Appointment would be equally consistent with an intention on the part of the University to inform Mr Dadey of the main award terms applicable to his employment at that time by force of statute, rather than an intention of the part of the University to incorporate the terms of the Award into the contract as enforceable contractual terms. If it were said to indicate the latter intention, then the intention would seem to be to incorporate the particular terms attached, rather than the terms of the Award as amended from time to time. 

1. The only reference in the Offer of Appointment to the attachment is found in clause 8, which provides:

   “The University will enter into no undertaking regarding your employment and associated conditions beyond the terms of this offer of appointment and the attachment.  ...”

1. The purpose of clause 8 is to limit the ambit of the University’s undertakings regarding the employment, rather than to incorporate additional terms into the contract of employment. It might be argued that, in expressly declining to offer undertakings beyond to the terms of the Offer of Appointment and the Award, the University was implicitly offering undertakings in the terms of both the Offer of Appointment and the Award, and that the terms of the Award thus become contractual terms. However, I am not satisfied that such an implication is necessary.

1. The University was immediately contracting to comply with the terms of the Offer of Appointment, and was immediately obliged by statute to comply with the terms of the Award. While any obligation accepted by the University beyond the terms of the award would necessarily be contractual in nature, the existing obligation upon the University to comply with the terms of the award arose from statute. It is not therefore necessary to imply from clause 8 an assumption by the University of an additional contractual obligation to comply with the terms of the award.

1. Accordingly, on the evidence before me, I am not prepared to find that the terms of the Award should be incorporated into the contract as contractual terms.

1. I am therefore satisfied that Mr Dadey’s contract was a contract of employment for a specified period of time, being a contract that was entered into before 16 November 1994.

1. Regulation 30B(2) of the Industrial Relations Regulations, provides that Regulation 30B(1) does not apply to an employee engaged under a contract of employment for a specified period of time “if the main purpose of the engagement under a contract of that kind is, or was at the time of the employee’s engagement, to avoid the employer’s obligations under Subdivision B, C, D or E of Division 3 of Part VIA of the Act.”

1. The applicant contends that Regulation 30B(2) has application in this case.

1. Like Justice von Doussa in Andersen v Umbakumba Community Council, I decline to hold that this employment contract, which was entered into before the Bill to enact the Industrial Relations Reform Act had been introduced into Parliament, and before there is any reason to suppose that either party had any knowledge of the proposed changes to the law, was entered into with the aim or purpose of avoiding statutory obligations that might fall on the employer in the future.

Conclusion

1. Accordingly, I find that there is no reasonable cause of action disclosed by this application because, while there was a termination at the initiative of the employer, Mr Dadey was excluded from the operation of Section 170EA of the Act by Regulation 30B(1)(a) of the Industrial Relations Regulations.

1. I will order that the application be dismissed.

   I certify that this and the preceding (15) pages
   are a true copy of the reasons for decision of
   Judicial Registrar R.D. Farrell.

   Associate:
   Dated:

   APPEARANCES

   Representative of the applicant:                 Mr N J Hodgson       

   National Tertiary Education Industry         Union -

   (WA Division)

   Representative of the respondent:              Mr D Shelton

   Australian Higher Education           Industrial Association

   Date of Hearing:  4 July 1996

   Date of Judgment:  8 July 1996