David Margetts v Department of Justice and Regulation T/A Corrections Victoria

[2016] FWC 5342

[2016] FWC 5342

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

David Margetts
v
Department of Justice and Regulation T/A Corrections Victoria
(U2016/6038)

DEPUTY PRESIDENT CLANCY MELBOURNE, 3 AUGUST 2016

Application for relief from unfair dismissal.

[1] Mr David Margetts has alleged the termination of his employment by the Department of Justice and Regulation T/A Corrections Victoria (Department) was unfair and has lodged an unfair dismissal application (Application).

[2] The Department objects to the Application asserting that the Fair Work Commission (Commission) had no jurisdiction to deal with the Application because Mr Margetts was not dismissed within the meaning of s.386 of the Fair Work Act 2009 (the Act). The Department claims that Mr Margetts’ contract of employment ended at the end of the period specified in it and the termination of his employment was not terminated on its initiative, with the result that he is excluded from the operation of the unfair dismissal provisions of the Act.

Legislation

[3] Section 385 of the Act states:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a)  the person has been dismissed; and

(b)  the dismissal was harsh, unjust or unreasonable; and

(c)  the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d)  the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[4] Section 386 of the Act defines “dismissed”:

“386 Meaning of dismissed

(1)  A person has been dismissed if:

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

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

(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; or

(b)  the person was an employee:

(i)  to whom a training arrangement applied; and

(ii)  whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement; and the employment has terminated at the end of the training arrangement; or

(c)  the person was demoted in employment but:

(i)  the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii)  he or she remains employed with the employer that effected the demotion.

(3)  Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person's employment, to avoid the employer's obligations under this Part.”

Background

[5] A summary of the employment history of Mr Margetts with the Department was outlined in a document prepared by the Department and it was not disputed by Mr Margetts. 1 His first engagement commenced with a fixed term contract for the period 22 February 2010 to 14 April 2010. There were sixteen discrete periods up until 5 March 2016. These comprised periods of work pursuant to fixed terms contracts, interspersed with periods of casual and ongoing employment. Mr Margetts only worked consecutive periods covered by fixed term contracts once, from 15 January 2012 to 21 April 2012.

[6] It was also not in dispute that Mr Margetts did not perform work at the Metropolitan Remand Centre (MRC) after 5 March 2016.

[7] The Department wrote to Mr Margetts on 5 April 2016 in response to communications and correspondence between the parties after 5 March 2016. 2 In this letter, the Department asserted that Mr Margetts’ fixed term contract commencing 10 January 2016 expired on 5 March 2016 and as a result, he was no longer employment by it. The communications and correspondence that had prompted the letter included:

• Mr Margetts calling Ms Carmel Dickinson, Team leader – Human Resources for the MRC, on 17 March 2016 asserting he had been offered an extension of his contract until May 2016 and seeking payment until then but not providing the name of the individual who had offered the extension;



• Mr Margetts calling Ms Carmel Dickinson again on 17 March 2016 and being advised that on 18 March 2016, he would be paid his untaken leave entitlements accrued during the term of the contract plus an additional 80 hours; and



• Mr Margetts emailing the Department on 21 March 2016 and again asserting he was verbally offered an extension of his contract until May 2016 but again not providing the name of the individual who had offered the extension.

[8] The Department advised Mr Margetts in its letter dated 5 April 2016 that it had made initial inquiries and no staff member recalled making him a verbal offer to extend his contract until May 2016. The Department further advised that while Mr Margetts’ name remained in the pool of casuals to whom the Department might offer casual employment, it did not intend to offer him further shifts at that stage.

[9] At the hearing, Mr Margetts gave evidence and made submissions. The following witnesses gave evidence for the Department:

a) Ms Carmel Dickinson;
b) Ms Lidiya Hanlon, Human Resources Supervisor for the MRC; and
c) Ms Mollie Vandenberg, Justice Officer – Human Resources for the MRC.

Evidence and submissions of the Department

[10] Ms Dickinson provided a statement 3 confirming she has been employed at the MRC since April 2006 and reports to the Supervisor of Human Resources, Ms Hanlon. Ms Dickinson said Prison master rosters are prepared six weeks in advance and are completed on a fortnightly basis. She said she and Ms Hanlon are the only two officers at MRC who are authorised to offer fixed-term contracts of engagement to Prison Officers in the MRC casual pool.

[11] Ms Dickinson said the contract of Mr Margetts from 10 January 2016 to 5 March 2016 4 was confirmed via email on 23 March 2016. She explained the delay in providing it as follows:

“The actual act of preparing the contracts and finalising them in such a busy environment can take some time.  It then also leaves our office and goes to the correct delegate, being the general manager.  It sits in her tray waiting for signature and then the signed contract will eventually end up back in my office where I will then instruct one of my girls to write the email to the employee saying that they have a signed contract waiting for their signature sitting in a folder.” 5

[12] Ms Dickinson was not able to give evidence on the sort of engagements Mr Margetts had prior to the engagement that commenced in January 2016, 6 but stated she did not recall offering an extended contract to Mr Margetts past 5 March 2016. She said she had checked her notes and emails to casual staff but this did not identify any evidence that indicated she had offered or provided Mr Margetts with a further fixed term contract until May 2016.

[13] Ms Hanlon also provided a statement 7 and said she had been employed at the MRC since October 2013. She confirmed that she and Ms Dickinson were the only two MRC officers who offer fixed-term contracts to casual employees.

[14] Ms Hanlon described her work environment as high paced, such that the delay in providing the fixed term contract from 10 January 2016 to 5 March 2016 was not unusual. As was the case for Ms Dickinson, Ms Hanlon does not recall offering an extended contract to Mr Margetts and she had checked her notes and emails to casual staff, but was not able to identify any evidence that indicated she had offered or provided Mr Margetts with a further fixed term contract until May 2016.

[15] Ms Hanlon explained that the hiring process at MRC was that casual employees were offered a fixed term contract for a period of time and at the end of the term they either continue for a further fixed term or remain in the casual pool. 8 Ms Hanlon said that if an individual goes into the casual pool, the next engagement comes as a result of going through the list of names and ringing each individual.9

[16] Ms Vandenberg has been employed at the MRC since December 2015. She provided a statement 10 and said that while her duties include completing roster day sheets and other HR data entry processing and filing, she does not manage the casual roster requirements and nor is she authorised to offer fixed term contracts of engagement to Prison Officers in the MRC casual pool. Ms Vandenberg confirmed Ms Hanlon and Ms Dickinson were the only two MRC officers who offer fixed-term contracts and she was not delegated any responsibilities in this regard.11

[17] Ms Vandenberg specifically denied making a verbal offer to Mr Margetts 12 and said she had never been involved in offering contracts at MRC13 and nor had she been taught how. She said that she was directed to send one general email on 23 March 2016 to various officers, reminding them that there was a contract at HR to be signed14 but this was not an offer of a contract.

[18] Ms Dickinson stated that Mr Margetts had received an additional 80 hour payment in addition to the payment of his accrued entitlements on 19 March 2016 because due to an administrative error, his name, complete with the official end date of 5 May 2016 beside it, had appeared on the roster from 6 March 2016 to 19 March 2016 and the General Manager of MRC authorised honouring what was on the roster.  15 Ms Hanlon confirmed this. 16

[19] The Department argued that because Mr Margetts was not dismissed, his complaint did not come within the jurisdiction of the Commission and the Application should be dismissed. In particular, the Department submitted:

• Mr Margetts was engaged by it in various capacities from 6 November 2011 until 5 March 2016, with the engagements consisting of casual, ongoing and fixed term employment;


• Mr Margetts was employed as a Prison Officer at the MRC on a full time basis in the most recent engagement from 10 January 2016 to 5 March 2016;


• Mr Margetts accepted the offer of employment for the fixed term and was employed by the Respondent for the entire period from 10 January 2016 to 5 March 2016;
•  At the expiration of the fixed term, Mr Margetts’ contract and his employment ended;


• As Mr Margetts’ employment ended because of the ending of the fixed term contract, the termination of his employment was not at the Department’s initiative and for this reason, he was not dismissed as defined by s.386(1)(a) of the Act.

[20] The Department relied upon the finding of the Full Bench of the Commission in Drummond v Canberra Institute of Technology:

“We agree with the Commissioner, in noting paragraph 1532 of the Explanatory Memorandum, which deals with s.386(2) of the Act, that the effect of s.386 is that “a contract which ends with the effluxion of time does not terminate at the initiative of the employer.”” 17 (end note omitted).

Evidence and Submissions of Mr Margetts

[21] Mr Margetts said he had been engaged with the Department in various capacities, with his first engagement as an employee occurring in February 2010. He said the engagements have comprised casual, ongoing and fixed term employment and he had two periods as a full time employee and reverted to the status of casual employee after fixed term contracts had expired. He said he had been “systematically and regularly offered shifts on a daily basis when not engaged in a fixed term contract or as a full time employee.” 18

[22] Mr Margetts said he was most recently employed at the MRC as a Prison Officer on a fixed term, full time basis from January 2016. He said he was verbally offered this fixed term contract by Ms Lidiya Hanlon, HR Manager, over the phone but did not sight or sign an actual written document which indicated the terms or dates of the contract. Mr Margetts nonetheless agreed that the fixed term contract was from 10 January 2016 until 5 March 2016. 19 He said it was common practice for fixed term contracts to be offered and extended on a ‘verbal basis’ by Ms Hanlon or a member of the site staff office.

[23] Mr Margetts said that for part of this fixed term period, his name was not even on the roster and he had to contact Ms Hanlon to rectify this and that sometime in early February 2016, his contract was extended into March 2016. Mr Margetts alleged he was verbally offered an extension into May 2016 by a member of the staff office. He could not recall who the member of staff was but thinks it may have been a female named ‘Molly’.

[24] Mr Margetts said that on or around the 16February 2016, he was contacted by Ms Melissa Westin, General Manager of MRC, and informed that he was suspended with pay, pending the outcome of an investigation of alleged misconduct said to have occurred the day before.

[25] Mr Margetts confirmed that in early April 2016 he received a letter stating that due to the expiration of his fixed term contract, he was no longer employed and that the Department did not intend to offer him further work. He said the same letter stated his name remained in the pool of individuals that may be contacted for casual work, which he found confusing and contradictory.

[26] Mr Margetts confirmed that he was not offered any work as a casual employee after 5 March 2016 but said he received an additional 80 hours pay on top of his accrued leave entitlements. 20 However, he said he had previously been offered a contract for the post 5 March 2016 period prior to being suspended and argues he had been placed on the roster for 80 hours. When it was put to Mr Margetts that he could have called witnesses to attest to the fact that he was offered a contract extension, he said two fellow officers he had spoken to for this purpose were reluctant to come forward out of concern for their careers.21

[27] While Mr Margetts understood that if he was in the ‘casual pool,’ he was not employed until he was asked to do work, he said he had regularly been offered work when he had previously been in the casual pool and yet this did not occur after 5 March 2016. 22

[28] Mr Margetts disputed the suggestion his name being on the roster after 5 March 2016 was a clerical error and said the fact that his name was on it indicates that the Department planned to employ him post 5 March 2016. 23 Mr Margetts confirmed however, that he did not perform work at the MRC after 5 March 2016.24

[29] Mr Margetts submitted his dismissal was at the Department’s initiative and not a result of the end of the fixed term contract. He said his employment had never ceased following any previous fixed term or ongoing contract and suggesting it did so on this occasion was inconsistent with the precedent set by the Department. 25

Consideration

[30] I am satisfied the evidence establishes that there was an oral contract between the parties in existence which commenced on 10 January 2016 and had a termination date of 5 March 2016, which was not confirmed in writing until after 5 March 2016. In determining the question of whether Mr Margetts’ employment was terminated on the Department’s initiative, the decision of the Australian Industrial Relations Commission in Department of Justice v Lunn (Lunn), 26 while concerned with the Workplace Relations Act 1996 (Cth), provides useful guidance:

“[9] The WR Act has, for some time, excluded the jurisdiction of the Commission under s.170CE where the employee was "engaged under a contract of a [sic] employment for a specified period of time": see s.170CBA(1)(a). It has been held that a contract with a nominated end date does not meet that description if it provides for a broad or unconditional right of termination during its term. In such circumstances, the description of such a contract as an 'outer limit' contract usefully distinguishes it from a contract for a "specified period of time" to which s.170CBA(1)(a) applies. There is no dispute that the Final Contract, executed on or about 16 January 2005, was an 'outer limit' contract thus described.

[10] When a contract for a specified period or an 'outer limit' contract reaches the nominated end date, the contract terminates through the effluxion of time and there is no termination of employment at the initiative of the employer. Thus, the critical issue is whether what occurred on 24 March 2005 involved a termination at the initiative of the employer.

…

[27] Whatever may have been the position in the past, under the modern law, there can be no employment relationship without there also being a contract of employment in existence between the parties to the employment relationship. However, as the Full Court of the Federal Court in Brackenridge v Toyota Motor Corporation Australia Ltd made clear, the termination of a contract of employment does not necessarily result in the termination of the employment relationship between the parties to that contract of employment: if the parties enter, or are taken to have entered, a new contract of employment of employment, the employment relationship continues notwithstanding the termination of the prior contract of employment. Thus, a "continuous employment relationship" is not inconsistent with a series of back-to-back fixed term or 'outer limit' contracts, each of which takes effect according to its terms. On the other hand, as noted by Dixon J in Automatic Fire Sprinklers Pty Ltd v Watson, it is possible for a contract of employment, and thus an entitlement to wages, to survive a termination of the employment relationship.

[28] Prior to 1996, s.170CB of the WR Act required the expression "termination of employment at the initiative of the employer" in s.170CE to be interpreted by reference to the meaning of the expression "termination of employment" in the Termination of Employment Convention. In that Convention the expression "termination of employment" refers to termination of the employment relationship rather than termination of an employment contract. In 1996 s.170CB was amended and, since that time, the expression "termination of employment at the initiative of the employer" in s.170CE has its ordinary meaning and refers to termination of a contract of employment. Thus, in this case we are concerned with whether there was a termination of Ms Lunn's contract of employment at the initiative of the employer and not with whether there was a termination of the employment relationship.

[29] A particular consequence of the fact that the law of employment in the modern era rests on contract is that, with some qualifications and subject to any statutory provisions to the contrary, ordinary contractual principles apply in relation to employment contracts. A fundamental feature of the general law of contract, applicable in relation to the contracts of employment, is that the intention of the parties is determined objectively and, indeed, evidence of the subjective intention of the parties is not admissible in construing a contract. Subjective intention is relevant in determining whether the parties to a written document intended to create binding legal rights and obligations but it is not determinative and the objective test will prevail where, to all outward appearances, there was an intention to create legal relations.” [Endnotes not reproduced]

[31] Lunn was cited with approval in Drummond v Canberra Institute of Technology (Drummond), 27 with Commissioner Deegan accepting the proposition that notwithstanding the introduction of the Act, the common law position that a contract which ends with the effluxion of time does not terminate at the initiative of the employer has been retained.28 In Drummond, the Applicant was employed under a fixed term contract which expired on 30 September 2009 and it was held that his employment terminated with the expiration of that contract and there was no jurisdiction for an application to be made pursuant to s.386 of the Act, as there was no termination at the initiative of the employer.29

[32] Despite the use of the term ‘fixed term contract’ by the Department and Mr Margetts, the evidence in this case persuades me that the parties agreed to a contract of employment for a specified period of time rather than an ‘outer limit’ contract because it was not intended there be a ‘broad or unconditional right of termination during its term’. A review of the written terms of the contract subsequently signed by the Department 30 confirms the Department did not contemplate this.

[33] I consider that the principles enunciated in Lunn, applicable to written contracts and also contracts that are partly oral and partly written, 31 can equally apply in scenarios such as this, where the contract is based on oral terms.

[34] The evidence does not establish that the parties’ contract of employment for a specified period would be automatically renewed by them upon its expiry and nor did Mr Margetts have that expectation. Upon expiration, there was a process the Department would work through. 32 The expectation of Mr Margetts, based on previously having had ‘fixed term contracts’, was that as soon as one finished, he would continue with the Department as a casual employee.33

[35] Previous decisions of the Commission 34 have relied on D’Lima v Princess Margaret Hospital (D’Lima),35as authority for the proposition that a decision maker is permitted to look beyond the contract terms to the ‘reality’ of the employment relationship. However the Full Bench in Lunn stated that D’Lima should now be treated with caution:

“[38] The Department correctly noted in its written submissions that in D'Lima Marshall J did not purport to apply some special rule to contracts of employment whereby written agreements not amounting to a sham or a pretence not intended to create legal relations (and not coming within one of the other established categories of exception) can be ignored. The decision in D'Lima might be explained on the basis that it was one of those rare cases where the written "contracts" were a sham or pretence in accordance with conventional principles, however his Honour did not use the term "sham" or "pretence" and did not conduct an analysis of the sort required by Sharrment. Given the subsequent decision of the High Court in Equuscorp the decision in D'Lima must now treated with caution. Certainly, the expression "strong countervailing factors" in the judgment of Marshall J in D'Lima should not be elevated to an independent test or treated as some form of jurisdictional talisman that obviates the need to consider whether, in the particular circumstances, a signed contract was objectively intended to create binding legal rights and obligations according to its terms consistent with the well established principles of contract law.

[39] The present case illustrates the problem of treating "strong countervailing factors" as some sort of independent test pursuant to which a written contract can be disregarded or a series of written contracts treated as a "sham". The "strong countervailing factors" relied upon by the Commissioner was the Department's practice of engaging all or almost all staff on a series of temporary contracts (see paragraph [30] of the Commissioner's reasons set out above).

[40] The mere fact that all or almost all of the Department's staff were engaged on temporary contracts and that there was a strong expectation that contracts would be renewed upon their expiry simply does not permit a conclusion that, determined objectively, there was a common intention (that is, the objective intention of both the Department and the relevant employee) that the contracts were not to create the legal rights and obligations which they give the appearance of creating…”  36

[36] I agree with this approach. As the Full Bench makes clear in paragraph [40] in Lunn, regardless of what expectation Mr Margetts held as at the termination of the contract in terms of automatic ongoing employment, this does not permit the conclusion that there was a common intention that the contract he and the Department entered into, which commenced on 10 January 2016, was not to terminate on 5 March 2016.

[37] I have considered Mr Margetts’ assertion that he was offered an extension into May 2016 but, on balance, accept and prefer the evidence of Ms Dickinson, Ms Hanlon and Ms Vandenberg that there was no offer by the Department to extend the contract into May 2016. Mr Margetts could not establish who made such an offer to him and while he suggested there were two colleagues who could have given evidence on his behalf, but for the concern they had for their careers if they did so, it was by no means clear they would have corroborated his evidence that he had been offered an extension. It seems as though his purpose in calling them would have been to establish that the common practice after any fixed term contract was that Prison Officers would go straight back into the casual pool where they would be offered work on a regular and systematic basis. 37 Regardless, they were not called and the Department could not test these propositions.

[38] As to the payment for the additional 80 hours after 5 March 2016, I accept the evidence of Ms Dickinson that this was a clerical error and consider the fact that Mr Margetts neither attended nor was required for work after 5 March 2016 persuasive in this regard.

[39] Finally, it was not asserted and nor do I find on the evidence that the contract between the parties was a sham or that s.386(3) of the Act applies to the facts of this case.

[40] I am satisfied the evidence establishes that the contract of employment between the parties was for a specified period of time, once it reached its end date of 5 March 2016, the contract of employment terminated through the effluxion of time. As such, there was no termination on the Department’s initiative.

[41] As a result, by virtue of s.386(2)(a) of the Act, Mr Margetts has not been dismissed and the Application must therefore be dismissed. An order to this effect will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

Mr D Margetts on his own behalf.

Mr K Reidy on behalf of the Respondent

Hearing details:

2016.

Melbourne:

June 8.

 1   Exhibit R6 and Transcript PN 108 and PN 232.

 2   Exhibit A2.

 3   Exhibit R1.

 4   Exhibit R2.

 5   Transcript PN 103.

 6   Transcript PN 107.

 7   Exhibit R5.

 8   Transcript PN 200- PN 201.

 9   Transcript PN 203.

 10   Exhibit R3.

 11   Transcript PN 165.

 12 Exhibit R3 at [7].

 13   Transcript PN 166.

 14   Exhibit R4 and Transcript PN 159.

 15   Transcript PN 78.

 16 Exhibit R5 at [9].

 17   Drummond v Canberra Institute of Technology[2010] FWAFB 5455 at [9].

 18   Exhibit A1.

 19   Transcript PN 270.

 20   Transcript PN 271 and PN 273.

 21   Transcript PN 279.

 22   Transcript PN 300-PN 303.

 23   Transcript PN 340-PN 341.

 24   Transcript PN 303.

 25   Exhibit A1.

 26   Print PR 974185.

 27   [2010] FWA 3534.

 28   Ibid at [51]

 29 Ibid at [52].

 30   Exhibit R2.

 31 Print 974185 at [37].

 32   Transcript PN 198- PN 203.

 33   Transcript PN 197.

 34   Smith v Mareeba RSLA Services Club Inc[2013] FWC 351 and Banchit v St Mina’s Global Restaurants Pty Ltd PR 940477

 35 (1995) 64 IR 19.

 36   Print PR 974185.

 37   Transcript PN 280.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR583708>