Dean Cowan v Wilson Parking Australia T/A Wilson Security

[2016] FWC 5768

[2016] FWC 5768

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Dean Cowan
v
Wilson Parking Australia T/A Wilson Security
(U2016/1768)

COMMISSIONER WILSON MELBOURNE, 24 AUGUST 2016

Application for relief from unfair dismissal; jurisdictional objection; whether Applicant dismissed at initiative of employer; jurisdictional objection upheld.

[1] This matter concerns an application made by Dean Cowan alleging unfair dismissal against his former employer, Wilson Security Pty Ltd.

[2] Wilson Security objects to the application contending that Mr Cowan’s contract of employment finished, not because he was dismissed, but for reason of his fixed term contract of employment coming to an end. The Respondent therefore contends that Mr Cowan has not been “dismissed” within the meaning of the Fair Work Act 2009 (the Act), and therefore is not entitled to make an unfair dismissal application.

[3] The evidence before me includes the documents filed by both parties in preparation for the hearing of the matter, and the oral evidence and submissions of Mr Cowan, the Applicant, and the oral evidence of Cris Rielly, General Manager, Regional Operations, on behalf of the Respondent.

BACKGROUND

[4] Mr Cowan was employed by Wilson Security Pty Ltd to provide services from that company to another, Wilson Protective Services PNG Ltd, which itself provides security services at the Regional Processing Centre at Manus Island in Papua New Guinea.

[5] It is uncontroversial that Mr Cowan’s employment was in Australia; that the Act applied to his employment; and that, subject to the Respondent’s objection to the question of whether he was dismissed, he is otherwise entitled to the protections of the Act.

[6] Mr Cowan’s employment with Wilson Security commenced on 28 March 2014 with that employment being pursuant to the terms and conditions set out in an offer of employment to him dated 11 March 2014. That offer of employment was categorical in that he was being offered fixed term employment until 30 September 2014 and that there was no guarantee of further employment beyond that fixed term. While stipulating the term of employment, the offer provided that nothing prevented either party from entering into a new agreement for employment beyond the fixed term.

[7] A further contract of employment was entered into by the parties on 5 September 2014, on the basis of a written offer of employment setting out an offer of a revised fixed term of employment until 31 October 2015. The offer of employment stated that “[f]or the avoidance of doubt, your length of service with the company began on 10 May 2014, the commencement date of your employment with the company”. 1 Mr Cowan’s employment continued through 2014 and into 2015, however shortly before the end of the second term of employment, on 2 October 2015, Wilson Security provided to him, and apparently to other people employed by it at Manus Island, what was termed a “consultation notice”, with the correspondence setting out the following, inter alia;

“We have been informed that Transfield Services intend to move forward in contract negotiations with Wilson as the preferred provider of security services across the offshore immigration portfolio. This is a positive and essential step towards securing the contract for these services for the coming years but still requires a structured negotiation process to be undertaken to reach agreement on the extent of those services, and other contractual considerations including pricing. It is also important to note that the requirements of the sites and the expectations of our clients have changed as the existing contract has matured. Wilson does not know what the final scope for services (including staffing levels) under a new contract would be at this stage.

On Tuesday 29 September 2015, Transfield Services gave Wilson notice of its intention to extend the subcontracts to 30 November 2015 whilst they continue their negotiations with the Australian Border Force (ABF) on a head contract. Wilson has also been asked to provide Transfield Services with an indicative timeframe for transition into any future contract subject to the approval of ABF of Transfield Services' choice of sub-contractor. It is therefore possible that there will be further extensions of the subcontract whilst this process is underway.

As a result of the above, the Company is pleased to offer you an extension of your current fixed term contract to 30 November 2015. To accept this offer all you need to do is simply turn up for work on your next rotation immediately following your current contract end date.” 2

[8] The same correspondence identified to Mr Cowan that his employment was not secure;

“As a final point, it would be remiss of us not to confirm the fact that, unless you are offered an extension beyond 30 November 2015, your employment will come to an end on that date and you will not be entitled to any further notice or redundancy pay because your employment contract will end in accordance with its terms and not at the initiative of Wilson. Further, job losses due to loss of contract are part of the ordinary and customary turnover of labour in this business and the Fair Work Act 2009 (Cth) does not provide an entitlement to redundancy pay if your employment ends in those circumstances.”

[9] The evidence is that Mr Cowan accepted that extension of his employment. Not long after doing so, on 5 November 2015, there was a further communication by Wilson Security to Mr Cowan and other security staff employed at Nauru and Manus Island which referred to the company having been informed that Transfield Services was negotiating with Wilson Security about being the preferred provider of security services “across the offshore immigration portfolio”. The advice to employees was that “your current fixed term employment contract is linked to the existing Transfield Services contract”. 3

[10] On 17 November 2015 correspondence directly to Mr Cowan referred to those negotiations continuing to occur, as well as offering him a further extension of his “current contract term to 29/02/2016 (the Extended Term)”. The same correspondence stated that “[y]our employment and your contract with Wilson will cease on the Extended Term. You should have no expectation of employment beyond the end of the Extended Term, nor will you have any entitlement to notice or redundancy pay”. The correspondence included a deemed acceptance provision with it stipulating that Mr Cowan’s attendance at the roster rotation following 30 November 2015 would be a signal of his intention to “agree to be employed on the terms as set out in this letter”. 4

[11] On 9 February 2016, Wilson Security again wrote to Mr Cowan extending his employment for a further month beyond the end of February, until 31 March 2016. The correspondence was in the following terms, noting that by that time Transfield Services had changed its company name to “Broadspectrum”;

“Dear Dean Cowan

EXTENSION OF EMPLOYMENT WITH WILSON

In anticipation of Wilson receiving a contract extension with Broadspectrum of its subcontract to 31 March 2016, Wilson are pleased to offer you an extension of your current contract term to 31 March 2016 (the Extended Term).

The terms of your employment set out in your contract continue to apply during the Extended Term.

Your employment and your contract with Wilson will cease on the Extended Term. You should have no expectation of employment beyond the end of the Extended Term, nor will you have any entitlement to notice or redundancy pay.

By attending your next rotation on or after the date of this letter, you agree to be employed on the terms as set out in in this letter.

Yours sincerely,

CRIS REILLY
GENERAL MANAGER- REGIONAL OPERATIONS” 5

[12] A further one month extension was offered to Mr Cowan on 11 March 2016, with the company’s correspondence setting out not dissimilar information to the February letter, but pointedly reminding Mr Cowan that his employment would cease on 30 April 2016 in the absence of either of two eventualities;

“1. Written confirmation of a further extension of your current fixed term employment contract beyond 30 April 2016;

OR

2. Written confirmation of a new fixed term employment contract.” 6

[13] On 31 March 2016 Mr Cowan was called to a meeting with his supervisor, Rob Patton, and Mr Rielly. In the course of that meeting Mr Cowan was told that although Wilson Security had obtained a contract extension, some personnel would not be extended and that he had been unsuccessful in obtaining a new contract of employment with Wilson Security. The reason given to Mr Cowan for the situation was because of adverse information shown on a National Police Certificate obtained in relation to Mr Cowan in June 2014, not long after he had commenced employment with Wilson Security. The Certificate records the conviction of Mr Cowan in respect of driving offences in 2008, for which he was fined and had his driver’s license disqualified for a period. It also records an earlier offence which was recorded without conviction, after entering into a good behaviour bond and making a payment to the Court fund.

[14] In the course of that conversation on 31 March 2016, Mr Rielly’s evidence is that he reinforced to Mr Cowan that he was not being fired but rather that he was not being provided with a new contract. 7

[15] Even though Mr Cowan’s contract of employment was due to end on 30 April 2016, he was sent home from Manus Island on 1 April 2016, the day after he was told that his contract would not be renewed. The Respondent characterises this as him being sent home on garden leave, with Mr Cowan being continued to be paid until the end of his contract. 8

[16] Mr Rielly’s evidence in relation to the circumstances in which Mr Cowan was informed that he would not have his employment contract renewed includes the following;

“16. As identified in the FAQs attached to the memorandum, the nature of the work being negotiated with Broadspectrum was changing and the Company had developed new position descriptions and performance criteria. With the introduction of the Border Force Act, a number of changes were made to the way the MRPC was run and as a result, the Company was required to amend its contract with Broadspectrum to reflect those new requirements.

17. Although not required for work on Manus Island, as a part of the new position descriptions, the Company took the view that all security personnel on Manus Island should meet the criteria to obtain a security licence. This involved a consideration of the employee's criminal history.” 9

[17] Mr Rielly’s evidence also includes his view that, following a preliminary assessment of Mr Cowan’s National Police Certificate, he had concluded that Mr Cowan would not be able to obtain a security license due to the matters shown on the certificate. Mr Rielly also gave evidence that Wilson Security had made a decision at or around the same time to not renew the contract for a number of other employees for the same reason. In giving his oral evidence, Mr Rielly indicated that there were 6 such employees in total, including Mr Cowan. 10

LEGISLATION

[18] The central question to this matter is whether Mr Cowan was dismissed at the initiative of the employer, or rather, as is contested by the Respondent, his employment ended on 30 April 2016 due to the effluxion of time. Relevant to the Commission’s consideration of this question are the provisions in s.386 of the Act;

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.

CONSIDERATION

[19] In making my decision, I have taken into account the recent decision of Commissioner Hunt in Beaumont v Wilson Security Pty Ltd, 11 which involved the same respondent, and the same jurisdictional issue in question in this matter.

[20] In this case, there is a sufficiency of evidence before the Commission for a finding to be made that Mr Cowan was subject to a contract of employment for a specified period of time.

[21] The Commission has accepted that a contract purporting to be a fixed term arrangement may be challenged with an argument that the appearance of a fixed term arrangement is a sham and that it in truth did not have that effect. 12 While accepting there will be cases in which such examination is required, the Full Bench decided in a matter arising under an earlier legislative regime prescribed by the Workplace Relations Act 1996 that such does not obviate “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”.13 The same matter also found that the inclusion in a contract of a broad or unconditional right of termination led to it being more accurately described as an “outer limit” contract, which terminates when it reaches the nominated end date through the effluxion of time, rather than there being a termination of employment at the initiative of the employer.14

[22] The evidence as reviewed above indicates that Mr Cowan was subject to an initial offer of employment which was then the subject of several extensions. The evidence accords with the proposition that each of those extensions was a separate offering of employment that was within the discretion of the Respondent to make.

[23] By late 2015 the basis of the continuation of Mr Cowan’s employment was plainly tenuous because of the contractual circumstances between Wilson Security and the entities with which it contracted. The correspondence from Wilson Security to its employees, including Mr Cowan, in October 2015 made it abundantly plain that there simply was no job security beyond 29 February 2016. When, in February 2016, Mr Cowan was told that his employment would be extended for a further month until the end of March 2016, there was no ambiguity that employment beyond that date was entirely conditional upon the status of Wilson Security’s own contractual circumstances. The same certainty was communicated to Mr Cowan when a further one month extension was given in March to the end of April 2016.

[24] All of these developments are consistent with the proposition that Mr Cowan’s employment was fixed term. His employment was only for the term prescribed and not longer, with the Respondent holding the discretion, based upon its own contractual circumstances, to offer employment beyond the end of the term. The fact that it did offer employment beyond the end of the term on several occasions in no way diminishes the central proposition that Mr Cowan’s employment was fixed term.

[25] The characterisation of Mr Cowan’s employment as fixed term was not a sham. There is no “weight of strong countervailing factors indicating a continuous employment relationship”. 15 It was subject instead to the weight of considerable uncertainty about its continuation. While most of that weight may have been attributable to Wilson Security’s own contractual uncertainties, Mr Cowan ultimately faced his contract of employment not being renewed because the Respondent assessed him as being ineligible to obtain a security license due to the matters disclosed in the National Police Certificate, with licensing being a requirement for employment beyond April 2016. That does not alter the fact that the characterisation of Mr Cowan’s employment as being fixed term was not a sham.

[26] The evidence records that the Respondent made a decision that Mr Cowan would be ineligible to obtain a security license due to the matters disclosed in the National Police Certificate. Mr Rielly’s evidence is that while the Certificate had been held by Wilson Security effectively since the start of Mr Cowan’s employment, the changed head contractor arrangements meant that from the start of the new contract in 2016 it needed to assess employees for their capacity to hold such a license. His evidence was that employment of a person who was not entitled to hold such a license would not be consistent with the ongoing requirements on his company. I accept that evidence, as well as the fact that this changed requirement meant that Wilson Security needed to review its employment records in order to identify who could or could not be offered employment beyond 30 April 2016.

[27] I accept Mr Rielly’s evidence as well that his review of Mr Cowan’s National Police Certificate led to him forming the view that employment under the new contract could not be offered to Mr Cowan. While Mr Rielly puts forward that this changed employment circumstance, of there being a far greater obligation on Wilson Security to scrutinise people for employment, was communicated in the FAQs attached to the memorandum provided to employees on 5 November 2015, such evidence seeks to make greater use of the FAQs than reasonably should be drawn from them.

[28] True it is that the FAQs say that “[t]hings have changed since we first started work on the Regional Rrocessing Centres. Government Policy is changing. The facilities on Nauru and Manus Island are changing and our main focus will be on ensuring a safe and secure environment is provided for all residents and stakeholders and there will be less focus on security and public order management” and that they also refer to there being new position descriptions and performance criteria for all positions. 16 However it does not appear, on the face of the document before the Commission, that the FAQs go so far as to make explicit the new requirement for registration as a licensed security officer or, for that matter, the need to review past information held by Wilson Security.

[29] However, those circumstances do not diminish the fact that Mr Rielly saw there to be such a requirement, and that it was new, or the overall proposition that Mr Cowan was subject to a contract of employment for a fixed term.

[30] In addition, Mr Cowan put forward that the fact that he had been sent away from Manus Island on 1 April 2016, the day after his employment had been terminated and a month prior to the date on which his employment contract ostensibly finished, meant that the Respondent had terminated his services in a manner that was not consistent with the exception from the definition of “dismissed” found within s.386(2). The exception provides that a person has not been dismissed if they work under a contract of employment for a specified period of time “and the employment has terminated at the end of the period”. The argument was made by Mr Cowan that the conjunctive element of the exception, that there both be a contract of employment for a specified period of time as well as the conclusion of employment on the date specified within the contract, had not been made out because the contract was terminated prior to the end of the period.

[31] In response to that proposition, Wilson Security submitted that it had exercised its discretion to send Mr Cowan away from the workplace but to continue to pay him until such time as his contract of employment expired.

[32] I am satisfied that the Respondent’s construction of the circumstances in this regard is made out. That is, Mr Cowan was removed from Manus Island at the discretion of Wilson Security, in accordance with its policy and not for any particular or apprehended reason in relation to Mr Cowan, and that the underlying contract of employment remained in effect until 30 April 2016, albeit with him not being required to undertake any duties for Wilson Security.

[33] Having made these findings, it follows that Mr Cowan’s application for unfair dismissal remedy is without jurisdiction and that it must now be dismissed. An order to that effect is issued at the same time as this decision.

COMMISSIONER

Appearances:

D O’Haire of Brian V. O’Haire lawyers for the Applicant.

T Angelopoulos of National Workplace Lawyers for the Respondent.

Hearing details:

2016.

Melbourne:

August 5.

Final written submissions:

Applicant: 22 August 2016

Respondent: 22 August 2016

 1   Exhibit Wilson 1, Witness Statement of Cris Rielly, Attachment CR-2.

 2   Ibid Attachment CR-3.

 3   Ibid Attachment CR-7.

 4   Ibid Attachment CR-4.

 5   Ibid Attachment CR-5.

 6   Ibid Attachment CR-6.

 7 Exhibit Wilson 1 [20].

 8 Exhibit Wilson 3, Respondent’s Outline of Submissions, [28]-[29].

 9   Ibid [16]-[17].

 10   Ibid [18]-[19].

 11   [2016] FWC 5662.

 12   Department of Justice v Lunn (2006) 158 IR 410 [33].

 13   Ibid [38], with reference to D’Lima v Princess Margaret Hospital for Children Board of Management (1995) 64 IR 19, 26.

 14   Ibid [10]; see also Andersen v Umbakumba Community Council (1994) 56 IR 102, 107.

 15   D’Lima v Princess Margaret Hospital for Children Board of Management (1995) 64 IR 19, 26.

 16   Exhibit Wilson 1 Attachment CR-7.

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