Kim Morris v Palcove Pty Ltd T/A Cheap as Chips

[2015] FWC 7890

[2015] FWC 7890

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kim Morris
v
Palcove Pty Ltd T/A Cheap as Chips
(U2015/11521)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 18 NOVEMBER 2015

Application for relief from unfair dismissal – meaning of dismissal – contract of employment for a specified period of time – probationary arrangements – on-going employee.

[1] On 1 September 2015 Ms Morris lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of her employment with Palcove Pty Ltd T/A Cheap as Chips (Cheap as Chips). Cheap as Chips has objected to the application on the basis that it asserts that Ms Morris was working under a contract of employment which specified an outer limit for the continuation of Ms Morris’s employment, and, unless that outer limit was changed, the cessation of her employment occurred at the achievement of that outer limit.

[2] This issue was the subject of a determinative conference on 16 November 2015. Ms Morris was represented by Ms Storey, of counsel, and Cheap as Chips was represented by Mr Love of counsel. I addressed the issue of representation in a procedural decision 1 issued on 22 October 2015.

[3] Section 385 of the FW Act establishes that an essential requirement for an unfair dismissal is that the person must have been dismissed. Section 386 gives a meaning for the concept of dismissal for the purposes of this part of the FW Act. This section states:

“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.”

[4] Consequently, if Ms Morris has not been dismissed consistent with this meaning, she cannot then have been unfairly dismissed and the Fair Work Commission (FWC) would lack the jurisdiction to further consider her application.

[5] In this context I have summarised the background to the employment arrangements that applied to Ms Morris.

[6] Ms Morris commenced part-time employment with Cheap as Chips as a Shop Assistant, on 24 March 2014. The terms of her employment were agreed in a written contract dated 20 March 2014. 2 That contract confirmed that Ms Morris was employed as a permanent part-time employee under the terms of the Cheap as Chips (Retail SA/ Broken Hill Staff) Enterprise Agreement 2013 (the Agreement). The contract provided for a probationary period of six months and confirmed termination of employment notice requirements applicable to both Ms Morris and to Cheap as Chips.

[7] In June 2015 Ms Morris’ hours of work were increased by agreement between her and Cheap as Chips. This agreement was confirmed in writing.

[8] Following an internal selection process, Ms Morris was appointed to the position of Assistant Store Manager on 8 September 2014. This appointment was confirmed in correspondence to her of 3 September 2014. 3 This correspondence confirmed that Ms Morris’s employment was subject to the FW Act. It confirmed that the position was a salaried appointment inclusive of penalty and overtime payments and it made no reference to the Agreement. The correspondence provided that Ms Morris was appointed to this position from 8 September 2014 until 8 March 2015. The correspondence stated:

“Position Description:
A Job Description giving an overview of your role is attached. We may vary, amend or replace this Job Description as required and you may be required to perform other work as directed by us. In the interest of true teamwork, it is important that you are able to carry out all functions as directed.” 4

[9] This correspondence also confirmed a probationary period of six months and notice of termination of employment provisions. The correspondence concluded on the basis that:

“To accept this offer of employment, please return a signed and dated copy of this letter together with the Job Description and Staff Security procedures.”

 [10] Ms Morris signed to acknowledge her agreement with this offer on 11 September 2014.

[11] On 9 March 2015 Ms Morris was provided with confirmation of her appointment to the Assistant Store Manager position. This correspondence 5 confirmed the same salary and employment conditions but did not refer to probationary employment arrangements. The correspondence did not refer to any end date for this position.

[12] In April 2015 Ms Morris made a workers compensation claim. The details and relevance of this claim potentially give rise to issues of merit rather than the question of jurisdiction to be determined here.

[13] In late April 2015 Ms Morris “asked if I could step down from my role as Assistant Store Manager of the Broken Hill store”. 6 She sought a position within Cheap as Chips that still enabled her to work 28 hours per week. She confirmed this request in correspondence7 of 27 April 2015.

[14] Whilst there are some differences between the parties as to the manner in which subsequent work was offered to Ms Morris, it is agreed that a letter of 7 May 2015 confirmed her appointment to the position of Shop Assistant/Shift Runner, effective from 11 May 2015 and until 16 August 2015. 8 This correspondence confirmed that her employment status was that of a “Permanent Part Time Employee”.

[15] This letter referenced the conditions of the Agreement and provided for a probationary period and notice requirements. Ms Morris confirmed her agreement with these arrangements on 11 May 2015.

[16] I note that, following her appointment to this position, Ms Morris was subject to a graduated return to work plan. 9

[17] On 11 August 2015 Ms Nixon, the Cheap as Chips People and Culture Manager met with Ms Morris and advised her that her employment with Cheap as Chips would end on the expiry of her fixed term contract. Ms Nixon provided correspondence to that effect. 10 Ms Morris was not required to work until 16 August 2015 and was paid up to that date.

[18] Cheap as Chips asserts that Ms Morris’ employment was bought to an end by the expiry of the fixed term contract consistent with s.386(2)(a) and therefore did not represent a dismissal. Accordingly, Cheap as Chips assert that the application is without jurisdiction.

[19] Ms Morris asserts that she was engaged on an on-going basis and that there was no fixed term employment contract. She asserts that the provisions of the appointment letters relating to probation and notice arrangements support the absence of a fixed term employment contract. Ms Morris asserts that:

“In conclusion, I wish to highlight that at no time was it ever highlighted to me that my employment was for a fixed term or terms but that I would be serving various periods of probationary periods of employment and that is what I thought I was signing.”  11

The Evidence

[20] Notwithstanding there are limited areas of factual dispute in this matter, I have taken into account all of the material before me. I have very briefly summarised the witness evidence in the following terms.

[21] Ms Morris gave evidence about her employment with Cheap as Chips and her understanding that she was an on-going employee.

[22] Ms Nixon, the Cheap as Chips People and Culture Manager gave evidence about how she advised Ms Morris of the conclusion of her employment.

[23] Ms Harris is the Cheap as Chips Broken Hill Store Manager. Her evidence went to Ms Morris’ employment history. She referred to the various letters confirming differing roles for Ms Morris on the basis that these were prepared by the Cheap as Chips Head Office.

[24] Ms Clarke is the Assistant Store Manager of the Broken Hill Cheap as Chips Store. Her evidence went to her participation, at Ms Nixon’s request, in the meeting with Ms Morris on 11 August 2015.

Findings

[25] The Full Bench decision in Searle v Moly Mines Limited 12confirms the requirement that any conclusion about matters of this nature are based on an objective assessment rather than on a subjective assessment of the reasonableness of the actions of the parties.

[26] Ms Morris’ initial appointment was on a weekly hire part-time employment basis. That appointment was subject to a probationary arrangement. The Agreement addresses part-time employment in the following terms:

“4.1.2 Part-Time Employment

4.1.2.1 This means that you are engaged by the week on an ongoing basis for less than 38 ordinary hours per week.

4.1.2.2 Part-time Employees are guaranteed a minimum of 12 hours per week or a greater number of minimum hours by mutual agreement.

4.1.2.3 Part-time Employees are guaranteed a minimum engagement of three hours per shift.

4.1.2.4 The employer will provide two weeks' notice of the required roster of hours to be worked. However, the employer retains the right to change the hours rostered to be worked by no less than 48 hours notice to meet the operational needs of the business.”

[27] The Agreement addresses Probationary Period in the following terms:

“4.2 Probationary Period (Full Time or Part Time)

4.2.1 New employees will be subject to a six (6) month probationary period. During this period, employment may be terminated by either party by the giving of one (1) week's notice (or payment in lieu).

4.2.2 The purpose of the probationary period is to enable new employees and the Company to consider our suitability and capability of working together.”

 [28] I note that, following the determinative conference, Mr Love provided the following written advice:

“We note O’Callaghan SDP’s query as to the use of the phrase ‘permanent’ in Ms Morris’ final contract of employment. We have now had the opportunity to review the applicable enterprise agreement – the Cheap as Chips (Retail SA / Broken Hill Staff) Enterprise Agreement 2013.

The phrase ‘permanent’ appears numerous times throughout the instrument as set out in the attached document. The Respondent respectfully submits that the word ‘permanent’ is used in the Agreement to denote a ‘non-casual’ employee, without regard to whether an engagement is for a defined or indefinite period of time.” 13

[29] I acknowledge that the word “Permanent” appears in a number of provisions of the Agreement and, in this context, could refer to both fixed term and on-going employees.

[30] Ms Morris was still within the initial six month probation period when she was appointed, again on a probationary basis, to the position of Assistant Store Manager. In this respect the letter of appointment 14 nominates specific dates consistent with the six-month probationary period which is later referenced. I do not consider it necessary in this matter to reach a conclusion about what would have happened in the event that Ms Morris did not successfully complete that probationary employment period because she did so, and her on-going employment was confirmed in the correspondence of 6 March 2015.15

[31] In April 2015 Ms Morris did not resign from Cheap as Chips. I have accepted her evidence that she sought to stand down from the Assistant Store Manager position. There is nothing in the evidence or the letter 16 which represents an intention or desire to resign from Cheap as Chips. Ms Morris’ correspondence of 27 April 2015 makes it clear that she sought to remain an employee of Cheap as Chips, but to undertake different duties. I have concluded that Cheap as Chips facilitated this by placing her in the Shop Assistant/Shift Runner position. This did not involve a termination of employment but rather, the allocation of different duties. Cheap as Chips agree that Ms Morris’ entitlements were not paid out so as to reflect any form of employment termination. I consider that her allocation to that Shop Assistant/Shift Runner position was regarded as the allocation of duties of a less demanding nature. As at 7 May 2015 Ms Morris was already a permanent weekly hire employee. Her on-going employment was clearly recognised in the correspondence of both 6 March 2015 confirming her then position as Assistant Store Manager. The 7 May 2015 letter confirmed her appointment to the Shop Assistant/Shift Runner position and also acknowledged she was a weekly hire employee. In this regard the reference to Permanent Part Time employment must be taken to be a reference to clause 4.1.2 of the Agreement, to which I have already referred. Further, the correspondence of 7 May 2015 confirming Ms Morris’ appointment as Shop Assistant/Shift Runner does not purport to confirm the termination of her earlier employment with Cheap as Chips or the commencement of a new employment contract. It does establish a new position for her the basis that position operated from 11 May 2015 until 16 August 2015.

[32] It is clear that, throughout her employment with Cheap as Chips, Ms Morris undertook duties which reflected a range of classifications in the Agreement. Indeed, whilst it is not an issue which impacts on this decision, it may well have been the case that the Assistant Store Manager function was also covered by the Agreement. The potential to change duties throughout a person’s employment is clearly envisaged in the Agreement classification structure and the various letters confirming Ms Morris’ roles. The last such letter, confirming the Shop Assistant/Shift Runner role confirms the earlier advice that she was required to carry out ‘all functions as directed’. 17

[33] Changes to positions held by an employee or to position requirements do not mean that there is a cessation of employment as distinct from a cessation of particular duties or functions so that a new or different function or position can be undertaken. Indeed, there does not appear to be any dispute that the position of Shop Assistant/Shift Runner became available to Ms Morris as a consequence of another employee “stepping down” into a standard shop assistant role. Had it been the case that the evidence confirmed that Ms Morris and Cheap as Chips explicitly acknowledged that Ms Morris’ on-going employment had ended and there was a new employment entered into for the Shop Assistant/Shift Runner position, this may have supported a conclusion that a probationary employment period had been specified. However, this was not the case. Simply put, Ms Morris moved from one position to another. While these positions may have been for prescribed periods, as an on-going employee, she was not ‘employed under a contract of employment for a specified period of time’.

[34] Further, I am not satisfied that the evidence confirmed that Ms Morris and Cheap as Chips had, through the correspondence of 7 May 2015, 18 explicitly agreed that Ms Morris’ on-going employment with Cheap as Chips would end on 16 August 2015 unless there was a new contract entered into on or before that date. In this respect I consider that this correspondence is able to be construed in a number of ways. Ms Morris signed this correspondence to indicate her agreement that she had read and understood the terms of her appointment. The Cheap as Chips contention is that her employment was brought to an end by the specification of 16 August 2015 as the outer term of the employment. However, the 7 May 2015 correspondence19 also specified that Ms Morris’ appointment was to the position of Shop Assistant/Shift Runner, until 16 August 2015, and confirmed that she was a “Permanent Part Time Employee”. The Probationary Period specified in that correspondence of 7 May 2015 states:

“Probationary Period:
A probationary period will apply for the first three (3) months of your employment. During the probation period you or Cheap as Chips may end your employment by providing notice in accordance with the table below.” 20

[35] The reference to a probationary period applicable in the first three months of Ms Morris’ employment cannot easily, on its plain words, mean that her employment could be regarded as probationary when she had already been endorsed as an on-going employee and was well outside of the three month limitation from the commencement of her employment.

[36] In Department of Justice v Lunn the Full Bench stated:

“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.”

(references removed)

[37] The approach adopted in Department of Justice v Lunn 21 is an example of the extent to which the entirety of the employment arrangement must be taken into account. In Ms Morris’ case the entirety of the employment arrangement clearly confirms that she was an on-going employee and that, in May 2015 she was appointed to a particular work function for a specified period of time. The appointment of an on-going employee to a particular work function is quite separate from a fixed term appointment where an employee was engaged or employed for a specified period of time. The adoption of an alternative position would mean that, in the very common circumstances where an employee is allocated particular duties for a defined period of time, their employment would naturally come to an end at the end of that time. I do not think this can be taken as consistent with the operation of s.386(2)(a).

[38] Had it been the case that Ms Morris’ employment was continuously regulated by a series of recent fixed term contracts, this may have supported the Cheap as Chips position. However as Cheap as Chips had confirmed to her that she was an on-going permanent employee, there is no basis for concluding that, as of 16 August 2015, when the specified time for the particular Shop Assistant/Shift Runner duties ceased to apply, this meant that she was no longer employed. Presumably, if there were no other duties to which Ms Morris could be allocated, Cheap as Chips might then have initiated a termination of her employment.

[39] Whilst I have considered Ms Morris’ position to the effect that the return to work plan, agreed to by Cheap as Chips indicates an intention to maintain her employment beyond the 16 August 2015 date set in the 7 May 2015 correspondence, 22 I am not satisfied that this is determinative of the issue here.

[40] I do not consider that the Cheap as Chips letter of 7 May 2015, confirming Ms Morris’ appointment to the Shop Assistant/Shift Runner should be regarded as a sham contract. It is simply the case that this letter cannot be seen, in the context of the overall employment relationship, to represent a contract of employment for a specified period of time. I have noted the Cheap as Chips’ position that the Northern Territory Court of Appeal decision in Northern Land Council v Hansen 23 is authority for the proposition that the concept of probation has no set meaning. However, I cannot agree with that proposition in these particular circumstances as clause 4.2 of the Agreement establishes clear constraints on the application of that concept for employees covered by the Agreement. Ms Morris was not a “new employee” as at 7 May 2015.

[41] Further, I have noted the Cheap as Chips position that Forrest v Cosmetic Co Pty Ltd & Anor 24 establishes that clear written contractual requirements establish obligations irrespective of the extent to which a party has read these documented provisions. As I have indicated, as at 7 May 2015, Ms Morris was an on-going employee, to whom the Agreement probationary arrangements could not be applied. To the extent that the 7 May 2015 correspondence25 purported to impose a less beneficial probationary arrangement than that which was provided for under the Agreement, this cannot be relied upon.

[42] Finally, in terms of the Cheap as Chips submissions, I do not consider the existence of termination of employment capacities in the various correspondence to her necessarily excludes Ms Morris from being regarded as an employee employed under a contract of employment for a specified period of time. That is clear from the decisions in Anderson v Umbakumba Community Council 26 and Cooper v Darling Rugby League Inc.27 It is simply the case that the overall circumstances of Ms Morris’ employment mean that I cannot regard her as a person who was employed under a contract of employment for a specified period of time.

[43] Accordingly, I am not satisfied that Ms Morris’ employment came to an end as a consequence of that 7 May 2015 correspondence. In effect, Ms Morris’ employment came to an end because her appointment to a particular position concluded and Cheap as Chips did not then appoint her to another position. On this basis I have concluded that Ms Morris was dismissed at the initiative of Cheap as Chips and the jurisdictional objection to the continued pursuit of her application must be dismissed. An Order (PR574017) reflecting this decision will be issued. The application will be referred for conciliation on this basis.

Appearances:

R Storey counsel for the applicant.

J Love counsel for the respondent.

Hearing (Determinative Conference) details:

2015.

Adelaide:

November 16.

 1   [2015] FWC 7310

 2   Exhibit R3, Attachment KH1

 3   Exhibit A2, Attachment KM2

 4   Exhibit A2, Attachment KM2

 5   Exhibit A2, Attachment KM3

 6   Exhibit A2, para 8

 7   Exhibit A2, Attachment KM4

 8   Exhibit A2, Attachment KM5

 9   Exhibit A2, Attachment KM6

 10   Exhibit R2, Attachment CN

 11   Exhibit A2, para 15

 12   [2008] AIRCFB 1088, para [36]

 13   Email from EMA Legal dated 16 November 2013, paras 2 and 3

 14   Exhibit A2, Attachment KM2

 15   Exhibit A2, Attachment KM3

 16   Exhibit A2, Attachment KM4

 17   Exhibit A2, Attachment KM5

 18   Exhibit A2, Attachment KM5

 19   Exhibit A2, Attachment KM5

 20   Exhibit A2, Attachment KM5

 21 (2006) 158 IR 410

 22   Exhibit A2, Attachment KM5

 23 [2000] NTCA 1

 24 [2008] SASC 152

 25   Exhibit A2, Attachment KM5

 26 [1994] IRCA 102

 27 [1994] IRCA 41

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<Price code C, PR574016>