Maree Nash v Serco Australia Pty Ltd T/A Serco Immigration Services

[2014] FWC 7634

[2014] FWC 7634

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Maree Nash
v
Serco Australia Pty Ltd T/A Serco Immigration Services
(U2014/9976)

COMMISSIONER WILLIAMS PERTH, 31 OCTOBER 2014

Termination of employment - minimum employment period.

[1] Ms Maree Nash (Ms Nash or the applicant) has made an application under section 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. The respondent is Serco Australia Pty Ltd T/A Serco Immigration Services (Serco or the respondent).

[2] Serco objects to the application on the grounds that under section 382 and 383 of the Act an employee is only eligible to make an application for an unfair dismissal remedy if they have completed the minimum employment period. The applicable minimum employment period in this instance is six months because Serco employs 15 or more employees.

[3] Both parties have provided written submissions to the Commission on this jurisdictional objection.

The relevant facts

[4] The parties are not in dispute as to the factual background to this matter.

[5] On the basis of the materials provided I find that Ms Nash was employed as a Client Services Officer by Serco at Christmas Island.

[6] Three offers of employment were made at times by Serco to Ms Nash and accepted by her.

[7] The first offer was dated 12 November 2012. That offer was for employment to commence on 19 November 2012 which would continue until 19 May 2013 unless terminated beforehand for misconduct (the first contract).

[8] The second offer was dated 17 May 2013. That offer was for employment to commence on 19 June 2013 which would continue until 19 December 2013 unless terminated beforehand for misconduct (the second contract).

[9] The third offer was dated 12 December 2013. That offer was for employment to commence on 16 March 2014 which would continue until 16 September 2014 unless terminated beforehand for misconduct (the third contract).

[10] Ms Nash’s employment was terminated by Serco on 30 May 2014 “...for a serious breach of the terms of your employment”. Serco paid Ms Nash one week’s notice as part of her termination pay.

[11] Serco offers six month contracts to employees on Christmas Island because the number of Client Services Officers required is variable dependent upon the number of detainees in the Christmas Island detention centre, the existing staff levels and the number of staff who do not return after their contract has expired. In addition Serco says the six month contracts are offered in consideration of the welfare of its employees and in particular are an acknowledgement of the remote location in which employees work, the 12 hour shift work and rostered fortnightly overtime worked and of the particular nature of the work involved.

[12] The six month contracts provide for a respite break after three months for employees to leave Christmas Island.

[13] These six months contracts all include a completion bonus as an incentive for employees to stay the full six months and to compensate them for the personal compromises involved in living and working on a remote island away from family and friends.

[14] Each of the contracts of employment signed by Ms Nash included a clause as follows:

“On the completion of the full term of this contract at a Christmas Island base, you will receive a one-off completion bonus of $5000 gross. Payment of the completion bonus is subject to performing work for the full term of the contract at Christmas Island. Early cessation of employment at Christmas Island under the contract for whatever reason voids the entitlement in its entirety.”

[15] Serco encourages those employees wishing to return for another six month contract to take a minimum break of at least four weeks but many stay away longer before returning.

[16] The respondent has since October 2012 recruited all of its new Client Service Officers on contracts of employment for periods of six months.

[17] Since January 2013, 270 employees have been employed by Serco under six month contracts. Of these, 119 have not applied for a further contract.

[18] At the end of each month Serco emails those employees whose six month contract is shortly to end advising them that they are able to express interest in applying for a new specified term contract. That email states that in order to be successful they will be required to pass a selection process and that this process comprises a short interview and performance review by their Line Manager.

[19] On 20 November 2013, prior to her second contract ending on 19 December 2013, the applicant responded to such an expression of interest email advising Serco she would like to be considered for a new fixed term contract at Christmas Island detention centre.

[20] At the end of Ms Nash’s first and second contracts she was removed from the Payroll and IT system of Serco and Serco paid out her unused annual leave and paid her contract completion bonus of $5 000.

Submissions

The respondent

[21] The Applicant has had three six month contracts with the respondent, each with different time periods between them, as negotiated with and agreed by the applicant.

[22] The contracts were for the periods 19 November 2012 – 19 May 2013 (full-time), 19 June 2013 – 19 December 2013 (full-time) and 16 March 2014 – 16 September 2014 (full-time).

[23] The time that had elapsed between the second and third contracts was nearly 3 months, from an end date of 19 December 2013 until the start of the new contract on 16 March 2014.

[24] The respondent submits the fixed term contracts were unremarkable and should be taken on their face value and there was no evidence that the substantial purpose of the contracts was to avoid the employer’s obligations under Part 3.2 of the Act.

[25] The applicant had not completed the minimum employment period and so she was not able to make this application and this application should be dismissed.

The applicant

[26] The applicant agrees that she has had a series of three six months employment contracts with the respondent but denies the respondent’s contention that her service was discontinuous.

[27] The applicant argues that at the time of her dismissal she had completed a period of employment with her employer of at least six months and that her employment was continuous within the meaning of the Act.

[28] Section 22 of the Act defines the meanings of word “service”and the expression “continuous service”for the purposes of the Act. Assuming the existence of national employment section 22(1) of the Act provides that “service”is a period during which the employee is employed by the employer, but does not include any period that does not count as service because of section 22(2) of the Act.

[29] Section 22(2) of the Act defines periods of employment that do not count as service, i.e. “excluded service”, including any period of unpaid authorised absence. Section 22(3) of the Act makes it clear however that an excluded period does not break a national system employee’s “continuous service”.

[30] Each of the applicant’s three periods of service contemplated further engagement for a specified period of time. The absences between the first and second and the second and third periods of service were authorised absences. At the end of the first two periods of service there was an expectation of further engagements for a specified period of time. At the beginning of the third period of service the applicant had an expectation of a further period of service or further periods of service before the respondent unfairly terminated her employment.

[31] The applicant has had a series of three contiguous “periods of service”with the respondent that count towards a single “period of employment”of more than 14 months with the respondent.

[32] The respondent employs more than 15 employees and is not a small business employer. It is submitted in all the circumstances the applicant has completed at least the minimum period of employment with the respondent.

[33] Furthermore the respondent engaged the applicant under a contract of employment for a specified period of time substantially for the purpose of avoiding the respondent’s obligations under Part 3.2 of the Act.

[34] The respondent maintains this system of specified term contracts which, if they are specified term contracts, have the effect of excluding all Client Service Officers employed on Christmas Island since October 2012 from the protections of the Act relating to unfair dismissal, for that purpose.

Consideration

[35] It is not in dispute that Ms Nash did no work for Serco between 19 December 2013, the end of her second contract, and 16 March 2014 when she began work again at the commencement of her third contract.

[36] For the applicant it is argued that this period was authorised absence and that her employment should be viewed as a continuous period.

[37] The facts however do not support this conclusion. There is no reason why the second and third contracts should not be construed on their face and there is no suggestion in those contracts that the period in between two sequential specified term contracts is a period during which Ms Nash was still an employee of Serco.

[38] The fact that there was a third contract is firstly because Serco chose to seek expressions of interest from its employees whose contracts were ending and secondly then because Ms Nash responded to that expression of interest positively and finally only because Serco chose to offer Ms Nash another contract. It was not the case that the third contract was an automatic extension of the second contract.

[39] Whether or not the terms of the contracts are consistent with any applicable agreement does not change their effect for the purposes of this application and the respondent’s objection. Each of the contracts was expressly for a specified term.

[40] Consistent with Ms Nash’s employment having ended on 19 December 2013 is the fact that at the conclusion of her second contract Serco paid out any outstanding annual leave, as is normal when someone’s employment has ended, and the completion bonus was paid to Ms Nash as was expressly provided for on completion of the full term of the contract.

[41] With respect to the assertions that Serco has entered into these specified term contracts in order to avoid the unfair dismissal provisions of the Act there is simply no evidence that that is the case.

[42] It is not uncommon for businesses in many industries to engage employees on an ongoing series of fixed term contracts of employment. The rationale Serco has explained to the Commission in its submissions is quite believable in the particular context of the work Serco is undertaking and the fact that the location is Christmas Island. There is no evidence to the contrary as to Serco’s motivation in offering the contracts to their employees on Christmas Island as they do.

[43] In any event the legitimacy of a contract of employment for a specified period of time is only relevant where an employer is relying on the employment having ended due to the effluxion of time to argue that the employee had not been dismissed, as is provided for in s. 386 (3) of the Act. This of course is not the case here, Serco readily acknowledge that Ms Nash was dismissed from her employment.

[44] I find that Ms Nash was not an employee of Serco between 19 December 2013 and 15 March 2014. Accordingly Ms Nash has not completed the minimum employment period of six months at the time of her dismissal.

[45] Consequently this application should not have been made and will now be dismissed.

[46] An order to that effect will be issued in conjunction with this decision.

COMMISSIONER

Final written submissions:

Respondent, 7 August 2014.

Applicant, 22 August 2014.

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