Mr Michael Kovac v Aboriginal Legal Service (NSW/Act) Limited

[2013] FWC 6832

[2013] FWC 6832

FAIR WORK COMMISSION

DECISION

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

Mr Michael Kovac
v
Aboriginal Legal Service (NSW/ACT) Limited
(U2013/6251)

SENIOR DEPUTY PRESIDENT DRAKE SYDNEY, 10 SEPTEMBER 2013

Application for unfair dismissal remedy - jurisdictional objections - whether applicant dismissed at date of lodgement of application - in alternative, if dismissed on such date, whether applicant served minimum employment period - Fair Work Act 2009 ss. 22, 382, 383, 384, 386.

[1] This decision arises from an application lodged by Mr Kovac pursuant to section 394 of the Fair Work Act 2009 (the Act).

[2] Mr Kovac was first employed by the Aboriginal Legal Service (NSW/ACT) Ltd (ALS) on 15 November 2010. The history of Mr Kovac's employment with the ALS was set out in a summary provided by the ALS and attached to its Outline of Submissions. It is reproduced below.

Date	Employment	Location	Pay records
15 November 2010 – 24 December 2010	Mr Kovac commenced employment for 6 week fixed term. No written contract.	Sydney	13/11/10 – 26/11/10 27/11/10 – 10/12/10 11/12/10 – 24/12/10
24 December 2010 – 8 April 2011	Employment extended orally for further 3 months.	Sydney
8 April 2011 – 7 November 2011	Employment extended orally for further 7 months.	Sydney
7 November 2011 – 4 May 2012	Employment extended orally for further 6 months.	Sydney	28/04/12 – 11/05/12
4 May 2012 – 13 May 2012	Mr Kovac took annual leave	See records for 28/04/12 – 11/05/12 and 12/05/12 – 25/05/12
14 May 2012 – 8 June 2012	Mr Kovac commenced employment for 4 week fixed term at Broken Hill. No written contract.	Broken Hill	12/05/12 – 25/05/12 26/05/12 – 08/06/12
8 June 2012	Mr Kovac's employment with the ALS terminated. Mr Kovac was paid all of his outstanding annual leave entitlements, totalling 169.0696 hours.	See email from Poonam Bajpai to Michael Kovac dated 15 June 2012.
23 July 2012 – 18 January 2013	Mr Kovac commenced employment pursuant to permanent contract at Moree Office. Mr Kovac's sick leave accrual started afresh ie no carryover of prior accrual.	Moree	21/07/12 – 03/08/12 05/01/13 – 18/01/13
18 January 2013	Mr Kovac's permanent contract was terminated. He was paid all of his outstanding annual leave entitlements, totalling 69.8082 hours.
18 January 2013 – 19 April 2013	Mr Kovac was employed pursuant to a contract for a term of 3 months. Mr Kovac's sick leave accrual started afresh ie no carryover of prior accrual.	Moree	19/01/12 – 01/02/13 13/04/13 – 26/04/13
6 February 2013	Mr Kovac filed an Application for Unfair Dismissal Remedy
19 April 2013	Mr Kovac's contract for a term of 3 months terminated. He was paid all of his outstanding annual leave entitlements.

[3] Mr McKenzie, the Chief Legal Officer of the ALS, gave evidence that it was necessary to insert a six month probationary period into the permanent contract because “It’s a very, very different environment, work environment and court environment to be working in a remote office...and it was thought a proper measure to make sure that he would be suitable for work in such a remote office...” 1.

[4] On 15 January 2013 the ALS informed Mr Kovac, without any prior warning, that his permanent contract would come to an end on 18 January 2013. According to the ALS’s Response, signed by Mr McKenzie, Mr Kovac’s permanent contract was terminated for the following reasons:

• Failure to satisfactorily complete his 6 month probation period.

• Failure to demonstrate adequate knowledge of the practice and procedure required in the conduct of a criminal law practice. Failure to apply such knowledge.

• Failure to heed the feedback given by his supervising solicitor in October.

• Failure to accept the advice and direction given by the senior solicitor in the Moree office.

• Failure to put the interests of the ALS clients and the outcomes achieved in court ahead of a personal desire to be seen arguing against the Magistrate for sake of argument.

[5] Despite these apparent failures the ALS offered Mr Kovac another fixed term contract immediately after communicating its intention to terminate his permanent contract. The reasons advanced by the ALS for offering the latest fixed term contract were to allow the Moree office to be adequately staffed while it searched for a replacement solicitor, and to give Mr Kovac time to adjust to the changes and make appropriate arrangements. 2 Mr Kovac’s evidence was that he “...felt pressured into signing that contract as I had no other options” and “...was in a remote town far from family and support and I have bills and rent to pay.”3

[6] Mr Kovac lodged his unfair dismissal application on 6 February 2013.

[7] The ALS objected to the application proceeding to arbitration. It had two alternate jurisdictional objections both of which I heard on 1 May 2013. Submissions were received on5 June 2013 from the ALS and 19 June 2013 from the applicant.

[8] The two alternative grounds of objection of the ALS are:

• Mr Kovac was not dismissed on the day he lodged his application, being 6 February 2013 (Ground 1); or

• alternatively, if he was dismissed prior to the lodgement of the application, he did not serve the six month minimum employment period because he had commenced work under the permanent contract on 23 July 2013 and was notified of the termination of the same contract on 15 January 2013 (Ground 2)

[9] The ALS submitted that “...while the Applicant’s Permanent Contract was terminated by the Respondent on 18 January 2013, this did not constitute a termination of the Applicant’s employment as the employer-employee relationship continued, albeit pursuant to a new Fixed Term Contract.” 4 Accordingly “On 6 February 2013, the date the Application was filed, the Applicant was and continued to be employed by the Respondent.”5

[10] The ALS’s submissions on this ground of objection are set out below.

“No dismissal

16. Section 386(1) states that 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.

17. Subclause (b) has no application on the current facts. Accordingly, the question to be determined by the Commission is whether the Applicant had been dismissed on the basis that his employment had been terminated on the Respondent’s initiative, at the date of his Application.

18. The Respondent contends that while the Applicant’s Permanent Contract was terminated by the Respondent on 18 January 2013, the Applicant’s employment with the Respondent remained on foot pursuant to a new Fixed Term Contract dated 18 January 2013.

19. On 6 February 2013, the date the Application was filed, the Applicant was and continued to be employed by the Respondent. Accordingly, the Respondent contends that there was no termination of the employment relationship between the Applicant and the Respondent and that the Applicant could not have been ‘dismissed’ for the purposes of section 386(1) of the Act.

20. The Respondent relies on the interpretation of the words ‘termination of...employment’ adopted by Wilcox CJ in Siagian v Sanel (Siagian). Relevantly, his Honour considered whether these words meant the same thing as termination of the contract of employment. His Honour held at 351:

5. 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 Pt 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, also brings to an end the contract of employment.

21. This approach was followed in Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99, where the Full Bench held that there is a conceptual difference between a termination of the contract of employment and whether an applicant has suffered a termination of his or her employment. The Full Bench went on to say that ordinarily the conceptual difference does not matter: dismissal will ordinarily terminate both the particular contract of employment and the employment relationship. In that case, however, the applicant employee continued to be employed by the respondent employer after the date of the alleged demotion argued by the applicant to constitute ‘termination of employment’. Consequently, the Full Bench determined that there was no termination; the employment relationship continued albeit under a new contract of employment.

22. The principle that there is a distinction between termination of the contract of employment and termination of the employment relationship was affirmed most recently by a Full Bench of the Federal Court in Visscher v The Australian Industrial Relations Commission [2007] FCAFC 206.

23. The Respondent relies on the authorities outlined above to support its contention that while the Applicant’s Permanent Contract was terminated by the Respondent on 18 January 2013, this did not constitute a termination of the Applicant’s employment as the employer-employee relationship continued, albeit pursuant to a new Fixed Term Contract.

24. The evidence of Mr McKenzie that he intended to dismiss the Applicant from his employment on 18 January 2013, needs to be read and understood in the context of what was actually agreed to and occurred, that is, that the Respondent intended to, and did in fact, terminate the Applicant’s Permanent Contract but at the same time agreed with the Applicant that the employment relationship between the Applicant and the Respondent was to be maintained on the basis of the Fixed Term Contract, which the Applicant agreed to in order to allow his employment to continue for a further 3 months.

25. Further, the Respondent submits that the payment of the Applicant’s annual leave entitlements and the starting afresh of his sick leave entitlements at the cessation of the Permanent Contract only signified the transition of the Applicant from a Permanent Contract to a Fixed Term Contract. It did not signify an intention on the part of the Respondent to terminate the employment relationship, as opposed to the then existing Permanent Contract, at that time.

26. It is the Respondent’s submission that when all of the facts are considered and taken into account concerning the Applicant’s employment by the Respondent a finding can and ought be made that the employment relationship between the Applicant and the Respondent continued beyond 18 January 2013 up until 19 April 2013.

27. Under these circumstances, the Applicant was not ‘dismissed’ within the meaning of section 386(1) at the time of the filing of his Application. Accordingly, the Application should be dismissed on the basis that the Commission has no jurisdiction to hear the matter.”

[11] One has to consider whether the employment relationship between Mr Kovac and the ALS continued, not whether a particular contract of employment had come to an end. I accept the ALS’s submission that the relationship of employee and employer between Mr Kovac and the ALS continued after 18 January 2013, even though the 21 July 2012 contract of employment between them ceased on 18 January 2013.

[12] If I accept, and I do, the submissions of the ALS as to the date the employment relationship between Mr Kovac ceased, then Mr Kovac was indeed still employed as that 6 February 2013 when he lodged this application. Having determined ground one in favour of the ALS it is now not necessary for me to deal with ground 2.

[13] Mr Kovac misunderstood, on reasonable grounds, the actions of the employer. He believed the actions of the employer on 15 January 2013 to be a termination of his employment as at 18 January 2013. This was a reasonable misunderstanding. The actions of the ALS could easily have been interpreted as a notice of termination of the employment relationship as at 18 January 2013 when the permanent contract ended, instead of a notice of termination of the employment relationship as at 19 April 2013 when the subsequent contract ended. Counsel for Mr Kovac put a strong argument to that effect.

[14] I am not persuaded that the Commission cannot hear an application lodged after notice of termination of employment is given but before the employment relationship is at an end. The ALS is to inform my Chambers within 14 days of the date of this decision if they wish to be heard on this issue.

[15] However, even if Mr Kovac has to lodge a further application and seek an extension of time for lodgement, given the circumstances, a member might be persuaded that Mr Kovac’s case for an extension of time for lodgement was in all the circumstances meritorious.

SENIOR DEPUTY PRESIDENT

 1   Transcript - 1 May 2013, PN62.

 2   Transcript - 1 May 2013, PN63 and PN129.

 3   Statement of Michael Kovac, p. 5.

 4   ALS’s Outline of Submissions, clause 23.

 5   Ibid, clause 19.

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