Nardy House v Perry

[2016] FWCFB 1621

[2016] FWCFB 1621

REASONS FOR DECISION

Fair Work Act 2009
s.604—Appeal of decision
Nardy House
v
John Perry
(C2016/2207)
VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT DRAKE	MELBOURNE, 21 APRIL 2016
COMMISSIONER JOHNS

Appeal against decision [2016] FWC 73 of Commissioner Riordan at Sydney on 6 January

2016 in matter number U2015/11804 – employment status – procedural fairness – Fair Work

Act 2009, ss.394, 400 and 604.

Introduction

[1] This decision concerns an appeal under s.604 of the Fair Work Act 2009 (the Act)

against a decision of Commissioner Riordan handed down on 6 January 2016. The decision of

the Commissioner concerned an application for an unfair dismissal remedy made by Mr John

Perry on 14 September 2015 under s.394 of the Act in relation to the termination of his

employment by Nardy House.

[2]        The application for permission to appeal was heard in this matter by the Full Bench on

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11 February 2016. On 12 February 2016 the Full Bench issued a decision granting Nardy

House’s application for permission to appeal. Directions were issued for the filing of

supplementary written submissions in advance of the appeal hearing.

[3]        At the hearing of the appeal matter on 26 February 2016 Mr I Latham of counsel

appeared on behalf of Nardy House, Mr O Fagir of counsel appeared on behalf of Mr Perry,

and Mr S Smith appeared and sought leave to intervene on behalf of The Australian Industry

Group (Ai Group).

[4]        At the conclusion of the hearing of the appeal we announced our decision to allow the

appeal on the grounds of appeal relating to the employment status of Mr Perry and related

natural justice grounds, quash the decision and order of Commissioner Riordan in the matter

below (U2015/11804) and remit matter U2015/11804 to Commissioner Johns for

determination of the remaining issues. These are the reasons for our decision.
[2016] FWCFB 1621
Decision under Appeal

[5]        Nardy House is a charitable organisation that delivers services to persons with

profound disabilities. It is managed by a part-time CEO, a part-time Financial Officer and a

part-time Service Co-ordinator. Mr Perry was employed by Nardy House as a casual Care

Support Worker from 4 September 2014. His employment contract described him as a casual

Care Support Worker under the Social, Community, Home Care and Disability Services

Industry Award 2010 and noted that the award applies as a matter of law. The contract stated

that he was not guaranteed any set number of hours per week and casual hours would be

advised by the Service Co-ordinator. Mr Perry was usually rostered to work at least 128 hours

per month. Nardy House contends that the number of hours allocated was dependent on

retirements, leave and other absences of full-time and part-time employees. The roster was

provided before the end of each 4 week cycle. It is not in dispute that Mr Perry received the

25% casual loading throughout his employment with Nardy House.

[6]        In April 2015 Mr Perry applied for permanent/part-time employment but was not

successful. He was nevertheless advised that the policy of offering casual employees hours of

work before part-time employees are offered hours to top up to full time hours would

continue. The letter stated:

“Dear John,

Thank you for your application for a permanent / part-time position. We are unable to

offer you a position at this stage. If further new positions become available we will

inform you.

We appreciate your contribution to Nardy House and you are a valued casual

employee. The present policy of casuals being offered hours, if the roster allows,

before part-time workers are offered hours to top up their load to full-time, will

continue.

Thank you once again for your interest in these positions. Your written application for

permanent work will remain on file and be considered when positions become

available.

Please inform us if circumstances change and you are unable to consider part-time or

full-time positions at Nardy House.

Yours sincerely,

Denise Redmond”

[7]        In August 2015, prior to the return to work of a number of permanent employees, all

casual employees were provided with a letter reminding them of their employment status. The

letter stated that casual employees are engaged on an ‘on-call’ basis and there was no

guarantee of the number of hours or the roster times.

[8] In mid-August 2015 Mr Perry viewed the September roster and saw that he had not

been allocated any shifts. Mr Perry wrote to Ms Redmond, part time CEO of Nardy House
[2016] FWCFB 1621

and sought an explanation for the modified roster and requested that he be made a permanent

employee. Ms Redmond responded in the following terms:

“Dear John,

Thank you for your email.

You are on a casual employment contract, have been receiving a casual rate of pay and

are employed under the terms of that contract. I believed that you understood the terms

of the same when you signed the contract. I am sorry if there appears to be some

misunderstanding with regard to your position, as there appears to be from your letter.

Marie is in charge of preparing the rosters and casuals are on a call-in basis. There has

never been a guarantee of work hours and work conditions other than what has been

contractually agreed. Casual employees may be asked to do increased hours when staff

members are on leave or on holidays and this has been the case in recent times. The

call-in position did not change however it was possible to guarantee that the hours

would be there when the permanent employee was on leave. This is why we have

casual staff. Casuals do not have to accept these hours and times and need only give

limited notice regarding this acceptance.

We did have a dispute, some time ago, with a casual member of staff that was taken to

Fair Work when their hours stopped. On advice from AFEI we developed our Casual

Employment Contract so that the employment conditions were clear and we were not

accused of exploitation of casual workers. The terms of this contract were worked out

for us by AFEI and you are employed under the Modern AFEI Award. This

employment condition was the original employment advertisement.

When we have permanent positions available we offer these positions to casual staff to

apply for. There is no guarantee that the casual will get the position. They get the

position if we see them suitable for the role or we advertise if we do not see our casual

staff as meeting the needs of the organisation. All new positions are on a three month

trial before contracts, permanent and/or casual, are entered into and contracts are only

entered into after discussion with existing staff members and management as to

suitability of applicant. All applications are in writing and all applications are filed

after permission is sought from the applicant. This saves all applicants from re-

applying through a written process. They are advised of a review and then may update

their application if they wish.

I hope this letter has addressed the issues raised.

Yours sincerely,

Denise Redmond

CEO Nardy House Inc”

[9]         Arising from the dispute over rostered hours Mr Perry was not offered any shifts since

August 2015.

[10]      Commissioner Riordan’s conclusions and findings were expressed as follows:

[2016] FWCFB 1621

“[31] Mr Perry's employment history with NHI does not fit within any acceptable

definition of the term "casual" employment. Mr Perry worked rostered regular and

systematic hours over a long period of time. Mr Perry, appropriately, had an

expectation that his hours would continue to be rostered in advance, based on

comments made to him during his interview and throughout his employment.

[32] Following the obiter in Blue Line Cruises and Cetin I find that Mr Perry was not a

casual employee. The regular and systematic rostering of Mr Perry identifies that he

was, in fact, a permanent part-time employee. The fact that he was paid a casual

loading is nothing more than an indication of the misunderstanding of the parties. To

enact the duck analogy in Re Porter, Mr Perry was rostered like a part time employee

and worked like a part time employee.

[33] I am not satisfied that the concept of "managerial prerogative" extends to the

unilateral modification of an employee's hours or system of work. The actions of Ms

Hawthorn, which were condoned by Ms Redmond, in not offering Mr Perry shifts due

to his application to the FWC and his complaint about the new rostering arrangements,

was unconscionable conduct and possibly adverse action. By not offering Mr Perry

any on-going shifts, NHI deliberately frustrated the contract of employment that it had

entered into with Mr Perry. I do not accept the argument that Mr Perry excluded

himself from working for NHI by refusing to participate in the "on-call" roster.

[34] I find that Mr Perry was dismissed by NHI. The jurisdictional objection of NHI is

dismissed.”

[11]      The Commissioner then turned to consider whether the dismissal was harsh, unjust or

unreasonable and concluded as follows:

“[45] I have taken into account all of the submissions and evidence of the parties.

Having found that the decision to deny Mr Perry on-going work was a dismissal, NHI

did not have a valid reason for Mr Perry's dismissal nor provide him with the required

procedural fairness throughout the dismissal process. Mr Perry did not receive a "fair

go" from NHI.

[46] I find that Mr Perry's dismissal was harsh, unjust and unreasonable.”

[12]      The Commissioner found the following in relation to remedy:

“[55] Having taken into account the submissions of the parties, the decisions in Perkins

and Australian Meat Holdings and the primary remedy identified in the Act, I find that

the reinstatement of Mr Perry is the appropriate remedy in this circumstance. I order

that Mr Perry be reinstated to his role as a Care Support Worker on a permanent/part-

time basis for 128 hours in a 4 week cycle.

[56] In these circumstances, I believe it to be appropriate, and order, that Mr Perry's

employment be regarded as being "continuous" from August 20, 2015.

[2016] FWCFB 1621

[57] After taking into account s.391(4) of the Act, the limited work that Mr Perry has

undertaken since his dismissal and the inaction of Mr Perry in not pursuing NHI for

work, I order that NHI pay Mr Perry four weeks backpay.”

Grounds of Appeal

[13]      We summarised the grounds of appeal in our decision concerning permission to

appeal. Nardy House submits that the issues can be dealt with thematically, as follows:

 The Commissioner erred in determining that Mr Perry was not a casual employee

 The Commissioner erred in determining that the contract of employment was

frustrated by Nardy House

 The Commissioner denied the parties procedural fairness in not putting those

conclusions to the parties

 The Commissioner made a number of consequential and miscellaneous errors.

[14]      We allowed the appeal on the first ground and the associated procedural fairness

grounds. It is not necessary that we deal with the other grounds of appeal.

Mr Perry’s employment status

[15]      It is clear that Mr Perry was a person protected from unfair dismissal for the purposes

of s. 382 of the Act, because Nardy House is not a small business employer, he was employed

for over six months and even if his employment was as a casual employee, it was on a regular

and systematic basis. The relevance of his employment status relates to the consideration of

whether he was dismissed, the date of any dismissal, whether the application was made within

the statutory time limit and the merits of the application. Hence it is an important factor in

dealing with the application.

[16]      Nardy House submits that the finding that Mr Perry was not a casual employee was

erroneous. It submits that the finding was contrary to the contentions of both parties that Mr

Perry was at all times a casual employee. It refers to the repeated contentions by Nardy House

that Mr Perry’s status as a casual employee did not provide any guarantee of a particular

number of hours of employment and the submissions on behalf of Mr Perry that he was

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employed as a casual Care Support Worker.

[17]      Nardy House further submits that the finding is contrary to the evidence. It refers to

the employment contract which describes Mr Perry as a casual employee, and also notes that

Mr Perry applied for permanent employment in April and August 2015. Nardy House also

refers to the evidence of Mr Perry in which he states that he was being paid as a casual

employee. It notes that the award applicable to Mr Perry’s employment, the Social,

Community, Home Care and Disability Services Industry Award 2010, defines a casual

employee as follows:

“10.4 Casual employment

[2016] FWCFB 1621

(a) A casual employee is one who is engaged and paid as such but will not include a

part-time or full-time employee.”

[18]      Nardy House submits that the Commissioner’s reference to common law notions of

casual employment was erroneous. It submits that the reference to casual employment in the

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Act does not call up the general law approach, and refers to the following passage of the Full

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Bench in Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union:

“We conclude that on the proper construction of the FW Act the reference to "casual

employee" in s.123(3)(c) and the rest of the NES - and, indeed, elsewhere in the FW

Act - is a reference to an employee who is a casual employee for the purposes of the

Federal industrial instrument that applies to the employee, according to the hierarchy

laid down in the FW Act (and, if applicable, the Transitional Act)….”

[19]      Ai Group submits that the Commissioner erred in concluding that Mr Perry was not a

‘casual employee’ and that accordingly, the decision should be overturned by the Full Bench.

It submits that it appears that the Commissioner gave no consideration as to the meaning of

‘casual employee’ under the relevant award. It submits that regardless of the position under

common law, ‘casual employee’ has a meaning under modern awards that is clear and

uncontested. Under modern awards (and pre-modern awards), a casual employee is widely

defined as ‘one engaged and paid as such’, similar to the definition in the award applying to

Mr Perry.

[20]      Mr Perry contends that consideration of the text of the applicable award leads to the

conclusion that Mr Perry was not a casual employee. He submits that unlike other awards

(including the awards mentioned in Telum Civil), the criterion for casual status is not simply

that an employee is engaged and paid as such. Rather, the threshold requirement under the

applicable award is that the employee is not a part-time or full time employee. Clause 10.3

provides:

“10.3	Part-time employment
(a) A part-time employee is one who is engaged to work less than 38 hours
per week or an average of less than 38 hours per week and who has reasonably
predictable hours of work.”

[21]      Mr Perry submits that it appears uncontroversial that he was engaged to work less than

38 hours per week. He submits that it is also plain on the evidence that he had reasonably

predictable hours of work throughout the period of his employment. He submits that it

follows that he was, on the definition in the applicable award, a permanent part-time

employee.

[22]      Mr Perry submits that the only matters weighing against a finding of permanency are

that his employment contract describes him as a casual employee and that he applied for

permanent employment in April 2015. He submits that those factors are not irrelevant but

they are far from determinative. He submits that the authorities make clear that neither the

parties’ description of their employment relationship or their subjective perceptions of it are

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determinative of its true character. Mr Perry submits that the fact that one or more party was

under a misapprehension as to the true position is beside the point.

[2016] FWCFB 1621

[23]      In response to Nardy House’s contention that the Commissioner’s finding of

permanent employment was contrary to the evidence, Mr Perry submits that the matters raised

by Nardy House are manifestly inadequate to vitiate the Commissioner’s finding, which was

not only open to him but manifestly correct.

[24]      As the employment status of Mr Perry is an important consideration in determining a

number of issues that arose for determination, it is important that the questions were

determined with the benefit of submissions by the parties and they were on notice that this

matter was under consideration. As both Mr Perry and Nardy House accepted that the

employment was on a casual basis it was incumbent on the Commissioner to expressly raise

the question if he was considering a contrary finding. In the High Court decision of Suvaal v

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Cessnock City Council Gleeson CJ and Heydon J said:

“A trier of fact, confronted with divergent cases being advanced by the parties, may

decline to accept either case and may proceed to make findings not exactly

representing what either party said. But that does not justify the creation of an entirely

new case with which the losing party had no testimonial or other evidentiary

opportunity to deal.”

(citations omitted)

[25]      In our view the Commissioner did not put the parties on notice that such a finding was

under active consideration and the parties thereby did not have an opportunity to deal

adequately with the issue.

[26]      As we have noted, no question of casual status for the purposes of the Act is

concerned. Rather, Mr Perry’s employment status was relevant to a consideration of other

questions which arose for determination in his unfair dismissal case. In our view, his

employment status is to be determined by reference to his contract of employment and the

applicable award. Employment status is a function of the common law employment contract

provided it is consistent with applicable laws and other instruments. Some awards proceed on

the assumption that status is governed by the contract and attach entitlements to employees

depending on their common law employment status. Others impose limitations on the scope

of casual employment that potentially override the position at common law. The case of

Telum concerned the meaning of casual employee for the purposes of the Act but nevertheless

applied the relevant award definition.

[27]      In this case the award contained a definition of casual employment which we have

quoted above. In our view the definition is properly construed as a limitation on the concept

of casual employment for employees covered by the award. Even though the definition

incorporates the circumstances of engagement as the primary basis for casual status it also

excludes full and part-time employees from the definition. Therefore to qualify as a casual

employee under the award, it is necessary to find, not only that Mr Perry was engaged and

paid as a casual employee, but also that he was not a full time or part-time employee.

[28]      Evidence before the Commissioner included the contractual documents to which we

have referred. These clearly establish the intended status of casual employment. The evidence

also includes the rosters of employees from August 2014 to December 2015, which

encompass Mr Perry’s period of employment. Mr Perry is first mentioned in the November

2014 roster. His entry states: “128 hours per month (casual)” He was rostered for 120 hours.

[2016] FWCFB 1621

[29]      A number of other casual employees have a similar notation. Other employees, who

appear to be full time employees, have a notation of 152 hours. Employees who are

apparently part-time employees have a lower number of hours, but no reference to casual

status. Subsequent rosters have a similar notation for Mr Perry and actual rostered hours from

120 to 144 per roster period. The evidence also establishes that although the roster indicates

the intended work times it may be altered by adding or substituting particular shifts. From

April 2015 the reference to 128 hours is omitted from Mr Perry’s entry and other casual

employees’ entries. The rosters show a variety of start and finish times for employees covered

by the roster.

[30]      The evidence also establishes that Mr Perry referred to himself as a casual employee in

complaining about the reduction in rostered hours and seeking conversion to permanent status

in August 2015. Nardy House consistently referred to him as a casual in rosters, contractual

documentation and correspondence. We note in particular the correspondence in May 2015

regarding his unsuccessful application for a permanent part-time position, the reminder to

casual staff in August 2015 and the response to his complaint about the reduction in rostered

hours which are set out above.

[31]      In all of the circumstances we find that Mr Perry was engaged as a casual employee

and was not a full-time or part-time employee.

Conclusions

[32]      For the above reasons we decided that the decision of the Commissioner was in error

because it made an incorrect finding of fact on the employment status of Mr Perry. The

decision was made without providing procedural fairness to the parties. The employment

status error was a significant error of fact for the purposes of the application.

[33]      We therefore determined to allow the appeal and remit Mr Perry’s unfair dismissal

application to Commissioner Johns for hearing and determination.

VICE PRESIDENT

Appearances:

Mr I Latham of counsel, with Mr D Taylor on behalf of Nardy House.

Mr O Fagir of counsel, with Ms M Whitington on behalf of Mr Perry.

Mr S Smith on behalf of Ai Group.

[2016] FWCFB 1621

Hearing details:

2016.

Sydney.

26 February.

Final written submissions:

Nardy House on 18 February 2016.

Ai Group on 19 February 2016.

Mr Perry on 24 February 2016.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR577992>

1

[2016] FWCFB 943.

2

Appeal Book p267.

3

See Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434 at [51]; Fair

Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365.

4

[2013] FWCFB 2434 at [58].

5

See, for example only, Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321; 201 IR 123 at [38]; Cetin v Ripon

Pty Ltd [2003] AIRC 1195 (PR938639) at [61]-[62]; Personnel Contracting Pty Ltd t/as Tricord Personnel v CFMEU

[2004] WASCA 312; (2004) 141 IR 31 at [24]-[25]; ACE Insurance Limited v Trifunovski [2013] FCAFC 3; 209 FCR

146; Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; 184 FCR 44.

6

Suvaal v Cessnock City Council [2003] HCA 41; (2003) 200 ALR 1; (2003) 77 ALJR 1449 (6 August 2003) at [36].