Newell v Commonwealth of Australia
[2012] FMCA 783
•14 September 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NEWELL v COMMONWEALTH OF AUSTRALIA | [2012] FMCA 783 |
| INDUSTRIAL LAW – Fair Work – Applicant engaged on series of “non-ongoing” 12 month employment contracts – Termination of employee’s employment contract – Applicant claims employment status was “ongoing” and as result of termination was entitled to benefits of an “ongoing” employee pursuant to industrial instrument – Whether the applicant’s employment was “ongoing” or “non-ongoing” at time of termination of employment – Employment was “non-ongoing” – Respondent complied with all obligations under employment contract and industrial instrument – Application dismissed. |
| Australian Crime Commission Act 2002 (Cth), s. 7, 47 Fair Work Act 2009 (Cth) ss. 117, 539, 545, 546 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) s.3 Public Service Act 1999 (Cth), ss.20, 22, 29 Superannuation Guarantee(Administration) Act 1992 (Cth) Workplace Relations Act 1996 (Cth), ss. 328, 661 Public Service Regulations 1999 (Cth), Reg. 3.5, 3.6, 3.11 Public Service Commissioner’s Directions 1999 (Cth) |
| Aneve Pty Ltd & Ors v Bank of Western Australia Ltd [2005] NSWCA 441 Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 Bryne & Frew v Australian Airlines Ltd (1994) 47 FCR 300 Re Australian Industrial Relations Commission and Arends: Ex parte Commonwealth of Australia (2005) 145 FCR 277 Watson v Foxman (1995) 49 NSWLR 315 |
| Applicant: | PAUL NEWELL |
| Respondent: | COMMONWEALTH OF AUSTRALIA |
| File Number: | SYG 973 of 2010 |
| Judgment of: | Lloyd-Jones FM |
| Hearing dates: | 19 and 20 October 2011 |
| Delivered at: | Sydney |
| Delivered on: | 14 September 2012 |
REPRESENTATION
| Counsel for the Applicant: | I. Latham |
| Solicitors for the Applicant: | Beston Macken McManis |
| Solicitors for the Respondent: | N.Gouliaditis of Australian Government Solicitor |
ORDERS
The Amended Application filed on 13 September 2011 be dismissed.
There be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 973 of 2010
| PAUL NEWELL |
Applicant
And
| COMMONWEALTH OF AUSTRALIA |
Respondent
REASONS FOR JUDGMENT
Introduction
This in an application brought to this Court on 5 May 2010 by the applicant, Paul Newell, under the Fair Work Act 2009 (Cth) (the “FW Act”), in relation to his employment with the Australian Crime Commission as an Intelligence Coordinator during the period 29 July 2008 and 12 October 2009.
The applicant moves on the Amended Application filed in this Court on 13 September 2011 in which he seeks the following orders:
1. That the respondent remedies any underpayment of notice due under s.117 of the Fair Work Act pursuant to section 539 and 545 of the Fair Work Act.
2. That the respondent remedies any underpayment as to superannuation pursuant to section 539 and 545 of the Fair Work Act.
3. That the respondent remedies any underpayment of retrenchment money due pursuant to clause 6 of the Australian Crime Commission Collective Agreement 2007-2009.
4. That the respondent remedies any underpayment of notice pursuant to clause 6 of the Australian Crime Commission Collective Agreement 2007-2009.
5. That the respondent remedies any breach of the retention period set out in A4.8 of the Australian Crime Commission Collective Agreement 2007-2009.
6. That the respondent pay a civil penalty pursuant to section 539, 545 and 546 of the Fair Work Act for each breach of the Fair Work Act.
7. That the respondent pay a civil penalty pursuant to section 539, 545 and 546 of the Fair Work Act for each breach of the Australian Crime Commission Collective Agreement 2007-2009 [the collective agreement].
8. That the payment of the civil penalties be made to the applicant.
9. In the associated jurisdiction, that the respondent pay damages for breach of the contractual term to give reasonable notice of termination.
10. Interest.
11. Costs.
Background
The applicant commenced his employment with the Australian Crime Commission (“ACC”) on 30 July 2007 and remained employed with the ACC, on a series of contracts, until the termination of his employment on or about 12 October 2009. It is the claim of the applicant that, at the time of the termination of his employment, he was an “ongoing” employee and, pursuant to the ACC Collective Agreement that was relevantly in force the respondent was obliged to, amongst a number of things, provide severance pay, look at redeployment options and fulfil a number of other obligations the applicant contends it did not do. It is the argument of the respondent that the applicant was a “non-ongoing” employee and that it complied with both the terms of the Collective Agreement and all relevant statutory requirements in the termination of the applicant’s employment and the application should be dismissed. Both parties agree that if this Court finds that the applicant was an “ongoing” employee at the time of the termination of his employment, there will need to be another hearing in respect of penalty.
The ACC
The ACC is established by s.7(1) of the Australian Crime Commission Act 2002 (Cth) (the “ACC Act”). Section 7 relevantly states:
7 Establishment of the Australian Crime Commission
(1) The Australian Crime Commission is established by this section.
(2) The ACC consists of:
(a) the CEO; and
(b) the examiners; and
(c) the members of the staff of the ACC.
The functions the ACC are set out in s.7A of the ACC Act, which states:
7A Functions of the ACC
The ACC has the following functions:
(a) to collect, correlate, analyse and disseminate criminal information and intelligence and to maintain a national database of that information and intelligence;
(b) to undertake, when authorised by the Board, intelligence operations;
(c) to investigate, when authorised by the Board, matters relating to federally relevant criminal activity;
(d) to provide reports to the Board on the outcomes of those operations or investigations;
(e) to provide strategic criminal intelligence assessments, and any other criminal information and intelligence, to the Board;
(f) to provide advice to the Board on national criminal intelligence priorities;
(g) such other functions as are conferred on the ACC by other provisions of this Act or by any other Act.
Section 47 of the ACC Act relates to the engagement of staff and states:
47 Staff
(1) Subject to sections 48 and 49, the staff of the ACC shall be persons engaged under the Public Service Act 1999.
(2) For the purposes of the Public Service Act 1999:
(a) the CEO and the APS employees assisting the CEO together constitute a Statutory Agency; and
(b) the CEO is the Head of that Statutory Agency.
Sections 48 and 49 relate to the employment of consultants to perform specific service for the ACC and the secondment of staff to the ACC from other Federal and State Government agencies, respectively.
The Statutory Framework
Part 4, Division 1 of the Public Service Act 1999 (Cth) (the “PS Act”) relates to APS employees and their general employment, including engagement, classification, remuneration and other conditions, duties, movement between Government Agencies, suspension, termination, retirement and other general matters.
Section 20 of the PS Act states:
20 Employer powers etc. of Agency Head
(1) An Agency Head, on behalf of the Commonwealth, has all the rights, duties and powers of an employer in respect of APS employees in the Agency.
(2) Without limiting subsection (1), an Agency Head has, in respect of APS employees in the Agency, the rights, duties and powers that are prescribed by the regulations.
Section 22 of the PS Act relevantly states:
22 Engagement of APS employees
(1) An Agency Head, on behalf of the Commonwealth, may engage persons as employees for the purposes of the Agency.
(2) The engagement of an APS employee (including an engagement under section 72) must be:
(a) as an ongoing APS employee; or
(b) for a specified term or for the duration of a specified task; or
(c) for duties that are irregular or intermittent.
(3) The usual basis for engagement is as an ongoing APS employee.
(4) The regulations may limit the circumstances in which persons may be engaged as mentioned in paragraph (2)(b) or (c).
(5) An engagement for a specified term may be extended, subject to any limitations prescribed by the regulations.
(6) The engagement of an APS employee (including an engagement under section 72) may be made subject to conditions notified to the employee, including conditions dealing with any of the following matters:
(a) probation;
(b) citizenship;
(c) formal qualifications;
(d) security and character clearances;
(e) health clearances.
(7) Subsection (6) does not, by implication, limit the conditions that may be applied to the engagement of an APS employee.
(8) An Agency Head must not engage, as an APS employee, a person who is not an Australian citizen, unless the Agency Head considers it appropriate to do so.
An APS employee who is not employed as “ongoing” pursuant to s.22(2)(a) is a “non-ongoing” APS employee as defined in s.7 of the PS Act.
Regulation 3.5 of the Public Service Regulations 1999 (Cth) (the “PS Regulations”) sets out the various circumstances under which a person can be engaged as a “non-ongoing” APS employee. It states:
3.5 Engagement of non‑SES employees (Act s 22)
(1) For the purposes of subsection 22 (4) of the Act, this regulation sets out the circumstances in which a person may be engaged as a non‑SES employee for a specified term or for the duration of a specified task.
Note Subsection 22 (3) of the Act provides that the usual basis for engagement of an APS employee is as an ongoing APS employee.
(2) The person may be engaged for a reason, and for a specified term, set out in the following table:
Item
Reason
Specified term
1
To enable the Agency to meet a temporary increase in the workload of the Agency, or of a component of the Agency, that the Agency Head does not expect to continue
Term not exceeding 18 months
2
The Agency has a temporary demand for employees with particular skills
Term not exceeding 18 months
Note
In relation to this item, ongoing APS employees in the Agency with those skills are, or have been:
(a) given the opportunity to express interest in performing the relevant duties; and
(b) considered for performance of those duties.
3
To replace an ongoing APS employee who is on leave authorised by the Agency
Term not exceeding 18 months
4
To replace an ongoing APS employee to whom other duties are temporarily assigned
Term not exceeding 18 months
5
To replace an ongoing APS employee who moves temporarily to another Agency
Term not exceeding 18 months
6
To replace an ongoing APS employee pending engagement of another ongoing APS employee
The lesser of:
(a) 6 months from the date of the engagement; and
(b) the period ending when an ongoing APS employee is engaged
7
To undertake duties for the Agency pending engagement of an ongoing APS employee to undertake the duties
The lesser of:
(a) 6 months from the date of the engagement; and
(b) the period ending when an ongoing APS employee is engaged
8
The person:
(a) has been offered, in writing, engagement as an ongoing APS employee; but
(b) prefers to be engaged for a specified term
Term not exceeding 3 years
9
To enable the Agency to engage an ongoing Parliamentary Service employee as a non‑ongoing APS employee
Term not exceeding 3 years
Note When considering the replacement of an ongoing employee whose absence is likely to be prolonged or indefinite, an Agency Head is bound by subs 22 (3) of the Act, which provides that the usual basis for engagement of an APS employee is as an ongoing APS employee, and para 10 (1) (n) of the Act, which provides that the APS is a career‑based service.
(3) The person may be engaged for the duration of a specified task if:
(a) the Agency Head can reasonably estimate the duration of the task at the time of engagement; and
(b) at that time, the Agency Head reasonably considers that the services of the person are unlikely to be required after completion of the task; and
(c) ongoing APS employees in the Agency with the skills required to undertake duties in relation to the task are:
(i) given the opportunity to express interest in performing those duties; and
(ii) considered for performance of the duties.
(4) The person may be engaged for a specified term, or for the duration of a specified task, if the engagement is for the purpose of the person gaining skills and experience under a scheme that is:
(a) approved under regulation 3.3; or
(b) the subject of a general direction in force under subsection 21 (1) of the Act.
(5) The person may be engaged for a specified term, or for the duration of a specified task, if the engagement is for the purpose of meeting a practical requirement for:
(a) the award of a qualification to the person by an educational institution; or
(b) accreditation of the person by a professional body.
(6) The person may be engaged for a specified term, or for the duration of a specified task, if the engagement is for the purpose of providing the person with occupational experience that is required under a law of the Commonwealth, or of a State or Territory, for licensing or registration to engage in the occupation.
Note The Commissioner’s Directions (in particular Ch 3, Diversity in employment, and Ch 4, Merit in employment) contain requirements that apply to the engagement of employees.
Regulation 3.6 of the PS Regulations relates to the extension of employment engagements for “non-ongoing” APS employees. It states:
3.6 Extension of specified terms of engagement of certain non‑SES employees (Act s 22)
(1) For the purposes of subsection 22 (5) of the Act, the engagement of a person for a reason mentioned in item 1 in the table in subregulation 3.5 (2) may be extended if:
(a) the reason continues to exist; and
(b) the total term does not exceed 3 years; and
(c) the Agency cannot fully meet its objectives by using the services of an ongoing APS employee in the Agency; and
(d) the temporary increase in workload of the Agency, or the component of the Agency, is a result of implementing a policy that does not involve an ongoing increase in the usual workload of the Agency or component.
(2) For the purposes of subsection 22 (5) of the Act, the engagement of a person for a reason mentioned in item 2, 3, 4 or 5 in the table in subregulation 3.5 (2) may be extended if:
(a) the reason continues to exist; and
(b) the total term does not exceed 3 years; and
(c) the Agency cannot fully meet its objectives by using the services of an ongoing APS employee in the Agency; and
(d) the Agency Head certifies that extension of the engagement is in the public interest.
Note The Commissioner’s Directions (in particular Ch 3, Diversity in employment, and Ch 4, Merit in employment) contain requirements that apply to the engagement of employees.
(3) For subsection 22 (5) of the Act, the engagement of a person for a reason mentioned in item 9 in the table in subregulation 3.5 (2) may be extended if:
(a) the reason continues to exist; and
(b) the total term does not exceed 3 years; and
(c) the Agency cannot fully meet its objectives by using the services of an ongoing APS employee in the Agency.
Section 29 of the PS Act relates to the termination of employment of an APS employee and states:
29 Termination of employment
(1) An Agency Head may at any time, by notice in writing, terminate the employment of an APS employee in the Agency.
Note: The Fair Work Act 2009 has rules and entitlements that apply to termination of employment.
(2) For an ongoing APS employee, the notice must specify the ground or grounds that are relied on for the termination.
(3) For an ongoing APS employee, the following are the only grounds for termination:
(a) the employee is excess to the requirements of the Agency;
(b) the employee lacks, or has lost, an essential qualification for performing his or her duties;
(c) non‑performance, or unsatisfactory performance, of duties;
(d) inability to perform duties because of physical or mental incapacity;
(e) failure to satisfactorily complete an entry‑level training course;
(f) failure to meet a condition imposed under subsection 22(6);
(g) breach of the Code of Conduct;
(h) any other ground prescribed by the regulations.
(4) The regulations may prescribe grounds or procedures applicable to the termination of the engagement of non‑ongoing APS employees.
(5) Subsection (4) does not, by implication, limit the grounds for termination for a non‑ongoing APS employee.
Regulation 3.11 of the PS Regulations relates to the termination of “non-ongoing” APS employees. It states:
3.11 Termination of employment of non‑ongoing APS employees (Act s 29)
(1) For the purposes of subsection 29 (4) of the Act, this regulation sets out procedures applicable to the termination of the engagement of a non‑ongoing APS employee.
(2) If an employment arrangement sets out procedures applicable to the termination of the non-ongoing APS employee, the procedures apply to the termination of the employee unless the procedures:
(a) if the employment arrangement is a fair work instrument — are an unlawful term; or
(b) if the employment arrangement is a transitional instrument that is not an award — are prohibited content; or
(c) if the employment arrangement is not a fair work instrument or a transitional instrument — would be an unlawful term if the employment arrangement was a fair work instrument.
(3) The engagement of a non‑ongoing APS employee may be terminated on the grounds of a breach of the Code of Conduct only in accordance with procedures established by an Agency Head under subsection 15 (3) of the Act.
Note The Fair Work Act 2009 has rules and entitlements that apply to termination of employment.
Chapter 4.2 of the Public Service Commissioner’s Directions 1999 (Cth) is in the following terms:
4.2 Engagement of ongoing APS employees
(1) An Agency Head must put in place measures to ensure that if:
(a) a person is to be engaged as an ongoing APS employee at a training classification or an APS Group 1 classification; or
(b) an ongoing APS employee (other than an employee whose current classification is a training classification) is to be assigned duties at a training classification:
the opportunity to apply for the relevant employment, or similar employment in the Agency, was open to all eligible members of the community, whether or not they were APS employees.
(2) An Agency Head must put in place measures to ensure that, subject to considerations of cost and operational efficiency, if a person is to be engaged as an ongoing APS employee (other than as an employee mentioned in paragraph (1) (a)), the opportunity to apply for the relevant employment, or similar employment in the Agency, was open to all eligible members of the community, whether or not they were APS employees.
(3) Subject to subclauses (4), (4B) and (4C):
(a) an opportunity mentioned in subclause (1) or (2) must have been notified in the Gazette:
(i) during the period of 12 months before the decision to engage the person is made; and
(ii) as open to all eligible members of the community, whether or not they were APS employees; and
(b) if the opportunity was also advertised externally, as open to all eligible members of the community, whether or not they were APS employees, it must have been advertised before, or not later than 4 weeks after, the opportunity was notified in the Gazette.
(4) If, because of considerations of cost or operational efficiency, an Agency Head decides not to provide an opportunity mentioned in subclause (2) to all eligible members of the community, as a minimum, the opportunity must have been notified in the Gazette:
(a) during the period of 12 months before the decision to engage the person is made; and
(b) as open to all APS employees.
(4A) However subclause (4B) applies if:
(a) an opportunity mentioned in subclause (4) was notified in the Gazette:
(i) during the period of 12 months before the decision to engage the person is made; and
(ii) as open to all APS employees; and
(b) after the notification, the Agency Head decided to provide the opportunity to all eligible members of the community, whether or not they were APS employees; and
(c) the opportunity was advertised externally as open to all eligible members of the community, whether or not they were APS employees.
(4B) The opportunity must have been advertised not later than 4 weeks after the opportunity was notified in the Gazette.
(4C) If:
(a) an Agency Head proposes to engage an ongoing Parliamentary Service employee as an ongoing APS employee; and
(b) the engagement would be at a comparable classification to the person’s classification as an ongoing Parliamentary Service employee immediately before the engagement (as identified in accordance with the Regulations);
it is not necessary for the relevant employment opportunity to be notified in the Gazette.
(5) For subclauses (4) and (4A), APS employee includes a person who, at the time the opportunity for employment is notified in the Gazette, is a person mentioned in Schedule 2.
(6) Despite subclauses (1), (2), (3), (4) and (4A), the Agency Head is not taken to have breached this clause only because the Agency Head has put in place measures that:
(a) are consistent with Commonwealth law; and
(b) identify an opportunity for employment as open to:
(i) an Aboriginal or a Torres Strait Islander within the meaning of the Racial Discrimination Act 1975; or
(ii) a person with an intellectual disability; and
(c) allow the engagement, as an APS employee, of a person of that kind.
(7) This clause does not prevent the engagement of a non-ongoing APS employee as an ongoing APS employee in the circumstances described in clause 4.2A.
The ACC Collective Agreement
The ACC Collective Agreement (the “CA”) was made pursuant to s.328 of the Workplace Relations Act 1996 (Cth) (the “WR Act”) (now repealed). Section 328 of the WR Act states:
328 Union collective agreements
An employer may make an agreement (a union collective agreement) in writing with one or more organisations of employees if, when the agreement is made, each organisation:
(a) has at least one member whose employment in a single business (or part of a single business) of the employer will be subject to the agreement; and
(b) is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement.
The WR Act was repealed by the commencement of the Fair Work Act 2009 (Cth). However, the CA continued to operate as a “transitional instrument” under Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth).
Attachment 4 of the CA states:
A4 REDEPLOYMENT, REDUNDANCY AND TERMINATION OF EMPLOYMENT
A4.1 Introduction
These provisions outline the arrangements for the termination of employment of ongoing employees who are not on probation, on the grounds that they are excess to the requirements of the ACC.
A4.2 Excess Staff
An employee may be declared excess if:
· he or she is employed substantively at a level where there is a greater number of staff than is necessary for the efficient and economical working of the ACC;
· the services of the employment can no longer be effectively used because of technological or other changes in the work methods or structural or similar changes in the nature, extent or organisation of the functions of the ACC;
· the duties of the employee are to be performed at a different locality and the employee is not willing to perform duties at that locality and the CEO agrees that the employee is in excess.
…
A4.4 Voluntary Redundancy
A4.4.1Where the CEO invites an excess employee to elect to take voluntary retrenchment, the employee will have a maximum of one calendar month in which to elect to do so.
A4.4.2Only one offer of voluntary retrenchment will be made to an employee.
A4.4.3If the employee declines an offer of voluntary retrenchment they may be declared excess.
A4.4.4Where the CEO declares an employee excess, the CEO shall, within two months of such declaration, invite the employee to elect to take voluntary retrenchment (if this has not already occurred), and the employee shall have a maximum of one calendar month in which to elect to do so.
A4.4.5The CEO may give notice of termination as soon as an election for voluntary termination is received from an employee.
A4.4.6An employee who has been invited to elect to take voluntary retrenchment will, prior to or during the month following the invitation, be given information on:
· the amount of severance pay, pay in lieu of notice and paid up leave credits;
· the amount of accumulated superannuation contributions;
· the options open to the employee concerning superannuation; and
· the taxation rules applying to the various payments the employee is entitled to receive.
A4.4.7An employee who has been invited to elect to take voluntary retrenchment, or who has been declared excess, is also entitled to reimbursement for financial and/or career counselling, to a maximum of $300 in total.
A4.5 Severance Benefit
A4.5.1An employee electing to take voluntary retrenchment and whose employment is terminated by the CEO under section 29 of the Public Service Act 1999 on the grounds that the employee is excess to the requirements of the ACC is entitled to be paid a severance benefit equal to two weeks salary for each completed year of eligible service plus a pro rata payment for completed months of service since the last completed year of service. The minimum amount payable will be four weeks salary and the maximum will be four-eight weeks salary.
A4.5.2The severance benefit will be calculated on a pro-rata basis for any period where the employee has worked part-time hours during their period of eligible service and they have less that twenty-fours years’ full time service.
A4.5.3 The severance benefit will be calculated on the basis of:
· the employee’s base salary; or
· the salary of the higher position, where the employee has been paid at the higher level for a continuous period of at least 12 months immediately preceding the date on which he or she is given notice of termination of employment; and
· other allowances in the nature of salary which are paid during periods of Annual leave and on a regular basis, excluding allowances which are a reimbursement for expenses incurred, or a payment for disabilities associated with the performance of duty.
…
The Applicant’s Claims and Submissions
In the Amended Application, the applicant’s revised grounds in support of his claims are stated as follows:
1. The applicant was at all material times a natural person and an employee for the purposes of the Fair Work Act [the FWA].
2. The applicant was responsible for maintaining the National Clandestine Laboratory Data Base.
3. The respondent is an employer for the purposes of the FWA and the Trade Practices Act [the TPA].
4. On or about July 2007, the applicant began working for the respondent pursuant to a series of contracts [the contracts].
5. The contracts were described as non-ongoing contracts and were expressed as being for a fixed term of one year.
6. The work performed by the applicant was ongoing.
7. Contrary to their purportedly fixed term nature, the contracts contained provisions for termination of the applicant where work was not longer required.
8. The contracts provided for a minimum of 2 weeks notice to the applicant.
9. The respondent was subject to the Australian Crime Commission Collective Agreement 2007 – 2009 [the collective agreement].
10. The collective agreement provided for redundancy, retention and redeployment and arrangements for ongoing employees.
11. On or about 12 October 2009, Michael Outram on behalf of the respondent dismissed the applicant purportedly on the basis that the duties and tasks of the applicant were no longer required to be performed.
12. Pursuant to an agreement between the states and the Commonwealth dated November 2006, the duties and tasks of the applicant were required to be performed on an ongoing basis.
13. The respondent paid the applicant 4 weeks salary purportedly as compensation for the period forgone of the fixed term contract and 2 weeks of notice.
14. The applicant did not receive any payment for redundancy.
15. The applicant did not receive the retention period set out in Clause A4.8 of the collective agreement or pay in lieu thereof.
16. The applicant did not receive pay in lieu of this accrued flex leave.
17. The applicant seeks payment of redundancy, retention payments, notice and accrued flex leave in accordance with the collective agreement.
18. The applicant seeks payment of notice in accordance with the Fair Work Act.
19. The applicant seeks the payments that should have been made to this superannuation fund on his behalf.
20. The appellant (sic) seeks a civil penalty for each breach of the collective agreement.
21. The applicant seeks a civil penalty for each breach of the notice provisions of the Fair Work Act.
22. In the associated jurisdiction, the applicant seeks orders for damages for breach of the contract.
The applicant submits that the respondent, the ACC, employed the applicant on a series of “non-ongoing” contracts, commencing during July 2007, until the termination of the applicant’s employment during October 2009. The applicant’s employment was described by the ACC as a “Non-Ongoing (Specified Term – 12 months with the possibility of becoming ongoing) [Australian Public Service] employee”, pursuant to s.22(2)(b) of the PS Act”).
The applicant contends that reg. 3.5 of the PS Regulations provides a regime for considering the circumstances in which a person may be engaged as a non-SES (Senior Executive Service) employee for a specified term or for the duration of a specified task. It notes when considering the replacement of an “ongoing” employee whose absence is likely to be prolonged or indefinite, an Agency Head is bound by subsection 22(3) of the PS Act, which provides that the usual basis for the engagement of an APS employee is as an “ongoing” employee. The applicant also refers the Court to subsection 10(1)(n) of the PS Act, which provides “the APS is a career based service”.
The applicant submits that in these proceedings, the contract was for the duration of a specified task, being the establishment and maintenance of the National Clandestine Laboratory Database (the “NCLD”) and that this task is ongoing. There is an agreement between the Commonwealth and States concerning the construction, implementation and operation of the NCLD.
The applicant argues that the contract that he was engaged under allowed for termination on the basis that the work that was to be performed was no longer required as a result of the work being completed ahead of the termination of the contract, the duties and/or tasks being no longer available and a decision being made that those duties or tasks were no longer likely to be performed. If the applicant was to be terminated in these circumstances, he would be entitled to compensation, which would be of a lesser amount than what he would be paid in the period of service that was foregone.
The applicant signed another contract of employment with the ACC in or around July 2009 for a term of a further 12 months. The applicant contends that on 12 October 2009 the Acting Chief Executive Officer, Michael James Outram, of the ACC wrote, on behalf of the ACC, to the applicant stating that the duties and tasks of his position were no longer required to be performed, that there were no options available for redeployment and that the applicant’s employment would be terminated.
The applicant alleges that:
a)He was in fact an “ongoing” employee;
b)The ACC could not lawfully terminate the employment contract with the applicant in circumstances other than where the work to be performed was no longer required due to:
i)Work being completed ahead of the terms of the contract; or
ii)Circumstances where the duties and/or tasks performed by the applicant were no longer available or where a decision had been made that those duties or tasks were no longer likely to be performed.
Neither of these circumstances existed;
c)The ACC paid the applicant the equivalent of ten weeks pay, being an amount equivalent to two weeks pay in lieu of notice, four weeks pay for the early termination of the contract and the equivalent of four weeks pay in addition;
d)At the time of the termination of the applicant’s employment, he was being paid at an annual rate of $72,781 per annum;
e)The applicant was bound by the CA, being an employee of the ACC below the Senior Executive Level: Clause 2.2 of the CA;
f)As an ongoing employee, the applicant was entitled to:
i)The benefit of redundancy, the provisions of which are set out in A4.5 of Attachment 4 of the CA and provide for two weeks pay for each completed year of service with a minimum payment of four weeks pay;
ii)The benefit of retention, the provisions of which are set out on A4.8.1 of Attachment four of the CA, and provide for a retention period of seven months for staff other than those with 20 or more years service or who are 45 years or older. The provisions do allow for paying out of the retention period in lieu of actual retention; and
iii)The benefit of notice, the provisions of which are set out in A 4.9.1 of Attachment 4 of the CA, and provide for a minimum of four weeks pay.
g)Superannuation is set out in the Superannuation Guarantee(Administration) Act 1992 (Cth) and would be payable on the redundancy and notice payments;
h)In failing to pay the entitlements set out in [23] (f) and (g), the ACC may be liable for those payments;
i)By failing to pay the entitlements set out in [23] (f) the ACC may be subject to penalties under the FW Act;
j)By unlawfully terminating the applicant’s employment contract, the ACC breached the contract and is liable for damages for doing so. Damages for breach of contract are generally determined by reference to reasonable notice, the purpose of which is to give an employee who is having their contract of employment terminated the opportunity to adjust to the change in their circumstances and seek other employment. The determination for the amount of damages awarded requires an analysis of, amongst other things, the nature and status of the position, the degree of responsibility and authority involved, the qualifications and experience necessary, the availability of suitable alternative employment, the amount of employment, any trade custom or practice and the length of service of the employee. In this instance, this amount can be fixed by the actual time off work;
k)The applicant was entitled to the benefit of his accrued “flex leave” upon termination of his employment.
The applicant contends that the position for which he was engaged was concerned with two particular functions, the establishment and maintenance of the NCLD, and in relation to the remediation guidelines. Mr Latham, representing the applicant, drew to the Court’s attention the Inter-Governmental Agreement that was attached to Mr Newell’s affidavit at Annexure “E”. At p. 10 of the document the Financial Commitment from the Commonwealth Government is outlined, including, at sub-paragraph 9.1(c):
The provision of a National Clandestine Laboratory Intelligence Coordinator …
Mr Latham then took the Court to Annexure “F” of Mr Newell’s affidavit, which is the “National Clandestine Laboratory Database Business Case”. Mr Latham drew to the Court’s attention the table located on that page, being a table showing the estimated costs of the project and the costing for an “ACC Intelligence Analyst/User Support” and, in particular, that those costs were budgeted as being for the entire three years that the Table covered. Mr Latham contends that those functions were “ongoing”, having regard to the oral evidence of Mr Outram, and that there was no evidence to the contrary. Mr Latham accepts that there was a period of interregnum at the time of the termination of Mr Newell’s employment.
Mr Latham also contends that Mr Newell was an “ongoing” employee, and because of that he has rights under the CA, the industrial instrument for employees of the ACC, which is Annexure “N” to the affidavit of Jane Olivia Bailey. Mr Latham took the Court to [6] on p. 43 of the document, which states:
The ACC recognises that, for a variety of reasons, employees might at some point consider the options of redeployment or redundancy. Arrangements for the management of excess employees are contained at Attachment 4.
Attachment 4 of the CA is titled “Employment, Redundancy and Termination of Employment”. Sub-paragraph 4.1 states:
These provisions outline the arrangements for the termination of employment of ongoing employees who are not on probation, on the grounds that they are excess to the requirements of the ACC.
Mr Latham took the Court to Attachment 4.3 of the CA, which is titled “Consultation Arrangements” and states:
On becoming aware that any employee is likely to become excess to requirements, the CEO will advise the employee of the situation as soon as practicable.
…
Mr Latham then showed the Court Attachment 4.4 of the CA, titled “Voluntary Redundancy” that states at sub-paragraph A4.4.4:
Where the CEO declares an employee excess, the CEO shall, within two months of such declaration, invite the employee to take voluntary retrenchment …
Attachment 4.5.1 deals with severance benefits. Mr Latham submits that the arrangement for severance payments for an ACC employee who chooses to take voluntary retrenchment is two weeks’ salary for each completed year of service with a minimum period of four weeks’ service and a maximum of 48 weeks pay. Mr Latham contends that the severance benefits as a result of involuntary redundancy are deemed to be in the same scale as those for voluntary retrenchment.
Mr Latham then referred the Court to Article 4.8, titled “Retention Periods”. Sub-paragraph relevantly states:
Unless the employee agrees, an excess employee will not be involuntarily terminated by the CEO under section 29 of the Public Service Act 1999 until the following retention periods have elapsed:
…
· 7 months for other staff.
Mr Latham then took the Court to Article 4.9 “Period of Notice”, and specifically sub-paragraph 4.9.1 which states:
Where an excess employee has their employment terminated, the employee will be given 4 weeks notice …
Mr Latham claims that none of these payments were made to Mr Newell, where they should have been. Had those arrangements applied to Mr Newell, he would have received, based on his annual remuneration package of $72,781, a total of 36 weeks pay. This is comprised of the seven month retention period, two weeks pay for each year of service and four weeks notice. Mr Latham contends that ten weeks of payment have already been made to Mr Newell and the applicant is seeking 20 weeks pay, based on his salary at the time of his termination. Mr Latham also contends that superannuation would apply to that amount, but that would be an automatic process.
Mr Latham did not press the claim for reasonable notice, and in relation to the payment of notice under the FW Act, did not press that claim either. The claim was simply in relation to the CA and the payments Mr Latham argues should have been made under it.
Mr Latham argues that the applicant was an “ongoing” employee, despite there being a contractual document with contractual effect that states he was a “non-ongoing” employee and submits that parties to a contract cannot alter the truth of the position of the parties to that contract by putting a different label on it, and this Court has a right to determine, regardless of what the label set out in the contract is, that truth. Mr Latham referred the Court to the decision of the Privy Council in Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 as an authority for that principle.
Mr Latham submits that any question of penalty should be deferred until a decision has been made in respect of whether any breaches have been made by the ACC.
Respondent’s Submissions
Mr Gouliaditis, appearing for the ACC, informed the Court that the ACC opposes all of the applicant’s claims for relief. Relevantly, the Amended Response filed by the ACC on 16 September 2011 was as follows:
The respondent opposes the making of the following orders sought in the application:
1. Order 1, as s. 117 of the Fair Work Act 2009 was not in effect during the relevant period and, in any event, as there was no underpayment of notice under (the now repealed) s. 661 of the Workplace Relations Act 1996 (which was in effect during the relevant period).
2. Order 2, as there was no underpayment of superannuation.
3. Orders 3 and 4, as clause 6 of the Australian Crime Commission Collective Agreement 2007 – 2009 did not entitle the applicant to a redundancy or notice.
4. Order 5, as clause A4.8 of the Australian Crime Commission Collective Agreement 2007 – 2009 did not apply to the applicant.
5. Orders 6, 7 and 8, as there was no breach of either the Fair Work Act 2009 or the Australian Crime Commission Collective Agreement 2007 – 2009.
6. Order 9, as the respondent made payments in lieu of notice and by way of compensation for early termination in an amount exceeding the applicant’s contractual entitlement.
7. Order 10, as no amounts are payable.
8. Order 11, as no factor has been identified capable of attracting the operation of s. 570(2) of the Fair Work Act 2009 and the applicant has instituted the proceedings without reasonable cause.
Mr Gouliaditis contends that the applicant has misconceived the ACC’s case, and that it is not the ACC’s entire argument that, because there were a series of “ongoing” contracts that label the applicant as “non-ongoing”, therefore he was “non-ongoing”, but that was only part of their case. Mr Gouliaditis submits that, as a matter of law, it is a matter in respect of the Commonwealth Government’s capacity to engage employees. Mr Gouliaditis argues that, as the applicant has dropped the contractual damages claim and the claim for relief under the FW Act, the only claim that remains are for entitlements under the CA.
Mr Gouliaditis contends that the employment history of the applicant is set out in the affidavit of Jane Olivia Bailey and demonstrates that, in respect of the applicant’s first contract for employment as a Project Officer:
a)The original position applied for by the applicant was “non-ongoing” (Annexure “A”);
b)The applicant was offered employment with the ACC as a “non-ongoing” (Specified Term – 12 months) APS employee under s.22(2)(b) of the PS Act (Annexure “B”); and
c)The initial contract of employment expressly stated the employment was as a “non-ongoing” APS employee under s.22(2)(b) for a specified term of 12 months.
Mr Gouliaditis submits, in respect of the applicant’s second contract of employment for the position of Intelligence Coordinator, that:
a)The subsequent position applied for by the applicant was for a period of 12 months “non-ongoing” with the possibility of becoming ongoing (Annexure “D”);
b)The applicant was offered employment with the ACC as a “non-ongoing” (Specified Term – 12 months with the possibility of becoming ongoing) APS employee under s. 22(2)(b) of the PS Act (Annexure “E”); and
c)The second employment contract expressly stated the employment was as a “non-ongoing” APS employee under s.22(2)(b) of the PS Act for a specified term of 12 months (Annexure “F”);
Mr Gouliaditis submits that the contract extending the second contract from 30 July 2009 expressly stated the employment was as a “non-ongoing” APS employee under s.22(2)(b) of the PS Act for a specified term of 12 months (Annexure “G”).
Mr Gouliaditis submits that the applicant relies on two documents in support of his claim that his contracts were for a “specified task” that was “ongoing”. The first is the Intergovernmental Agreement concerning the construction, implementation and operation of the NCLD executed on 16 November 2006 and, in particular, Clause 6 of the Agreement that states the ACC “shall oversee [NCLD] construction, implementation and ongoing operation”. The second is the Business Case regarding the NCLD project prepared by the Attorney-General’s Department on 12 October 2006, which was an annexure to the Intergovernmental Agreement, and, in particular, section 7 of that document that states “An ACC intelligence analyst will provide intelligence reports and provide ongoing support/guidance to all NCLD users”. Mr Gouliaditis contends that neither document is capable of altering the legal status of the applicant’s employment at the ACC. If a term within either of those documents has been breached it is a matter for the parties to the Intergovernmental Agreement.
Mr Gouliaditis also contends that, in relation to the two documents relied on by the applicant, neither requires the ACC to employ an “ongoing” APS employee with pre-determined skills in a specific role, or dictates how the ACC should go about fulfilling its obligations under the Intergovernmental Agreement. The ACC was well within its authority when it decided, in the context of an organisational restructure, that it could better fulfil its role as a party to the Intergovernmental Agreement by engaging a business analyst with IT skills to enhance the capability of the NCLD and limiting or relocating the duties previously assigned to the position that was occupied by the applicant. Mr Gouliaditis contends that this decision by the ACC does not constitute a breach of the Intergovernmental Agreement, and it is not correct the applicant argues his duties continued to be performed.
Mr Gouliaditis argues that the applicant was not employed for the duration of a “specific task”, rather, he was employed for a “specified period” of 12 months, twice, in different positions with the second term of employment being extended for a period 12 months. Even if these terms of employment were considered as a single term of employment, the total term of “non-ongoing” employment would not exceed three years and, as such would not contravene Reg. 3.6(2) of the PS Regulations. Mr Gouliaditis contends that the only way the applicant’s employment status could have changed to being “ongoing” was by way of a merit selection process, in which an “ongoing” employment position would need to be advertised with the applicant successfully applying for the role, or by an authorisation from the Public Service Commissioner which would require the Agency Head of the ACC to apply directly to the Public Service Commissioner, and neither of these occurred.
Mr Gouliaditis argues that under its enabling legislation, there is no capacity for the ACC, on behalf of the Commonwealth, to engage an employee outside the framework of the PS Act and refers the court to the decision of the Full Court of the Federal Court in Re Australian Industrial Relations Commission and Arends; ex parte Commonwealth of Australia (2005) 145 FCR 277 at [48]. To the extent that the applicant contends that he was promised an “ongoing” position, (which the ACC denies and evidence is given about in [6] – [9] of the affidavit of Julie Scott), such a promise is irrelevant to the applicant’s status as a “non-ongoing” employee under the PS Act.
Mr Gouliaditis contends that the majority of the relief sought by the applicant is contingent upon him establishing that he was an “ongoing” APS employee, which is denied. However, even if the applicant was an “ongoing” employee, there has been no underpayment in this case. In respect of the applicant’s claim under s.117 of the FW Act, Mr Gouliaditis argues that s. 117 was not yet in effect at the time of the termination of the applicant’s employment. The relevant statutory entitlement for notice was contained in s.661 of the WR Act, which continued to have effect until 31 December 2009 despite the WR Act being repealed. That entitlement was subject to s. 638 of the WR Act, which excluded employees “engaged under a contract of employment for a specified period of time”. Mr Gouliaditis contends that the applicant was, therefore, not entitled to any notice under any statutory regime. However, even if the applicant was entitled, there was still no underpayment as the period of notice required pursuant to s.661 was two weeks, the same as required under his contract, which he was paid.
In respect to the applicant’s claim for underpayment of redundancy under Clause 6 and Attachment of the CA, Mr Gouliaditis submits that the entitlement for redundancy payments only applies to “ongoing” APS employees. However, if it did apply to the applicant, he would be entitled to two weeks’ salary per year of service calculated pro rata (Clause A4.5). The applicant was paid four weeks’ severance pay as required under his contract of employment as well as an extra four weeks’ payment ex gratia, the total of which is greater than his claimed entitlement under the CA. Mr Gouliaditis argues that the applicant cannot claim that he was entitled to both redundancy payments and benefits under his contract of employment.
In respect to the applicant’s claim for underpayment of notice under Clause 6 and Attachment 4 of the CA, Mr Gouliaditis submits that this entitlement again is only for “ongoing” APS employees pursuant to A4.1 of the CA and this claim must also fail. In any event, the notice period required is two weeks, pursuant to A4.9 of the CA and taking into account the two weeks’ given to the applicant under his employment contract as well as the ex gratia payment, there could not have been any underpayment.
Mr Gouliaditis contends that, in relation to the applicant’s claim for underpayment of superannuation, it is clear from the applicant’s submissions that this claim is ancillary to all his other claims for underpayment. Mr Gouliaditis submits that no underpayments have been made, and as such, no further superannuation is payable.
Mr Gouliaditis submits that, in respect of the applicant’s claim for remedy of any breach of the retention period as set out in A4.8 of the CA, this clause did not confer any benefit upon the applicant. Mr Gouliaditis contends that this clause only applies to “ongoing” APS employees who are “excess” and entitles them to work out a retention period before being terminated and refers the Court to Clause A4.1. As the applicant was not “ongoing”, he was covered under this clause. In any event, it is unclear what the applicant is actually seeking and, to the extent that the applicant seeks payment in lieu of the seven month retention period “compensation for loss” under s.545(2) of the FW Act, the amount payable as compensation would be limited to the period in which the applicant remained unemployed, to which the applicant has put on no evidence.
Mr Gouliaditis submits that, in respect of the applicant’s claim for civil penalties to be paid to the applicant, there has been no contravention of the WR Act, the FW Act, or the CA, regardless of whether or not the applicant’s employment status at the time of his termination was “ongoing” or “non-ongoing” with the exception of the claim for breach of the retention period. Mr Gouliaditis argues this claim should be rejected.
Mr Gouliaditis argues the applicant’s claim for “damages for breach of the contractual term to give reasonable notice of termination” has been re-characterised in the applicant’s written submissions as a claim for damages as based on the “unlawful termination of the contract” with damages to be assessed “by reference to reasonable notice” which, in this case, is time actually off work. Mr Gouliaditis contends that the relevant contract that applied to the applicant at the time of the termination of his employment provided for the ACC to terminate the contract on the basis that, amongst other things:
… [W]ork is no longer required due to … a decision being made that those duties or tasks are no longer required to be performed …
The affidavit of Jane Olivia Bailey, at [9] – [13] and [19] – [21], demonstrates that a decision was made that the duties or tasks that had been previously performed on the applicant’s position were no longer required to be performed in that position by a single person, or at all. The duties that had been allocated to the applicant were either limited or reallocated. Mr Gouliaditis submits that the applicant’s employment contract was, therefore, lawfully terminated and no damages arise.
Applicant’s Submissions in Reply
Mr Latham, in reply, submits that s. 4.2 of the Public Service Commissioner’s Directions that Mr Gouliaditis referred to as the basis for the ACC’s argument in respect of the claim of unlawfulness does not mean what Mr Gouliaditis submitted that it did. Mr Latham contends that the statutory regime does not affect the characterisation of terms in a contract and refers the Court to the decision of the Full Court of the Federal Court in Bryne & Frew v Australian Airlines Ltd (1994) 47 FCR 300. Mr Latham argues that the contract stands by itself, and on the basis of the terms within the contract the redundancy provisions should apply to Mr Newell.
Evidence
The applicant read the affidavit of Paul Newell sworn 16 September 2010. The applicant also sought to rely on testimony from Michael James Outram, who was cross-examined at the hearing.
The respondent read the following evidence:
a)Affidavit of Jane Olivia Bailey sworn 22 October 2010; and
b)Affidavit of Julie Anne Scott sworn 2 February 2011.
Both witnesses were cross-examined.
Cross-examination of Paul Newell
Mr Newell gave evidence about his employment at the ACC. Mr Newell’s evidence was that he originally joined the ACC as a project officer with the task of running a national advertising campaign within the chemical industry encouraging them to prevent the diversion of chemicals to the illicit drug trade. As a result of the success of that project Mr Newell, after conversing with the then director Jeff Pope, applied to work in the NCLD which was around the time of the signing of his second contract. Mr Newell gave evidence that Mr Pope indicated to Mr Newell that as soon as the ACC’s budgetary position improved he would be offered an “ongoing” contract.
Mr Newell agreed in cross-examination to the proposition that, in respect of his employment with the ACC, he had signed a series of contracts, each for 12 month periods and that none of those contracts were “ongoing” in nature. He also agreed that he never signed a contract for “ongoing” employment with the ACC. Mr Newell agreed that he signed his third contract for “non-ongoing” employment on 24 April 2009, after discussions sometime in the weeks before 24 April 2009 with his then supervisor, Ms Scott. Mr Newell maintained that Ms Scott promised to convert his position to “ongoing” if the budget that was soon to be announced was favourable to the ACC, but that did not occur.
Mr Newell gave evidence about the events on the day of his termination. His evidence was that on that day he was called into the office of the ACC Sydney office manager at the time, Mr Michael Outram. During this meeting Mr Outram presented him with a letter of termination and told Mr Newell that the work he was performing was no longer required. Mr Newell was also informed that Mr Jim Duffy had been conducting a review of Mr Newell’s work and that he was unaware this review was taking place. Mr Newell gave evidence that Mr Outram also informed him that the termination of his employment was effective immediately, and Mr Newell was escorted to his desk to gather his belongings and then out of the building.
Cross-examination of Michael Outram
Mr Michael Outram is an employee of the ACC and at the relevant time was Executive Director, Serious and Organised Crime based in its Canberra office. Mr Outram gave evidence that the maintenance of the NCLD project was still ongoing at the time of the hearing and at the time Mr Newell’s employment was terminated the construction of the NCLD was not yet complete. Mr Outram’s evidence was that a review was conducted of the NCLD and shortly after Ms Scott provided him with a business case she had written suggesting that the ACC needed to go in a different direction with the staffing around the NCLD. Another factor Mr Outram had to consider was that a forensic chemist was returning from the United Nations in December and that person would possibly be able to take up a number of the duties that were, at that time, being performed by Mr Newell. Mr Outram, based on the report and other factors, made the decision to terminate Mr Newell’s employment. Mr Outram stated that the work that had been performed in the role occupied by Mr Newell was no longer required to be done, and the business case that had been provided by Ms Scott provided the rationale for the making of the decision to terminate his employment. He stated that the project to establish the NCLD was fixed in term, but the work of the NCLD was ongoing and the ACC made the decision that the work should be performed by someone with a business analyst background, not a forensic chemist. Mr Newell’s skill set as a forensic chemist was ill-fitted with the task of maintaining the NCLD. Mr Outram had explored redeployment as an option for Mr Newell with Jim Duffy and Human Resources, but there were no realistic options for that to occur, taking into account Mr Newell’s skill set and attributes.
Mr Outram gave evidence in respect of the events on the day of Mr Newell’s termination. He was visiting Sydney from Canberra and invited Mr Newell to meet with him in the executive suite where the Sydney ACC office manager, Eddie Iser, was also present. Mr Outram gave Mr Newell the termination letter (Annexure “G” of Mr Newell’s affidavit) and spent some time explaining the rationale behind the making of that decision. Mr Outram had also made the decision that it would be better if Mr Newell ceased employment immediately, rather than remain on premises for two weeks, and Mr Newell was offered two weeks’ pay in lieu of notice. Mr Outram also gave evidence that, based on his experiences dealing with similar situations, it was better to make terminations effective immediately as not doing so could create potential problems in the workplace.
Cross-examination of Jane Olivia Bailey
Ms Bailey is the Executive Director of People and Business at the ACC. Her responsibilities within the ACC include information technology, finance, facilities, purchasing, integrity, the ACC’s corporate functions and organisational change that includes the reallocation of funding against priorities in the group and targeting division. The NCLD was within Ms Bailey’s suite of responsibilities.
Ms Bailey gave evidence about the funding relationship of the NCLD, that it was established with funding given by the Attorney-General’s Department, also known as tied funding. Tied funding is funding that is generally limited to one function within an agency, but under special circumstances could be reallocated with authority. Ms Bailey’s evidence was that the entire amount of tied funding allocated to the NCLD was used and had to be supplemented with some of the ACC’s own funding.
Ms Bailey gave evidence in respect of a review that was undertaken by Ms Scott in the “Amphetamine Type Substances” section of the ACC. The purpose of the review was to match the priorities the ACC had to deliver with its funding base. A whole range of functions and outgoings were reviewed in order to see which could be continued and which had to be reviewed in light of the ACC’s financial circumstances. One of the proposals in the review was that resources in the NCLD would be better undertaken by a business analyst with IT skills. There had been feedback from other agencies that the NCLD needed to be more functional and capable, and more available to develop an integrated response to the other agencies’ queries and intelligence needs. There was a need to integrate all of the ACC’s databases to one IT platform in order a deliver a whole suite of products to the various jurisdictions.
Ms Bailey’s affidavit evidence explains how Mr Newell’s employment was terminated after a decision had been made to enhance the capabilities of the NCLD by engaging a person with a business analyst skill set, rather than that of a forensic chemist. Ms Bailey gave evidence that, following the termination of Mr Newell’s employment, the ACC hired a person with a business analyst skill set to map the business requirements needed in the NCLD system that an IT specialist could then build and write code for. This would enhance the system and add more functionality to the NCLD so it operated in a more seamless and integrated fashion than had been the case previously.
Ms Bailey stated that after Mr Newell was terminated arrangements were made to deliver the support and transition the NCLD project around to other people. For a time after his termination any work was ceased while the ACC consulted with other jurisdictions about what they wanted and the best way to re-engineer the system. After the re-engineering process took place many of Mr Newell’s duties and tasks were performed by the IT systems of the ACC.
Cross-examination of Julie Anne Scott
Ms Scott at the time leading up to and of the termination was the Head of Determination, Amphetamine Type Stimulants. She was Mr Newell’s supervisor. During December 2009 Ms Scott went on maternity leave and returned to the ACC in March 2011 in a different position.
Ms Scott wrote a report (Annexure “A” to her affidavit) on 27 September 2009 that looked at the functions carried out by the NCLD, where its deficiencies lay, and where improvements could be made. A concern Ms Scott had with the NCLD was that it was the only database at that time that was being operated in a standalone manner in an operational area. All other intelligence databases were being operated from the specialist intelligence services area, and the NCLD didn’t have anyone supporting it who had an IT background or IT experience, including Ms Scott. Essentially Ms Scott believed that a person with a different skill set to Mr Newell’s was needed to manage the NCLD, which was why he was not involved in the preparation of the report.
Ms Scott also gave evidence about a conversation she had with Mr Newell around the time his contract was extended in April 2009. Mr Newell had asked her to make him an “ongoing” employee and she explained to him that it wasn’t appropriate at that time, given the financial situation the ACC was in and that he had had his employment contract very recently extended. She denies that she had undertaken to make him an “ongoing” employee. Ms Scott did not have the authority to do so, and the position would have had to have been advertised nationally. It would be unethical, unlawful and completely inappropriate to make someone “ongoing” in the way Mr Newell had asked her to, and she does not believe she made any such commitment.
Consideration
Mr Latham in his opening address acknowledged that it is a very simple question before the Court to be determined in relation to this matter is whether when the contract described Mr Newell’s job as “non-ongoing” whether that was in fact the case. Mr Latham indicated that the argument being advanced on behalf of Mr Newell were that the conditions of employment were that the conditions of employment were governed by the CA and that agreement sets out periods of retention, processes for redeployment and severance pay, none of which were granted to Mr Newell. Mr Latham acknowledged that if the Court finds that the position was “non-ongoing” that is the end of the case.
The primary issue to be determined is the precise employment status of Mr Newell. In broad terms the PS Act being the legislative instrument under which Mr Newell is employed defines three categories of APS employee under s.22.(2):
a)Ongoing employee;
b)Employees engaged for a specific term or for the duration of a specific task; and
c)Employees engaged for irregular or intermittent duties.
The Act also defines “non-ongoing APS employees” as an APS employee who is not ongoing (s. 7 – Definition). Under s.22 of the PS Act, APS employees must be engaged in one of the three categories. Section 22 also states that the usual basis for engagement is as an “ongoing” APS employee. The PS Act enables the PS Regulations to limit the circumstances of “non-ongoing” employment and extensions to engagement for a specific term (s. 22). In effect s.22(2) contemplates the appointment of “non-ongoing” employees and regs. 3.5(2) and 3.6 set out the basis of such appointments and the conditions under which a specific term contract can be extended.
The details of the legislative scheme and provisions of the PS Act are set out at [7]-[14] above. The essential parts that are relevant to the initial consideration in this matter are:
a)Section 20(1) of the PS Act states that an Agency Head on behalf of the Commonwealth, has all the rights, duties and powers of an employer in respect of APS employees in the Agency;
b)Section 22 deals with engagement of APS employees:
i)An Agency Head, on behalf of the Commonwealth may engage persons as employees for the purpose of the Agency;
ii)The engagement of an APS employee must be;
a) as an “ongoing” employee; or
b) for a specified term or for the duration of a specified task; or
c) for duties that are irregular or intermittent;
iii)the usual basis for engagement is as an “ongoing” APS employee;
iv)the regulations may limit the circumstances in which a person may be engaged as for a specified term or irregular tasks;
v)An engagement for a specific term may be extended, subject to any limitations prescribed by the regulations.
c)An APS employee who is not engaged as an “ongoing” APS employee under s.22(2)(a) is a “non-ongoing” APS employee (s.7 – Definitions);
d)The PS Regulations set out the circumstances in which a person can be engaged as a “non-ongoing” APS employee for a “specified term” under s.22(2)(b) and Reg. 3.5(1); and
e)A “non-ongoing” employee can be engaged for a period of up to 18 months if there is a “temporary demand for employee’s with particular skills” (reg. 3.5(2) table item 2). An engagement as a “non-ongoing” APS employee may be extended if the temporary demand continues to exist but the total length of engagement cannot exceed 3 years (reg. 3.6(2)).
The affidavit evidence of Jane Olivia Bailey sworn 22 October 2010 was that Mr Newell:
a)Was engaged by the ACC from 30 July 2007 as a “non-going” APS employee for a specific term of 12 months under s.22(2)(b) of the PS Act in the position known as “Project Officer”:
i)Annexure “A”- position description;
ii)Annexure “B” – letter of offer – sent 29 July 2007;
iii)Annexure “C” – initial contract of employment.
b)On 29 May 2008 the ACC advertised in the APS Employment Gazette for a 12 month “non-ongoing” (with possibility of becoming “ongoing”) position of “Intelligence Coordinator”:
i)Annexure “D” – copy of advertisement.
Mr Newell applied and was successful;
c)On 30 July 2008 Mr Newell was engaged as an Intelligence Coordinator with primary responsibilities to oversee the NCLD and compiling a draft Clandestine Laboratory Site Remediation Guidelines;
i)Annexure “E” – letter of offer;
ii)Annexure “F” – new contract of employment.
d)On 24 April 2009 Mr Newell’s contract of employment as a “non-ongoing” APS employee was extended or a further 12 months from 30 July 2009 to 29 July 2010;
i)Annexure “G” – extension of contract.
e)On 12 October 2009 Mr Newell was advised that his duties and tasks were no longer required and his employment ceased immediately;
i)Annexure “H” – termination letter.
Consequently Mr Newell’s employment was for a total of 2 years, 2 months and 12 days. The full contracted period covered by three separate agreements (although the third agreement being the 12 month extension was not fully served due to termination) was from 30 July 2007 to 29 July 2010 and did not exceed the three year limit specified in Reg. 3.6 (2).
Each of the confirmation letters clearly state that the agreements are for “non-ongoing” engagement (Affidavit of Jane Olivia Bailey sworn 22 October 2010):
a)29 July 2007 “Offer of Non-Ongoing Engagement APS 6, Project Officer, Sydney Office” (Annexure “B”, p.9)
I am pleased to inform that you have been selected for employment as a Non-Ongoing (Specified Term – 12 months) APS employee under Section 22(2)(b) of the Public Service Act 1989 with the Australian Crime Commission…
b)29 July 2008 “Offer of Non-Ongoing Engagement APS 6, Intelligence Coordinator, Sydney Office” (Annexure “E”, p.20).
I am pleased to inform that you have been selected for employment as a Non-Ongoing (Specified Term – 12 months with the possibility of becoming on-going) APS employee under Section 22(2)(b) of the Public Service Act 1999 with the Australian Crime Commission…
In respect to the extension of Mr Newell’s contract of employment on 24 April 2009 no formal letter similar to those issued on 29 July 2007 and 2008 was issued. Rather a standard ACC form “Engagement Contract for Non-Ongoing Employee (excluding casual engagement) was completed on 24 Aril 2009 (Annexure “G”, p.27-29). That form does contain the following information:
In accordance with Section 22(2)(b) of the Public Service Act 1999 you are engaged as a non-ongoing employee of the Australia Crime Commission (ACC)…
Commencement Date: 30 July 2009.
Separation Date: 29 July 2010.
Based on the material before the Court Mr Newell was employed under three consecutive “non-ongoing contracts” within the provisions of s.22(2)(b) of the PS Act for a specified term as a “non-ongoing” employee for the total 2 years, 2 months and 12 days. It does not appear to be in dispute that during that time Mr Newell was specifically engaged to develop the NCLD with the primary responsibility to compile a draft Clandestine Laboratory Site Remediation Guidelines to reduce the risk of harm to humans and environmental health for the Australian community arising from residential properties used for the manufacture of illicit drugs which was a project funded by the Australian Government, Department of the Attorney-General.
Despite the documentary evidence being clear that Mr Newell was employed for the entire period under the provisions of s.22(2)(b) of the PS Act the argument that is advanced on his behalf is that his employment was “ongoing” on the basis that the task of establishing and maintaining the NCLD was ongoing. Although detailed argument is advanced for this contention it is contrary to the provisions of the PS Act as there is no provision for the automatic conversion of “non-ongoing” employment. The Public Service Commissioners Directions 1999 require that ongoing positions are, subject to considerations of costs and operational efficiency, advertised to all eligible members of the community including by advertisement in the APS Employment Gazette (cl.4.2 (2) and (3)). Even if, due to considerations of costs and operational efficiency, “ongoing” positions are not advertised to all eligible members of the community, they must at a minimum be advertised to all APS employees (cl. 4.2(4)). Selection must then be made on merit (see s.10(1)(b) and (2) of the PS Act). An Agency Head may only engage a “non-ongoing” APS employee as an “ongoing” APS employee, without taking the above steps, by applying to the Public Service Commissioner to authorise the engagement (which requires, amongst other things, “exceptional circumstances”)(cl.4.2(7) and cl.4.2A).
Nothing that fits the description of an advertisement of the nature of Mr Newell’s job specification for an “ongoing” position or a special application to the Public Service Commissioner seeking authorisation for the engagement of Mr Newell as an “ongoing” position has been tendered. Neither of the affidavits of Ms Scott (Mr Newell’s supervisor) or Ms Bailey (the Executive Director, People and Business Support) make any reference to a consideration of this nature. The question was not raised in cross-examination of either witness. I believe that the structure of the PS Act sets a very clear delineation of steps that must be taken to reassign a “non-ongoing” position to that of an “ongoing” position and there is no such evidence placed before this Court that this scheme was pursued. A very much less persuasive argument was advanced on behalf of Mr Newell that his status had been or should have been changed to that of an “ongoing” employee.
Mr Newell in his affidavit sworn on 16 September 2010 and read in these proceedings stated that:
5. On 23 April 2009 I had a conversation with Ms Julie Scott who was my Manager at the ACC in relation to the conversion of my employment contract to an on-going contract.
Julie Scott stated word to the effect of, “If the budget is favourable, ACC will move immediately to convert your contract to an on-going contract”
Julie Scott stated word to the effect of, “The ACC acknowledges the essential role of the clan lab database coordinator”
6. The conversation stated under paragraph 5 was recorded contemporaneously in my work diary. Attached and marked “B” is a copy of the diary entry.
The relevant passage contain on the diary page Annexure “B” is identified as “April 2009, 23 Thursday” states:
Discussed contract with Julie Scott. Julie stated that if budget was favourable, ACC will move “immediately” to convert contract to on-going, and that ACC acknowledged the essential role of clan lab coordinator. I pointed out that the ACC has been promising to convert my contract to ongoing for nearly 2 years. JS said we/ ACC are facing a potentially difficult budget position so future resourcing was uncertain but reiterated that if the budget was favourable they will convert contract to ongoing immediately and will not need to wait for the existing contract to expire.
The affidavit of Ms Scott affirmed 2 February 2011 states:
6. I have read the Applicant’s affidavit sworn 16 September 2010 and filed in this proceeding. At paragraph 6 of his affidavit, the Applicant alleges that, during a conversation on 25 April 2009, I said words to the effect of “if the budget is favourable, ACC will move immediately to convert your contract to an on-going contract.”
7. I have no recollection of any such conversation. For the following reasons, I do not believe that any such conversation occurred or that any such undertaking was given.
Under cross-examination of Ms Scott the following exchange occurred:
Mr Latham: You refer at paragraph 7 to a conversation that Mr Newell refers to in his affidavit and you say that you have no recollection of such a conversation?
Ms Scott: That’s correct.
Mr Latham:Did you – do you have any recollection of having met with Mr Newell on the day that he refers to?
Ms Scott:I think the conversation that he is referring to is the conversation that I had with Mr Newell the day of or the day after he signed his contract, which was extended for a further 12 months, because the only conversation I had at around about that time with Paul was about – he came to me after he signed the contract and asked that he be made an ongoing employee and I told him that it wasn’t appropriate at that time, given the financial situation that we were in and that he had only just had his contract extended.
Mr Latham: So would it be fair to say this: a conversation did occur, but you think not on the precise date used by Mr Newell in his affidavit?
Ms Scott:I don’t take so much issue with the date; I take issue with the content of what was being said. I don’t believe that the conversation took place as Mr Newell represents it.
Mr Latham:I see. But you can’t – you don’t have a recollection one way or the other of that conversation taking place?
Ms Scott:I can’t definitely state it didn’t take place, but I don’t believe it did, because I was brand new to the position. His contract had only just been extended, and I knew that our financial situation was very difficult. And lastly, I don’t have any authority to make someone permanent. It’s the position that is made ongoing, and the decision for an ongoing position is made by our senior executive. You put up a business case to the senior executive about whether or not a position should be ongoing. The senior executive then makes the consideration, and if they agree that a position should be ongoing, then that position is advertised. And not just advertised within the public service: it’s advertised in the media nationally. I don’t have any authority to stroke a pen and make someone permanent, and that would be unethical, unlawful and completely inappropriate. And on that basis, I don’t believe I made any such commitment.
I have formed the view that the above material does nothing more than establish that Mr Newell had a strong desire to obtain an ongoing contract of employment and pursued that desire with some vigour however there is no evidence put before the Court that indicates that the formal steps required under the PS Act to convert Mr Newell’s position from “non-ongoing” to “ongoing” were initiated or even discussed by the management structure of the ACC. I believe that the evidence given by Ms Scott to be reliable in that she was actively aware of the provisions of the PS Act that would prevent her from undertaking to arrange this change in employment status for Mr Newell.
There is clearly a distinct difference in the evidence given by Mr Newell and Ms Scott in respect of the discussion between them on the day of, or days after the signing of the extension of Mr Newell’s contract of employment on 24 April 2009 (Ms Bailey’s Affidavit Annexure “G”; p. 27-28). There could be numerous explanations for this difference and I particularly refer to the decision in Aneve Pty Ltd & Ors v Bank of Western Australia Ltd [2005] NSWCA 441 per Hodgson JA (with Santow JA and Bryson JA agreeing) at [49] where his Honour stated:
In assessing evidence of this kind in cases such as this, in my opinion it is important to have in mind the considerations which were set out with admirable clarity by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-9:
…Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions of self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, construed. All this is a matter of ordinary human experience…
Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a cause of action… in the absence of some reliable contemporaneous record on the other satisfactory corroboration.
In the light of the evidence before the Court the contemporaneous diary note prepared by Mr Newell also has the appearances of being affected, possibly subconsciously, by the perceptions of self interest.
I agree with the written submission prepared by Mr Gouliaditis that Mr Newell was not, as is asserted, employed for the duration of a “specific task” although if he was, he would still be a “non-ongoing” employee under s.22(2)(b) of the PS Act. Rather, Mr Newell was employed for a “specific period” of 12 months, twice, initially as a Project Officer then as a Intelligence Coordinator with the second term extended by a further 12 months. The total “non-ongoing” employment did not exceed the three year limit imposed by reg. 3.6(2). Consequently when Mr Newell was terminated he was a “non-ongoing” APS employee and was subject to the relevant provisions of the PS Act and PS Regulations covering that status of employee.
This situation was not altered by Mr Newell’s employer being the ACC. The Australian Crime Commission was established by s.7(1) of the ACC Act. Section 47(2) states that the CEO of the ACC and the APS employee assisting the CEO together constitute a Statutory Agency for the purposes of the PS Act with the CEO as Agency Head. Under that enabling legislation there is no capacity for the ACC, on behalf of the Commonwealth, to engage employees outside the framework of the PS Act; see Re Australian Industrial Relations Commission and Arends: Ex parte Commonwealth of Australia (supra) per Wilcox, Gyles and Bennett JJ at [48] where their Honours stated:
…The engagement of servants by Commonwealth Department of state in that sense has generally been governed by the statute from at least the coming into force of the Public Service Act 1922 (Cth) and there are many statutes dealing with particular situations. Any residual executive power that may exist to engage employees would clearly not a position like the present.
The argument advanced by the Mr Latham on behalf of the Mr Newell was that the function of maintaining the NCLD was ongoing and this was confirmed by Mr Outram, the Acting Chief Executive Officer at the relevant time, during cross-examination (Transcript 19.10.11, pp. 16 – 17). The following exchange occurred:
Mr Latham:All right and could I ask you this; the National Clandestine Laboratory Database, the maintenance of that database, is that ongoing?
Mr Outram: Yes, I believe it is.
Mr Latham:And could I ask you about another matter that’s been briefly averted to, there is a National Clandestine Site Remediation Guideline Project, are you aware of that project?
Mr Outram:There was a – I don’t think there was a specific project – but there was certainly a task to create some guidelines for remediation of Clandestine Laboratories, yes.
Mr Latham:Okay and at the time that Mr Newell was terminated were both of there tasks complete?
Mr Outram: Well, as you’ve rightly said, the maintenance of the database is an ongoing issue, do it wouldn’t be complete but the construction of the database, I’m not sure exactly what stage that was at, but I don’t believe that was complete. There were issues with the database about the role and function and what was delivering and in relation to the remediation guidelines, that was not complete.
Mr Latham relied on that cross examination to develop the argument that was the key to Mr Newell’s case, that the function referred to by Mr Outram were “ongoing” and therefore Mr Newell was ongoing. If Mr Newell is an “ongoing” employee then he has rights that exist under the CA 2007 - 2009. I will address the issues in respect to the CA below. I believe the flaw in this reasoning is the distinction between the status of a position in the employment structure, being nominated as either “ongoing” or “non-ongoing” on one hand, and the status of the person filling the position. Generally when a position is established it is nominated as either “ongoing” (covered by s.22(2)(a)) or temporary (covered by s.22(2)(b)). To fill those respective positions an advertisement is placed in the national media in the case of s.22(2)(a) positions and a slightly less formal approach of s.22(2)(b) and (c) positions. This process was described in more detail by Ms Scott in her cross-examination (response to last question at [76] above). I believe that there has been a misunderstanding in the attempt to establish that as the maintenance of NCLD is ongoing therefore the person who was undertaking that role must also be “ongoing”.
This was further clarified by Mr Outram in his subsequent cross-examination. Mr Latham asked Mr Outram to tell the Court the basis upon which his letter dated 12 October 2009 addressed to Mr Newell (Annexure “H”, affidavit of Ms Bailey), was prepared and provided:
Mr Outram:…There were issues with what the database was delivering from our stakeholders. I’d ask one of my line reports to conduct a review around the database. I then received a business case that was written by Julie Scott, the head of determination for the amphetamines, aloe-synthetic drugs I think it was then, special intelligence operation. I received that report with Jim Duffy’s endorsement that suggested that we needed to go in a different direction in relation to the staffing around the database. There was also an issue about Mr Newell’s specialist capabilities in terms of he was a forensic chemist and we had a forensic chemist coming back form the United Nations in the December who I was informed could tae up a lot of the roles and functions being performed by Mr Newell. There was also a window of opportunity to delay the remediation guidelines. So based on the review, basically it was done by Julie Scott, I took the decision to terminate the contract.
Mr Latham:I see. So was it your position that the work that Mr Newell had been doing was no longer required to be done?
Mr Outram:That’s correct, yes, in the role that he was performing and that business case that was provided by Julie Scott and provided the rationale for that decision.
Mr Latham:But Mr Outram, wasn’t your earlier evidence that in fact this work was ongoing?
Mr Outram:Well, the work was ongoing, but in relation to who does what within a large scale project like this, that doesn’t mean that all roles and specific tasks remain ongoing. There’s got to be ebbs and flows in any project.
(Transcript 19.10.11, p. 17)
The above sequence of evidence confirms the flaw referred to earlier that “ongoing” roles are not necessarily filled by employees that have an “ongoing” status under s.22(2)(a) of the PS Act but can, in some instances, be occupied by temporary employees provided for under s.22(2)(b).
As indicated above Mr Latham referred the Court to the CA. In paragraph 2.2 of that CA it applies to the CEO in relation to employees employed under the PS Act and employees of the ACC below SES level or equivalent, other than those whose employees are paid by another agency or employed under an Australian workplace agreement. Mr Latham then referred to paragraph A4.1 which refers to the provisions outlining the arrangements for the termination of employment of “ongoing” employees who are not on probation. Again this is a flaw in the argument being advanced because a review of the entire CA makes no reference to “non-ongoing” employees, as it deals only with “ongoing” employees. There are no references to the correct classification of an employee or any process of reclassification of designated “non-ongoing” employees. Mr Latham in his opening submission contends that Mr Newell was an “ongoing” employee and that provides him with rights under the CA. On the material before the Court I am satisfied that such a link to the CA cannot be established and the various claims brought under the provision of the CA accordingly also fail.
Despite the detailed submissions and analysis of the Inter-Governmental Agreement being a binding agreement between the ACC, the Commonwealth Government and the States and Territories of Australia I am satisfied that agreement does not in any way establish that Mr Newell is required to be retained as an “ongoing” employee as defined in s.22(2)(a) of the PS Act. Given that status there is no evidence that the procedures followed in the termination of Mr Newell were contrary to any provision of the PS Act. Consequently the application filed on 5 May 2010 and the Amended Application filed on 13 September 2011 must fail and should be dismissed.
The application was commenced in the Court’s jurisdiction under the FW Act which is subject to the policy of discouraging legalism in proceeding before Courts exercising industrial jurisdiction. Consequently, there will be no order made as to costs in these proceedings
I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Date: 14 September 2012
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