Paul Andrews v Cooperative Research Centre for Advanced Composite Structures Ltd T/A Advanced Composite Structures Australia

[2011] FWA 1255

[2011] FWA 1255

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Paul Andrews
v
Cooperative Research Centre for Advanced Composite Structures Ltd T/A Advanced Composite Structures - Australia
(U2010/10294)

COMMISSIONER BLAIR MELBOURNE, 25 FEBRUARY 2011

s.394 - application for unfair dismissal remedy - jurisdiction.

[1] This is an application under s.394 of the Fair Work Act 2009 (the Act), for unfair dismissal remedy. The applicant in the matter is Mr Paul Andrews (the Applicant) and the respondent in the matter is Cooperative Research Centre for Advanced Composite Structures Ltd t/as Advanced Composite Structures - Australia.

[2] The matter was set down for 10 February 2011 to deal with the jurisdiction argument. Ms R Nelson, of counsel, represented the Applicant and Mr T Donaghey of counsel, represented the Respondent.

[3] The jurisdiction objection raised by the Respondent in form F3, lodged with Fair Work Australia (the Tribunal) on 20 July 2010, and supported by correspondence dated 15 September 2010, is that the Applicant’s employment was for a specified period of time under s.386(2) of the Act.

[4] The Respondent’s objection to the jurisdiction is on the basis that the Applicant was not dismissed within the meaning of the Act.

[5] The Respondent argues that the Applicant signed a contract in 2004 which bound the Applicant and the Respondent in relation to the employment. That contract provided to the Applicant is a contract dated 9 December 2003 signed by Professor Murray Scott, Chief Executive Officer.

[6] The contract states, under the heading “Commencement and Period of Employment”:

“Attached to that contract is Schedule A, which details the terms and conditions of employment.”

[7] It is interesting that the only change to that document is under the heading “Long Service Leave” where a manual notation is made dated 12 January 2004. There is a signature of the Applicant at the end of Schedule A dated 12 January 2004 and the Acknowledgement states:

“I accept employment with the Company on the terms and conditions set out in this letter and its attachments. I accept the right of the company to vary these with appropriate notice or in line with legislative requirements.”

[8] The Tribunal notes that the letter dated 9 December 2003, addressed to the Applicant, has not been altered in any way.

[9] The Applicant provided evidence on his own behalf, along with Mr John Heathcote.

[10] Professor Murray Scott provided evidence on behalf of the Respondent.

[11] Mr Heathcote’s position in 2003 was Administration Manger and Company Secretary of Cooperative Research Centre for Advanced Composite Structures Ltd. Mr Heathcote states that in 2003 all staff at Cooperative Research Centre for Advanced Composite Structures Ltd were issued with a confidential internal memorandum from the CEO, Professor Murray Scott, advising them of the establishment of a new company, also known as Cooperative Research Centre of Advanced Composite Structures Ltd, but with a new ACN and ABN.

[12] Staff were advised that from 1 July 2003 all assets, other than intellectual property, and staff would be transferred to the new company; however, the number of staff employed by the new entity would be reduced and therefore expressions of interest were sought from employees who wished to accept a voluntary redundancy, rather than transfer to the new entity.

[13] Mr Heathcote states that those staff who continued with the new entity were asked to sign a new employment contract. Mr Heathcote states that part of his role as Administration Manager and Company Secretary was to discuss with staff the terms of the new contracts. He states that he recalls discussing with the Applicant his questions in relation to the new contract. He states that the Applicant asked whether all of his terms and conditions of employment would stay the same.

[14] Mr Heathcote states that he advised the Applicant and others that their continuity of employment would not be broken and all of his entitlements would continue to accrue. He specifically remembers the Applicant asking him about his leave entitlements and initialled a hand written confirmation on page 6 of the new contract, which is referred to above.

[15] Mr Heathcote states that in preparing the new contracts a statement was included that current Commonwealth funding would continue until 30 June 2010. He also states, however, that it was not intended that there be any change to the existing terms of employees’ employment so as to change ongoing employment to a fixed term contract.

[16] Mr Heathcote confirms that he was instructed by Professor Scott to draft the terms of the 2004 employment contract. In doing so, Professor Scott had in mind the period of funding obtained by the Respondent and that the Respondent had no basis for offering employment to employees such as the Applicant beyond June 2010.

[17] Professor Scott, in his statement, states that his instructions, which are confirmed by Mr Heathcote, were (a) to ensure that the employees were informed their employment would continue only until 30 June 2010 and (b) to emphasise that the funding of the Respondent meant that they could not offer employment beyond this period because of the Commonwealth funding arrangements.

[18] In questioning from the Tribunal at PNs 454, 455, 456 and 457 of transcript it is confirmed by Mr Heathcote that, indeed, what was put to Mr Andrews and others was a fixed term contract. That was on the basis that the operations of the Respondent did not allow employment contracts to run beyond the term of funding from the Commonwealth, so that was the deadline.

[19] Further, at PN462 of transcript, in questioning of Mr Heathcote by the Tribunal, it states:

[20] “Right. Did you make it clear in accordance with Professor Scott’s instructions that their employment contract only went to 30 June 2010? --- I have to say yes to that because there can’t be another date.”

[21] In evidence from Professor Scott at PN62 of transcript the Professor advises that there was a total of 14 employees, including the Applicant, who were leaving at the same time as the Applicant. Professor Scott does state that the majority finished on that date, being 30 June 2010, but some left earlier by arrangement.

[22] Professor Scott states that nobody left later than 30 June 2010. He also states that additional commonwealth funding was obtained to go beyond the end of June 2010; however, that funding was reduced by some 30%, meaning that the Respondent was not able to provide new contracts of employment for all of the existing employees due to the decrease in the Commonwealth funding.

[23] The Tribunal notes that any Commonwealth government funding is for a period of seven years.

[24] Mr Donaghey asked the Applicant, in cross-examination at PN264 of transcript:

“Turning to paragraph 12, you state, don’t you, that you “understood there were no changes to my ongoing employment with the respondent, which at the time had continued for 11 years”. What you don’t say is that paragraph is where that understanding derived from. Where did it derive from? --- It derived from the trust that I had built up in the company, working under two previous CEOs prior to Murray Scott. When a refunding occurred of the CRC, there was an expectation that ongoing employees such as myself would continue.”

[25] Further, at PN268 of transcript it would appear that the Applicant and an expectation of continuing with the company, and he does say “I would have an expectation of continuing with any refunded entity.”

[26] This view is further endorsed at PN330 of transcript, where the Applicant states:

“Because the history of the CRC was that the work or funding was for a seven year term, it wouldn’t be surprising that people would be ongoing, which was the situation that I was in.”

[27] Further at PN381 of transcript, in questioning from the Tribunal, the Applicant states:

“My understanding was that this company would cease to exist at the time because it was funded for a seven year term, but that if there was a refunding of the CRC which occurred in 2009 I would have an expectation of moving into that new company.”

[28] Further at PN383 of transcript, again in questioning from the Tribunal:

“Did you raise it with Mr Heathcote? Significantly - - - ? --- I don’t clearly remember if that clause - if I raised that clause with John Heathcote. I read it thinking that, you know, we’d been through various refundings and if the CRC is refunded I should have an expectation of going forward.”

Conclusion

[29] Looking at the wording of the contract of employment provided to the Applicant, dated 9 December 2003, it states:

“Commencement and Period of Employment

Employment from 1 January 2004 will be with the new company. Under current Commonwealth Funding provisions employment will not continue beyond 30 June 2010.”

[30] Therefore, having considered all the material and taking into account the evidence of the Applicant, it would appear that the Applicant was operating on assumptions and the parties are aware that assumptions do not form the basis of a contract. What is more compelling is the evidence of Mr Heathcote. Mr Heathcote’s evidence is very clear, that there could be no ongoing contract beyond 30 June 2010 that would be guaranteed as any contract of employment beyond that date would be dependent on Commonwealth funding and, as it turned out, funding was provided but at 30% less than what they had anticipated, therefore some 14 employees, including the Applicant, did not have their employment extended beyond 30 June 2010.

[31] The Tribunal’s attention was drawn to Cheshire and Fifoot’s Law of Contract Ninth Australian Edition, where at 10.31 “Objective Approach”, it states:

“The High Court has repeatedly emphasised that the court approaches the task of ascertaining the meaning of the parties’ expressions objectively. It is not interested in their subjective understanding, but applies the meaning that an objective outsider would attribute to the contract in the circumstances. Indeed, evidence of unilateral subjective understanding is normally inadmissible.”

[32] Further in Equuscorp Pty Ltd v Glengallan Investments (2004) 218 CLR 471, at point 33 it states:

“Having executed the document, and not having been induced to do so by fraud, mistake, misrepresentation, the respondents cannot now be heard to say that they are not bound by the agreement recorded in it.”

[33] Further at point 34 it states:

“The legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey, not upon actual beliefs or intentions.”

[34] It is very clear that the contract provided to the Applicant states very clearly that employment will not continue beyond 30 June 2010.

[35] As indicated above, what the Applicant’s assumptions were, cannot alter the words of the contract simply because of those assumptions.

[36] The Tribunal would therefore determine that the employment of the Applicant was not at the initiative of the employer, within the meaning of s386(1)(a) of the Act.

[37] The cessation of the Applicant’s employment falls within s.386(2)(a), where it states that a person has not been dismissed if::

“(a) the person employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task or at the end of the season”

[38] It is clear to the Tribunal that the Applicant was under a contract of employment for a specified period of time and that contract expired on 30 June 2010. Therefore the Tribunal determines that the Applicant is not able to bring a claim within the meaning of the Act and upholds the jurisdiction raised by the Respondent. Accordingly, the application has been rejected and the matter will be dismissed.

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