Raffaele James Sette v Icon Water Limited
[2024] FWC 667
•2 APRIL 2024
| [2024] FWC 667 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Raffaele James Sette
v
Icon Water Limited
(C2024/45)
| DEPUTY PRESIDENT DEAN | CANBERRA, 2 APRIL 2024 |
Application to deal with contraventions involving dismissal – whether Applicant was dismissed – no dismissal at the initiative of the employer.
This decision concerns an application made under s.365 of the Fair Work Act 2009 (the Act) by Mr Raffaele Sette (Applicant) for the Commission to deal with a general protections dispute involving his alleged dismissal by Icon Water Ltd (Respondent).
The Respondent has raised a jurisdictional objection that the Applicant was not ‘dismissed’ for the purposes of s.365 and within the meaning of s.386 of the Act. It argues that the Applicant was engaged on a maximum term contract which had reached its expiry date and accordingly his employment ended by reason of agreement between the parties, not dismissal.
The meaning of ‘dismissed’ in s.386 of the Act relevantly provides as follows:
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was 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; or
…”
A dismissal is a fundamental prerequisite that must be established before the Commission can exercise powers under s.368 of the Act to deal with a dispute about whether a dismissal was in contravention of the general protections provisions.[1] There is no dispute the Applicant did not resign. The issue then is whether his employment was terminated on the Respondent’s initiative.
A hearing was conducted on 14 March 2024 to determine the jurisdictional objection. The Applicant was represented with permission by his father, Mr F Sette, and the Respondent was represented with permission by Ms T Lawrence of Australian Business Lawyers.
For the reasons set out below, I find the Applicant was not dismissed within the meaning of the Act and as a result the application is dismissed.
Background
For the most part, the factual circumstances are not in dispute and are briefly stated here.
The Respondent is the ACT’s supplier of water and sewerage services.
The Applicant was employed as a Labourer on the Respondent’s water meter replacement program (the Program).
In obtaining this employment, the Applicant had responded to a job advertisement which stated that the employment period was for a maximum term until 30 June 2023.
His employment contract, dated 9 November 2022 (the Contract), provides core terms and conditions which include an employment commencement date of 21 November 2022 and an expiry date of 30 June 2023.
Clauses 4.2 and 4.3 of the Contract are in the following terms:
“This agreement operates on a fixed term, expiring on the date specified in Item 3 of clause 2 (unless terminated earlier in accordance with clause 11). At the close of business on the Expiry Date, this Agreement and our employment relationship will automatically terminate by reason of the mutual agreement outlined in this document.
You acknowledge that Icon Water is under no obligation to provide you with employment beyond the Expiry Date and that no representations have been made to you to the effect that further employment will be offered beyond the Expiry Date.”
On 28 March 2023 the Respondent offered to extend the expiry date of the Contract to 31 December 2023, which was accepted by the Applicant in writing on 30 March 2023. The offer to extend the expiry date was in the form of a letter headed “variation to terms and conditions”. The only change to the Contract was the new expiry date. The letter also included the same words that are found in clause 4.2 of the Contract to the effect that the Contract and the employment relationship would automatically terminate by reason of mutual agreement at the close of business on the expiry date.
In late November 2023, representatives of the Respondent met with the Applicant and informed him he would not be offered a further extension to the Contract. As a result, his employment would end on 31 December 2023, and in fact did end on this date.
When is a person ‘dismissed’?
As noted above, s.386 sets out the meaning of ‘dismissed’, which has been considered in a number of decisions of the Commission.
In Saeid Khayam v Navitas English Pty Ltd t/a Navitas English[2] (Navitas), the majority of the Full Bench summarised the proper approach to the operation of s.386(1)(a) as follows:
“[75] Having regard to these propositions and the court decisions to which we have earlier referred, we consider that s 386(1)(a) should be interpreted and applied as follows:
(1) The analysis of whether there has been a termination at the initiative of the employer for the purpose of s 386(1)(a) is to be conducted by reference to termination of the employment relationship, not by reference to the termination of the contract of employment operative immediately before the cessation of the employment. This distinction is important in the case of an employment relationship made up of a sequence of time-limited contracts of employment, where the termination has occurred at the end of the term of the last of those contracts. In that situation, the analysis may, depending on the facts, require consideration of the circumstances of the entire employment relationship, not merely the terms of the final employment contract.
(2) As stated in Mohazab, the expression “termination at the initiative of the employer” is a reference to a termination that is brought about by an employer and which is not agreed to by the employee. In circumstances where the employment relationship is not left voluntarily by the employee, the focus of the inquiry is whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.
(3) In Mahony v White the Full Court stated that a termination of employment may be done at the initiative of the employer even though it was not done by the employer. In circumstances where the parties to a time-limited contract have agreed that their contract will expire on a specified date but have not agreed on the termination of their employment relationship, it may be the case that the termination of employment is effected by the expiry of the contract, but that does not exclude the possibility that the termination of employment relationship occurred at the initiative of the employer - that is, as a result of some decision or act on the part of the employer that brought about that outcome.
(4) Where the terms of an operative time-limited contract reflect a genuine agreement on the part of the employer and employee that the employment relationship will not continue after a specified date and the employment relationship comes to an end on the specified date, then, absent a vitiating or other factor of the type to which we refer in (5) below, the employment relationship will have been terminated by reason of the agreement between the parties and there will be no termination at the initiative of the employer. Further, in those circumstances a decision by the employer not to offer any further contract of employment will not be relevant to the question of whether there was a termination of employment at the initiative of the employment. The decision not to offer further employment is separate and distinct from the earlier agreement between the parties to end the employment relationship on a particular date. However if the time-limited contract does not in truth represent an agreement that the employment relationship will end at a particular time (as, for example, in D’Lima), the decision not to offer a further contract will be one of the factual matters to be considered in determining whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.
(5) In some cases it will be necessary to go further than just examining the terms of any contract in which the parties have ostensibly agreed to terminate the employment relationship at a particular time. It is not necessary or appropriate that we attempt to identify exhaustively all relevant matters, but the authorities to which we have earlier referred indicate that the following are likely to be relevant and may in some cases be determinative:
(a) The time-limited contract itself may be vitiated by one of the recognised categories by which the law excuses parties from performance of a contract. The categories potentially relevant in an employment context include the following:
● the employee entered into the contract as a result of misrepresentation or misleading conduct by the employer;
● the employee entered into the contract as a result of a serious mistake about its contents or subject matter;
● there has been unconscionable conduct associated with the making of the contract, which may relevantly include that the employer took advantage of a disability affecting the employee such as lack of education, lack of information, lack of independent advice or illiteracy;
● the employment contract was entered into by the employee under duress or coercion (which might include the types of coercion prohibited in ss 343(1)(a), 348 and 355) resulting from illegitimate pressure on the part of the employer;
● the employee lacked the legal capacity to make the contract; or
● the contract was a sham in the sense that it was not intended by the parties to give legal effect to its apparent terms or in the broader sense dealt with in Pt 3-1 Div 6 of the FW Act.
If any of the above applies there will be no legally effective time-limit on the employment.
(b)The time-limited employment contract may be illegal or contrary to public policy (for example, it contains relevantly objectionable terms as defined in s 12 of the FW Act or has the purpose of frustrating the policy or operation of the FW Act or preventing access to the Commission’s unfair dismissal jurisdiction). Whether the employment was constituted by successive short term contracts or the use of time-limited contracts was appropriate in the relevant field of employment may be some of the considerations relevant to an examination of the employer’s purpose for entering into such contracts.
(c) The contract may have been varied, replaced or abandoned by way of a separate agreement, whether in writing and/or orally, such that its ostensible time limit no longer applies.
(d)The employment contract may not be limited to the terms of a written document and may, for example, be one of a series of standard-form contracts which operated for administrative convenience and did not represent the reality or the totality of the terms of the employment relationship.
(e) During the term of the employment relationship the employer may have engaged in conduct or made representations (for example, representing to the employee that the employment will continue subject to conduct and performance notwithstanding a contractual time limit on the employment) which provide a proper legal foundation to prevent the employer from relying upon the terms of the contract as the means by which the employment relationship has been terminated.
(f) The terms of the contract time-limiting the employment may be inconsistent with the terms of an award or enterprise agreement given effect by the FW Act which prohibit or regulate fixed-term employment, in which case the terms of the award or agreement will prevail over the contract.” (citation and references omitted)
As is clear above, the decision in Navitas deals in detail with the operation of time limited contracts, including maximum term contracts. Relevantly, where there has been genuine agreement to enter into a maximum term contract then any decision not to extend such a contract does not constitute a termination at the initiative of the employer.
Time limited contracts were recently considered by the Federal Court of Australia in Alouani-Roby v National Rugby League Ltd[3] (NRL), in which the following principles, as relevant to this application, were expressed:
a.Nothing in the statutory framework within which the employment relationship is established inhibits the freedom of parties to enter into a maximum term contract.
b.Remedies for dismissal available under the Act are not available for employees whose employment ends pursuant to the expiry of a genuine outer limit contract.
c.It cannot be that the mere act of the entering into such a contract can, of itself, be the principal contributing factor resulting in the termination of employment if employment terminates as provided for in the contract.
d.A contract cannot be contrary to public policy or be found to evade the dismissal provisions simply because statutory exclusions operate upon it.
e.Employers are entitled to structure their employment arrangements on the basis that such exclusions will operate.
f.The exclusion from the meaning of ‘dismissed’ contained in s.382(2)(a) of the Act applies to outer limit contracts which allow for early termination, in circumstances where an employee’s employment has been terminated at the end of the specified period of time.
The case for the Applicant
The Applicant was ably assisted by his father, who provided comprehensive written submissions along with a detailed witness statement of the Applicant and annexures.
The essence of the Applicant’s case is that his employment was terminated at the initiative of the Respondent. He argued that the “contract variation” to extend the expiry date, as described by the Respondent, was not a variation but was instead a new contract. He argued that while this second contract had expired, he did not agree that this terminated the employment relationship between the parties.
He contended that there were no performance issues that would lead the Respondent to decide not to offer or extend his employment Contract.
The Applicant submitted that Navitas was the correct precedent to be applied in this matter, and the key issue arising here was whether any vitiating or other factors of the type referred to in Navitas were at play in relation to the Applicant’s employment Contract, which might render the contract void and unenforceable.
In this regard, the Applicant submitted that the Respondent misled the Applicant about the justification for the use of fixed term contracts being contingent on budget funding. This misrepresentation meant the Contract was vitiated and was therefore void and unenforceable.
The Applicant also submitted that the Respondent’s use of fixed term contracts was not legitimate and was contrary to public policy as the work performed is planned, ongoing work, running across successive five-year budget cycles. He pointed to various annual reports of the Respondent which he said showed no significant fluctuation in the number of water meters replaced from year to year, and no break in the Program to replace water meters.
The Applicant submitted that offering him a fixed term contract for work in the Program that had continued for the past 10 years, and was likely to continue, is unjustified and has the purpose of frustrating the policy or operation of the Act, including by preventing access to the unfair dismissal jurisdiction.
The Applicant gave evidence that he had been advised by representatives of the Respondent that the employment relationship would likely continue beyond the Contract’s nominal end date of 31 December 2023. After he injured his hand in a workplace accident in May 2023, he says he was pressured to return to full duties in a short period. He disputed that the alleged performance issues raised by the Respondent as justification for not offering him a further contract were genuine or significant.
The Applicant contended that it was the act of not being offered a further contract that brought an end to the employment relationship and as a result he says he was dismissed at the initiative of the Respondent.
The case for the Respondent
The Respondent contended that the Applicant was not terminated from his employment at its initiative, but rather he was engaged on a maximum term contract which had reached its expiry date, and accordingly his employment ended by reason of agreement between the parties and he was not dismissed.
The Respondent’s witnesses were:
· Robert Brito – Network Manager
· Harry Bentley – Team Leader – Network Maintenance Delivery
· Melinda Brady – Health and Wellbeing Business Partner
· Brett Sheehan – Supervisor – Water Meter Replacement Program
· Guy Price – Manager Revenue Assurance Asset Information and Metering
The Respondent contended that the evidence showed the Contract was a genuine time-limited contract, and the time-limited nature of the Contract had been explicitly emphasised to the Applicant on numerous occasions. It said it did not make representations to the Applicant contrary to the terms of the Contract or engage in conduct which could reasonably have been taken to indicate to him that his employment would continue after the end of the Contract.
It contended that the conduct of the Applicant in instigating discussions with Mr Bentley and Mr Brito to secure further employment established that he was under no misapprehension that his employment was to cease on 31 December 2023. Further, the evidence showed that representatives of the Respondent advised the Applicant that he would need to apply for a permanent role if he wished to continue employment beyond the expiry date. The Applicant did not apply for a permanent role with the Respondent.
The Respondent also contended that there were no factors that vitiated the Contract, saying that there was no objective basis for the Applicant to expect that his employment would continue beyond the expiry date.
In terms of the Applicant’s contention that the Contract was illegal or contrary to public policy, the Respondent submitted that the use of maximum term contracts was a result of genuine operational reasons. It explained that the funding for the Program (and in fact all its funding) was subject to regulatory approval and budget allocation over 5 yearly periods, with the relevant budget period concluding on 30 June 2023. The budgetary oversight and approval is via the Independent Competition and Regulatory Commission ACT (ICRC).
At the time of the Applicant’s employment, the Respondent did not have guaranteed funding for the Program for the next 5 yearly budget period. It was able to extend the Applicant’s expiry date to 31 December 2023 as it had not expended all its funds for the budget period ending on 30 June 2023.
Consideration
For the following reasons, I find that the Applicant was not dismissed within the meaning set out in s386(1) of the Act, in that the cessation of his employment was not at the initiative of the Respondent.
The Contract is clear in its terms that the employment was for a maximum time period. By agreement, the expiry date was extended once to 31 December 2023. I am satisfied that the terms of the Contract reflected a genuine agreement between the parties including that the employment relationship would end on the expiry date. This is evident from both the express terms of the Contract and the extension, and the fact that the Applicant applied for a role that was explicitly stated to be for a maximum term. I also find that there was no conduct of the Respondent which had the effect of varying or replacing the express terms of the Contract, such that the time limit no longer applied.
Given the Applicant sought to engage in discussions with representatives of the Respondent in November 2023 about further employment past 31 December 2023, I am satisfied he was aware his employment was due to end on that date. There is also no doubt that the Applicant was advised in late November 2023 that he would not be offered a further extension to the Contract.
I am not satisfied that the maximum term contracts were a practice put in place by the Respondent for mere administrative convenience. I accept, given the unique funding arrangements of the Respondent (ie in 5 yearly time periods where the budget is allocated at the beginning of each five-year cycle), that the use of maximum term contracts is appropriate in circumstances including that of the Applicant’s employment. Even if this were not the case, the law is clear that a maximum term contract will not be illegitimate or contrary to public policy simply because the work to be performed is planned, ongoing work.
There is no evidence which supports a finding that the Respondent engaged in conduct which could reasonably be considered misleading or would otherwise have the effect of vitiating the Contract. Again, the Applicant was clear that the role he applied for was for a maximum term and he entered into a valid contract freely and willingly. Further, while the Applicant gave evidence that a representation was made to him about ongoing employment, I am not satisfied, when considering the evidence in its totality (including for the reasons already given), that the Respondent engaged in conduct or made a representation that would have the effect of preventing it from relying on the express terms of the Contract.
Finally, in the context of determining whether the Applicant was dismissed within the meaning of the Act, it does not matter whether the Respondent was justified in its decision not to offer further employment, nor does it matter whether the performance issues raised by the Respondent were genuine or significant. The only issue for the Commission to decide here is whether the Applicant was dismissed, nothing further.
In summary, the employment contract and the employment relationship came to an end based on terms agreed by the parties. There was no dismissal at the initiative of the Respondent. This application is therefore dismissed.
DEPUTY PRESIDENT
Appearances:
F Sette for the Applicant.
T Lawrence for the Respondent.
Hearing details:
2024.
By video:
March 14.
[1] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152.
[2] [2017] FWCFB 5162.
[3] [2024] FCA 12.
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