[2016] FWC 8697

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Renato Sinatad
v
Aquatic Leisure Technologies ATF Aqua Technics Unit Trust
(U2016/11917)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

ADELAIDE, 6 DECEMBER 2016

Application for relief from unfair dismissal – termination at the initiative of the employer – contract not for a specified period of time or task – frivolous, vexatious, or no reasonable prospect of success argument not made out – application referred for determination of the merits.

[1] On 28 September 2016 Mr Sinatad lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of his employment with Aquatic Leisure Technologies ATF Aqua Technics Unit Trust (Aquatic Leisure Technologies). I note that the application incorrectly described the respondent and have utilised the discretion in s.586 of the FW Act to amend the application to reflect the correct name.

[2] Aquatic Leisure Technologies has objected to the application on the basis that it asserts that Mr Sinatad was not dismissed consistent with s.387 of the FW Act in that the termination of his employment was not at the employer’s initiative, and, further that Mr Sinatad was engaged under a contract of employment for a specified period of time, or a specific task and the employment terminated at the end of that period. Furthermore, Aquatic Leisure Technologies asserts that Mr Sinatad’s unfair dismissal application is frivolous, vexatious or has no reasonable prospect of success in that his subclass 457 visa expired on 24 October 2016. Aquatic Leisure Technologies asserts that Mr Sinatad had been made well aware of this. Aquatic Leisure Technologies asserts that the application is fundamentally being made in order for Mr Sinatad to recover excess luggage costs associated with his departure from Australia.

[3] The application was the subject of a hearing in Perth with a video-link to Adelaide. Both parties represented themselves. An interpreter was present to assist Mr Sinatad.

[4] Aquatic Leisure Technologies manufacture and install swimming pools and associated equipment. Mr Sinatad was employed by Aquatic Leisure Technologies on 11 September 2012. 1 He was engaged as a full time Painter Trades Worker. His employment was pursuant to a signed contract of employment which referred to his subclass 457 visa but did not specify a particular end date.

[5] Mr Sinatad appears to have worked to the satisfaction of Aquatic Leisure Technologies. As Mr Sinatad notes in his evidence, he received a number of wage increases.

[6] In early 2015 Aquatic Leisure Technologies met with its subclass 457 visa employees to discuss its sponsorship obligations, in the context of its understanding of the requirements of the Department of Immigration Border Protection (DIBP) that it was required to have a Labour Agreement. The extent to which that Labour Agreement related to all the subclass 457 visa employees engaged by Aquatic Leisure Technologies is not clear. Mr Sinatad was then involved in individual discussions over these arrangements. The Aquatic Leisure Technologies’ position is that these discussions extensively canvassed the extent to which an on-going subclass 457 visa was fundamental to continuing employment. Further, the Aquatic Leisure Technologies position is that it was required to undertake Labour Market Testing in accordance with its sponsorship obligations, irrespective of whether the Labour Agreement or its standard business sponsorship arrangements applied. Further, Aquatic Leisure Technologies asserts that, in September 2016, it formed the view that suitable Australian citizens or permanent residents were readily available to fill the position occupied by Mr Sinatad and that, accordingly, it was precluded from sponsoring him for a further visa. Aquatic Leisure Technologies advised DIBP of this, and, on 27 September 2016 Aquatic Leisure Technologies engaged a person in the position that Mr Sinatad held. Aquatic Leisure Technologies met with Mr Sinatad on that same day and advised him that it would not be renewing its subclass visa arrangements such that his employment must terminate with effect from the expiry of that visa on 24 October 2016. Notwithstanding that he was paid until 24 October 2016, Aquatic Leisure Technologies terminated Mr Sinatad’s employment with effect from 27 September 2016.

[7] It is convenient that I note two further background issues. Firstly, Mr Sinatad advised that he was injured at work on 22 August 2016 and appears to have an on-going dispute over the extent to which this is a compensable injury. Secondly, as a subclass 457 visa holder, Mr Sinatad is entitled to payment from Aquatic Leisure Technologies for the costs associated with return airfares for him and his family, to the Philippines. The information before me indicates that the quantum of that financial payment has been the subject of some on-going disputation between Mr Sinatad and Aquatic Leisure Technologies.

The Evidence

[8] Mr Sinatad’s evidence went to his employment history with Aquatic Leisure Technologies, including his concerns over his shoulder injury and the extent to which he attributed issues associated with an aborted attempt to achieve permanent residency status, to Aquatic Leisure Technologies. Mr Sinatad asserts that Aquatic Leisure Technologies acted so as not to renew his visa and asserts that this was related to his workplace injury. He asserts that he was actively discriminated against on the basis of that subclass 457 visa. Inherent in Mr Sinatad’s evidence is his submission that the termination of his employment should be regarded as a dismissal for the purposes of the FW Act, and that Aquatic Leisure Technologies should be required to either actively pursue a new visa arrangement and/or make some form of additional payment to him.

[9] Ms Moretti is the Aquatic Leisure Technologies Human Resources Manager/Registered Migration Agent. Her evidence went to the arrangements applicable to the employment of Mr Sinatad and to the basis for its conclusion that Mr Sinatad’s employment was under a fixed term contract which was required to end on the expiry of his subclass 457 visa. Ms Moretti asserted that the absence of specific recognition of Mr Sinatad’s fixed term employment on the basis of the expiry of his subclass 457 visa in the Schedule attached to his contract of employment 2 reflected a clerical error. Ms Moretti’s evidence was that Aquatic Leisure Technologies’ obligations in relation to Labour Market Testing required it to be satisfied that there was a “suitably qualified and experienced Australian citizen or Australian in Permanent Resident” readily available to fill the nominated position.3 Her evidence detailed the steps she took to explain to Aquatic Leisure Technologies subclass 457 visa employees, the instructions provided by DIBP in this respect and the extent to which on-going employment was conditional upon renewal of subclass 457 visa arrangements.

[10] Ms Moretti’s evidence went to her participation in meetings from 4 February 2015 with Mr Sinatad over these are arrangements and to the discussions held with him on 27 September 2016.

[11] Mr Stone is the General Manager of Aquatic Leisure Technologies. His evidence went to his involvement in the engagement of Mr Sinatad. Mr Stone was also involved in meetings with subclass 457 visa employees from early 2015 where those employees were advised of the requirement to transfer visas from a standard business sponsorship to a Labour Agreement. Mr Stone’s evidence went to the meeting convened with Mr Sinatad on 27 September 2016.

The jurisdictional issues

[12] Mr Sinatad is unable to pursue this application unless the termination of his employment meets the definition of dismissed in s.386 of the FW Act. That section states:

“386 Meaning of dismissed

(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

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[13] Aquatic Leisure Technologies met with Mr Sinatad on 27 September 2016 and advised him that it was not renewing his visa arrangements. Further, Mr Stone advised him that he would be “let go today”. 4 Mr Sinatad was given formal advice of the termination of his employment on 27 September. This advice stated:

“Cessation of Fixed Term Contract

As per your Fixed Term Contract of Employment with Aquatic Leisure Technologies Pty Ltd (‘ALT’) you were engaged on a fixed term basis. As specified in Clause 6.7 ‘your employment shall automatically cease upon the expiration of the terms specified in Schedule A of this contract’. Schedule A, Item 7, ‘Fixed term – on expiry of s/c 457 visa’. As per the attached Visa Entitlement Verification Online (VEVO) Entitlement Check, your subclause 457 visa expiry date is 24 October 2016.

The purpose of this letter is to confirm that your employment will cease on the expiry of your subclause 457 visa. As discussed at today’s meeting with myself and Kevin Stone – General Manager ALT has decided to pay you in lieu of notice as per Contract Clause 6.3. As such your last working day will be effective as of the date of this letter.

Your final payment will be processed on the next weekly pay run to the full satisfaction of your unpaid employment entitlements accrued to the termination date. The payment will be by direct deposit into your bank account by Electronic Funds Transfer.

I would like to take this opportunity to thank you for your efforts and wish you all the best for the future.

Kind Regards

Elena Moretti
Human Resources Manager” 5

[14] I have considered the extent to which Mr Sinatad was in fact engaged under a contract for a specified period of time, or under another form of contract consistent with s.386(2) of the FW Act.

[15] The contract regulating Mr Sinatad’s employment 6 was signed on 11 and 12 September 2012. It defines a fixed term contract in the following terms:

“j) ‘Fixed-term’ means to be engaged for a specified period. Unless a new contract is entered into, fixed-term employment will automatically terminate on the date specified in Schedule A.” 7

[16] It also defines a “maximum term” in the following manner:

“k) ‘Maximum term’ means to be engaged for a maximum period or season which will expire on date indicated in Schedule A. On this date, your employment with the Company will automatically cease. However, the Company may terminate your employment in accordance with the terms of this contract prior to the expiry date prescribed in Schedule A.” 8

[17] Clause 6.7 of the contract states:

“6.7 If you are employed for a maximum term or a fixed term your employment shall automatically cease upon the expiration of the terms specified in Schedule A of this contract. Provided that, where you are engaged on a maximum term basis, either party may end the employment at any time by giving the notice specified in this clause.”

[18] Schedule A of the contract makes it clear that the commencement of Mr Sinatad’s employment would occur after his subclass 457 visa was approved. This Schedule specifically identifies Mr Sinatad’s employment to be on a full time basis. The provisions or dates for fixed term or maximum term employment are not identified in the contract or the Schedule, as relevant. I have concluded that, whilst this may have reflected an administrative oversight, the evidence before me does not establish that the parties agreed, at the time this contract was signed, that Mr Sinatad’s employment would conclude on a specific end date. Indeed, it appears that, at some stage, Aquatic Leisure Technologies was supporting Mr Sinatad’s attempt to obtain permanent residency status. The absence of a specific reference to an employment conclusion date or event, in the contract or its attendant Schedule, represents a significant impediment to regarding Mr Sinatad’s employment as being of a fixed term nature.

[19] Further, in terms of the contract, I note that clause 6 provides that termination may be at any time in accordance with a notice schedule. Again, this appears to be inconsistent with an employment contract of a fixed term nature.

[20] In Izawa v Ocean Spirit Dive Pty Ltd 9 a Full Bench of the Australian Industrial Relations Commission considered the extent to which an employee, employed pursuant to a subclass 457 visa, was engaged under a contract for a specified period of time or a specified task. The Full Bench particularly noted that, in that instance, the employee knew that the employment relationship could not continue after a nominated date.

[21] That position was consistent with long established authorities. In Department of Justice v Lunn 10 a Full Bench of the Australian Industrial Relations Commission noted that a contract for a specified period of time would generally have unambiguous start and finish time.11 This is consistent with the position set out by Von Doussa J in Andersen v Umbakumba Community Council12 in the following terms:

“A contract of employment to run throughout a nominated number of days, weeks, or years would be a contract of employment for a specified period of time. If the terms of the contract of employment, instead of identifying in this manner the period of time during which it is to run, provides that it is to run until some future event, the timing of the happening of which is uncertain when the contract is made, the contract will be for an indeterminate period of time.”

[22] The absence of a specified start and finish time, together with the capacity for termination at any time and the absence of any specific reference in the employment contract, to Mr Sinatad’s then current visa, mean that I am unable to characterise his employment as being for a specified period of time. It seems to me that Mr Sinatad’s visa may well have been a practical mandatory precondition for his employment and his residency in Australia, but the contract under which he was engaged was not for a specified period of time.

[23] For similar reasons, I am unable to characterise Mr Sinatad’s employment as being under a contract for a specified task or season. As the approach adopted in Qantas Airways v Fetz 13 and SPC Ardmona Operations Limited v Esam14 indicates, such a contract would generally relate to an identifiable project or job and would be inconsistent with a broad right of termination.

[24] There is no suggestion that Mr Sinatad was employed under any form of training arrangement or that his employment was seasonal in nature.

[25] The only remaining issue then goes to whether the termination of Mr Sinatad’s employment can be said to be not at the initiative of the employer given that it coincided with the expiry of his subclass 457 visa. I do not consider this to be the case.

[26] There are two relevant issues here. Firstly, as I have indicated, there is nothing in his employment contract other than the start date that links on-going employment with the maintenance of the visa. Nevertheless, it is clear that Aquatic Leisure Technologies was Mr Sinatad’s sponsor and that it entered into a contract with the Australian Government accordingly. It is equally clear that Mr Sinatad’s capacity to remain in Australia legally was dependent on continuing visa arrangements.

[27] At this point it is convenient to digress briefly. When Aquatic Leisure Technologies sponsored Mr Sinatad’s subclass 457 visa application in 2012, it did so as a “standard business sponsor”. This is the most common form of sponsorship, requiring an application to the Department of Immigration and Border Protection (the Department) which demonstrates that the employer has a strong record of employing local labour and a record of training Australians. 15

[28] The evidence of Ms Moretti and Mr Stone was that in early 2015, Aquatic Leisure Technologies was required by the Department, to enter into an alternative “Labour Agreement”. The Department describes a Labour Agreement on the basis that it is a formal agreement between the Department and an employer to meet special labour market circumstances. It has application in industries such as meat and “on-hire” industries and details specific requirements not covered by the standard business sponsorship arrangements. Under a Labour Agreement, employers are required to make commitments to the employment, education, training and career opportunities of Australians. 16

[29] I am not satisfied that the evidence before me establishes that the subclass 457 visa arrangements applicable to Mr Sinatad were covered by the Labour Agreement or by the standard business sponsorship arrangement. For the reasons that follow, I do not think this is particularly significant to the issue to be determined. The Department publishes advice about Labour market testing in the following terms:

“Labour Market testing was introduced on 23 November 2013. This means that employers who want to access the subclass 457 visa programme might need to provide evidence that they have conducted labour market testing before they lodge a nomination for an overseas skilled worker.
(

[30] The Department also confirms that the occupation of Printing Trades Work 17 is an occupation that requires that Labour Market testing be undertaken.

[31] Ms Moretti and Mr Stone confirmed that Aquatic Leisure Technologies was required to undertake “Labour Market Testing” with respect to the job which was undertaken by Mr Sinatad. 18 Further, Ms Moretti advised that Australian labour was found for the job held by Mr Sinatad. Limited evidence about the detail of the manner of that testing is before me. However, this should not be taken as any indication of an improper approach on the part of Aquatic Leisure Technologies.

[32] Consideration of the extent to which the termination of Mr Sinatad’s employment was at the initiative of Aquatic Leisure Technologies is assisted by a recent decision of the Full Court of the Federal Court of Australia, Mahony v White. 19 In that matter the Court stated:

“19. The concept of the termination of employment having been at the “initiative” of the employer has its genesis in the Convention Concerning Termination of Employment at the Initiative of the Employer adopted by the International Labour Organisation (“the Convention”) on 22 June 1982. Legislative effect was given to that Convention when the Industrial Relations Act 1988 (Cth) (“the IR Act”) was amended by the Industrial Relations Reform Act 1993 (Cth). The Convention then became Sched 10 to the IR Act. Articles 3 and 4 of the Convention provided as follows:

Article 3
For the purpose of this Convention the terms termination and termination of employment mean termination of employment at the initiative of the employer.
Article 4
The employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.

It will be noted that Art 4 was expressed in the passive voice. Absent the terms of Art 3, Art 4 would have applied to termination by either party in the employment relationship. But, as the title of the Convention made clear, that was not the intent. The Convention applied only to a termination at the employer’s initiative, that is to say, to a termination which, in Anglo-Australian systems of law, would be described as a dismissal.

20. In the provisions of the IR Act which implemented the Convention, the passive voice was not used. In every case, a direct legislative prohibition, enforceable by court proceedings, was established by use of the formula, “an employer must not terminate an employee’s employment” (see ss 170DB, 170DC, 170DE, 170DF and 170DG). Nonetheless, it was provided by s 170CB that an expression in the relevant Division of Pt VIA of the IR Act had the same meaning as in the Convention.

21. It was in this state of the law that the Full Court of the Industrial Relations Court of Australia decided Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200. There the question was whether the termination of the employment of the employee concerned had been at the initiative of the employer. The employee had signed a letter of resignation, but that had been done in circumstances where he had been given a choice by his employer either to resign or to have the police called in to investigate what, according to the employer, was the theft of an item of stock. The Full Court held that the employee’s resignation had been at the initiative of the employer and had, therefore, been a termination within the meaning of the Convention and the legislation. The effect of this judgment was that, notwithstanding the use of the active voice in the legislation, a termination that had not been done by the employer might nonetheless have been, and in that case it had been, done at the initiative of the employer and thus covered by the statutory prohibitions.

22. The Full Court said (62 IR at 205):

These definitions reflect the ordinary meaning of the word “initiative”. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression “termination at the initiative of the employer” as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship.

And (62 IR at 205-206):

In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.

23. Although their Honours were concerned, as they had to be, with meanings conveyed by the terms of the Convention, the formula “at the initiative of the employer” has been retained in the FW Act (albeit not in that precise grammatical arrangement). This judgment remains good authority as to the connotation of that formula.”

[33] I have concluded that it is clear that Aquatic Leisure Technologies made a decision not to seek to renew the subclass 457 visa relative to Mr Sinatad. This reflects a decision made at the initiative of the employer. It had a consequence of meaning that Mr Sinatad could no longer work in Australia when his visa expired. If that reflected a discretion available to Aquatic Leisure Technologies, or not, is not sufficiently clear on the material before me. In the event that the decision reflected the proper execution of a mandatory obligation arising under the Labour Agreement, it is difficult to see how that decision could then be argued to be anything other than an appropriate step leading to a valid reason for the termination of Mr Sinatad’s employment. To the extent that the decision not to renew Mr Sinatad’s visa application may have been related to other factors, such as the injury he suffered in August 2016, the discretionary nature of that decision is open to greater question.

[34] Consequently, I am not satisfied that Aquatic Leisure Technologies has established that Mr Sinatad’s application must be dismissed on the basis that he was not dismissed consistent with s.386 of the FW Act. An order (PR588188) giving effect to this decision will be issued.

[35] To the extent that Aquatic Leisure Technologies asserts that Mr Sinatad’s application should be dismissed as frivolous or vexatious pursuant to s.587 of the FW Act, I am not satisfied that the information before me establishes that the application is so wanting in merit that Mr Sinatad should be denied the opportunity to argue his case. That said, there are significant practical difficulties confronting him. Mr Sinatad’s capacity to stay in Australia is clearly visa related. Irrespective of the merits of the matter, I doubt that there is any jurisdiction available to the Fair Work Commission such that Aquatic Leisure Technologies could be required to make a further visa application. In simple terms, it is highly unlikely that Mr Sinatad could be re-employed at the direction of the Fair Work Commission. Further issues associated with compensation may also arise.

[36] The application will be listed for consideration of the merits. The parties will be advised of arrangements in this respect. Notwithstanding this, I have asked an alternative Member of the Fair Work Commission to conduct a further attempt at conciliation to explore the extent to which an agreed resolution of this matter may be achieved.

Appearances:

R Sinatad on his own behalf.

E Moretti for the Respondent.

Hearing details:

2016.

Adelaide (and video-link to Perth):

November 28.

1 Exhibit R1, Attachment A

2 Exhibit R1 Attachment A

3 Exhibit R1, para 7

4 Exhibit R3, Attachment C

5 Exhibit R1, Attachment E

6 Exhibit R1, Attachment A

7 Exhibit R1, Attachment A, cl. 4 j)

8 Exhibit R1, Attachment A, cl. 4 k)

9 PR900784

10 (2006) 158 IR 410

11 (2006) 158 IR 410, paras 9 and 10

12 (1994) 126 ALR 121

13 (1998) 84 IR 52 66

14 PR957497, AIRCFB, 20 April 2005

15 Australian Government Department of Immigration and Border Protection Temporary Work (Skilled) (subclass 457) Visa Guide pg 10

16 Australian Government Department of Immigration and Border Protection Temporary Work (Skilled) (subclass 457) Visa Guide pg 12

17 ANZCO 332211

18 Exhibit R1, pg 2, para 2

19 [2016] FCAFC 160

Printed by authority of the Commonwealth Government Printer

Renato Sinatad v Aquatic Leisure Technologies ATF Aqua Technics Unit Trust

[2016] FWC 8697

6 DECEMBER 2016

DECISION