Shields and National Union of Workers v Rubbermaid Australia Pty Ltd
[1996] IRCA 319
•19 July 1996
DECISION NO: 319/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - CONTRACT OF EMPLOYMENT - whether contract for a specified period of time
Industrial Relations Act 1988 ss.170DF(1), 170EA
Industrial Relations Regulations reg.30B(1)(aa)
CASES: Andersen v Umbakumba Community Council 1 IRCR 457
Cooper v Darwin Rugby League Inc. 1 IRCR 130
Strecker v Metropolitan Cemeteries Board (1995-1996) 64 IR 109
Dadey v Edith Cowan University (unreported, R.D. Farrell JR,
No. WI 1062 of 1996, 8 July 1996)
O’Neill v Australian National University (unreported, Linkenbagh JR,
No. AI 1176 of 1995, 29 August 1995)
Australian Liquor, Hospitality and Miscellaneous Workers’ Union v
Commonwealth of Australia (1994) 55 IR 18
ALLAN JOHN SHIELDS & NATIONAL UNION OF WORKERS - v - RUBBERMAID AUSTRALIA PTY LTD
No. VI 6169 of 1995
A N D
DEAN MATHEW HERMON & NATIONAL UNION OF WORKERS - v - RUBBERMAID AUSTRALIA PTY LTD
No. VI 6170 of 1995
Before: Judicial Registrar Millane
Place: Melbourne
Date: 19 July 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 6169 of 1995
VI 6170 of 1995
B E T W E E N :
ALLAN JOHN SHIELDS &
NATIONAL UNION OF WORKERS
Applicants
AND
RUBBERMAID AUSTRALIA PTY LTD
Respondent
A N D
DEAN MATHEW HERMON
NATIONAL UNION OF WORKERS
Applicants
AND
RUBBERMAID AUSTRALIA PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 19 July 1996
THE COURT ORDERS THAT:
The application of Allan John Shields being proceeding No. VI 6169 of 1995 is dismissed.
The application of Dean Mathew Hermon being proceeding No. VI 6170 of 1995 is dismissed.
AND FURTHER ORDERS THAT:
There be liberty to the parties to apply to the Court on reasonable notice regarding the issue of costs on each application.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 6169 of 1995
VI 6170 of 1995
B E T W E E N :
ALLAN JOHN SHIELDS &
NATIONAL UNION OF WORKERS
Applicants
AND
RUBBERMAID AUSTRALIA PTY LTD
Respondent
A N D
DEAN MATHEW HERMON
NATIONAL UNION OF WORKERS
Applicants
AND
RUBBERMAID AUSTRALIA PTY LTD
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 19 July 1996
REASONS FOR JUDGMENT
Two applications have been brought by the applicants seeking reinstatement to their respective positions as a rotation moulder and machine operator following what they allege to be termination of their employment on 30 November 1995 in contravention of Division III Part VIA of the Industrial Relations Act 1988 (the Act). In particular they concede that the respondent’s operational requirements gave rise to the terminations but allege that their selection was for a prohibited reason under section 170DF(1) of the Act because of their union involvement. They allege further that, in any event, the terminations were harsh, unjust or unreasonable.
The respondent raises a preliminary issue; namely, that the contracts of employment in each case were fixed term contracts and exempted from the relevant provisions of the Act by reason of Regulation 30B(1)(aa) of the Industrial Relations Regulations which provides:
“Subject to subregulation (2), for the purposes of section 170CC of the Act, the following employees are excluded from the operation of Subdivisions B, C, D and E of Division 3 of Part VIA of the Act:
...(aa) an employee engaged under a contract of employment for a specified period of time, being a contract that was entered into on or after 16 November 1994, if the specified period is less than 6 months;
...
(2)Subregulation (1) does not apply to an employee engaged:
(a)under a contract of a kind referred to in paragraph (1)(a) or (aa); or
(b)...
if a main purpose of the engagement under a contract of that kind is, or was at the time of the employee’s engagement, to avoid the employer’s obligations under Subdivision B, C, D or E of Division 3 of Part VIA of the Act.”
By agreement of all the parties the preliminary issue was heard first in respect to each applicant.
Both applicants answered a newspaper advertisement (Exhibit A1) in which the respondent advertised in late June 1995 in the following terms:
“Australia’s leading Playground Equipment supplier has
vacancies in their newly established rotational moulding
dept for machine operators, assemblers and packers.
It is highly desirable to have a strong commitment towards
quality products, team work and safety. There will be
3 x 8 hour rotational shifts on a 24 hour basis.
Commencing date mid July ‘95.”
They both completed written applications for employment (Exhibits A2 and A12 respectively), and submitted these to the respondent in June 1995. Both men were interviewed at some time in late June by a person from the respondent’s organisation who was referred to as Ralph Reinaur (Reinaur).
DEAN MATHEW HERMON (HERMON)
Dealing first with Hermon’s evidence, it was alleged by him that Reinaur told him at interview that the job was (i) a long term one; (ii) the respondent was an American firm; (iii) that the respondent was offering rotational shifts; (iv) that the equipment the respondent intended to manufacture was expensive equipment being imported from overseas and the employees would be trained to operate it; (v) that the employees would work in teams of five people; (vi) that the respondent wanted employees to stay because of the cost of training them; (vii) that there would be a three month trial period and after that period Hermon’s work performance would be evaluated. If he was good he would be retained; (viii) that the new employees would be trained by a person being brought in from overseas for a period of about two weeks; (ix) that Hermon had to undergo a medical examination; (x) that Hermon was a good candidate; and (xi) the respondent would call him.
Reinaur was not called to give evidence so that the matters both applicants referred to in relation to the initial interview were not directly contradicted.
Hermon was offered a position by the respondent and told he would commence on 19 July 1995. He was given a training schedule (Exhibit A3). Both men received a letter from the respondent dated 14 July 1995 (Exhibits A4 and A13) containing the offer of employment and conditions of employment as follows:
“We are pleased to offer you the position of Machine Operator, Level One. Your starting date is 19.7.1995 at 8.00a.m. Commencement of shift work will be determined during the training week.
1.Your commencing salary will be $483.00 per week which will be paid into your nominated bank account fortnightly.
2.On commencing employment you will be eligible to the statutory superannuation scheme and the company contribution is 6% of salary.
3.Annual Leave of 4 weeks plus 17.5% loading. (Pro Rata may apply in the first year of service)
4. Sick leave on full pay will be on the following basis:-
a) 1st year - 5 days
b) 2nd and subsequent years
- 8 daysc)The first two single days of each year do not require a medical
certificate but subsequent single days and any two or more
consecutive days will require a medical certificate.
d)Any sick leave period adjoining a Public holiday must be
covered by a medical certificate.
1.A fixed term contract period until 31st October will apply, after which your position with this company will be reviewed. A six day working week, with three rotational shifts will apply. Graveyard shift 11p.m. - 7a.m., Morning shift 7a.m. - 3p.m., Swing shift 3p.m. - 11p.m.
2. A smoke-free workplace policy has been in place since January 1994.
3.Accordingly, no employee is allowed to smoke in any Ausplay buildings or premises.
4.A notice period of two weeks is required should either party wish to terminate this contract.
This offer is subject to the return of this letter, signed as acceptance and understanding of the conditions of employment.”
The documents were signed and returned to the respondent by each applicant.
As can be seen from the conditions contained in the letter of offer, there is a reference to a fixed term contract period until 31 October 1995 after which the applicants’ positions were to be reviewed. The expiration of the alleged fixed term of employment is in fact three and a half months after the commencement of their employment on 19 July 1995.
Some twenty-six employees commenced the training program before a training officer named Terry who came from overseas to train the workers. The training was conducted in connection with Balu Jega (Jega), who is the respondent’s plant manager recruited himself by the respondent in April 1995 to establish the new business and the rotational moulding equipment for the company. Jega is an engineer with a Masters degree in business administration.
It was Jega’s evidence that the company, which is owned by an American organisation, was originally a retail and wholesaling outlet for children’s playground equipment to councils and stores such as the McDonalds stores. The intention of the company from mid July onwards was to produce the playground equipment in Australia and to do this it imported a rotational moulding machine valued at some $1.6m. This was then the only equipment of its kind in Australia.
Certain assumptions were made by the respondent about demand and production which in turn led to assumptions about the number of employees the company would require to train and retain. On Jega’s evidence he kept a very close eye on the operations of the company from week to week and it was his observation that by October 1995 the demand for the product was some 30% to 40% less than had been the expectation when the operation was commenced. Initially because of the unpredictable market and the need to evaluate and decide whether the company would require a certain number of employees, a decision was made to employ the trainee employees on fixed term contracts for some three months by which time the company anticipated it could determine its future needs. By the third week of October, because of the reduction in demand, Jega determined that he required another three weeks to make a fair decision as to the needs of the company.
Reinaur, who was a production supervisor, also participated in the training program. The trainees were paid during the training period and underwent a written test (Exhibit A5) in which Hermon scored well although he did concede in cross examination that his paper was marked by a fellow employee in circumstances where the participants in the training program were asked to swap their papers for the purposes of marking them. Hermon gave uncontested evidence that he was complimented on his speed and accuracy and informed by Terry that he would be one of the first to be employed. It was agreed that during the training period some of those who commenced the training did not complete it.
At commencement both applicants were fitted out with boots and protective clothing by the respondent and the respondent gave them their shift notice form. This form placed Hermon in the C shift (Exhibit A6), which rotated with three other shifts.
One matter relied on by the applicants was the fact that the respondent provided them with individual outfitting. On any view of the matter the respondent appeared to act on the basis that the employees would work for it in the long term and its actions were at all times consistent with a desire to develop a business with a permanent workforce.
Although he was trained in all jobs Hermon was at first placed on the rotational moulder applying a heat process on plastic products. According to Hermon, and this was not disputed, of shift C’s original five employees, three are still employed by the respondent with one, in September 1995, shifting to another group and not being replaced. Hermon produced to the Court a calendar (Exhibit A7) which was given to him at the end of his training period. As Jega noted, this document was part of the training manual given to the employees in July 1995. This calendar required completion by the employee by referring to rosters posted by the respondent on its board display showing employee work times to Christmas 1995. This was notwithstanding the fact that the calendar provided for work dates through to December 1996 again suggesting that both the employees and the respondent acted on the basis that they were there for the longterm.
The union is a party to both proceedings. According to Hermon from the beginning of September 1995 he became involved with the union because of concerns regarding pay and conditions in the respondent’s work place. By agreement evidence of matters to do with breaches of the provisions of the Act was curtailed, it being envisaged that the parties would call further evidence if the applicants were successful on the preliminary point. Hermon claims that both Reinaur and Jega spoke to him on a number of occasions about his involvement with the union because they were not happy with union involvement on the site believing it would slow down production and the commitment to overseas contracts. On his part Jega denied these conversations. Hermon also claims to have been approached by the head leading hand, Peter Grant Bennetto (Bennetto), and questioned as to whether or not he was involved with the union. This was admitted by Bennetto who pointed out that when the union organiser came to the site he was asked how many employees were in the union. Any questions put to the applicants about their membership of the union was asked in this context only. Subsequently, the respondent arranged to let the union representative attend the site and meet with the workers. It was not disputed that Hermon maintained contact and dialogue with the union representatives right through to November 1995.
On 31 October 1995 the applicants both received a letter from the respondent in the following terms (Exhibits A8 and A14):
“Further to our letter of 14th July, 1995, the Company wishes to extend your period of employment for a further month, to Thursday 30th November, 1995. For this period your salary has been adjusted to Level 2 (sic).
During this extension of your employment, the terms and conditions contained in your original letter of offer shall continue to apply except for the notice period of two weeks should either you or the Company wish to terminate the employment, which is inapplicable.
At this stage the Company is still assessing whether customer demand is sufficient to justify continuing its manufacturing operations. You will be advised at the end of the period whether your employment shall cease on 30th November, 1995 or whether it shall be continued as on-going employment.
I would be grateful if you could sign the enclosed copy of this letter where indicated and return it to me.”
It was agreed that these letters were given to the applicants during meetings of the different groups of employees. Significantly the letters withdraw any requirement for the giving of two weeks’ notice should either party to the contract seek to terminate the contract of employment.
Hermon was given the letter dated 31 October 1995 and when he received it believed then he would remain the month provided for in the letter and then be retained. This belief was fostered by the praise he alleged he received from Reinaur about his performance and from Joe, his shift supervisor.
On his last shift Hermon was invited into the canteen by Bennetto for a discussion. He alleges that Bennetto informed him that his job was safe and that he should not worry. Bennetto denies this assurance, pointing out that on 30 November 1995 the meeting with Hermon as with other employees at that time, was to assess their performance in order for Bennetto to make a recommendation to management on who should be retained. Despite the reassurances given him, Hermon told the Court that when he finished his shift he was called into the office with Reinaur and Jega who asked him if he realised that his contract had come to an end to which question he responded in the affirmative. This was an important concession because it was an acknowledgment that Hermon understood that the second agreement was for a limited term. They then broke the news that the respondent would not be renewing his contract. He told the Court he was upset and at that meeting queried the availability of a position in the respondent’s warehouse. The respondent made enquiries about this and then informed him that no position was available. Jega contested this lastmentioned matter asserting that it was he who asked Hermon if there was any other work he could do to which question the applicant responded by identifying warehouse work. As a result Jega checked to see if there were any vacancies and informed the applicant that he should leave his telephone number so that if any position arose he could be contacted. The fact that there were any discussions or efforts made to consider alternative positions lends weight to the respondent’s contention that it was letting Hermon go because it had to reduce its workforce in this part of the operation.
At the final meeting Hermon was asked to sign a form entitled “Resignation Form” (Exhibit A9). He refused to do this because he was not resigning. This refusal, he said, prompted the comment that if he signed the form he would receive all his pay. He declined to do this wanting the opportunity to take the form away. He was escorted from the premises; receiving his entitlements to the date of termination but no additional pay for one week (see Exhibit A10). In contrast, the other applicant Allan John Shields (Shields), did sign the resignation form handed to him and received one week’s additional pay. Shields also received an Employment Separate Certificate which identified him as having ceased work voluntarily with the reason being “personal reasons”. Some weeks after the termination Hermon received an Employment Separation Certificate (Exhibit A11) which gave the reason for termination as “contract not renewed”. It made no reference to the employee ceasing work voluntarily, nor did it complete the part of the pro-forma form where the employer is asked to indicate what the employment was terminated for.
Just prior to Christmas Hermon discovered that the respondent had paid one week’s pay directly into his bank account, and believed this was payment in lieu of notice. Jega told the Court that the one week’s additional pay was offered to all the employees who left to encourage them to return the employer’s equipment. On the termination date it was not disputed that Hermon did not have all of his equipment at work and could not return it immediately. In contrast, Shields returned his equipment and was given the one week’s additional pay straight away. The one week’s additional pay paid to Hermon was paid after Jega was informed at the conciliation conference that it had not been paid to Hermon. He then took steps to rectify the situation by making the payment.
Jega sought to characterise the additional payment of one week’s wage as a gratuitous gesture on the part of the employer to assist the employees. He also denied that the document entitled “Resignation Form” was in fact a resignation form, noting that it was the only form available to the employer. On the evidence I have some difficulty accepting the plausibility of his evidence on these matters. A reasonable inference to be drawn from the resignation forms, the Employment Separation Certificates and the payment of one week’s additional pay is that the respondent was attempting to shore up its position in respect to the cessation of the employment of a number of employees. On its part these acts are inconsistent with the notion of a fixed term contract; although I venture to say that the respondent would not be the first employer to act in a way inconsistent with the terms of the contract of employment. What has to be determined is what was the true nature of the contract of employment as at 30 November 1995 and whether the contract on that day expired by effluxion of time.
ALLAN JOHN SHIELDS (SHIELDS)
Shields evidence of the representations made to him by Reinaur included (i) that there was to be a new machine (the only one in Australia) and the respondent was going to train staff; (ii) that there would be two weeks of schooling; (iii) that the respondent was not certain how many people would be placed on the four shifts to operate the equipment but there may be four to five employees; (iv) that the respondent was looking for people who would stay with the company; (v) what the wage rate was, the entitlements to annual leave loading and to sick leave; and (vi) that he had to undergo a medical examination.
Shields told the Court that he understood the reference to a fixed term in the letter of offer (Exhibit A13) “... was like a standard trial period, like most companies ... make sure you learnt the job and were able to cope with six days’ shift work”. It is Shields’ allegation that when Jega called his group to a meeting on 31 October 1995 Jega then informed the group that he did not want to lose any of the workers and the job was available for as long as the employees wanted it.
Shields also recalled a representation either on the abovementioned date or on another occasion to the effect that the respondent was obtaining new equipment and expanding into powder coating works. This was said in a context where the employees were being assured that they had a long term future. Exhibit A14, which is Shields’ copy of the letter dated 31 October 1995, was received by him on about 31 October 1995. He says that he took it away before he returned it signed. He too attended a meeting, however, he at first denied any explanation being given at that meeting concerning the matters set out in paragraph 3 of the letter. Notwithstanding this denial he subsequently contradicted himself by saying that Jega told him that the letter “... did not mean anything ... he said if (they) wanted they (the company) could sack me tomorrow so I could sign it or not”.
Shields also alleged that he was told, and understood, that the only reason the letter was handed “... out was because America wanted it signed and (it) did not mean anything because there would be work at the end of that period and the job was secure”.
Shields’ evidence on the abovementioned matters is inconsistent and lacks plausibility. Because of this I am not satisfied that Jega made the representations ascribed to him. Bennetto gave evidence that he attended these meetings with the various groups. He was adamant that at those meetings Jega told the assembled workers about the respondent’s concerns with the ongoing production and it not being able to offer future employment. If anything, the evidence of the dialogue between Shields and Jega concerning the contents of the letter and particularly paragraph 3, suggests that there was discussion on the downturn in customer demand and its effect on the employees’ ongoing employment beyond 30 November 1995.
In Shields’ case his association with the company was not as good as that of Hermon because Shields had removed from the company property of the company without proper authorisation. On 25 October 1995 he received a “final warning” in connection with this conduct. In recounting these matters it is not my intention to deal with the merits of the warning. As I understand Shields’ case, this matter was a further matter relied on to suggest the ongoing nature of the employment relationship. In other words, if the contract was to cease by 31 October 1995 it was argued that there was no need to adopt the formality of providing a formal warning. As it transpired the events referred to in the warning and the warning itself did not impact on the decision made subsequently to offer this employee a new short term contract from 31 October 1995 to 30 November 1995.
Shields alleged that Jega, Bennetto and Reinaur all told him he was doing a good job and that advice, if anything, is consistent with the respondent’s move to offer Shields a further period of employment from 31 October 1995.
On or about 29 November 1995 Shields alleges that Bennetto told him and two other employees on his shift that one or two people would be leaving but their jobs were secure. On the morning of 30 November 1995 Shields claims he was called into the office where Bennetto, Jega and Reinaur were assembled. Jega then told him that there was not enough work and it then seemed that there might only be two to three months’ work for the company. He too signed a form entitled “Resignation Form” and received his monetary entitlements plus one week’s additional pay. He claims to have been told by Jega, and this is denied by Jega, that this additional sum was in lieu of notice. So far his Employment Separation Certificate was concerned (Exhibit A16), he told the Court he had nothing to do with the completion of its contents which suggest that he had departed from his employment voluntarily for “personal reasons”.
In cross-examination Shields agreed that when he started his employment he knew then that it was for three months but for what he described as a training period or probationary employment. Interestingly enough, Bennetto denies any reference in his original interview to any trial period or probationary period. Shields also agreed that in the beginning there was an emphasise by the company on the need to properly operate the equipment so as to maximise sales and create sufficient work for the people employed. This was accepted by Shields with the comment that he knew that the respondent had to match the American product in order to take on the Asian markets and because of this there was a lot of discussion about whether there was enough work there to keep all the employees employed. He did qualify his acceptance of the lastmentioned proposition by saying that he was told that only one or two employees would need to go and when two other employees did go he believed the reference was to these two employees. It was his recollection that he was told that the respondent was expanding its business into areas such as powder coating and that it would find a place in the company for him. Again, the fact that these discussions were had demonstrates to some degree the knowledge of the concerns that generated these discussions.
It emerged in cross-examination of Shields that there were a number of performance and conduct related issues alleged against him by Bennetto during October and November 1995 relating to his interaction with other employees on his shift and an allegation that he had been drinking alcohol before a shift. Again, Shields denied the substance of the allegations. For the purposes of this hearing it is not necessary to determine the truth of the allegations but to focus on the fact that these allegations led to some ongoing confrontation between Shields and management. Because of this the respondent asserted that contrary to Shields’ claim that he had no reason to doubt his future in the October and November 1995 period, in truth there was then good reason for him to doubt it and certainly no obvious basis for the respondent to make representations to him that his job was assured in the long term.
FINDINGS
The letter of offer of employment received by both applicants and signed by them (see Exhibits A4 and A13) is one which purports to create a fixed term contract to expire on 31 October 1995. Essentially the contract contained in the letter of offer was not one expiring with the effluxion of time but was a contract which could be brought to an end by either party on two weeks’ notice. Had that letter been the only matter for argument before the Court in determining the nature of the contractual relationship between the parties then, because of the decisions of this Court in Andersen v Umbakumba Community Council 1 IRCR 457 and Cooper v Darwin Rugby League Inc. 1 IRCR 130, it would have to be said that the contract was not one excluded by the provisions in Regulation 30B(1) of the Industrial Relations Regulations set out above. So that as at 31 October 1995, and before they signed the other letters on that date, both men were employed under a contract of employment for an indefinite period. Indeed, counsel for the respondent Mr Lawrence, appeared to concede that had there been termination before 31 October 1995 there might have been a basis for making an application to this Court by reason of the matters referred to in, for instance, the decision in Cooper’s case.
Notwithstanding any difficulties concerning the first letter, the applicants entered into the new contract by signing the letter dated 31 October 1995, which offered a short term fixed contract without a term allowing for either party to give two weeks’ notice to terminate the contract. Once the time expired for the second contract period the contract of employment was terminated by the effluxion of time and not necessarily by any act of the respondent as is contemplated by the Act when it speaks of termination at the initiative of the employer. In making this observation I have kept in mind that there are at least two decisions of Judicial Registrars in this Court (Strecker v Metropolitan Cemeteries Board (1995-1996) 64 IR 109 and Dadey v Edith Cowan University (unreported, R.D. Farrell JR, WI 1062 of 1996, 8 July 1996)) where a distinction is drawn between an act terminating the employment relationship and one terminating the contract of employment. In both these cases the decision of the employer during the currency of the period of the contract, not to renew the contract, where there were successive contracts, was treated as an act of the employer bringing the employment relationship to an end. However, as was pointed out in Dadey’s case, it is still necessary to determine whether the subject contract is one to which Regulation 30B(1)(aa) applies.
There are a number of decisions in this Court in which the Court has had occasion to consider events other than an act of the employer bringing the contract to an end. One such event may be an agreement by the parties to the ending of the contract by reason of that agreement (see O’Neill v Australian National University (unreported, Linkenbagh JR, No. AI 1176 of 1995, 29 August 1995)) which decision also highlighted the view that if a contract of employment comes to an end then any expectation an employee may have as to the likelihood of renewal is not relevant in considering the issue of termination of employment. Another event bringing a contract to an end other than by the act of the employer may be because of the effect of a statute, such as was the case in Australian Liquor, Hospitality and Miscellaneous Workers’ Union v Commonwealth of Australia (1994) 55 IR 18.
I was invited by the applicant’s counsel, Ms Young, to look at the applicants’ intention in determining whether the contract of employment was excluded by the operation of the Industrial Relations Regulations and, in doing so, to take into account their intention of entering into longterm employment. I understood her submission to be directed at the contractual implications of representations made to the employees where the contracts were not necessarily confined to the express terms set out in the letters of offer. It is true that the advertisement made no mention of the duration of the employment and, insofar as any representations were made to the applicants before their signing of the letter of offer, Reinaur was not called to refute their version of these pre-contractual discussions. What is apparent from the evidence of both applicants and Bennetto, who was also employed at the same time, is that there was an understanding that there would be some limited period whether that be a trial or fixed term employment. When that limited period expired they understood their performance would be assessed or reviewed. Bennetto went so far as to suggest that it was made clear to him there would be what he called an evaluation at the end of three months, which was also subject to the respondent’s sales and production outcomes. If I accede to the proposition that the initial contract included terms that the applicants would be employed for an indefinite period, which is a conclusion I must reach by reason of the force of the arguments in Anderson’s case and Cooper’s case, the applicants still cannot overcome the import of the contractual arrangement they entered into on 31 October 1995.
When the letters dated 31 October 1995 were given to each applicant during meetings attended by Jega and Bennetto at which meetings the respondent highlighted the possibility of the production not continuing, each applicant signed and returned the letters agreeing then to a fixed term of employment to 30 November 1995, subject to review.
On the respondent’s evidence from 1 December 1995 it decided on and retained a permanent workforce from the group of employees trained less four employees including the two applicants.
No doubt the intentions of all the parties as at July 1995 was for the venture to prosper and the trained employees to continue their employment beyond the period referred to in the letter dated 31 October 1995. Whatever their intentions may have been, I am satisfied that the changing fortunes of the venture overtook these intentions and the respondent made cuts to its workforce because of this. By mid to late October Jega was not certain of the future of the company and offered all the employees an additional month’s work on the terms set out in a letter they each signed and returned to the company.
This is not a case where it might be said that the applicants did not understand the agreement they were entering into on 31 October, or one where I accept on the evidence before me that they were misled. What they had was an expectation and hope that they would be retained along with all the other employees if the manufacturing operation continued. It did, but with a reduced staff level, with one employee being removed from each shift group after their performance was considered by Bennetto and a recommendation was made by him to the management. There are parallels to be drawn between some of the issues in this case and those dealt with in O’Neill’s case where the expectations the employee may have had of renewal of employment were not considered relevant to the issue of whether or not employment was terminated at the initiative of the respondent once the contract of employment came to an end.
In view of the abovementioned considerations, my finding is that on the evidence I am satisfied that the applicants’ final contracts were for specified periods of time, being contracts entered into after 16 November 1994 for periods of less than six months. No argument was advanced which in any way suggested that the contracts were a sham, the main purpose of which was to avoid the employer’s obligation under Division III Part VIA of the Act. Accordingly, both applications are dismissed.
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The application of Allan John Shields being proceeding No. VI 6169 of 1995 is dismissed.
The application of Dean Mathew Hermon being proceeding No. VI 6170 of 1995 is dismissed.
AND FURTHER ORDERS THAT:
There be liberty to the parties to apply to the Court on reasonable notice regarding the issue of costs on each application.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding seventeen (17) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 19 July 1996
Representative for the Applicants: National Union of Workers
Counsel for the Applicants: Ms M. Young
Solicitors for the Respondent: Phillips Fox
Counsel for the Respondent: Mr B. Lawrence
Date of hearing: 3 June 1996
Date of judgment: 19 July 1996
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