Veronica Sanchez Gibbs v Embassy of Mexico

[2011] FWA 7853

Note: An appeal pursuant to s.604 (C2011/6831) was lodged against this decision - refer to Full Bench decision dated 12 July 2012 [[2012] FWAFB 5840] for result of appeal.

[2011] FWA 7853

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Veronica Sanchez Gibbs
v
Embassy of Mexico
(U2010/14926)

COMMISSIONER MCKENNA SYDNEY, 21 NOVEMBER 2011

Application for unfair dismissal remedy - no dismissal - application dismissed.

[1] Veronica Sanchez Gibbs (“the applicant”) has filed an application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (“the Act”) concerning her termination of employment with the Embassy of Mexico (“the respondent”).

[2] The initiating process, namely the Form F2, indicated that the applicant had been employed by the respondent under three contracts over a period of nearly two years. The applicant contended that the decision of the respondent not to offer her a further contract for the period after 31 December 2010 was made without proper explanation to her and, further, that the fixed-term contractual arrangements were designed to avoid employment-related rights.

[3] The respondent took threshold objections to the application. The respondent principally contended that the applicant was not dismissed; rather, the applicant’s contract expired in accordance with its provisions and the applicant was not offered a further contract for the period beyond 31 December 2010.

Background

[4] The applicant was employed by the respondent on a series of three, contiguous fixed-term contracts of employment. The applicant commenced employment with the respondent on 1 February 2009 to work full-time as an executive assistant. The applicant was next offered a further employment contract as a secretary-receptionist within the respondent’s consular and communications section, to fill an employment vacancy created by the resignation of another employee. As a result, on 5 August 2009, the applicant and the respondent entered a second employment contract referable to the period 1 August 2009 to 31 December 2009. During January 2010, the applicant and the respondent entered a third contract referable to the period 1 January 2010 to 31 December 2010, again to work as a secretary-receptionist. The contract contains clauses which read as follows, being provisions which the applicant’s submissions suggested were relevant to her application:

“6. One month prior to the expiration of the contract period at paragraph 1, the employee’s performance will be reviewed to determine whether a new employment contract will be offered. The review will involve consultation between the employer and employee.

...

9. In the event that the Contract of Employment is terminated prior to the completion of the twelve (12) month period, the employer shall give the employee written notice three (3) weeks before termination of the Contract.

Notice will not be given in the case of serious misconduct ...”

[5] On 7 December 2010, the applicant was informed by a senior official that she would not be given a further contract for the period after 31 December 2010. In her evidence, the applicant said she was given no reason why her contract would not be renewed. The applicant was shocked and very distressed at the “bad news” and had a number of physical reactions in response to that advice. The applicant considered that she had worked satisfactorily and had not received any negative attention during her employment with the respondent. The applicant was informed that she would be paid her entitlements upon the signing of a recibo de finiquito, which is a type of receipt/release document used by the respondent in connection with terminations of employment. The applicant left work early on 7 December 2010, upset at the advice she had been given. She returned to work the following day, 8 December 2010. Put in its most neutral terms (for the parties dispute the characterisation of what occurred), the applicant was informed on 8 December 2010, in connection with her signing of the recibo de finiquito that day, that the respondent did not require her to work the balance of the contractual period to 31 December 2010. The recibo de finiquito read, in part, that the applicant received an amount of money from the Mexican Government “being the settlement of my working contract up to 31 December 2010”. It was unresolved on the evidence what discussions, if any, were held on 9 December 2010 - being the date the applicant initially had specified in the Form F2 as being the date she “was advised best actually to leave”.

[6] Ivy Franco, Administrative Officer, has some limited level of responsibility for the respondent’s local employment-related matters, but this responsibility is subject to very close general and specific instruction from the Government of Mexico. Ms Franco’s evidence indicated that the respondent employs its locally-engaged employees on fixed-term contracts, given matters such as externally-determined changes in annual funding and budgetary constraints, and fluctuations in the numbers of diplomatic staff. In early-December 2010, the Mexican Government informed the respondent there would be reductions in the numbers of diplomatic staff in 2011 and decreased funding for administrative positions, with the result that the applicant was informed on 7 December 2010 that the respondent could not offer her a further contract of employment and that her employment would end on 31 December 2010. On Ms Franco’s understanding, the applicant was also informed that her payments had been made to 31 December 2010 and that she would be required to sign the recibo de finiquito acknowledging her employment had ended and that entitlements had been paid. While there was no first-hand evidence in the respondent’s case as to the content of the discussions on 7 and 8 December 2010 (the official with whom the discussions were held is now posted in Asia), the respondent’s position was that the applicant asked if she could cease working earlier than 31 December 2010, being a request to which the respondent had acceded. Ms Franco described how the numbers of employees, comprising both diplomats and local employees, decreased in 2011 as against the staffing establishment in 2010 due to decisions emanating from the Mexican Government. Her evidence also confirmed that the respondent was satisfied with the applicant’s performance and the standard of her work.

Submissions

[7] Mr S Dickson, the applicant’s agent, submitted the applicant was a satisfactory employee who had been dismissed by the respondent on 7 December 2010 for reasons other than those for which the respondent contended. Mr Dickson submitted that Fair Work Australia should not accept that the termination of employment had been brought about by a contract merely terminating through effluxion of time on 31 December 2010. He also submitted that the applicant’s fixed-term employment contract was a sham which was substantially designed for avoidance, namely, to avoid the unfair dismissal jurisdiction under the Act and, as such, the respondent’s fixed-term contract-related objection should be rejected.

[8] Mr J Macken, solicitor for the respondent, submitted there were three principal issues to be considered. First, was there a contract for a specified period of time; second, did the employment terminate at the end of the period; and, third, was it a substantial purpose of employment on a fixed-term contract to avoid unfair dismissal obligations under the Act? Mr Macken submitted that, contrary to the submissions advanced by Mr Dickson, an examination of the evidence, considered in the context of legal and contractual principles, did not support the applicant’s contentions. He submitted that the application should be dismissed for want of jurisdiction.

Consideration

[9] The provisions which principally arise for consideration in relation to the threshold question concerning this application are s.385 and s.386 of the Act, which read as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if FWA is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust and unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

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 the completion of the task, or at the end of the season; or

...

(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.”

[10] The applicant was employed on a series of three fixed-term contracts, with the final contract having an end-date of 31 December 2010. It was common ground that the applicant was a well-regarded employee who performed her work satisfactorily. It was also common ground that, absent any supervening events, the applicant might have had a not unreasonably-based hope or expectation of being offered a further employment contract to operate beyond 31 December 2010. That is, Ms Franco’s evidence confirmed that she had not counselled the applicant about any aspect of her employment, as there was no cause to do so as there had been no problems with the applicant. Ms Franco also confirmed that budget, funding and operational considerations permitting, contracts were typically renewed provided appropriate authorisation was forthcoming from the Mexican Government.

[11] Here, the respondent’s evidence described the reason why local employees are employed under fixed-terms contracts. That is, the respondent, on instruction from the Mexican Government, engages its local employees on fixed-term contracts given matters such as externally-determined fluctuations in annual funding, budgetary constraints and the numbers of diplomatic staff. In early-December 2010, the Mexican Government informed the respondent there would be reductions in the numbers of diplomatic staff in 2011 and decreased funding for administrative positions. Ms Franco’s evidence as to the funding-related and operational changes, and the receipt by the respondent of a diplomatic cable thereto, was not disturbed in cross-examination. I am not minded, contrary to the submissions advanced by Mr Dickson, to draw inferences adverse to the respondent for not including that cable in its evidence, given the evidence from Ms Franco as to the essentially confidential nature of documentation from the Mexican Government to the respondent coupled with the submissions from Mr Macken that, should I have considered it necessary, he would have endeavoured to obtain instructions to have the documentation produced. More generally, the respondent’s staffing establishment decreased in numbers in 2011 as against 2010 and the respondent no longer employs anyone in the position formerly held by the applicant, namely secretary-receptionist.

[12] I do not consider that the evidence leads to a conclusion that a substantial purpose of the employment by the respondent of the applicant on a fixed-term contract or contracts was to avoid obligations under Ch 3, Pt 3-2 of the Act. I accept as being unremarkable the respondent’s description of why the applicant, as one of its local employees, was employed under a fixed-term contract.

[13] For all practical intents and purposes, the last day that work was performed by the applicant under her employment contract was on or around 7 or 8 December 2010, but I do not accept the case advanced by the applicant that 7 December 2010 was a date upon which the applicant was dismissed. The evidence established that on 7 December 2010 the respondent informed the applicant that her employment would not be extended beyond the contracted period, namely after 31 December 2010. The applicant was also given a copy of the recibo de finiquito; it had already been signed for the respondent and Ms Franco’s evidence satisfactorily described why it was administratively necessary to ensure that all the applicant’s entitlements were paid before 31 December 2010. There was nothing arising in the evidence to suggest that the applicant was informed that her employment was being terminated on 7 December 2010 or that she was, for example, being given three weeks’ notice in accordance with the notice provisions under the contract, albeit there would have been only a small number of days in the difference if notice had been given under the contract. On 7 December 2010, the applicant left work early, as she was upset, and took with her a copy of the recibo de finiquito.

[14] The following day, 8 December 2010, the applicant attended work. There was another discussion between the applicant and the same official who had advised her on 7 December 2010 that the contract would not be renewed. Among other matters, discussions ensued about whether the applicant would be required to work to the end of the contract period on 31 December 2010 (the applicant’s evidence was internally contradictory as to whether such discussions had occurred on both 7 and 8 December 2010 or, alternatively, only on 8 December 2010). The applicant’s evidence was also somewhat internally contradictory as to whether she had obtained “permission” for not working and, for example, whether she had been told to leave for reasons which she speculated had related to attendance at a Christmas lunch that same day. As Mr Macken noted, the applicant’s evidence concerning the recibo de finiquito was, at times, equivocal and unresponsive; but that may well be reflective of how distressed and upset she was at the time of the discussions in question. Equally, as Mr Dickson submitted, there were at least some problematic aspects to the recibo de finiquito. The document had been presented to the applicant as a fait accompli and sought, for example, that the applicant warrant in early-December 2010 as to future matters during the unexpired period of the contract, such as potential workers’ compensation injuries. In the end, the applicant’s evidence indicated that she “just want[ed] to sign” the recibo de finiquito if the Ambassador did not want her there. The evidence does not lead to a conclusion that the applicant signed the recibo de finiquito under some form of improper duress from the respondent, albeit I accept the applicant was understandably anxious in signing to ensure she would be paid all her entitlements. By one means or another, it was determined that the applicant would not be required to perform work under the contract of employment to its end-date of 31 December 2010. The applicant returned her keys and ID card. If there were further discussions on 9 December 2010, as alluded to in the initiating process and in the submissions, there was no evidence thereto.

[15] There were differing characterisations in the respective cases as to whether the applicant had been directed not to work after 8 December 2010 or whether the respondent had, on the applicant’s request, dispensed with the requirement that the applicant continue to perform work under the contract in the period to 31 December 2010 for which payment had been made. I do not consider that anything, or anything of substance, turns on which version is to be preferred or accepted in relation to the determination of the jurisdictional issue. That is, even if the version in the applicant’s case were accepted at its highest, it appears it would have been the respondent’s prerogative to make such a direction provided, as was the case here, that the applicant’s remuneration under the employment contract was properly paid for the period in question to 31 December 2010. Further, there was no evidence to suggest that the applicant objected to not being required to perform work for which payment had been made by the respondent to 31 December 2010 or that she sought to assert any claim to be able to continue to work for the respondent during that period, although she was otherwise plainly concerned and upset about the advice that she would not be employed by the respondent beyond 31 December 2010.

[16] The applicant considered herself to be a temporary employee under her first fixed-term contract, but that she then attained some type of permanent or quasi-permanent employment status under her second and third fixed-term contracts with the respondent. Despite the applicant’s views on the matter, the applicant and the respondent most recently signed a written employment contract specifying a fixed-term that was to expire on 31 December 2010. The applicant’s subjective hope or expectation of an automatic extension or renewal of her employment beyond 31 December 2010 cannot be sustained when considered in the terms of the employment contract. The applicant’s case placed emphasis on cl.6 of the contract of employment. It is true that the applicant was not performance-reviewed as contemplated in cl.6 of the employment contract, but the review provisions did not relevantly arise given that the evidence supported the view that the termination of employment was brought about as a result of the exigencies described by Ms Franco concerning externally-determined funding and operational considerations. A consideration of the evidence and submissions does not lead me to the view that the respondent had employed the applicant on fixed-term contracts for any reason or reasons other than those described in the respondent’s case. I should note for completeness that there was evidence from Yezabel Fernandez, a former employee of the respondent, which indicated that she had quickly glanced at a document named an acta administrativa in January 2011 which contained some type of adverse observation about the applicant’s conduct. Ms Franco denied that any such document had been generated in relation to the applicant and noted that such documents are prepared “to register emergencies”. Second, a comment was made to the applicant that the Ambassador allegedly disliked her, but there was no evidence as to any such alleged dislike or any reason thereto. The relevance of the evidence advanced in the applicant’s case concerning these matters to the determination of the threshold issue was not well-developed. If they are relevant, my consideration of the evidence as to these matters would not lead me to any different conclusion concerning the jurisdictional issue.

[17] At the time the proceedings adjourned when I had reserved my decision, I left open the prospect that I may act of my own initiative to seek further short evidence or submissions on a number of discrete matters that essentially arose only the day of the hearing going to: (a) certain evidence-in-chief that was given orally by the applicant; and (b) whether the application had been made within 14 days after the dismissal had taken effect. Having regard to my findings concerning the respondent’s jurisdictional objection, I do not regard it is necessary in my determination of the preliminary issue in contest to receive anything further from the parties concerning those matters. That is, on a consideration of the evidence and submissions, I am satisfied as to the substance of the respondent’s objection. I do not consider that the applicant was, within the meaning of the Act, dismissed by the respondent on either 7 December 2010 or 31 December 2010. I accept the respondent’s submission that the termination of the applicant’s employment with the respondent was brought about by effluxion of time under the fixed-term contract of employment that had an end-date of 31 December 2010 and, in so concluding, have fully considered the fact the applicant was not required to perform work under the contract from about 8 December 2010 as well as the decision in Drummond v Canberra Institute of Technology[2010] FWA 3534, a case to which both parties particularly referred. Further, I do not accept the applicant’s submission that in employing the applicant under a fixed-term contract the respondent had as a substantial purpose the avoidance of unfair dismissal remedies under the Act.

[18] As such, an order dismissing the application has been issued in conjunction with the issuing of this decision.

COMMISSIONER

Appearances:

S Dickson, agent, for the applicant, Veronica Sanchez Gibbs

J Macken, solicitor for the respondent, The Embassy of Mexico

Hearing details:

2011
Canberra
November 3

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