Fisher v Edith Cowan University [1996] IRCA 584

DECISION NO:584/96 CATCHWORDS TERMINATION OF EMPLOYMENT - Claim of UNLAWFUL TERMINATION - Successive FIXED-TERM CONTRACTS - whether TERMINATION at the INITIATIVE OF EMPLOYER Industrial Relations Act 1988 (Cth): s 170DE(1) Termination of Employment Convention: Art. 3 of Part 1 Aitken v CMETSWU (1995) 63 IR 1 Andersen v Umbakumba Community Council (1994) 1 IRCR 457 APESMA v David Graphics Pty Ltd (Industrial Relations Court of Australia, Moore J, 11 November 1994, unreported) Burazin v Blacktown City Guardian (Industrial Relations Court of Australia, Madgwick J, No. 660 of 1995, 15 December 1995, unreported) Byrne v Australian Airlines Limited (1995) 131 ALR 422 Christie v Qantas (1996) 138 ALR 19 D'Lima v Princess Margaret Hospital for Children (1995) 64 IR 19 Grout v Gunnedah Shire Council (1994) 57 IR 243 Grout v Gunnedah Shire Council (1995) 62 IR 150 Minister for Health v Ferry (Industrial Relations Court of Australia, Full Court, 4 April 1996, No 117/96, unreported) Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 Siagen v Sanel Pty Ltd (1994) 1 IRCR 1 Victoria v Commonwealth (1996) 138 ALR 129 LYNNE FISHER v EDITH COWAN UNIVERSITY No. WI 1061 of 1996 CORAM: MADGWICK J PLACE: PERTH DATE: 12 NOVEMBER 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIAN DISTRICT REGISTRY No. WI 1061 of 1996 BETWEEN LYNNE FISHER Applicant AND EDITH COWAN UNIVERSITY Respondent CORAM: MADGWICK J PLACE: PERTH DATE: 30 OCTOBER 1996 MINUTES OF ORDER THE COURT ORDERS THAT The Application is dismissed.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIAN DISTRICT REGISTRY No. WI 1061 of 1996 BETWEEN LYNNE FISHER Applicant AND EDITH COWAN UNIVERSITY Respondent CORAM: MADGWICK J PLACE: PERTH DATE: 12 NOVEMBER 1996 REASONS FOR DECISION MADGWICK J:

Introduction This case concerned the question whether the respondent ("the University") terminated the employment of its erstwhile employee ("Ms Fisher") within the meaning of the Industrial Relations Act 1988 (Cth) ("the Act"), so as to invest the Court with jurisdiction to consider whether any such termination was unlawful and in need of remedy pursuant to the Termination of Employment Division of the Act. That jurisdictional question was originally raised in the context of a submission that the case should be summarily dismissed because no reasonable cause of action had been shown. By agreement, however, the entire question of jurisdiction was tried as a preliminary issue by Ritter JR, who held, on 16 July 1996, that the University had terminated Ms Fisher's employment and that the Court, accordingly, had jurisdiction. The remaining issues were tried before Boon JR who held, on 5 September 1996, that such termination was unlawful and that Ms Fisher should be reinstated. Upon the hearing of an application for review before me on 30 October 1996, it was again agreed that the issue of jurisdiction should be heard separately and in advance of the other issues. At the conclusion of the argument I indicated my opinion that the Court lacked jurisdiction, dismissed the application and reserved my reasons. These are my reasons.

Fixed-term contracts Ms Fisher was employed by the University as a lecturer in Academic Dance Studies at the Western Australian Academy of Performing Arts ("WAAPA"). The University is established by statute and WAAPA is a semi-autonomous Academy of the University. The governing board of WAAPA resolved in May 1995 that "all staff contracts which terminate in December 1995 be subject to open advertisement". There was a considerable number of such contracts. One of them was between the University and Ms Fisher. Ms Fisher began her employment with the University on 1 January 1993 as a lecturer in Dance Studies in WAAPA's School of Dramatic Arts. She had, on 31 December 1992, accepted a written offer of appointment. So far as relevant, that offer provided: "2. The appointment offered is for a one year contract commencing 1 January 1993. While it may be that your appointment will be extended to a further contract, or that you may apply for and obtain a tenured position, there is no entitlement to continued employment beyond the date of completion of the contract as set out above. ... 8. The University will enter into no undertaking regarding your employment and associated conditions beyond the terms of this offer of appointment and the attachment." On 1 December 1993, she accepted an offer containing identical terms except that it was "for a one year contract commencing 1 January 1994". On 9 December 1994 Ms Fisher signed a new contract, which incorrectly and inadvertently stated that it was to operate for the period 1 January 1995 to 31 December 1997. The error was pointed out by an officer of the University and, on 13 January 1995, Ms Fisher accepted a contract of employment showing the correct, intended period, from 1 January 1995 to 31 December 1995. So far as relevant, the written offer which Ms Fisher thus accepted provided: "1. This offer of appointment as a Lecturer in Dance Studies is made on behalf of the Edith Cowan University Council as of today's date, 27 October 1994, to Ms Lynn Fisher. 2. This offer is for a fixed-term, full-time contract from 1 January 1995 to 31 December 1997. There is no entitlement to continued employment beyond the completion date of the contract. ... 8. To confirm your acceptance of this Offer of Academic Appointment and the associated conditions of employment, you should sign, date and return the duplicate to the Director no later than 7 November 1994." In the middle of 1995, after the resolution of 30 May referred to above, the Dean of WAAPA's School of Dramatic Arts wrote to Ms Fisher on 23 June 1995 in the following terms: "SUBJECT: CONTRACT DATE: 23 June 1995 You will be aware that your one year contract will expire at the end of 1995 and it is the decision of the School to formally advertise a three year appointment now that we have had the opportunity of consolidating the Dance Department staff structure. It is University and Academy Board policy that all positions be advertised, but obviously I strongly encourage you to apply. The selection criteria and duties and responsibilities for the position will be prepared by August/September with the selection process being undertaken throughout October. I will advise you when the advertisement for the position is to be placed before the public." The position occupied by Ms Fisher was accordingly advertised, along with others. The advertisement said they were "Fixed-Term One - Three Year Contracts Commencing 1 January 1996". Ms Fisher and another, outside applicant sought and were ultimately short-listed for the position. A selection panel awarded the post to the outside applicant. Ms Fisher was advised of this in the following terms: "Dear Lynn Thank you for participating in the interview process for this position of Lecturer in Dance (Academic Studies). I am sorry to advise you that your application on this occasion has not been successful. The selection panel was very impressed with the quality of your application and the supporting documentation you provided. We see the Academy as being a growth area and are optimistic that in the not too distant future a further position would be available. We sincerely hope that if and when that is advertised you will be prepared to consider a further application. We thank you once again for your interest in the Western Australian Academy of Performing Arts. Yours sincerely Dr G Gibbs Director"

Ms Fisher's employment with WAAPA ceased on 31 December 1995, the date fixed as the expiry date of the employment by the contract.

The industrial environment Various awards and industrial instruments applied to academic staff at the University. None prevented the University and an employee from contracting that the employment would cease after a fixed period. Indeed, a system of "fixed-term", "non-permanent academic staff employed under contract for a specific period at the conclusion of which the appointment automatically lapses" was specifically contemplated and regulated: see, for example, Exhibit Review 1, at pp 3-4. In 1991, the applicant union and an employer association representing the University had agreed: "1. The parties recognise that continuing (i.e. tenured or tenurable) appointments are not evenly spread throughout the classification structure. Whilst institutions have pursued flexible staffing arrangements in order to facilitate and respond rapidly to change, it is recognised that a more even spread of continuing and non-continuing staff should be developed. ... 3. The parties agree that there is no benefit in establishing more than about 30% of total academic staff* on non-continuing appointments at a system-wide level. However, institutions must retain the flexibility to exceed this system-wide level and the proportions set out in paragraph 4 in order to deal with such circumstances as: (a) Unavailability of permanent staff of a suitable quality, where suitable limited term or casual staff are available; or (b) The need of facilitate special academic programs such as industry/institution initiatives. It is expected that the incidence of non-tenured appointments within this framework will be higher in the more junior staff classification. 4. (a) It is agreed that the system-wide proportion of total academic staff in continuing employment at Level A should be broadly established at 30%. (b) It is agreed that the minimum system-wide proportion of total academic staff in non-continuing employment at Level C should be broadly established at 10%. ..." (see Exhibit Review 3, pp 4 and 20) There is an obvious tension between the competing and legitimate policy requirements of employers and employees in universities, and of the public, that: (a) academics should have security of employment to encourage freedom and courage of thought, inquiry and expression; (b) academic institutions should have an opportunity to encourage new faces with new ideas; (c) employers should have reasonable flexibility generally in relation to staffing arrangements, particularly in an uncertain climate of public funding; and (d) employees should have reasonable employment security. At WAAPA there has been a rather heavy resort to "fixed-term" contracts such as those entered into with Ms Fisher - some 70% of the academic staff have been so employed. On the other hand, as Dr Jessup QC points out for the University, it may be that, in the field of the performing arts, there is a particular need for arrangements to encourage innovative thinking. No relevant inference can here be drawn from such frequent use of such contracts. Effective ability to compel the subjection of the University to independent conciliation and arbitration pursuant to the Act has at all times been available to Ms Fisher and the Union, which is her union, should the practice of engagement by fixed-term contract have been thought to be harsh, unjust or unreasonable. I mention these matters because I wish to stress that this is not a case where the use of a fixed-term contract has been unreal, unconscientious or oppressive as against an employee of any special vulnerability.

The case for Ms Fisher Ritter JR considered the matter thoroughly. Quite properly, the Union in effect founded its argument on his Reasons for Decision. The Judicial Registrar's conclusions (from pp 50-53 of his typescript Reasons) may be summarised as follows: (a) The question is whether the termination of the employment relationship was at the initiative of the employer. (b) Here, the employer had "decided not to continue the employment relationship" by failing to appoint Ms Fisher to the position she applied for. (c) The employment relationship commenced when Ms Fisher first accepted the offer of an appointment on 31 December 1992 and ceased on 31 December 1995. However, it could and would have continued but for the employer's decision, conveyed to Ms Fisher by the letter of 31 October 1995, to offer the outside applicant a contract from 1 January 1996. (d) Hence, that decision was the "critical action" which "led to" the termination of the employment: see APESMA v David Graphics Pty Ltd (Industrial Relations Court of Australia, Moore J, 11 November 1994, unreported) and Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200. (e) Ms Fisher did not leave the employment relationship voluntarily. (f) No decision of the Court required a contrary finding. The decisions in D'Lima v Princess Margaret Hospital for Children (1995) 64 IR 19 and Minister for Health v Ferry (Industrial Relations Court of Australia, Full Court, 4 April 1996, No 117/96, unreported) assisted by analogy, and there was no majority view to the contrary in Christie v Qantas (1996) 138 ALR 19. (g) The employment relationship "involved more than the final contract of employment"; there was a continuing requirement for the work to be done and the relationship could have continued. (h) To regard what occurred here as termination of the employment at the initiative of the employer was more in keeping with the general and beneficial purposes of the Termination of Employment Division of the Act both as those purposes are explicit and as they have been seen in such cases as Aitken v CMETSWU (1995) 63 IR 1 at 6, Grout v Gunnedah Shire Council (1994) IRCR 143 at 160 and Burazin v Blacktown City Guardian (Industrial Relations Court of Australia, Madgwick J, No. 660 of 1995, 15 December 1995, unreported). Earlier in his reasons, the Registrar had, among other things, considered in detail a number of cases to arrive at the central conclusion that: (i) "A termination of employment at the initiative of the employer [which is what "termination of employment" means in the Termination of Employment Convention - see Art. 3 of Part 1] may be treated as a termination that is brought about by an employer and which is not agreed to by the employee ... [that is] a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship: Mohazab v Dick Smith Electronics (1995) 62 IR 200 at 205". (Quite apart from the authoritative nature of that Full Court formulation, there can in my respectful opinion be no reasonable quarrel with it). (ii) The controversy about whether there is or can be a distinction between a relationship of employer and employee and the contract of employment out of which such a relationship grew should, after Byrne v Australian Airlines Limited (1995) 131 ALR 422 at 431 be regarded as settled in favour of the view of Wilcox CJ in Siagen v Sanel Pty Ltd (1994) 1 IRCR 1 that "termination of employment means termination of a relationship of employer and employee and is not confined to a case where an employee's contract of service has been terminated": Mohazab at p 205 and Grout v Gunnedah Shire Council (1995) 62 IR 150 at 156. In relation to the second conclusion, I assume that it is correct. But the essence of the difference between the Registrar's approach in this case and mine is the use to which the legal proposition constituted by that conclusion can be put. The nub of the Registrar's position is two-fold: that an employment relationship between Ms Fisher and the University would have continued, apart from a positive decision not to appoint her under a new contract of employment, and that such decision was the "principal contributing factor", the "critical action", which led to the termination of the employment relationship. I disagree with both aspects of this approach.

What was the employment relationship? In the first place, the task is to interpret the phrases "An employee must not terminate an employee's employment unless . . ." (s 170DE(1)) and "termination of employment at the initiative of the employer". In some cases it may be possible, useful and correct to interpret this statutory (and treaty) language as comprehending a situation in which two parties are not in a contractual relation of employment, but one sufficiently close to it as to warrant treating one of them as an employer and the other as an employee. In the course of so interpreting the statute, it may be convenient to speak of such a non-contractual relationship as an "employment relationship". But, in any case, care must be taken to understand just what such a relationship is. Where, as here, the relationship between the parties arises out of and owes its existence to one or more actual contracts of employment, care must be taken to recognise and categorise such relationship accordingly. Here, the "employment relationship" between the parties was, in fact, three consecutive such relationships: each was co-extensive with and limited to the relevant contractual relationship. For the purposes of understanding the application of the Industrial Relations Act, Ms Fisher was not so much continuously employed for three years as, in the language aptly employed by the parties in one of their consent awards (Exhibit Review 1), the subject of "contiguous ... fixed-term appointments" (p 4). For the purposes of other legislative or quasi-legislative prescriptions of rights and liabilities, for example as to long service leave, the context may fasten attention on the continuity of the actual performance of work for reward. But here the question is: by whose act or decision, primarily, was the employment terminated? To my mind, the answer is that the employment terminated as and when it did by reason of the agreement of the parties, made a year earlier, that it should so terminate. The decision of the employer not to make a fresh, "contiguous, fixed-term appointment" of the employee did not and could not affect that fact: had the decision been to re-appoint Ms Fisher, that would, in the instant circumstances, for the purposes of the Industrial Relations Act, have simply created another employment (and contractual) relationship.

Agreements versus imposition In the second place, for the purposes of s 170DE(1) of the Act, there is a clear and cogent distinction between, on the one hand, an agreement between an intending employer and an intending employee that the employment shall endure for a certain term, even when that term is proposed by the employer, and, on the other, a unilateral decision by an employer that the employment shall so endure. This is made clear by the majority judgment of the High Court in Victoria v Commonwealth (1996) 138 ALR 129 at 172-173. In that case the Court dealt, among other things, with an argument predicated on the holding in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188, that the Commonwealth cannot legislate to prevent a State from exercising its "right to determine . . . the term of appointment of [persons whom it wishes to employ]. It was argued that the prohibitions in s 170DE(1) (among other sections) impaired such right of the States". Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said: "The relevant words of each prohibition are that "[a]n employer must not terminate an employee's employment". In the case of s 170DC, the prohibition is elaborated by reference to specific reasons. As a matter of ordinary language, an employer does not terminate an employee's employment when his or her term of employment expires. Rather, employment comes to an end by agreement, or, where the term is fixed by award or statute, by operation of law. There is nothing in the Act to suggest that the words "[a]n employer must not terminate an employee's employment" are to be construed other than in accordance with their ordinary meaning. So construed, they do not apply to the situation where employment comes to an end because its term has expired. To put the matter another way, the prohibitions are concerned with termination for reasons unconnected with the term of employment. And that is manifestly clear when regard is had to ss 170DC, 170DE(1) and 170DF. The prohibitions effected by those sections are directed, respectively, to termination for a specified reason and termination for one or more specified reasons, none of which includes the expiry of the employee's term of appointment." The other cases in the Court do not, in my opinion, assist. Christie is inconclusive. Ferry was a case where there was a lack of agreement by an employee to a fixed term. In D'Lima, Marshall J held (at 25) that "[i]n substance, and in truth, Ms D'Lima was employed continuously. I reject unreservedly the submission that [she] was employed on a series of fixed term contracts and that each contract expired on its own terms ...". In other words, the reality did not accord with the form. Marshall J's further comments about Andersen v Umbakumba Community Council (1994) 1 IRCR 457 were, it seems to me, obiter dicta. In any case, to the extent that they do not accord with my own view that Andersen, although correct, is distinguishable from a case such as the present, I respectfully disagree with them.

A special case? It has not been necessary in this case to determine whether the same result would necessarily follow in an employment environment that did not involve an arm's length acceptance in the relevant industry, or an otherwise objective determination, that fixed-term appointments might be reasonably appropriate. Questions might arise, when the work done by the employee continues after expiry of the term to be done by another employee, as to, among other things, the reality of the supposed agreement for employment for a fixed term, and as to whether equitable relief on various bases (including in some States, statute law) might be available to the employee, such that s 170DE(1) would nevertheless apply. Nor, of course, was this a case of an employee hired for an indefinite period where, after such hiring, the employer seeks to vary the agreement so that the employment would expire at the end of some fixed term.

I certify that this and the preceding 11 pages are a true copy of the Reasons for Decision of the Honourable Justice Madgwick. Associate: Date: 12 November 1996 APPEARANCES Representatives for the Applicant: W Clayden with N Hodgson of the National Tertiary Education Industry Union Counsel for the Respondent: C Jessup QC with P Burchardt Solicitor for the Respondent: Mallesons Stephen Jacques Date of hearing: 30 October 1996