NORSKE SKOG TASMAN LIMITED V EDWARD CLARKE CA CA181/03

NORSKE SKOG TASMAN LIMITED V EDWARD CLARKE CA CA181/03 20 May 2004IN THE COURT OF APPEAL OF NEW ZEALAND CA181/03BETWEEN NORSKE SKOG TASMAN LIMITED Appellant AND EDWARD CLARKE Respondent Hearing: 4 December 2003 Coram: Anderson J William Young J Heath J Appearances: R J McIlraith and L J Turner for Appellant D G Jacobson for Respondent Judgment: 20 May 2004JUDGMENTS OF THE COURT Judgments Para No Anderson P and William Young J [1] Heath J [95] ANDERSON P AND WILLIAM YOUNG J (DELIVERED BY WILLIAM YOUNG J) Introduction[1] This is an appeal, with leave, against a judgment of the Employment Court delivered on 26 June 2003 in which Judge Colgan:1. Held that the respondent, Edward Clarke, had been unjustifiably dismissed from his employment by the appellant, Norske Skog Tasman Ltd ("NSTL"); 2. Directed his reinstatement; and 3. Provided in indicative terms (and with leave to revert to the Court) for other relief by way of monetary compensation. [2] The proceedings in the Employment Court involved a challenge (made under s179 of the Employment Relations Act 2000) to a determination of the Employment Relations Authority which had earlier dismissed the claims made by Mr Clarke. This challenge required a de novo hearing in the Employment Court, see s183.Background facts[3] NSTL operates a paper mill at Kawerau. One of the units of its business structure is known as "Day Utilities". In the late 1990s the Day Utilities unit consisted of six employees who were engaged in three functions: ordering and delivering cores on to which newsprint was wound, housekeeping and cleaning functions in the mill's workhouse and packaging areas and cutting Kraft board bases on to which rolls of newsprint were stacked. From 1994 the Day Utilities employees were subject to a collective employment contract (CEC) under the Employment Contracts Act 1991. This CEC expired on 12 September 1997. It was not, however, renewed or replaced until after the events which gave rise to the present litigation. [4] By late 2000, the number of the employees in the team had fallen to five. Two of these were on fixed term contracts covering two "permanent" employees who were on long-term absence due to illness. [5] In late September 2000 NSTL and the Pulp and Paper Industry Council of the Manufacturing and Construction Workers Union ("the union") began to negotiate a new Day Utilities collective employment agreement. In the course of these negotiations, there was an interim agreement reached (in mid October 2000) that an additional employee would be engaged on the Day Utilities team temporarily toalleviate what union negotiators contended was an inadequate manning level. NSTL and the union agreed that such position would not become "permanent", at least until the outcomes of the bargaining processes and operational needs of the business were known. So this meant that there were to be six employees in the Day Utilities team of whom three were to be employed, for the foreseeable future, on a temporary basis. [6] The new temporary position was advertised. Unfortunately the terms of the advertisement were not produced in evidence. [7] Mr Clarke was the successful applicant. [8] On 1 November 2000 Mr Clarke signed an employment agreement prepared by NSTL. This agreement was in the form of a letter from NSTL to Mr Clarke in these terms:I am pleased to offer you the temporary position of Temporary Day Utilities Operator in the Finishing Department of Norske Skog Tasman. You are being employed to maintain agreed manning levels. Should for any reason the circumstances change and the Company decide that your services will be no longer required, you will be given the appropriate notice and this contract will cease accordingly. You should have no expectation of guaranteed ongoing employment at Norske Skog Tasman after the expiry of this contract. Terms of EmploymentThe terms and conditions of employment are in the Paper Division Day Utilities – Finishing & Despatch Collective Employment Contract (expired). A copy of the CEC is available from your team leader of HR Advisor. It is a condition of this offer that you become a party to this CEC. Period of EmploymentYou will be employed from [6] November 2000 to 3 February 2001 unless circumstances warrant an earlier termination. Company PoliciesNorske Skog Tasman has a number of policies and procedures that are applicable to all employees. These policies and procedures are contained in the Norske Skog Tasman's Human Resource Reference manual and the Human Resources Health and Safety Manual which are available from your Team Leader or HR Advisor. Norske Skog Tasman may introduce new policies and procedures or change existing policies and procedures. The above offer does not constitute an offer of permanent employment with the Company; it is a temporary position for the period specified only.[9] Mr Clarke signified his acceptance to the terms of the letter by signing under the following subscription clause:I accept the terms and conditions of employment as set out in this letter of offer. I acknowledge that I have had the opportunity to take independent advice as to the meaning and effect of this agreement.[10] The policy of both NSTL and the union was that when a temporary position became permanent, there would be a contestable selection process. This policy appears to have influenced the structure and form of the agreement. If the policy had been that temporary employees automatically were employed permanently on their positions becoming permanent, the form of agreement between NSTL and Mr Clarke may well have been different; it may have provided for his employment to cease in the event that the Day Utilities team was down-sized but otherwise to be of indefinite duration. [11] In December 2000 Mr Clarke became a member of the union (albeit without enthusiasm). [12] The 1 November 2000 agreement was succeeded by a series of further agreements, each purporting to be of a fixed term nature. In the end, 11 such agreements were executed and these covered a period of approximately two and a half years. [13] The second fixed term agreement was entered into on 19 February 2001. This agreement provided for four months employment from 4 February (ie the day after the expiry of the term of the first fixed term agreement) to 1 June 2001 and was otherwise, at least materially, in the same terms as the original agreement. [14] The third fixed term agreement was entered into on 12 June 2001 and provided for four months employment from 2 June to 1 October 2001. Relevantly, for present purposes, this agreement provided Mr Clarke was continuing "to be employed" to "maintain agreed manning levels" and this was said to be an "extension of the temporary position" Mr Clarke held.[15] In late September or early October 2001, NSTL decided to investigate the possibility of using a different base for packaging and this had implications for the role of the Day Utilities team in relation to the disc cutting operation (ie the cutting of the Kraft board bases). [16] The fourth fixed term agreement was entered into on 4 October 2001 and applied for the three month period between 2 October and 31 December 2001. This agreement went a little further than the earlier agreements and provided that the "purpose" of the agreement was "to maintain agreed manning levels for the period of the company's review of the disc cutting (Kraft) operation". It is common ground that Mr Mark Hofert, an NSTL manager, explained to Mr Clarke what was involved in the disc cutting review. [17] The fifth and sixth agreements (covering the periods between 1 January to 1 March 2002 and 2 March to 30 April 2002) were similar in form to the fourth fixed term agreement. [18] In April 2002 the union invoked the disputes procedure over manning levels in the Day Utilities department. Three of the six employees in the Day Utilities team were still temporaries and the union wanted all employees to be permanent. This dispute was quickly resolved and, on 18 April 2002, it was agreed between NSTL and the union that two temporary positions (including the temporary position held by Mr Clarke) would be replaced with permanent positions with the third position to remain as a temporary to be reviewed on 31 May 2002. Mr Clarke was aware of what was happening and he supported the temporary positions being made permanent. He anticipated that he would be appointed to his "old job" on a permanent basis but he knew that there would be a contested selection process. [19] The permanent positions were advertised on 7 May 2002. Mr Clarke applied for one of them. [20] Employee and union representatives were involved in the appointments process.[21] On 10 May 2002 the annual general meeting of the union passed a resolution which proposed criteria for appointments including preferences for "local people" and "family of existing employees" and existing permanent employees (in the case of transfers and appointments). "Seniority" was to be the main criterion. [22] These criteria did not favour Mr Clarke. We note, however, that the evidence which was accepted by both the Employment Relations Authority and Judge Colgan was that these criteria were, in fact, not applied by the appointments panel. [23] The upshot of the appointments process was that Mr Clarke's application was unsuccessful. He did not even make the short-list of six applicants who were interviewed by the appointments panel. He was notified of this on 21 May 2002. He was very resentful about what had happened and saw the whole procedure as unfair. He was very critical of the role of the union in the exercise. [24] Mr Clarke complained to NSTL about his non-appointment and, on 11 June 2002, took up his grievance with his employer by way of a letter from his solicitor. [25] In the meantime, however, the seventh fixed term agreement, this time for six weeks, was entered into. This covered the period from 1 May 2002 to 14 June 2002 and was executed on 22 May 2002. It was otherwise in terms which were similar to the fourth, fifth and sixth fixed term agreements. [26] Mr Clarke's personal grievance claim was heard and determined by the Employment Relations Authority with commendable speed with the decision dismissing the claim being released on 19 August 2002. Mr Clarke had, in the meantime, remained an employee of NSTL on additional fixed term agreements and this continued until mid-October 2002. At this point he stopped working for NSTL and he was replaced by another person. [27] Shortly afterwards a new collective agreement for the Day Utilities employees was settled and ratified.[28] Mr Clarke was able to secure alternative employment. But he had to give up his new job shortly after he started. This was to travel to the United Kingdom to be with his mother who had become very unwell. She subsequently died and Mr Clarke stayed in the United Kingdom for some time to attend to her funeral and associated arrangements. [29] The third and last of the new permanent positions in the Day Utilities team was filled on 28 April 2003, about a month before the hearing of Mr Clarke's case in the Employment Court.Fixed term agreements – the legislative context[30] Under the Employment Contracts Act 1991 and its precursors there was much dispute as to the circumstances in which the expiry of a fixed term contract of employment should be regarded as a dismissal. Reference can be made to Actors Equity Industrial Union of Workers v Auckland Theatre Trust [1989] 2 NZLR 154,Smith v Radio i Ltd [1995] 1 ERNZ 281 and The Principal of Auckland College of Education v Hagg [1997] 1 ERNZ 116. [31] The position arrived at under the 1991 Act was that a cessation of employment associated with the expiry of a fixed term contract was not usually regarded as a dismissal and that parties were generally at liberty to enter into such contracts of employment. [32] That is the background to s66 of the Employment Relations Act 2000 which provides:66 Fixed term employment(1) An employee and an employer may agree that the employment of the employee will end— (a) at the close of a specified date or period; or (b) on the occurrence of a specified event; or (c) at the conclusion of a specified project.(2) Before an employee and employer agree that the employment of the employee will end in a way specified in subsection (1), the employer must— (a) have genuine reasons based on reasonable grounds for specifying that the employment of the employee is to end in that way; and (b) advise the employee of when or how his or her employment will end and the reasons for his or her employment ending in that way. (3) The following reasons are not genuine reasons for the purposes of subsection (2)(a): (a) to exclude or limit the rights of the employee under this Act: (b) to establish the suitability of the employee for permanent employment.The decision of the Employment Relations Authority[33] The Employment Relations Authority held that NSTL had genuine reasons based on reasonable grounds for requiring fixed term agreements and that, accordingly, the requirements of s66(2)(a) had, throughout, been satisfied. It also held that the agreements which Mr Clarke signed provided adequate advice to him of when they would end. So the first requirement set out in s66(2)(b) was satisfied. [34] The Authority also held that the second part of s66(2)(b) was satisfied. Since this is the key issue in the case, we set out the relevant passage of the decision:As to the reasons, the initial contract and the successive ones up until the end of October 2001 explained that he was employed on a temporary basis to maintain agreed manning levels. From October 2001, the reason for a fixed term contract incorporated the disc cutting review. That reason was reflected in the wording of each contract, which Mr Clarke subsequently entered into until 30 April 2002. The initial contracts citing "agreed manning levels" did not fully express the underlying circumstances that notwithstanding the contract expiry dates the respondent was obliged by agreement with the Union to maintain "agreed manning levels" until a final decision on manning the Day Utilities group was made. I accept that the timing of that decision was not reasonably foreseeable when the contracts were entered into and therefore that explains why contracts of three months duration were successively offered to Mr Clarke. Despite the clear wording of the contracts, I cannot ignore the evidence that given the working environment and the activities of the Union as noted in the factual summary Mr Clarke was in my opinion well aware of the circumstances and reasons underlying his position. That would include alsothe circumstances surrounding the May-June 2002 contract. The whole issue involving fixed term contracts in this case was a point of considerable interest by workers in the Day Utilities group as well as the Union whose intervention was decisive in determining finally the manning question.[35] The Authority would appear to have approached the case on the basis that Mr Clarke at all relevant times knew why his position was temporary and that this background knowledge on his part meant that the elliptical nature of the letter of appointment was of no moment. [36] The Authority dismissed arguments advanced by Mr Clarke in relation to what he claimed was unjustifiable disadvantage associated with the appointments process and other claims generally associated with his contentions of unjustifiable dismissal and disadvantage.The approach of the Employment Court[37] In the Employment Court, Mr Clarke does not appear to have prosecuted the unjustifiable disadvantage claim and, in any event, Judge Colgan was satisfied that the appointments process was fair. [38] On the s66 issue, the Judge made two findings in favour of NSTL. We set these findings out in the Judge's own words:[41] I accept that, before each of the relevant fixed term agreements was settled, NSTL had genuine reasons based on reasonable grounds for specifying that Mr Clarke's employment was to end at the close of the date specified in the agreement. At first, these were that the company and the union were negotiating a new collective agreement that may or may not, when settled, have required a sixth employee in the Day Utilities area. I accept, also, that it was not unreasonable to suppose that even after more than three years following the expiry of the 1994 CEC, settlement of a replacement collective agreement for only a handful of employees might have been contemplated to be a matter of two or three months hence. The expansion of the scope of the negotiations and therefore delay in achieving settlement was at the instigation of the union. Later, the company's review of its disc cutting operations provided an additional ground for retaining temporarily an employee for whom this work was a significant part of his duties. Not only were the employer's reasons not those, or of the sort exemplified, in s66(3), but they were both genuine and reasonable. [42] I find, also, that the company met the first of the two obligations under s66(2)(b) before each of the consecutive fixed term agreements wasentered into. In each agreement, the advice of when the fixed term agreement would end was clearly set out by reference to a calendar date. As I have found, on each occasion, a draft agreement was given to Mr Clarke and, whether or not he took it, he had an opportunity to consider its contents and even obtain advice on them before signing it. As to this first requirement under s66(2)(b), Mr Clarke was made aware by NSTL of when the agreement would end.[39] The Judge, however, found that the second limb of s66(2)(b) had not been satisfied because he concluded that NSTL had not advised Mr Clarke of "the reasons for his employment ending" on the dates specified in each of the fixed term agreements. [40] The primary approach of Judge Colgan was that this issue fell to be determined by reference to the first of the fixed term agreements. But he concluded that in any event there was a failure to comply with s66(2)(b) in relation to all of the relevant fixed term agreements (that is all of the agreements entered into prior to 22 May 2002). [41] Again it is appropriate to set out the Judge's reasons in his own words:[44] Because of what I conclude are the consequences of non-compliance, it is really only the first of the agreements that needs to be examined. But even accepting the company's evidence as I have on what happened before each of the subsequent fixed term agreements was made, I find it did not advise Mr Clarke of the reasons for his employment ending in the way it was intended as it failed to do before the first. These were not questions of the employee's state of mind, informed as it may have been from other sources including his own observations, union advice or other sources of knowledge. The legislation places a positive obligation on employers to advise before a fixed term agreement can lawfully be agreed to. The statute is clear that the test is what the employer tells or advises the employee, not what the employee may or may not know independently of such advice as is, or is not, given.[45] The evidence of the employer's advice on each occasion falls into two categories. First, and more easily established, is its advice in writing to Mr Clarke. In each case this was in the form of a draft agreement presented to him for consideration and signature. I find the notation that the fixed term agreement was "to maintain agreed manning levels" did not meet the test of advice to him of the reasons for his employment ending in the way that it was to, that is about three months after it began on 6 November 2000. That inadequate explanation was only complicated and made more inadequate by the subsequent written reference in the agreement that "unless circumstances warrant an earlier termination". That obfuscated rather than clarified the statutory requirement for reasons for the term ending as it was intended to do.[46] Turning to evidence of what advice may have been conveyed to Mr Clarke other than in writing, I accept the accounts of company witnesses where these conflict with Mr Clarke's evidence that there were no such communications. Mr Hofert's evidence was that on those occasions when he spoke with Mr Clarke before new fixed term agreements were entered into, he would point out to the plaintiff what in succeeding documents had changed from previous agreements. He said that in most cases this was only the term of the agreement. Mr Hofert said in evidence-in-chief:In Eddie's case, on every occasion that I had cause to take that contract to him, I would take him the contract. There was only one case where there was a change in terms, it was really just the length of the extension of service that was required, but in every case I give the letters to fixed term employees, as with Eddie, and give them the chance to have a read of it, and to take it away, consider it, I offer them the opportunity to go to their union and gain opinion from the union before they return it. They are under no obligation, and Eddie's never been under any obligation, to give it straight back to me. More than happy for him to take it away and consider it and I have said that to him as much on a number of occasions. (Transcript 31 lines 34-43) [47] Mr Hofert also explained his role in introducing the new agreements to Mr Clarke as follows:You see, when the change of circumstances came about after the dispute and then resolution with the union, all of a sudden we are in a position where we could give some certainty to the temps about what would happen. We are in a position then where Eddie would have some resolution to whether he would get a permanent position or wouldn't. So I went down and spoke with Eddie privately about the fact that there was a process that was about to begin, that it would be a contestable selection process and they would be able to apply. I would be extending their employment contracts until that was resolved. Then if they were unsuccessful, I would still need to keep them on for a period while we were training the successful applicant. It really just depended on what the circumstances were going to be as to how long that they would get to stay for. Of course, if they were successful, they just would have been appointed and that would have been that. (Transcript 33 lines 1-17) [48] In December 2001 Mike Vincent, the mill's human resources adviser for Order Fulfilment, became involved in these dealings with Mr Clarke. He, too, said that he highlighted the differences between an existing and an intended fixed term agreement at the time of presenting the next intended form of agreement to Mr Clarke. [49] Neither the written contents of the first agreement (or of subsequent agreements) nor the oral advice given to Mr Clarke before entering the first (or subsequent) agreements, met the requirement to inform him of the"reasons for his employment ending in that way".[Emphasis in relation to para [44] added][42] The Judge was then required to consider the impact of his conclusions as to s66(2)(b). He expressed these conclusions in these terms:[53] If an employer cannot establish compliance with s66, such arrangements as have been made will not meet the statutory tests and employment will, thereby, be deemed to be employment of indefinite duration and not for a fixed term. The ending of that employment would be considered a dismissal and challengeable as to justification in the same way as any other dismissal from employment of indefinite duration. [60] It follows, therefore, that despite what the first and subsequent fixed term agreements purported to disclose, Mr Clarke was, from 6 November 2000, engaged on an individual employment agreement of indefinite duration and incorporating the terms of the then expired CEC. [61] That in fact is consistent with the actual "on the job" position as it transpired. Mr Clarke was employed continuously in the same job for almost two years. He underwent training, attained job related qualifications, and received pay increases. There was no discernible break in his employment: he continued doing the same work as if he had been a"permanent" employee. There was no criticism of his job performance. Although very well paid and, therefore, doubtless sought after, the Day Utilities position cannot be said to have demanded high qualifications, long relevant experience, or special skills. [62] It follows that it was not lawful for NSTL to have purported, periodically, to end Mr Clarke's employment and re-engage him. That was conduct in keeping with a number of fixed term agreements that were inconsistent with employment of indefinite duration. In spite of what both parties apparently believed to be the position at the time, that was deemed to be the position in law. The parties' understandings of their positions cannot deprive Mr Clarke of recourse to rights he did not appreciate he had. This means that it is open to Mr Clarke to challenge the justification for his dismissal by personal grievance.[43] The Judge then turned to consider whether the dismissal was justifiable. The Judge concluded that it was not and again it is appropriate to set out his conclusions in his own words:[63] Mr Clarke's dismissal came about as a result of NSTL appointing someone else to perform the job he held, having concluded that it would continue to require a Day Utilities employee performing the same duties, albeit fewer of them because of the elimination of the disc cutting work, as Mr Clarke had performed until then. [64] It was not justifiable for the employer to have decided to advertise Mr Clarke's job which he was performing without criticism, in effect simplybecause it wanted to find if there was anyone better to do it. It is no answer to say that Mr Clarke was entitled to apply for his own job and did so, although unsuccessfully. Employment law does not allow employers to advertise periodically the jobs of employees engaged in employment of indefinite duration to see either if such employees still lead the field of those interested in doing the job, or to upgrade the workforce by appointing someone else and thereby ending the incumbent's employment. In view of s66, it is now doubtful whether fixed term employment agreements can achieve these objectives, even if they are otherwise lawfully entered into. Mr Clarke's employment of indefinite duration was on the individual terms settled by the parties in November 2000 contained in his letter of employment and in the expired CEC. There was nothing in these provisions entitling NSTL to do what it purported to do when it appointed another person to do Mr Clarke's job. [65] Nor was it open to NSTL to agree with the union, in settlement of their dispute about "permanent" manning in the Day Utilities area, to advertise Mr Clarke's employment. Although he was a member of the union (albeit an unenthusiastic, even by then cynical, member) it could not bind him to an otherwise unlawful arrangement concerning his own employment agreement. NSTL had contractual obligations to consult about these matters not only with the union but with Mr Clarke. Although it did so with the union, there was no consultation about the situation that led to his job being advertised, with Mr Clarke as the expired CEC required. His dismissal was without justification in law.[44] The Judge went on to address remedies. He did so on this basis: 1. If Mr Clarke had not finished working at NSTL in October 2002 the probabilities were that NSTL would have kept his job open for him so as to permit him to travel to the United Kingdom to be with his ill mother and then to attend to funeral and associated arrangements after her death. 2. Mr Clarke was therefore entitled to compensation for loss of remuneration and other employment benefits (although necessarily being required to bring to account his earnings from his alternative employment). 3. Mr Clarke was entitled to "a modest award' for non-economic consequences of his dismissal. 4. Leave was reserved to revert to the Court in relation to quantification or other directions in the event that the parties could not agree as to the actual implementation of remedies indicated by the Judge.Overview of the issues on appeal[45] We see the central issues which we are required to address on this appeal as being: 1. Was there compliance with s66(2)(b) in relation to the initial agreement? 2. Was there compliance with s66(2)(b) in relation to the later agreements? 3. What is the effect of non-compliance with s66(2)? 4. Was Mr Clarke dismissed? 5. Is Mr Clarke's claim out of time? 6. Was the dismissal justified? 7. Can the remedies fixed by the Judge be challenged?Was there compliance with s66(2)(b) in relation to the initial agreement?[46] The relevant factual background lies within a narrow compass. There was no evidence of any advice to Mr Clarke as to the reasons for his employment ending on 3 February 2001 other than what appears in the letter of appointment. So this issue comes down to whether the reference in the letter of appointment to the maintenance of agreed manning levels served to "advise Mr Clarke of the reasons for his employment ending [on the date stipulated]". [47] The argument for NSTL on this point is based on the following proposition:[T]hat the requirement in the second limb of s66(2)(b) is met where an employer tells an employee the date their employment is to end and the reason why they have been employed on a fixed term basis. Clearly inherent in that combination is the reasons the employee's employment will end.[48] Counsel for Mr Clarke invited us to adopt the approach of the Employment Court. His position was that the reference to the purpose of maintaining "agreed manning levels" did not amount to an explanation why Mr Clarke's employment was to end on the date specified in the first of the fixed term agreements. [49] We have concluded that NSTL did not comply with s66(2)(b). [50] The Shorter Oxford English Dictionary gives meanings for "advise" which relevantly include offering advice and counselling on the one hand and giving notice, informing or apprising on the other. [51] There is some support in the Parliamentary history of the legislation for the view that the former set of meanings are primarily relevant. This is because the majority report of the Employment and Accident Legislation Committee on the Employment Relations Bill noted that[A] fixed-term agreement is a valid option so long as it is for genuine reasons and the employer explains those reasons to the employee before the fixed-term agreement is entered into.On the other hand, the words "advise of" (as opposed to "advise about") are consistent with the second and more formal set of meanings. So too is the structure of s66(2)(b). The obligation to "advise the employee of when or how his her employment will end" is more easily read as requiring the employer to provide the relevant information rather than offering advice or counsel. [52] Against that background, we consider that in s66 the phrase "advise of" has a meaning which is equivalent to "give notice of". So it is sufficient to comply with ss66(2)(b) if the employer brings the relevant reasons to the attention of the employee. We would likewise accept that a failure by an employee to take on board those reasons, perhaps because they are set out in a written document which he or she has been given but has chosen not to read, does not mean that the employer has failed to comply with s66(2)(b). [53] It follows that the Judge adopted an over-broad approach to the obligations of an employer. We refer in this respect to para [44] of the judgment, and in particularto the passage which we have placed in bold italics. We regard the background knowledge of an employee as being potentially highly relevant. This is because what, at first sight, might seem an elliptical statement of reasons on the part of an employer may well have been sufficient to bring those reasons fairly to the attention of the employee if the employee already knew all the missing details. [54] The reason for the employment of Mr Clarke was, indeed, to "maintain agreed manning levels" as the letter of appointment specified. But this was not, at least in express terms, an explanation why his employment was to end on the date specified, ie 3 February 2001. Judge Colgan held (see para [41] of his judgment, set out in para [38] above) that the reason was that bargaining between NSTL and the union over the eventual configuration of the Day Utilities team had not been completed and no final decision had been made as to what that configuration should be. [55] As we already indicated, we are inclined to think that the contestable selection process policy (see para [10] above) also formed part of the relevant reasons albeit that there was no express finding of fact by the Judge to this effect. [56] If Mr Clarke had known, in November 2000, of the substance of the interim agreement between the union and NSTL, and in particular, that the interim agreement as to manning levels was to subsist only pending an agreement as to the final configuration of the Day Utilities team, then, on the Judge's finding as to the relevant reasons, what was said in the letter of appointment would have been sufficient to satisfy the requirements of s66(2)(b). This is because we would, in this context, regard a reference to "agreed manning levels" as necessarily incorporating all other aspects of the agreement which were known to Mr Clarke. If our view that the contestable selection process policy also formed part of the relevant reasons is correct, then Mr Clarke's knowledge would have had to extend to that policy before the reference to "agreed manning levels" would have sufficed to ensure compliance with s66(2)(b). [57] Unfortunately for NSTL, there was no evidence before the Employment Court that Mr Clarke then knew sufficient of the substance of the interim agreementbetween the union and NSTL to provide a context in which the reference to "agreed manning levels" could be fairly regarded as satisfying s66(2)(b). We recognise that Mr Hofert gave general evidence to the effect that Mr Clarke, throughout his employment, knew that manning levels were under review. But we do not see this as sensibly applying to Mr Clarke's knowledge when he signed the first agreement. Mr Hofert did not deal with Mr Clarke at that time. It was never suggested to Mr Clarke in cross-examination that he had any knowledge in November 2000 of the reasons for the temporary nature of his employment which went beyond what was in the letter of appointment. [58] Against that background, we are satisfied that the Judge's conclusion that NSTL did not comply with s66(2)(b) in November 2000 was correct.Was there compliance with s66(2)(b) in relation to the later agreements?[59] On our assessment of the evidence and of the realities, we think it more likely than not that Mr Clarke appreciated before he signed the second of the fixed term agreements (in February 2001) that there was an agreement between NSTL and the union which covered agreed manning levels for the Day Utilities team but which was on an interim basis pending the taking of final decisions as to the eventual configuration of that unit. We also think that Mr Clarke would have appreciated that no permanent appointments would be made until final decisions were made and that this was a reason why his position was not permanent. [60] Where we hesitate in concluding that there was compliance with s66(2)(b) is on the point whether Mr Clarke recognised that there would be a contestable selection process if position was made permanent. There are two problems. The first is that it is unclear on the evidence whether Mr Clarke knew prior to signing the sixth fixed term agreement in April 2002 that there would be a contestable selection process. There is certainly no finding of fact on this point. The second is that the Judge did not expressly find that the contestable selection process policy was one of the relevant reasons for the purposes of s66(2)(b).[61] We have no desire to remit this case to the Employment Court for further hearing. For this reason, we propose to test the ultimate conclusions of the Judge on the assumption that NSTL complied with s66(2)(b) in relation to the second and subsequent fixed term agreements.What is the effect of non-compliance with s66(2)?[62] The Judge held that the effect of NSTL's non-compliance with s66 was that Mr Clarke's employment was of indefinite duration. [63] Counsel for NSTL challenged this conclusion. He contended that s66(2)(b) is aimed at process and not substance and that a fixed term agreement entered into for a genuine reason should not be held to be ineffective on procedural grounds. [64] This submission was not developed in great detail. Indeed, it would be difficult to do so. [65] Section 66 does not specify the consequences of non-compliance. [66] The Parliamentary history is of some but limited assistance. Clause 81 of the Employment Relations Bill (the precursor of the current s66) was, in some respects more stringent than s66 but it did not impose an obligation to advise employees of the reasons for a fixed-term agreement. The passage to which we have referred from the report of the Select Committee (see para [51] above) suggests that compliance with what is now s66(2)(b) was seen as fundamental to an effective fixed term agreement. In the only Parliamentary speech which addressed this issue even obliquely, the then associate Minister of Labour in her contribution to the debate on 9 August 2000 said:This part of the bill makes it clear that people can have a fixed-term agreement, but there has to be informed consent to that agreement.The reference to "informed consent" would appear to encompass the s66(2)(b) obligation to advise the employee of the reasons for the fixed term nature of the agreement.[67] So the Parliamentary history provides some support for the Judge's view. [68] Further, it is unrealistic to ascribe to the legislature an intention that a failure to comply with s66(2)(b) should be of no moment. Section 62(a) and (b) are both prefaced by the word "must". As a matter of ordinary English, it is not possible to construe the language of s66(2)(b) so as to treat the requirements to advise the employee of how and when his or her employment will end as fundamental to the effectiveness of a fixed-term agreement (as they plainly are) but the requirement to advise the employee of the underlying reasons as being of less or no significance. [69] In any event, what sanction for compliance might there be unless this consequence were to occur? It cannot be that the nature or quality of the employment should be something less than a fixed term agreement; nor that non-compliance should have no consequence. It must be that the qualification of a fixed term is to be ineffective. [70] It follows that we are broadly in agreement with the approach of the Judge although – and perhaps this is semantic point – we prefer to express our conclusion in slightly different terms. We are of the view that a provision as to termination of a fixed term agreement is ineffective when s66(2)(b) has not been satisfied.Was Mr Clarke dismissed?[71] For reasons already indicated we propose to approach the case on the basis that there was non-compliance with s66(2)(b) in respect of the first of the fixed term agreements but on the assumption that there was compliance in respect of the later agreements. [72] It is clear from the judgment that if Judge Colgan had found that s66(2)(b) was satisfied in relation to the second and subsequent agreements he would nonetheless have concluded that Mr Clarke was dismissed.[73] In its submissions to us, NSTL did not seek to argue Mr Clarke was not dismissed if the pattern of our findings was as expressed in para [71] above - a possibility which was expressly addressed in argument. [74] Given the absence of an argument to the contrary from NSTL we can address this issue briefly. We are of the view that Mr Clarke's employment was brought to an end pursuant to processes which depended for their validity on the effectiveness of all the fixed term agreements. These processes were implemented by NSTL. In those circumstances we think that Mr Clarke was dismissed by NSTL.Is Mr Clarke's claim out of time?[75] Consistently with our general approach to the case, we address this issue on the footing that the first agreement was not within s66 (and thus in accordance with the approach adopted by the Judge) but, departing from the approach taken by the Judge, on the assumption that there was compliance with s66 in relation to the second and subsequent agreements. [76] Counsel for NSTL contended that non-compliance with s66(2)(b) in relation to the first fixed term agreement must have the consequence that Mr Clarke was dismissed in February 2001. He sought to argue that Mr Clarke's claim was thus out of time as he did not raise a personal grievance about his dismissal within the 90 days stipulated by s114(1) of the Act. [77] Sections 114 and 115 provide:114 Raising personal grievance(1) Every employee who wishes to raise a personal grievance must, subject to subsections (3) and (4), raise the grievance with his or her employer within the period of 90 days beginning with the date on which the action alleged to amount to a personal grievance occurred or came to the notice of the employee, whichever is the later, unless the employer consents to the personal grievance being raised after the expiration of that period. (2) For the purposes of subsection (1), a grievance is raised with an employer as soon as the employee has made, or has taken reasonable steps to make, the employer or a representative of the employer aware that theemployee alleges a personal grievance that the employee wants the employer to address. (3) Where the employer does not consent to the personal grievance being raised after the expiration of the 90-day period, the employee may apply to the Authority for leave to raise the personal grievance after the expiration of that period. (4) On an application under subsection (3), the Authority, after giving the employer an opportunity to be heard, may grant leave accordingly, subject to such conditions (if any) as it thinks fit, if the Authority— (a) is satisfied that the delay in raising the personal grievance was occasioned by exceptional circumstances (which may include any 1 or more of the circumstances set out in section 115); and (b) considers it just to do so. (5) In any case where the Authority grants leave under subsection (4), the Authority must direct the employer and employee to use mediation to seek to mutually resolve the grievance. (6) No action may be commenced in the Authority or the Court in relation to a personal grievance more than 3 years after the date on which the personal grievance was raised in accordance with this section.115 Further provision regarding exceptional circumstances under section 114For the purposes of section 114(4)(a), exceptional circumstances include— (a) where the employee has been so affected or traumatised by the matter giving rise to the grievance that he or she was unable to properly consider raising the grievance within the period specified in section 114(1); or (b) where the employee made reasonable arrangements to have the grievance raised on his or her behalf by an agent of the employee, and the agent unreasonably failed to ensure that the grievance was raised within the required time; or (c) where the employee's employment agreement does not contain the explanation concerning the resolution of employment relationship problems that is required by section 54 or section 65, as the case may be; or (d) where the employer has failed to comply with the obligation under section 120(1) to provide a statement of reasons for dismissal.[78] Counsel for Mr Clarke said that NSTL had not raised any issue regarding the 90 day period before either the Employment Relations Authority or the Employment Court. As well, he noted that the 90 day period provided for by s114(1) commences only with "the date on which the action alleged to amount to thepersonal grievance occurred or came to the notice of the employee, whichever is the later". He asserted that "the action alleged to amount to the personal grievance" only came to the notice of Mr Clarke when he realised that there had been non- compliance with s66(2)(b). [79] We appreciate that Mr Clarke's pleadings focused on an alleged unjustifiable dismissal occurring in April or June 2002. As well his solicitor's letter of 11 June 2002 (which is set out in full in the judgment of Heath J in para [111] below) in which Mr Clarke's personal grievance was raised primarily addressed the events commencing in April 2002. One of the problems with the case is that Mr Clarke never appears to have fully taken on board the significance of the contestable selection policy. He appears to have regarded his employment as being in substance of indefinite duration unless manning level reviews resulted in a down-sizing of the Day Utilities team. On that basis, his initial focus on the events beginning in April 2002 (when what he saw as "his" job was advertised) is understandable. On our preferred view (which is that the contestable selection policy was one of the "reasons" for Mr Clarke's temporary employment) his misunderstanding in this regard resulted from failures on the part of NSTL to comply with s66(2)(b). [80] In any event, there were also general allegations (unparticularised as to dates) in the statement of claim which included the contention that NSTL had not complied with s66(2). Further, although the solicitor's letter of 11 June 2002 focused on later events, we think that the complaints can fairly be read as extending to all of the fixed term agreements. In this context, we think that NSTL was on notice that the claims against it extended to the contention that there had been non-compliance with s66(2)(b) in relation to the first of the fixed term agreements and should therefore have pleaded s114 if it intended to rely on it along with the associated argument that if there was a dismissal it occurred on the "expiry" on the first of the fixed term agreements. [81] If the s114(1) point and associated arguments had been taken in the Employment Court:1. Judge Colgan may well have addressed the significance of the contestable selection policy. If he formed the same view as we have, he may well have concluded – and unimpeachably - that NSTL did not comply with s66(2)(b) in relation to the second and subsequent fixed term agreements 2. Judge Colgan, in any event would have been required to determine when the dismissal occurred. On our appreciation of the case, Mr Clarke was dismissed by degrees. So it is distinctly arguable that, for the purposes of s114, his dismissal did not occur until April 2002 (when the decision was made to advertise Mr Clarke's job, as he saw it), May 2002 (when someone else was appointed to Mr Clarke's job) or October 2002 (when Mr Clarke was finally sent away). 3. If of the view that the dismissal occurred prior to April 2002 (and thus outside the 90 days preceding the raising of the grievance), Judge Colgan would have then addressed when Mr Clarke had notice of the actions giving rise to his grievance and it is at least conceivable that he may have held that this was not until he appreciated that NSTL had not complied with s66(2)(b). 4. If against Mr Clarke on all of these issues, Judge Colgan would have then considered whether to exercise the s114(4) discretion in favour of Mr Clarke. Conceivably the contestable selection policy may have been significant because if Mr Clarke throughout laboured under misunderstandings as to what would happen if "his" position was made permanent as a result of a breach of s66(2)(b) by NSTL, this would have provided a basis for a favourable exercise of the s114(4) discretion. [82] Given these considerations, we are not prepared to permit the s114(1) point to be raised for the first time in this Court.Was the dismissal justified?[83] Counsel for NSTL argued that there was justification for the dismissal. The purpose of the first and subsequent fixed term agreements was expressed to be tomaintain agreed manning levels. Once that purpose was spent, there was justification for the dismissal. Further, Mr Clarke knew from the outset that his employment was intended to be temporary. He was one of those who, in early 2002, was pressing NSTL to make the temporary positions in the Day Utilities team permanent and he applied for the new permanent positions when they were created. The Judge held that the selection process for those positions was fair. [84] On balance, however, we are of the view that the Judge's general approach to this issue was correct and broadly for the reason which we have already given in a related context in paras [66] - [69] above. Section 66 was intended to change the law in this area. Where an employer has not complied with s66(2), it would be inconsistent with the policy of the Act to regard the purportedly fixed term nature of an agreement (or the underlying reasons) as justifying a dismissal. To put it another way, we would be flying in the face of the policy underlying s66 if we concluded that NSTL, despite not complying with s66(2), was entitled to justify the dismissal by reference to either the fixed term nature of the first of the fixed term agreements or its reasons for requiring such a fixed term agreement. [85] This is not to say that the terms of an invalid fixed term agreement and the underlying reasons of the employer are necessarily irrelevant where s66 has not been complied with. For instance, if the manning level reviews had resulted in a decision to reduce the size of the Day Utilities team to 5 with the result that Mr Clarke's employment was terminated, NSTL might well have sought to justify his dismissal on grounds of redundancy. In assessing such an argument, the terms of the fixed term agreements would have been highly relevant.Can the remedies fixed by the Judge be challenged?[86] NSTL seeks to challenge the Judge's decisions to direct reinstatement and as to financial compensation. [87] The first issue turned on whether reinstatement was "practicable" for the purposes of s125(2) of the Act.[88] The reinstatement as directed by Judge Colgan is likely to be difficult for NSTL. The last of the permanent positions in the Day Utilities team was filled in April 2003. Redundancies at the mill are likely so there are no spare places for Mr Clarke. As well, there is said to be continuing ill-will associated with the dispute (particularly as between Mr Clarke and the union) which might affect the working environment of the Day Utilities team. [89] Whether reinstatement was appropriate was a closely balanced question and could have been decided either way. But it is not tenable to argue that the Judge's decision was irrational. In saying this we note that Mr Clarke worked in the Day Utilities team until mid-October 2002 despite his personal grievance being before the Employment Relations Authority, and seemingly without difficulty. Further, given the imminence of the Employment Court hearing, NSTL was unwise to appoint to the third of the new permanent positions in April 2003. We see the decision by the Judge on this aspect of the case as being well open to him. [90] The financial compensation argument is associated with the illness and death of Mr Clarke's mother and its impact on the alternative employment he obtained and its likely impact on his employment with NSTL had it continued after October 2002. [91] The Judge's approach to these questions was orthodox. He formed a view as to what would have happened if Mr Clarke had remained with NSTL after October 2002. This necessarily involved a hypothetical question – the assessment of a counter-factual – as causation and damages issues often do. Such an assessment is often made on the basis of a Judge's evaluation of the probabilities rather than by reference to after the fact evidence by the parties as to how they may have responded if events had panned out differently. The Judge concluded that NSTL would have granted Mr Clarke whatever leave was necessary. Counsel for NSTL did not take us to any evidence which was inconsistent with this conclusion. Having reached this conclusion, the Judge then had to compare Mr Clarke's actual earnings with what he would have earned if not unjustifiably dismissed. In substance it is the basis for his indicative conclusions as to financial relief.[92] We see the conclusions reached by the Judge on this phase of the case as turning on questions of fact and as being available to him. The fact that Mr Clarke would have almost entirely mitigated his loss but for circumstances which lay outside the control of NSTL seems to us to be irrelevant given that, for reasons outside his own control, such mitigation did not occur. [93] We note that the arguments as to remedies were not signalled in the application for leave to appeal.Disposition[94] In accordance with these views of the majority the appeal is dismissed. The respondent is awarded $6,000 by way of costs together with costs and disbursements (including the reasonable travelling expenses of counsel) to be agreed and, failing agreement, to be fixed by the Registrar.HEATH J Introduction[95] Norske Skog Tasman Ltd (NSTL) appeals against a judgment of Judge Colgan, delivered in the Employment Court on 26 June 2003. The judgment under appeal is reported as Clarke v Norske Skog Tasman Ltd (2003) 7 NZELC 97,227. At issue is the true construction of s66 of the Employment Relations Act 2000 (the Act). Section 66 deals with the topic of fixed term employment. The section is set out in full in para [32] of the majority judgment, delivered by William Young J. [96] Section 66(1) of the Act permits an employer and an employee to agree that employment of an employee will end at the close of a specified date or period, on the occurrence of a specified event or at the conclusion of a specified project.[97] Section 66(2) of the Act provides that before an employer and employee agree that the employment of the employee will end in one of the three ways specified in s66(1), the employer must: a) have genuine reasons based on reasonable grounds for specifying that the employment of the employee is to end in that way; and b) advise the employee of when or how his or her employment will end and the reasons for his or her employment ending in that way. [98] At the time of the events in issue in this case, s66(3) defined two reasons that are deemed, as a matter of law, to be an insufficient basis for a genuine fixed term employment agreement. The first is where an employer seeks to exclude or limit the rights of an employee under the Act. The second is where an employer seeks to establish the suitability of an employee for permanent employment through an initial (but fixed) term of temporary employment. Neither constitutes a "genuine reason" for a fixed term agreement for the purposes of s66(2)(a). Subsequently, a third reason has been added to s66(3); namely, where an employer seeks to exclude or limit the rights of an employee under the Holidays Act 2003. [99] While the central question is the true construction of s66 of the Act, in my view three separate questions of law arising on this appeal can be identified: a) With what degree of specificity must an employer advise an employee of when or how his or her employment will end and the reasons for employment ending in that way? b) In determining whether there has been compliance with the requirement to advise reasons for employment ending in the manner stipulated, can account be taken of personal knowledge of the employee gained independently of any written or oral communication between employer and employee?c) If an employer breaches s66(2)(b) but, nevertheless, has genuine reasons based on reasonable grounds for the fixed term employment agreement, what are the consequences of breach? [100] All three questions arise out of the submissions made on the application for leave to appeal to this Court. Leave to appeal was granted by this Court on 22 September 2003.Structure of judgment[101] I deal with the questions arising on this appeal in the following sequence: a) First, I set out the background facts against which the section falls to be construed in this case. b) Second, I set out the procedural history of the employment problem raised by Mr Clarke. c) Third, I discuss the proceedings in, and the judgment of, the Employment Court. d) Fourth, I analyse the issues of interpretation arising out of the Employment Court's judgment. e) Fifth, I determine the degree of specificity with which an employer must advise an employee of when or how his or her employment will end and the reasons for employment ending in that way. f) Sixth, I determine whether, in ascertaining whether there has been compliance with the requirement to advise reasons for employment ending in the manner stipulated, regard may be had to personal knowledge of the employee gained independently of written or oral communications between employer and employee.g) Seventh, I consider the consequences of breach of s66(2)(b). h) Eighth, I state my conclusions.Background facts[102] I gratefully adopt the summary of background facts contained in paras [3]- [29] (inclusive) of the majority judgment. There are two aspects on which I wish to expand on that summary. The first is to set out in more detail the nature of the eight fixed term contracts entered into between November 2000 and July 2002. The second is to refer to evidential material to which the majority do not refer but which has informed my view of the case. [103] I summarise below the eight fixed term contracts entered into between November 2000 and July 2002: a) An initial fixed term from 6 November 2000 to 3 February 2001 to implement the agreement reached with the Union on 16 October 2000. b) A further fixed term from 4 February 2001 to 1 June 2001 to maintain the agreed manning levels. c) A further fixed term from 7 June 2001 to 1 October 2001 to maintain the agreed manning level. d) A further fixed term from 2 October 2001 to 31 December 2001 to maintain the agreed manning level. From that point the requirement to maintain the agreed manning level was mentioned together with the review of disc-cutting operations. e) A further fixed term from 1 January 2002 to 1 March 2002 to maintain the agreed manning level. Again the disc-cutting review was referred to.f) A further fixed term from 2 March 2002 to 30 April 2002 to maintain the agreed manning level. Again the disc-cutting review was referred to. g) A further fixed term being from 1 May 2002 to 14 June 2002. The circumstances around this fixed term are described below. Like the other letters of appointment given to Mr Clarke, this document records that Mr Clarke should have no expectation of ongoing employment at NSTL after the expiry of the contract. h) A further fixed term from 15 June to 12 July 2002. As with the May-June fixed term, and as discussed with Mr Clarke in late April and early May, this extension was to maintain the agreed manning level until the selection process was concluded. [104] Both Anderson P and William Young J acknowledge that when Mr Clarke signified his acceptance to the terms of the first fixed term employment agreement he acknowledged that he had had the opportunity to take independent advice as to the meaning and effect of the agreement: see para [9] of the majority judgment. Section 64(2)(b) of the Act required NSTL to provide him with that opportunity. As a matter of fact, Mr Clarke did not avail himself of the opportunity provided. [105] The evidence called before the Employment Court did not focus on the nature or extent of Mr Clarke's knowledge of the reason for the need to "maintain agreed manning levels" at the time he entered into the first fixed term contract. In particular, there was no evidence to suggest that Mr Clarke knew the precise terms of the agreements entered into between NSTL and the Union in September and October 2000. [106] Nevertheless, it is clear that Mr Clarke applied for a fixed term position. There is no suggestion, in Mr Clarke's evidence (or, indeed anyone else's evidence), that he was employed on the basis of a contract of indefinite duration, terminable on reasonable notice.[107] The evidence of Mr Hofert, the Performance Leader, Paper Finishing at NSTL (whose evidence was preferred, by the Employment Court Judge, to the evidence of Mr Clarke where their evidence conflicted) strongly suggested that Mr Clarke knew, throughout his employment, that the manning levels were under review. Mr Hofert's evidence was supported by Mr Wallace, a union negotiator. [108] Mr Hofert gave evidence that all employees in the area were aware of the review and that NSTL and the Union provided "a wealth of information about these issues". Mr Hofert also said that Mr Clarke acknowledged at the investigation meeting held in Tauranga, before the Employment Relations Authority (the Authority) that he was aware of the uncertainty over manning and the future of the disc cutter. [109] On 10 April 2002 NSTL received notification of a dispute from the three "permanent" employees in the Day Utilities team. NSTL agreed to advertise two of the three existing vacancies immediately. The vacancies were advertised. About a week after advertising the selection panel met and reduced the list of candidates to a short list of six. [110] Mr Clarke had applied for a permanent position. He was not, however, one of those short-listed for consideration. Mr Clarke first raised a personal grievance under s114 the Act after he was told that he had not been short-listed for the "permanent" vacancy. [111] Mr Clarke's grievance was notified to NSTL by a letter dated 11 June 2002 from his solicitors. The letter was transmitted by facsimile. The grievance was expressed in the following terms:We act for Mr Clarke. He has instructed us regarding his employment with your company. Our instructions are that Mr Clarke has been employed since 6 November 2000 as a day utilities operator in the finishing department of your company.Your company has purported to employ Mr Clarke on a temporary position by means of six fixed term contracts from commencement date to 14 June 2002 inclusive.The company has recently advertised two permanent positions replicating exactly the work that Mr Clarke has been doing for approximately the last 19 months. We are instructed that Mr Clarke fulfils all the requirements ie experience, essential skills, desirable skills and education for what amounts to his job now being advertised as a permanent position. We understand that there is only one other employee in a similar position to that of Mr Clarke. Furthermore, Mr Clarke made an application for appointment to the permanent position. He received written advice from the company by letter of 21 May 2002 rejecting his application. He was not even given the opportunity of a job interview.It is clear that, while the company may once have had legitimate reason for engaging Mr Clarke on a fixed-term contract, that reason no longer exists. Certainly, in our view, the company is precluded by virtue of s66 of the Employment Relations Act 2000 from claiming that it had legitimate reasons for maintaining Mr Clarke on fixed-term contracts, particularly the last one running from 1 May 2002 until Friday 14 June 2002, when it is clear that a permanent position was in contemplation.There have been no issues raised regarding Mr Clarke's job performance. He is the long term incumbent of one of the positions now being advertised as a permanent position, ie it is in fact his job that is being made permanent. In short, under the circumstances, the fixed-term contracts for Mr Clarke were a sham given that he has held for some 19 months one of the positions now being advertised as permanent and that there has been repeated renewals of his fixed-term contracts giving him a reasonable expectation of ongoing employment. We understand that the company intends to hold job interviews this Wednesday 12 June 2002. The company is hereby put on notice that if it does [not] intend to offer Mr Clarke permanent employment in the work that he has been doing for the last 19 months, then he will pursue his remedies to the fullest extent available under the law, including damages and reinstatement. If the company does not undertake to preserve Mr Clarke's employment by 4.45pm today, then an application for urgent injunctive relief may be filed with the Employment Relations Authority. Please advise urgently by return facsimile today what the company's intention in that regard are. We look forward to your urgent response. Please direct all communications regarding Mr Clarke's employment to us. . (my emphasis)[112] The solicitors for NSTL responded the following day. NSTL's response to the grievance was summarised succinctly in the second paragraph of its solicitors' letter to the solicitors for Mr Clarke of 12 June 2002. They said:The company is firmly of the view that the employment agreement entered into between it and Mr Clarke on 1 May this year was a genuine fixed term agreement. The company had a genuine reason for requiring Mr Clarke's services on a fixed term basis, namely the requirement to maintain appropriate manning levels pending the creation of a permanent position. While a decision had been made to create a new permanent role, that decision had not been implemented. Until that occurs there was (and will be) a genuine commercial need to maintain the required manning level. Mr Clarke was clearly advised of the situation when he entered into the fixed term agreement. He did not raise any concerns about the fixed term at that time.[113] The employment problem articulated by Mr Clarke's solicitors focussed on the last of the fixed term contracts, from 1 May 2002 until 14 June 2002. Mr Clarke's real grievance was that he had not been appointed to the permanent position advertised. Clearly, as is evident from the nature of the eight fixed term contracts, and the evidence of Mr Hofert (see paras [107] and [108] above), by 1 May 2002 Mr Clarke was well aware of the reasons for the fixed term contracts on which he had been engaged.The procedural history[114] In the absence of an agreed resolution, Mr Clarke's employment problem was submitted to the Authority for determination. [115] In the Authority, Mr Clarke advanced two claims. The first alleged unjustifiable dismissal. This claim was premised on the absence of a genuine reason for all fixed term contracts. The second was a claim for unjustifiable disadvantage. This claim focussed on the selection process when the "permanent" vacancy was advertised at the conclusion of the sixth fixed term contract. The unjustifiable dismissal claim was based on s103(1)(a) of the Act. The unjustifiable disadvantage claim was based on s103(1)(b). [116] Mr Clarke sought "reinstatement" to a "permanent" position, compensation for distress and humiliation and a compliance order requiring NSTL to comply with terms of the expired Paper Division Day Utility Finishing & Despatch Collective Employment Contract. Damages were also sought.[117] Mr Clarke's claims were heard by the Authority (Mr T Woods) on 30 July 2002. In a determination made on 19 August 2002 the Authority held in favour of NSTL on both claims. [118] Having been unsuccessful before the Authority, Mr Clarke elected to have his grievance heard afresh by the Employment Court under s179 of the Act.The Employment Court proceedings(a) The pleaded issues in the Employment Court[119] Section 179(1) and (2) of the Act provide that a party who is dissatisfied with the determination of the Authority, or any part of that determination, may elect to have the matter heard by the Employment Court within the stipulated time. Section 179(3) of the Act states:179 Challenges to determinations of Authority (3) The election must— (a) specify the determination, or the part of the determination, to which the election relates; and (b) state whether or not the party making the election is seeking a full hearing of the entire matter (in this Part referred to as ahearing de novo). [The Act's emphasis][120] By s183 of the Act, where a party has elected to have the matter heardde novo by the Employment Court, the Court must make its own decision on that matter and any relevant issues. Accordingly, the Employment Court exercises an originating jurisdiction as opposed to an appellate review. [121] In his Statement of Claim in the Employment Court Mr Clarke contended that NSTL had: a) Unjustifiably dismissed him on 14 June 2002 or 30 April 2002.b) Breached its statutory duties of good faith. c) Breached the implied contractual terms of trust, confidence and fair dealing. d) Breached express terms of its employment agreement with Mr Clarke. e) Breached its statutory duties under s66(2) of the Act. f) Engaged in conduct that misled, deceived or was likely to mislead or deceive Mr Clarke, in breach of s12 of the Fair Trading Act 1986. [122] Mr Clarke sought the following remedies: a) Reinstatement "to his job as Day Utilities Operator from 14 June 2002 or 30 April 2002 as the case may be". b) Compensation for distress and humiliation under s125(c)(i) of the Act in the sum of $10,000. c) Compliance orders (varying, depending upon whether reinstatement was or was not ordered) requiring NSTL to comply with terms of the expired collective employment contract. d) An order setting aside costs awarded against Mr Clarke by the Authority. e) Costs of the proceedings before the Employment Court. [123] Two aspects of Mr Clarke's claims in the Employment Court deserve specific mention: a) The first concerns the date on which Mr Clarke alleged he was unjustifiably dismissed. On his own case, unjustifiable dismissal occurred on either 30 April 2002 or 14 June 2002. Those datesrepresent the end of the sixth and seventh fixed term employment agreements. b) The second concerns the nature of the claim before the Employment Court. In contrast to the claim put before the Authority (see para [115] above) Mr Clarke did not pursue a claim for unjustifiable disadvantage in the Employment Court. Instead, Mr Clarke focussed his claim on the lack of genuine reasons for employing him on a fixed term contract. On that issue the Employment Court found against Mr Clarke.(b) The Employment Court's judgment[124] The Employment Court found that NSTL had complied with s66(2)(a) of the Act in respect of each of the fixed term contracts. Judge Colgan made an affirmative finding that:Not only were the employer's reasons not those, or of the sort specified, in s66(3), but they were both genuine and reasonable. (para [41] at 97,236)[125] The Judge also found that NSTL met the first of the two obligations cast upon it by s66(2)(b) before each of the fixed term agreement were entered into. In other words, NSTL advised Mr Clarke when and how the fixed term agreement would end, by reference to a calendar date: see para [42] at 97,236. [126] However, the Judge held that NSTL did not comply with s66(2)(b) because it failed to advise Mr Clarke why Mr Clarke's employment would end in that way. Judge Colgan held that NSTL failed to advise Mr Clarke of the reasons for his employment ending in the way it was intended because it failed to do that before the first agreement was signed by Mr Clarke: see paras [43], [44], [49] and [50] at 97,236-97,237. [127] The Judge took the view that he needed to consider only the first of the consecutive fixed term contracts because of what he concluded were the consequences of non-compliance with s66(2)(b): para [44] at 97,236.[128] Judge Colgan held that the consequence of failure to comply with s66(2)(b) was that Mr Clarke was employed continuously under an individual employment agreement of indefinite duration, incorporating the terms of the then expired collective employment contract: para [60] at 97,239. On the Judge's findings (contrary to Mr Clarke's own pleading: cf paras [121] and [122] above) employment of that type commenced on 6 November 2000. [129] Because NSTL purported to terminate Mr Clarke's contract based on effluxion of time Judge Colgan held the dismissal to be unjustified: paras [63]-[65] at 97,239. The Judge found that reinstatement ("as the primary remedy") was appropriate: para [72] at 97,241. [130] Mr Clarke was ordered to be reinstated on terms maintaining the benefits for continuity of his employment commencing on 6 November 2000. NSTL was ordered to pay Mr Clarke the salary he was earning when unjustifiably dismissed or the difference between current earnings with any other employer and that salary. The parties were left to negotiate (or mediate) "the practicalities of reinstatement": paras [80] and [81] at 97,242-97,243. The Judge reserved the question of compensation for lost remuneration from the date of dismissal, as well as questions of non-economic loss under s123(c)(i) of the Act and costs: paras [83] and [84] at 97,243.(c) How did the Employment Court reach those conclusions?[131] Judge Colgan reached those conclusions by reference to the purpose of s66, discerned from his analysis of its terms, its surrounding provisions, earlier authority dealing with fixed term contracts, an International Labour Organisation Convention and various reports prepared during the passage of the Employment Relations Bill through the House of Representatives. Generally, see paras [32]-[40] at 97,234-97,235. More particularly, the Judge took the view that the purpose of requiring advice of the reason for employment ending in that way was to provide an additional basis for an unjustifiable dismissal claim arising out of a purported fixed term contract: see para [50] at 97,237.[132] In considering the purpose of s66 of the Act, the Judge took into account s60 of the Act. That provision states the objectives of Part 6 of the Act, the Part in which s66 is to be found. Part 6 of the Act is headed "Individual employees' terms and conditions of employment". [133] Section 60 states:60 Object of this PartThe object of this Part is— (a) to specify the rules for determining the terms and conditions of an employee's employment; and (b) to require new employees, whose terms and conditions of employment are not determined with reference to a collective agreement, to be given sufficient information and an adequate opportunity to seek advice before entering into an individual employment agreement; and (c) to recognise that, in relation to individual employees and their employers, good faith behaviour is— (i) promoted by providing protection against unfair bargaining; and (ii) consistent with the implied term of mutual trust and confidence in the relationship between employee and employer.[134] Referring to s60(b), the Judge said:The sufficiency of information requirement informs how s66 is to be interpreted (para [38], at 97,235).[135] The Judge continued:All of the requirements of s66 are cumulative in the sense that each of the obligations placed upon the employer must be met. The failure of any one of those obligations cannot be cured by (even substantial) compliance with some or all of the remainder. (para [39] at 97,235)[136] The Judge saw s66 as "a legislative compromise" between two lines of judicial authority dealing with fixed term contracts. One line of authority commenced with Actors' Equity of New Zealand IUOW v Auckland Theatre Trust[1989] 2 NZLR 154 (CA); the other had its origins in The Principal of Auckland College of Education v Hagg [1997] 2 NZLR 537 (CA).[137] In Hagg, this Court held that employers and employees were at liberty to enter into fixed term contracts. The Court also decided that, in most cases, termination of employment on the expiry of a lawful fixed term contract did not amount to a dismissal. Judge Colgan viewed s66 as Parliament's response to Hagg. In his view, the previous law (stated in Actors Equity and Smith v Radio i Ltd [1995] 1 ERNZ 281 (EC)) was restored by s66. [138] In effect, the Judge concluded that breach of s66(2)(b) of the Act, prior to the first fixed term agreement being entered into, had the consequence of metamorphosing what the Judge had held to be genuine fixed term employment agreements (see para [124] above) into a single employment agreement of indefinite duration, to which Mr Clarke could be reinstated. It is necessary to analyse whether that startling proposition can be justified on an interpretation of s66 of the Act. [139] Before doing so, I record Judge Colgan's views about the consequences of any breach of s66:[52] Parliament intended to both allow some fixed term agreements to expire without their expiries being dismissals challengeable by personal grievance claims, and to require such arrangements to be genuine and to establish qualifications for their validity. It set out those qualifications in s66 so that employers wishing to have fixed term agreements must satisfy a number of conditions before entering into them and, if necessary, establish the genuineness and other statutory qualifications of fixed term agreements by proving that these statutory prerequisites existed at that time, if later challenged. Parliament required not only that fixed term agreements have to be for genuine reasons based on reasonable grounds under s66(2)(a) as elucidated in subs (3) but, additionally and independently, that there will be a communication of both the detail of the end of such an agreement and the reasons for it ending that way under s66(2)(b). It is not sufficient that a fixed term agreement is such for genuine reasons based on reasonable grounds and that its end is clearly signalled. Additional advice of the reasons for that fixing of the term is required to be given to the employee.[53] If an employer cannot establish compliance with s66, such arrangements as have been made will not meet the statutory tests and employment will, thereby, be deemed to be employment of indefinite duration and not for a fixed term. The ending of that employment would be considered a dismissal and challengeable as to justification in the same way as any other dismissal from employment of indefinite duration.(my emphasis) (at 97,237-97,238)[140] Having expressed those views, the Judge reinforced his conclusion by reference to the Explanatory Note to the original Bill on which the Act was based,cl 81 of the Bill and the majority report of the Employment and Accident Insurance Legislation Select Committee. I refer to paras [54]-[58] (inclusive) at 97,238. The Judge then said:[59] The references to "undermine the Act" in the Department of Labour's report, "which provide that a fixed-term agreement is a valid option " in the Select Committee's report and that ",,, the arrangement can survive " also in the Committee's report, tend to confirm that non-compliance with the statutory prerequisites was intended to mean that there would not be a lawful fixed term agreement and, therefore by inference, that the employment would be of indefinite duration. I do not consider that Parliament went so far as to continue, but only by implication, the Bill's original intention that the termination of an invalid fixed term agreement would amount not only to a dismissal but also to a deemed unjustified dismissal. However, the previous common law that the termination of an invalid or unlawful fixed term contract was a dismissal, was what Parliament intended to continue and that the Court or the Authority would then have to determine the justification for that dismissal. (at 97,238-97,239)Is the Employment Court's interpretation of s66 sustainable?[141] In my view, the validity of the Employment Court's judgment that Mr Clarke ought to be "reinstated" to employment under an employment agreement of indefinite duration, incorporating the terms of the then expired employment contract, with effect from 6 November 2000 rests on the correctness, in law, of the following propositions: a) Even though NSTL had both genuine and reasonable grounds to employ Mr Clarke on each of the fixed term agreements, the agreements were never operable as fixed term agreements because NSTL failed, prior to the first fixed term contract, to communicate the reasons why Mr Clarke's employment would end in the manner stipulated in accordance with s66(2)(b) of the Act. Generally, see paras [124]-[126] above. b) It was unnecessary to consider the validity of subsequent fixed term agreements because of the consequence of non-compliance with s66(2)(b) of the Act: namely, that the employment agreement under which Mr Clarke was employed was deemed to be an individualemployment agreement of indefinite duration. See paras [127] and [128] above. c) Mr Clarke was unjustifiably dismissed because NSTL purported, unlawfully, to terminate an employment agreement of indefinite duration on the wrongful ground of effluxion of time. See para [129] above. d) Because the nature of the contractual arrangement entered into between NSTL and Mr Clarke was always, in law, an employment agreement of indefinite duration, terminable on reasonable notice, it was appropriate to "reinstate" Mr Clarke to the position he held under that contract. See para [130] above. [142] There are a number of difficulties with the Judge's analysis. The most fundamental difficulties seem to be: a) The suggestion that a genuine fixed term employment agreement can transformed into an employment agreement of indefinite duration because of a failure to communicate one or more of the matters set out in s66(2)(b) of the Act. b) A reversal of the correct order of analysis in interpreting s66. It seems odd, with respect, to commence an analysis by considering the consequence of non-compliance. Ordinarily, one would establish the purpose of a particular provision and then determine the consequence of non-compliance with a provision of that nature. c) The Judge prejudiced NSTL's presentation of its case by holding that it was unnecessary to consider whether the second and subsequent fixed term employment agreements were valid. Mr Clarke always put his claim on the basis that the fixed term agreements of which he made complaint were not genuine. He sought reinstatement as from either 14 June 2002 or 30 April 2002 on that basis. He had to put hiscase on that basis as more than 90 days had elapsed since the failure to comply with s66(2)(b). Thus, he had no right to claim a personal grievance in respect of the first fixed term contract: see s114(1) of the Act. On this issue I part company with the majority's view. While they take the view that NSTL is precluded from taking a limitation point because it was not raised in the Employment Court, the issue never arose on Mr Clarke's pleading and could not, therefore, be the subject of a response pleading limitation. The issue arose squarely from the Employment Court judgment. For that reason I would be prepared to allow the limitation point to be argued in this Court. [143] I consider those three issues below. I commence my analysis by reference to the provisions of the Act, the reasons why the provision appears to have been enacted, and the statutory aids to construction to which I am entitled to refer. For ease of reference, I note that s66 of the Act (as it stood at the time of the events in issue in this case) is set out in full in para [32] of the majority judgment. [144] The meaning of an enactment must be ascertained from its text and in light of its purpose: s5(1) Interpretation Act 1999. [145] Section 66(2)(b) of the Act does not, in express terms, indicate the specificity with which advice must be communicated by employer to employee. Neither does s66 prescribe the extent to which an employer is entitled to rely on knowledge possessed by the employee at the time the advice is given. Finally, s66 does not address at all the consequences of non-compliance by an employer with either s66(2)(a) or (b). [146] It is conceivable that different consequences could flow, depending upon the nature of the breach and the purpose of the provision requiring the employer to do certain things. With those thoughts in mind I commence an analysis of the provision.[147] Section 66(2) must be interpreted in light of s66(1). It is lawful, except to the extent subsequently prescribed, for an employer and an employee to enter into a fixed term employment agreement of the type contemplated by s66(1). [148] Section 66(2) spells out what must be done before a fixed term employment agreement is entered into. Section 66(2)(a) addresses a substantive question; namely, the need for a genuine reason for the agreement. Section 66(2)(b) deals with an issue of process; namely, the communication of certain information to an employee before the fixed term agreement is concluded. Section 66(2)(a) is then qualified by s66(3). Section 66(3), in effect, deems specified reasons for fixed term agreements not to be genuine for the purpose of s66(2)(a). [149] The requirement for genuine reasons is easy to understand. If an unscrupulous employer seeks to mask the true nature of an indefinite employment agreement by pretending that it is a fixed term agreement, the employee should be able to exercise the same rights, on termination of employment, as he or she would have had if the true position had been disclosed. [150] However, the requirement for an employer to articulate when, how and why the agreement will end in the manner stipulated fulfils an entirely different function. In effect, it operates as a disincentive to an employer to mask the true position. An invented reason is unlikely to withstand scrutiny if challenged later. The requirement also provides information on which the employee can take the independent legal advice contemplated by s64(2)(b) of the Act. Had Mr Clarke bothered to seek legal advice it is likely that his lawyer would have sought and obtained the true reasons for the genuine agreement. [151] Given those different functions, it is unlikely that Parliament intended the same consequences to follow if an employer breached s66(2)(b), as opposed to s66(2)(a). [152] The conclusion I have drawn can be supported by reference to the International Convention to which Judge Colgan referred. Although New Zealand has not ratified the International Labour Organisation's Convention 158, theTermination of Employment Convention 1982 (the ILO Convention), the ILO Convention has been referred to in this Court for the purpose of ascertaining minimum acceptable standards for protection against unjustified termination of employment: eg Principal of Auckland College of Education v Hagg [1997] 2 NZLR 537 (CA) at 554 per Richardson P and Aoraki Corporation Ltd v McGavin [1998] 3 NZLR 276 (CA) at 306-307 per Thomas J. [153] Article 4 of the ILO Convention provides: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.[154] Article 2(2) makes it clear that a member State may exclude certain categories of employed persons from all or some of the provisions of the ILO Convention. For present purposes, art 2(2)(a) is relevant. It refers to workers engaged under a contract of employment for a specified period of time or a specified task. The idea underlying art 2(2)(a) is the same as that underlying s66(1) of the Act. [155] Article 2(3) refers to the need for adequate safeguards to be provided against recourse to contracts of employment for a specified period of time. The aim of those safeguards is to prevent the inappropriate avoidance, by employers, of the protections resulting from the ILO Convention. [156] While art 2(2)(b) entitles a member State to exclude from the ambit of the ILO Convention workers serving a period of probation or a qualifying period of employment, that particular exclusion has not been adopted in New Zealand: see s66(3)(b). Instead, specific arrangements dealing with probationary employment are set out in s67 of the Act. [157] A comparison of ss66 and 67 of the Act with the relevant terms of the ILO Convention strongly suggests that Parliament's intention was to prevent unscrupulous employers from disentitling an employee (employed, in truth, under an employment agreement of indefinite duration) from exercising his or her rights tochallenge dismissal, by masking the employee's true employment status through the device of a fixed term employment agreement. [158] That conclusion is reinforced by other provisions within Part 6 of the Act that suggest that an employer's non-compliance with s66(2)(b) alone does not have the consequence the Employment Court found it did. I refer, in particular, to the safeguard involving the opportunity to take legal advice (s64(2)(b) of the Act) and the specific remedies for unfair bargaining in ss68 and 69. I add that the absence of a reason (rather than the invention of a false one) is likely to lead a legal adviser to inquire and ascertain the true position. For that reason the Judge's view of the weight to be afforded to s60(b) of the Act, in interpreting s66 (see para [134] above) does not withstand scrutiny. [159] The next question is whether the authorities to which the Judge referred, determined under earlier employment statutes, support the Judge's interpretation of s66 and the consequences of breach of s66(2)(b). [160] The starting point for that inquiry is the decision of this Court in Actors' Equity. Actors' Equity was decided under the Industrial Relations Act 1973 shortly after the Labour Relations Act 1987 had come into force. At issue was whether the personal grievance provisions of the Industrial Relations Act 1973 applied to fixed term contracts. [161] The Union sought to limit fixed term employment agreements to "genuine" agreements. That argument reflected the distinction between fixed term contracts entered into because an employer has a genuine need to limit the duration of the contract and those entered into to mask the reality of an indefinite contract of employment, terminable on reasonable notice: a distinction on which I have already dwelt. [162] The majority in Actors' Equity (McMullin and Barker JJ) were prepared to allow the appeal to enable the Labour Court to determine whether a particular provision of the award applied to the worker. If it did, the complaint of unjustifiable dismissal had to be addressed on its merits. On the other hand, Cooke P held that a"dismissal" might arise where a worker had a legitimate expectation of renewal of a contract: at 158. On that point, McMullin J preferred to characterise such an employee as having a "hope" of continued employment rather than a "legitimate expectation" (at 160), while Barker J opined that a "dismissal" could not arise from a fixed term contract where there was no evidence of an express or implied promise to renew the contract (at 162). Thus, the majority did not regard termination of a lawful fixed term contract by effluxion of time (in the absence of a provision of an award to the contrary) as a "dismissal" for the purposes of the personal grievance provisions of the relevant Act. [163] In Smith v Radio i Ltd, a Full Court of the Employment Court (Chief Judge Goddard, Judge Travis and Judge Colgan) held that the Employment Contracts Act 1991 did not operate to change the law from that stated in Actors' Equity. At 309 the Employment Court restated "the law relating to fixed term contracts" as follows:(1) Fixed-term contracts of employment are valid unless prohibited expressly or impliedly by an applicable collective employment contract. (2) A fixed-term contract will not automatically expire on the date specified in it for the purpose against the will of the employee if: (a) It does not genuinely relate to the operational requirements of the undertaking or establishment of the employer; or (b) If the employer fails to discharge the burden of proving, in each case, that there was a genuine reason for the seasonal or other fixed-term contract of employment and that the purpose of the contract is not to deprive the employee of the protection of an applicable collective employment contract or of the benefit of the personal grievance procedure required to be inserted in the contract by the Act. (c) The employer failed to consider whether the genuine need at the time of the creation of the contract for its termination on a particular date still existed when the expiry of the contract was imminent and considered whether the genuine need at the time of its creation for its termination on a particular day still existed; or (d) There has been an express or implied promise of renewal that has not been kept or the termination of the contract was brought about in defiance of the employee's legitimate expectations of renewal; or (e) The termination of the contract was brought about by any wrong motive or unfairness on the part of the employer.[164] The question whether the Employment Contracts Act 1991 had altered the approach to fixed term contracts was reconsidered by this Court in Hagg. The Court prefaced its comments with observations on the scope of an appeal from decisions of the Employment Court under s135 of the Employment Contracts Act 1991. Delivering the principal judgment of this Court, in Hagg, Richardson P said at 545:There is no right of general appeal from decisions of the Employment Court. By s 135 a decision may be challenged only as being "erroneous in point of law" and with the qualification that there is no appeal "on the construction of any individual employment contract or collective employment contract". But it is well settled that the limitation on appeal rights does not extend to questions of principle going beyond the particular terms of the contract (Air NZ Ltd v Johnston [1992] 1 ERNZ 700; [1992] 2 NZLR 159; (1991) 4 NZELC 93,365; A-G v NZ Post Primary Teachers Assn [1992] 1 ERNZ 1163; [1992] 2 NZLR 209 and Tisco v Communication & Energy Workers Union [1993] 2 ERNZ 779). The interpretation approach of the Employment Court to the contract in question, as well as its interpretation of relevant provisions of the legislation, are properly for this Court.Section 135 of the Employment Contracts Act 1991 is in substantially similar terms to s214 of the Act under which leave to appeal was granted in this case. I regard Richardson P's observations as equally applicable to s214. [165] The restatement of principles in Radio i Ltd was discussed in Hagg at 552-553. At 553-554, Richardson P said:With all respect to the Employment Court, we cannot see any basis either in the principled application of the law governing the construction of contracts or in the provisions of the Employment Contracts Act for the guidelines formulated by the full Court. Paragraph 2 assumes that "the will of the employee" ascertained independently of the contract entered into is a crucial consideration. That runs counter to Part II of the Act, concerned with bargaining. In subparas (a), (b), and (c) of para 2, the guidelines require the employer to justify offering a limited term contract at the outset or failing to convert it into a permanent contract when its expiry was imminent. The factors stated in (d) may arise in a conventional assessment of whether the intended duration of the contract was either at the outset or became in the course of the contract not reflective of the true intent of the parties, a point to which we shall return. But subpara (e) reflects a misconception as to what constitutes dismissal. Dismissal is the act of the employer in terminating the contract. Merely to allow a limited term contract to come to an end by effluxion of time is not a dismissal. If it be assumed that employment contracts may involve an inequality of bargaining power there is potential for actual or perceived unfairness in the provision of limited term contracts in some situations, depending on the particular circumstances — compare s 57 which is directed against harsh andoppressive contracts. As Phillips J observed in Terry v East Sussex County Council [1977] 1 All ER 567, 571: "There are many kinds of temporary contracts of employment. They can range from genuine short-term fixed contracts where somebody is filling in for an absent worker and it is made plain upon engagement that the worker is being employed only during the period of absence of the other permanent employee; at the other end of the spectrum, is the case of an employee, engaged on a short fixed-term contract described as 'temporary', in a field of employment, where employees are usually engaged on a weekly basis and where there is no particular end served by the employment being terminated." And to take an extreme example, a series of nominally fixed-term monthly contracts for the whole of the workforce might be used in an attempt to defeat the protections given by the personal grievance procedure. In that regard, art 2(3) of ILO Convention 158 on Termination of Employment states that adequate safeguards should be provided against recourse to those fixed-term contracts, the aim of which is to avoid the protections resulting from the Convention. .[166] In a concurring judgment, Thomas J took a similar view. He cited, in support of his view, Terry v East Sussex County Council, a case to which Richardson P had also referred. At 557, Thomas J said:The essential question in this case, therefore, is whether the fixed-term contract in issue was genuine or whether it was a device by the employer to avoid the obligations of longer term employment or was otherwise in substance and reality ongoing employment. If it was genuine, no question of dismissal can arise. The fixed-term contract simply expired. If, however, it was not genuine or had become in substance and reality ongoing employment, sending the employee away may constitute a dismissal in terms of the Contracts Employment Act, and may or may not be considered unjustifiable, depending on the circumstances.[167] An analysis of the decisions of this Court in Actors' Equity and Haggrespectively and the Employment Court's decision in Radio i Ltd do not support the conclusion reached by Judge Colgan that s66 was enacted to restore the law as declared in Actors' Equity. The flaw in Judge Colgan's reasoning, in my respectful view, is that both judgments of this Court rely on an underlying premise that only fixed term contracts designed to mask the reality of an indefinite employment agreement, terminable on reasonable notice, ought to be susceptible to review by the Court on a claim of unjustifiable dismissal due to the alleged effluxion of time of employment. In my view, there is no basis to regard breach of a proceduralprovision such as s66(2)(b) as the equivalent of a breach of s66(2)(a). There will only be a masking of the true situation if there is a breach of s66(2)(a). [168] The final issue is whether the terms and purpose of the Employment Relations Act requires a different conclusion, notwithstanding my view that the approach adopted in Actors' Equity did not differ materially from that set out inHagg. At paras [37] and [38] (at 97,235) Judge Colgan said:[37] The Employment Relations Act 2000 is in many respects employment protection legislation. Section 3(a)(ii) requires it to be interpreted so that productive employment relationships are built through the promotion of mutual trust and confidence in all aspects of the employment environment and of the employment relationship, among other things, by acknowledging and addressing the inherent inequality of bargaining power in employment relationships. Mr Clarke had little, if any bargaining power in the establishment of his employment relationship with NSTL. Employment was offered on its terms, not only at the start of the relationship in November 2000 but purportedly on each occasion when the fixed term agreements were rolled over by the company. The Act must also achieve those aims of productive employment relationships by observance in New Zealand of the principles underlying Conventions 87 and 98 of the International Labour Organisation. Section 4 relating to statutory obligations on employers and employees to deal with each other in good faith, require that neither may directly or indirectly do anything to mislead or deceive the other or that is likely to mislead or deceive the other. This includes in relation to a proposal by an employer that might impact on the employees including to contract out work otherwise done by employees: s4(1)(b) and s4(4)(d). [38] Further statutory objects in relation to employment agreements are contained in s60. Under subs (b) Parliament has required that new employees, whose terms and conditions of employment are not determined with reference to a collective agreement, be given sufficient information and an adequate opportunity to seek advice before entering into individual employment agreements. The sufficiency of information requirement informs how s66 is to be interpreted.[169] The Judge's analysis may be open to question for failing to take account of observations made by members of this Court in Coutts Cars Ltd v Baguley [2002] 2 NZLR 533 (CA); in particular, I refer to the joint judgment of Richardson P, Gault and Blanchard JJ, delivered by Gault J, at 545-546, paras [39]-[43] and the judgments of Tipping J at 548-549, paras [60]-[62] and McGrath J at 553-554, paras [80]-[82].[170] However, I prefer not to place any weight on that particular argument as it is clear that s66 is designed to protect employees against unscrupulous acts by employers that operate to remove, otherwise, proper claims for unjustified dismissal. [171] I conclude that the approach adopted by Judge Colgan to s66 of the Act was in error. In summary, I record my reasons for reaching that view as follows: a) The Act does not require a different approach to fixed term employment agreements than was found to be appropriate by the majority in Actors' Equity or a full bench in Hagg. See, generally, paras [160]-[167] above. b) There was no warrant for the Judge to focus only on the first fixed term agreement when Mr Clarke based his claim on what had happened in 2002. The first contract had been found to be genuine. Its effect was spent. The employment problem was submitted outside the 90 day period prescribed by s114(1) of the Act, once the alleged breach was based on NSTL's failure to comply with s66(2) before the first contract. See para [142][c] above. c) Given the different functions of s66(2)(a) and (b), there was no warrant for the Judge to hold that consequences of breach were the same. See paras [147]-[151] above. The Judge erred by failing to determine first the purpose of s66(2)(a) and, second, determining the consequences of breach. The consequence of breach of s66(2)(b) had to be referable to the purpose of the provision and take into account the express finding that the fixed term contracts were genuine. [172] By s66 of the Act Parliament permitted employer and employee to negotiate fixed term contracts. In doing so Parliament largely adopted the approach contained in the ILO Convention. By excluding probationary periods from fixed term employment contracts (see ss66(3)(b) and 67 of the Act) and providing discrete remedies for unfair bargaining (see ss68 and 69 of the Act) a deliberate policydecision was made to depart from terms of the ILO Convention, yet, still to protect the rights of employees. [173] If an employment agreement of indefinite duration is, as a matter of fact, masked by a purported fixed term contract the true position must prevail. Substance must prevail over form. [174] Plainly, s66(2)(a) is a substantive provision designed to give effect to the reality of the situation. Such an approach is entirely consistent with the emphasis placed, in s66(2)(a), on "genuine reasons based on reasonable grounds". It is equally consistent with the emphasis placed on "genuine" fixed term contracts in the cases to which Judge Colgan referred. But, such an approach to s66(2)(a) does not justify the same approach to a situation in which breach of the obligation to communicate is found in respect of what, otherwise, is a genuine fixed term agreement. In short there is no compelling reason why Parliament would have intended such a result. [175] I now consider independently the three questions of law identified in para [99] above.What is the degree of specificity required to comply with s66(2)(b)?[176] The Judge rejected the suggestion, found in the commentary to s66 inBrooker's Employment Law, that advice must be provided in writing by an employer to an employee. The Judge noted the prudence of such a course but did not find any warrant to require that as a matter of law. I agree with that conclusion. [177] The problematic issue, so far as specificity is concerned, arises from the degree of knowledge held by Mr Clarke at the time he entered into the first contract. The nature of the advice to be given by employer to employee under s66(2)(b) might be different depending upon the extent of knowledge already possessed by the employee. There would be no point, as a matter of law, in requiring information to be communicated for the sake of it.[178] In my view, there was ample evidence to establish that Mr Clarke knew the reasons why his employment would end on the dates specified in the fixed term employment agreements, in particular in the sixth and seventh fixed term agreements on which his case hinged. Reinforcement for that conclusion can be found from the way in which Mr Clarke put his own case, relying upon the sixth and seventh fixed term contracts as the basis for his claim. [179] In my view, it was not open to the Employment Court to find, as a matter of law, that insufficient information had been conveyed by the employer to the employee for the purposes of s66(2)(b) of the Act. Once the facts identified in paras [103], [104] and [107] are taken into account, it is clear that the references to implementation of the agreement with the Union, to "manning levels" and "the future of the disc cutter" in various fixed term agreements provided sufficient information for Mr Clarke to understand why his employment would end in the manner stipulated. And, certainly, it provided him with enough information to seek the legal advice he was given the opportunity to obtain under s64(2)(b). [180] Accordingly, in my view, NSTL did not breach s66(2)(b) of the Act in the manner found by the Judge.What knowledge of the employee is to be taken into account?[181] In my view, all knowledge available to the employee at the time advice is given can all be taken into account in determining whether sufficient advice has been conveyed for the purposes of s66(2)(b) of the Act. To hold otherwise would put too great an obligation on employers, particularly if the consequences suggested by Judge Colgan as flowing from breach of s66(2)(b) were to stand, as a matter of law. [182] In my view, there is no warrant in the Act to suggest that information available to an employee from any source ought to be excluded from consideration whether advice in accordance with s66(2)(b) has been adequately communicated.What are the consequences of breach of s66(2)(b)?[183] The only reason the Judge felt able to order reinstatement was because he concluded that the consequence of the breach of s66(2)(b) was to change the whole nature of the employment agreement entered into between employer and employee. The Judge's views are summarised at paras [128] and [129] above. [184] I readily understand how a fixed term contract entered into to mask the reality of a contract of employment of indefinite duration ought to be treated as a contract of employment of indefinite duration. I fail, however, to understand why a genuine fixed term agreement (that otherwise complies with s66) should be treated as a contract of employment of indefinite duration simply because of a failure to convey adequate information at a time prior to the fixed term agreement under consideration as a result of the employee's grievance. [185] No penalty is prescribed by s66 for breach of any of its terms. Yet, s133 of the Act confers full and exclusive jurisdiction on the Authority to deal with all actions for the recovery of penalties (among other things) for a breach of any provision of the Act for which a penalty in the Authority is provided in the particular provision: s133(1)(b). The absence of a prescribed penalty militates against the suggestion that a failure to comply with s66(2)(b), in the context of what otherwise is held to be a genuine fixed term contract, creates any actionable wrong on the part of the employee. Neither is it likely that Parliament intended to confer on an employee an independent cause of action for breach of statutory duty. I say that because s66(2)(b) does not state the degree of specificity with which the advice must be communicated and where a fixed term employment agreement has been held to be genuine, no loss can be caused to an employee through breach of the duty to communicate. See, generally, R v Deputy Governor of Parkhurst Prison, ex parte Hague [1992] 1 AC 58 (HL) at 159 per Lord Bridge of Harwich and X v Bedfordshire County Council [1995] 2 AC 633 (HL). [186] It goes without saying that reinstatement, albeit the remedy described in the statute as "the primary remedy" (see s125 of the Act) will not be relevant if thegenuine and actual agreement reached between employer and employee is that employment will end at the conclusion of a defined period of time.Conclusion[187] For the reasons I have given I conclude that the Employment Court was wrong in law to hold that there had been an actionable breach of s66(2)(b) of the Act for which reinstatement could be ordered. [188] I would allow the appeal and dismiss Mr Clarke's claim for unjustifiable dismissal in the Employment Court.Solicitors: Russell McVeagh, Auckland for Appellant Sharp Tudhope, Tauranga for Respondent