DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Garth Duggan
v
Metropolitan Fire and Emergency Services Board
(U2016/14351)

Application for relief from unfair dismissal - jurisdictional objection - minimum period of employment – meaning of “notice of the dismissal” in s.383(a).

[1] Mr Duggan’s brief employment as a recruit firefighter with the Metropolitan Fire and Emergency Services Board (the MFB) has already been the subject of extensive litigation between Mr Duggan and the MFB both in this Commission and in the Federal Court.

[2] Mr Duggan commenced employment with the MFB on 9 February 2016. On 24 May 2016 the MFB wrote to Mr Duggan advising him of the MFB’s decision to terminate his employment and advising him that the decision to terminate his employment would be implemented once a dispute between the United Firefighters’ Union of Australia (the UFU) and the MFB concerning Mr Duggan’s termination had been resolved. After proceedings before Wilson C 1 and then on appeal before a Full Bench2 of the Commission the MFB wrote to Mr Duggan on 10 November 2016 advising him that his employment terminated that day. Mr Duggan filed an unfair dismissal application on 1 December 2016.

[3] The issue before the Commission, as currently constituted, is very narrow. The MFB contends that Mr Duggan has not met the minimum employment requirements of the Act and is therefore not entitled to make an unfair dismissal application. Mr Duggan contends that he has met the minimum employment requirements of the Act.

The relevant legislation

[4] Relevantly s.382 and s.383 provides as follows:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

383  Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i)  the time when the person is given notice of the dismissal;

(ii)  immediately before the dismissal; or”

[5] The issue in the present matter concerns the proper meaning and application of s.383(a)(i).

Other relevant matters

[6] In order to put the contentions of the MFB in context it is necessary to have regard to other provisions of the Act, the terms of the enterprise agreement which covered and applied to Mr Duggan and the MFB and to the content of the letters to Mr Duggan from the MFB on 24 May 2016 and 10 November 2016.

[7] Relevantly, s.117 of the Act contains a requirement for written notice to be given to employees before termination. Section 123 limits the operation of s.117. It was not disputed that s.123 did not apply to Mr Duggan’s employment with the MFB and that s.117 did apply to the termination of Mr Duggan’s employment with the MFB. Section 117 relevantly provides as follows:

“117  Requirement for notice of termination or payment in lieu

Notice specifying day of termination

(1)  An employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).

Note 1:       Section 123 describes situations in which this section does not apply.
Note 2:       Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a notice may be given. In particular, the notice may be given to an employee by:

(a)    delivering it personally; or

(b)    leaving it at the employee’s last known address; or

(c)    sending it by pre-paid post to the employee’s last known address.

Amount of notice or payment in lieu of notice

(2)  The employer must not terminate the employee’s employment unless:

(a)  the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or

(b)  the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.”

[8] Both clauses 9 and 27 of the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2010 (the Agreement) are relevant to the present matter. The clauses relevantly provide as follows:

9. OBLIGATIONS

9.1. Obligations on the MFESB

9.1.1. If a term or condition of this Agreement confers an entitlement or benefit on an employee, MFESB will comply with that term or condition and provide that entitlement or benefit.

9.1.2. If a term or condition of this Agreement imposes an obligation on the MFESB with respect to an employee, the MFESB will comply with that obligation.

9.2. Obligations on both parties

9.2.1. If a term or condition of this Agreement places an obligation on a party to do or refrain from doing an act or thing, the party will comply with that term or condition.

9.2.2. If a term or condition of this Agreement confers an entitlement or benefit on a party, the other party will comply with that term or condition.

9.2.3. If a term or condition of this Agreement permits a party to do an act or thing, the other party will permit that act or thing to be done.

27. TERMINATION OF EMPLOYMENT

27.1. An employee’s employment may not be terminated unless:

27.1.1. the Employee Code of Conduct has been complied with in accordance with clause 26.3;

27.1.2. the employee and the union have been notified that the employer intends to terminate an employee’s employment; and

27.1.3. any dispute notified by the employee or the union has been resolved.

27.2. Notice of termination by employer

27.2.1. In order to terminate the employment of an employee the employer shall give to the employee the period of notice specified in the table below:

Period of continuous service Period of notice

1 year or less 1 week

Over 1 year and up to the completion of 3 years 2 weeks’

Over 3 year’s and up to the completion of 5 years 3 weeks’

Over 5 year’s of completed service 4 weeks’

27.2.2. In addition to this notice, employees over 45 years of age at the time of the giving of the notice, with not less than two years continuous service, are entitled to an additional week’s notice.

27.2.3. Payment in lieu of the notice will be made if the appropriate notice period is not required to be worked. Employment may be terminated by the employee working part of the required period of notice and by the employer making payment for the remainder of the period of notice.

27.2.4. In calculating any payment in lieu of notice, the wages an employee would have received in respect of the ordinary time they would have worked during the period of notice had their employment not been terminated will be used.

27.2.5. The period of notice in this clause, shall not apply in the case of dismissal for conduct that justifies instant dismissal, including inefficiency, neglect of duty or misconduct.

27.3. Notice of termination by an employee

27.3.1. The notice of termination required to be given by an employee is the same as that required of an employer, save and except that there is no requirement on the employee to give additional notice based on the age of the employee concerned.

27.3.2. If an employee fails to give notice the employer has the right to withhold monies due to the employee to a maximum amount equal to the ordinary time rate of pay for the period of notice.

27.4. Time off during notice period

27.4.1. Where an employer has given notice of termination to an employee, an employee shall be allowed up to one day’s time off without loss of pay for the purpose of seeking other employment. The time off shall be taken at times that are convenient to the employee after consultation with the employer.

[9] The letter from the MFB to Mr Duggan of 24 May 2016 was quite detailed but the only relevant content is as follows:

“I confirm that MFB has decided to terminate your employment. In making the decision to terminate your employment, MFB has considered the material provided by you in your email dated 8 May 2016. Your explanations and the further material provided by you did no alleviate our concerns.”

And

“In accordance with clause 27.1.3 of the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2010 (the Agreement), the MFB will not implement this decision until the dispute between the parties has been resolved. Please find attached Form F10 Application for the Fair Work Commission (FWC) to deal with the dispute in accordance with Step 5 of the dispute resolution procedure at clause 19 of the Agreement, which we intend to file with the FWC today in the interests of resolving the dispute as soon as possible.”

[10] The letter dated 10 November 2016 contained the following:

“Dear Mr Duggan

Further to our letter of 24 May 2016 and in light of the decision of the Full Bench of the Fair Work Commission published today, your employment will now terminate, effective immediately.

In accordance with clauses 27.2.1 and 27.2.3, the MFB will pay you in lieu of one week's notice.

You will be paid in respect any outstanding entitlements into the bank account in which you ordinarily received your pay.

Yours sincerely,”

The contentions of the parties

[11] The essence of the case advanced by the MFB was that the letter of 24 May 2016 satisfied the requirement of s.383(a)(i) in that it was giving Mr Duggan “notice of the dismissal” and that as this date was earlier than “immediately before the dismissal” then it is the 24 May 2016 which is the date for the purpose of calculating the minimum period of employment of Mr Duggan.

[12] Mr Duggan contends that the letter of 24 May 2016 does not satisfy the requirement of s.383(a)(i) because the letter was no more than advice of an intention to dismiss and was not the giving of notice of dismissal as no date for the dismissal was included in the letter. Mr Duggan contended that notice of the dismissal was only given to him on 10 November 2016, the day he was dismissed.

[13] In its written outline of argument the MFB contended as follows:

“24. The delay between notice of termination being provided and the termination taking effect arose only because of the resolution of the Dispute pursuant to clause 27 of the Agreement. However, clause 27 of the Agreement cannot be construed so as to negate the notice of a dismissal provided to Mr Duggan before the end of the minimum employment period.

26. The intention stated in the Notice Letter was clear. Mr Duggan was to be dismissed, such decision to be implemented upon the resolution of the Dispute. The MFB could not dismiss Mr Duggan any earlier, despite having decided that he should be dismissed, because of the requirements of clause 27.1.3 of the Agreement.

27. The delay caused by the resolution of the Dispute due to the operation of clause 27.1.3, causing Mr Duggan to remain an employee of the MFB for in excess of six months, did not permit him to come within the jurisdiction of the unfair dismissal provisions given he had notice of his dismissal prior to this six month requirement being met, such notice to be effective upon the resolution of the Dispute.

28. Any conclusion that the delay in Mr Duggan’s dismissal being implemented due to the operation of clause 27.1.3 caused him to come within the jurisdiction of the unfair dismissal provisions would lead to a conclusion contrary to the intent of:

(a) s.194(c) of the FW Act (any term of an agreement is unlawful if it purports to confer an entitlement or remedy in respect of a termination when the minimum employment period has not been met); and

(b) the “status quo” provisions that operated in respect of the Dispute by reason of clause 19.4 of the Agreement, such “status quo” provisions being intended to ensure that “[n]o party is prejudiced as to the final settlement by the continuance of work in accordance with the sub- clause”. The MFB would be prejudiced if the delay in resolving the Dispute caused Mr Duggan to come within the unfair dismissal jurisdiction when the MFB gave notice of its intention to terminate his employment prior to the minimum employment period being met.”

[14] In a written outline of argument Mr Duggan contended as follows:

“3. The letter of 24 May 2016 (a copy of which is set out in full attached to the respondent’s Form F3) does not stipulate the day of termination and so does not comply with s.117(1). It is probably correct that the respondent’s letter of 10 November 2016 (also attached to the F3) supplied a day of termination being the date of the letter, so that this letter may be regarded as a valid notice of termination, subject only to the question whether the dispute has yet been resolved. Since 10 November 2016 is outside the 6 month period specified by s 383, the FWC has jurisdiction to hear the claim.

4. Secondly, the letter is invalid as a notice of termination at common law because of uncertainty. The purpose of a notice of termination is to give the employee an opportunity to arrange his or her affairs in the light of the impending loss of employment. The employee must therefore be able to ascertain objectively from the notice when the employment will cease. The letter of 24 May did not satisfy this requirement as it left open not only when the termination would take effect but indeed whether it would take effect at all.

5. Thirdly, the letter in its terms does not notify a termination. It notifies only that a decision has been made to terminate. It says further that the decision will not be implemented until the dispute is resolved. It clearly envisages a further step to effect the termination and that step was taken by the letter of 10 November. This construction is supported by the facts that Mr Duggan continued as an employee and continued to receive his wages until 10 November.

6. Fourthly, it does not assist the respondent to characterise the letter as a conditional notice of termination. There is conflicting authority on whether a conditional notice can be valid. Leaving that aside, such a notice cannot take effect until satisfaction of the condition. Thus the letter of 24 May could not have taken effect as a notice of termination until 10 November 2016 (at the earliest) and so the time when Mr Duggan was given notice of termination for the purposes of s 383 was that date.

7. Finally, the respondent gains nothing from its reliance on s 194(c) or the status quo provision of cl 19.4 of the Agreement. It might be different if the respondent had merely purported to terminate the employment in May 2016 and the question would then have been whether it was entitled to do that or whether there was a dispute still on foot which prevented it from taking that action. But the respondent avowedly did not do that. Instead it acknowledged the subsistence of the dispute and ensured its prolongation by instituting a proceeding in the FWC. As long as the dispute was on foot Mr Duggan’s employment continued by virtue of cl 19.4, as the respondent has acknowledged. Thus it was the respondent’s own action which prolonged the dispute and with it Mr Duggan’s employment. It must have been foreseeable to the respondent when it instituted the proceeding in the FWC that the prolongation of the dispute and Mr Duggan’s employment might run past the 6 month cut-off for the purposes of s 383. This has resulted from the respondent’s own action in instituting the proceeding in the FWC and it cannot be heard to complain about a foreseeable and likely consequence of its own conduct.

[15] In oral submissions both parties addressed the relationship between s.117 and s.383(a)(i).

[16] The oral submissions on behalf of the MFB contended as follows:

PN44. MS NELSON: There has been some suggestion that what should have been - what is necessary in order to comply with the notice requirements under section 383(a) combined with section 382 is some suggestion that written notice in accordance with section 117 ought to have been provided.  That's not what's required, in my submission.  With the greatest respect - - -

PN45. THE COMMISSIONER:  So what is required in your submission?

PN46. MS NELSON:  Common law, unambiguous, clear notice and I'll come to that.

PN50. what's required in the section 117 notice, written notice of the day of termination - we say that's not required by the section.  What is required is clarity that can be ascertained between the parties to this dispute as to what is meant by that notice

PN64. MS NELSON:  I just want to work through, Commissioner, why I say section 117 - this requirement of written notice of the day of termination because I understand that seems to be relied upon by the applicant and that is simply because that's not what section 383(a) requires.  If I take, Commissioner, you to that section - the minimum employment period in section 383(a) requires that:

PN65. The minimum period is ascertained by determining whether the person has served six months employment, ending at the time when the person is given notice of the dismissal.

PN66. MS NELSON:  That's very different language to what section 117 says, which is that a person must be given written notice of the day of termination.  They're quite different things because they serve quite different purposes.  The purpose - in my submission - of section 117 of that strict requirement is to insure that the requirements in the national employment standards are met.  There is a - it's a different obligation.  That obligation is one that gives rise to a civil penalty.  As you'll see later on in the materials, Commissioner, it's one that was complied with in this event by the letter of 10 November:  provided the requisite notice, did all of those things - payment in lieu.

PN67. But in determining what's required by section 382(a) the purpose of that provision must be considered.  If I can just hand up a bundle of authorities - there's not many that I wish to take the Commission to and one that no doubt, Commissioner, I don't really need to provide to you.  But the test for construing this legislation is clear from Project Blue Sky v Australian Broadcasting Authority, which is the first case in that bundle, and if I can just take the Commission to what the High Court McHugh, Gummow, Kirby and Hayne JJ said at paragraph 69, that in construing the statute the purpose of the statute must be considered and they refer to what the then chief justice Dixon had said in Commissioner for Railways v Guilanas and said:

PN68. The context, the general purpose and the policy of a provision are surer guides to the meaning than logic.

PN69. MS NELSON:  The purpose of section 383(a) is without doubt one to insure that there is a period of the first six months of employment where an employer can determine that things are not working out, the employment is coming to an end and there is no subject - they're not subject to the unfair dismissal provisions.  That is the entire purpose of section 383(a).

PN70. THE COMMISSIONER:  It's an exclusionary provision that's to say to some workers, "You have no rights to access the unfair dismissal provisions of the Act."

PN71. MS NELSON:  Yes, and if I take you to the clause of the explanatory memorandum, that replicates those words and in my submission that is the purpose:  it's to allow a period where both parties but particularly the employer can make an assessment of an employee and there is no fear that the unfair dismissal provisions apply.  It's an exclusionary, cut-out provision from those obligations.  It's similar to the qualifying period that used to exist under the previous legislation.  However, what the applicant is saying is you need to incorporate the words of section 117 into section 383 and with the greatest respect neither the purpose of that provision nor the words of that provision impose any requirement that there be notice in writing specifying the date of termination.

PN92. THE COMMISSIONER:  Okay, and that's the focus.  So if - we're all in violent agreement.  We don't need to focus on written or unwritten notice.  The focus has to be on what is meant by the notion of notice of the dismissal - that phrase - - -

PN93. MS NELSON:  Yes.

PN94. THE COMMISSIONER:  - - - in 383(a)(1) and does it require a specified date or not or is it sufficient that if it's - the time must be ascertainable, I think are the words you used, but not necessarily by reference to a specific date?

PN95. MS NELSON:  Indeed, and that is my submission, Commissioner.  The words of section 117 which require the day of termination to be specified are not included in the language of section 383.  It was - if the parliament intended that to be stated, just as it did in section 117, it would have said so in section 383.  That's particularly the case when as you have already helpfully identified for me, Commissioner - I need not press it - there are people for whom section 117 will not apply and yet will be covered by section 383.

PN96. THE COMMISSIONER:  Yes.

PN97. MS NELSON:  So if the parliament had have wanted notice of the day of termination, whether in writing or not, that could be have been specified.  In my submission we need to turn to the ordinary meaning of, "notice of dismissal", and that's the focus of what I want to take you to now. The full bench - a full bench of this Commission has considered this issue.  If I can take you in the bundle of authorities that's been provided to you, Commissioner - I think it's the last in the bundle - it's a decision of the full bench in Ayub v New South Wales Trains [2016] FWCFB 5500.  In that decision the full bench considered the common law requirements of what notice was and if I could- - -

[17] The oral submissions on behalf of Mr Duggan contended as follows:

PN224. Mr Duggan was an employee covered by section 117.  I don't think that's in dispute.  He was an employee who is entitled to receive notice under 117.  He doesn't come within 123.  There is no other exclusion that would cover him, that would deprive him of the entitlement that he has under 117.  That is to say, his employment cannot be validly terminated except by him receiving notice in accordance with 117

PN228. MR PEARCE it appears also to be conceded that the letter of 24 May did not comply with 117.  In my learned friend's submissions I don't think she expressly said that.  The thrust of her submissions was we don't need to comply with 117 to satisfy 383.  Now, logically, sir, 383 is concerned with unfair dismissals.  So before you get to 383 you have to have a dismissal.  The gateway to dismissal is 117.  If you've not complied with 117 you don't have a dismissal.

PN234. MR PEARCE Now, how could Mr Duggan's employment be terminated without him receiving a notice under 117?  The answer is it can't be, unless he falls within 123;  unless there's some other basis for his termination.

PN243. MR PEARCE For today's argument we say that before you get to 383 you have to have a dismissal and the gateway to that is 117 and if you don't pass through that gateway, we - that is Mr Duggan, the employee - is entitled to say, "Well, there has been no dismissal."  We would concede, as I say, for the purposes of today that the letter of 10 November, which did specify a clear date - the date of the letter - would satisfy 117 on the assumption that the dispute terminated on the same day;  on 10 November.  But that is the limit of the concession that we would make and we certainly make no concession that the letter of 24 November satisfies - - -

PN244. THE COMMISSIONER:  24 May.

PN245. MR PEARCE:  - - - 24 May, sorry - satisfies 117.  We go further than that, sir:  on its correct construction that letter is not a notice of termination.  On its correct construction that letter is a notice that the MFB has decided to terminate and a further notice that the termination would be implemented -

Consideration

[18] The interaction between s.117 and s.383(a)(i) is at the heart of the issue in this matter. The Respondent drew attention to the Full Bench decision in Ayub v NSW Trains, 3 and there is much in that decision which is helpful in determining the present matter even though the Full Bench in that matter was not required to address, and did not address, the relationship between s.117 and s.383(a)(i).bb

[19] Two preliminary matters need to be dealt with.

[20] Firstly, the contention from Mr Duggan that he could not be terminated if notice of termination in accordance with s.117 had not been given is unsustainable given the clear decision in Ayub v NSW Trains.

[21] Secondly, a significant issue raised by the MFB was in relation to the operation of s.194(c) in the context of clause 27 of the Agreement. The issue of the operation of s.194(c) was also raised in the Full Bench proceedings on appeal from the decision of Wilson C. The Full Bench dealt with the issue as follows:

“The Availability of a Merits Review of the Decision to Terminate

[51] An issue remains as to whether the Commissioner could have dealt with other issues relating to the decision to terminate Mr Duggan’s employment by reference to the matters raised by the UFU concerning the appropriateness of relying on the NCAT decision. As the dispute evolved in the arbitration before the Commissioner, it can be said that these matters were the subject of a dispute.

[52] The parties have agreed in the Agreement that a wide range of disputes can be progressed and resolved under the disputes procedure. It would appear that a decision to terminate employment of an employee is a matter pertaining to the employment relationship. The MFB contends that it is improbable that the MFB would have agreed to dismissal disputes being included in disputes capable of determination by private arbitration because this undermines the statutory power vested in the CEO under the Metropolitan Fire Brigades Act 1958 (Vic).

[53] As improbable and as undesirable as it may seem, we do not see the basis for such a limited reading of the provision in the Agreement. The parties have agreed to mechanisms for dispute resolution in their agreement. By expressly including a reference to disputes pertaining to the employment relationship, the net has been cast very broadly. In our view a dismissal dispute falls within this broad class of disputes. This conclusion is consistent with the conclusion of a Full Bench in relation to a different matter under the same agreement. 

[54] Such a finding brings s.194(c) of the Act into play. This provides:

‘194 Meaning of unlawful term

A term of an enterprise agreement is an unlawful term if it is:

…

(c) if a particular employee would be protected from unfair dismissal under Part 3-2 after completing a period of employment of at least the minimum employment period—a term that confers an entitlement or remedy in relation to a termination of the employee’s employment that is unfair (however described) before the employee has completed that period; …’

[55] Section 253 of the Act provides that a term of an enterprise agreement has no effect to the extent that it is an unlawful term.

[56] The UFU submits that these provisions have no relevance because the MFB made the application to the Commission itself and the decision to terminate was not a termination of employment itself.

[57] Permitting the dispute settlement clause to be a vehicle for determining the fairness of the decision to terminate Mr Duggan’s employment within the six month qualifying period for an unfair dismissal remedy in ss.383-4 of the Act confers a remedy in relation to the termination of the employee’s employment. Hence such a use of the dispute settlement clause renders the term to be an unlawful term under the Act and of no effect to that extent. It is of no consequence that the MFB sought the imprimatur of the Commission under the disputes procedure over what it considered to be an unfounded allegation of breach of a consultation obligation. Further, a remedy that purports to result in an order or determination not to terminate the employment of an employee pursuant to a decision to do so is clearly a remedy in relation to termination of the employee’s employment.

[58] The argument that s.194(c) is a relevant limitation on power of the Commission was raised by MFB in the proceedings before the Commissioner but was not addressed in his decision. That may be because of the alternative way he decided to define the dispute by reference to a failure to consult over the issue of probation.

[59] The general issues of fairness of the decision to terminate Mr Duggan’s employment are not capable of agitation under the dispute settlement procedure.” 4

[22] In the present matter the MFB contended that:

“Any conclusion that the delay in Mr Duggan’s dismissal being implemented due to the operation of clause 27.1.3 caused him to come within the jurisdiction of the unfair dismissal provisions would lead to a conclusion contrary to the intent of:

(a) s.194(c) of the FW Act (any term of an agreement is unlawful if it purports to confer an entitlement or remedy in respect of a termination when the minimum employment period has not been met).” 5

[23] This contention must be rejected. In the present matter the MFB made an enterprise agreement with its employees in which it agreed to bind itself as set out in clause 27.1. The MFB voluntarily accepted that before it could terminate an employee’s employment certain conditions had to be complied with by the MFB. On its face clause 27.1 of the Agreement could not fall foul of s.194(c) as it created no entitlements to any remedy in relation to the termination of any employee. The clause operated so that the termination did not take place until the specified conditions were met. Delaying a termination so that an employee is terminated after the employee has passed the minimum employment period is not a term that offends against s.194(c). The issue properly identified by the Full Bench was that the use of the disputes procedure required by clause 27.1.3 could not be used to determine the fairness of the decision to terminate Mr Duggan’s employment within the six month minimum employment period.

[24] The issue to be determined in the present matter can be reduced to series of questions:

● Does s.117(1) apply to the dismissal of Mr Duggan?

● What does s.117(1) require?

● In the case of a dismissal to which s.117(1) applies and where the exclusions in s.123 are not relevant does a notice of dismissal for the purpose of s.383(a)(i) need to meet the requirement of s.117(1)?

● If the answer to question 3 is Yes: then does the letter of 24 May 2016 meet the requirements of s.117(1)?

There is no need to ask the same question in relation to the letter dated 10 November 2016. This is because Mr Duggan made a concession, for the purpose of this matter only, that the letter dated 10 November 2016 would meet the requirements of s.117. However, that concession would appear to unnecessary as the letter dated 10 November 2016 would not be relevant in any event as the dismissal occurred on 10 November 2016 in which case the relevant requirement is s.383(a)(ii) and not s.383(a)(i).

● If the answer to question 3 is No: then in the case of a dismissal to which s.117(1) applies and where the exclusions in s.123 are not relevant and where the notice of dismissal for the purpose of s.383(a)(i) does not need to meet the requirement of s.117(1), what is required of a notice of dismissal for the purpose of s.383(a)(i)?

● Having answered the previous question: then does the letter of 24 May 2016 satisfy the requirements of a notice of dismissal for the purpose of s.383(a)(i)?

Does s.117(1) apply to the dismissal of Mr Duggan?

[25] The reason given by the MFB for terminating Mr Duggan’s employment was that “the MFB does not consider that you are a person in which it can have the level of trust and confidence that is required of a firefighter, including in relation to the Emergency Medical Response component of the role, or that you meet the standard of personal integrity that is an inherent requirement of an MFB firefighter.” Mr Duggan had not engaged in any misconduct (and certainly not any serious misconduct) in the performance of his employment at MFB. The dismissal was not a summary dismissal. The dismissal occurred because the MFB did not want to continue to employ Mr Duggan for the reason given. Mr Duggan was not an employee who falls within any of the classes of employees described in s.123(1) or (3). Therefore Mr Duggan was an employee to whom s.117(1) applied.

What does s.117(1) require?

[26] Section 117(1) operates to prevent an employer from terminating an employee’s employment unless the employer gives to the employee a written notice and that written notice must contain the day of the termination. The requirement in s.117(1) that the employee must be given “written notice of the day the termination” appears to require a high level of specificity. In order to determine the degree of specificity required it is useful to compare the language of s.117(1) with the requirements in the Workplace Relations Act 1996. Included in the Unlawful Termination provisions of Subdivision C of Division 3 of Part VIA of the Workplace Relations Act 1996 was s.661 (originally numbered as s.170CM) which relevantly provided as follows:

“Employer to give notice of termination

(1) Subject to subsection (8), an employer must not terminate an employee's employment unless:

(a) the employee has been given the required period of notice (see subsections (2) and (3)); or

(b) the employee has been paid the required amount of compensation instead of notice (see subsections (4) and (5)); or

(c) the employee is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue the employment of the employee concerned during the required period of notice (see subsection (7)). “

[27] The requirement in s.661(1)(a) was to give the employee “the required period of notice”. It is obvious that there is a significant difference between giving an employee “the required period of notice” and the giving an employee “notice of the day of termination”. The Explanatory Memorandum to the Fair Work Amendment Bill 2012 sheds no light on why Parliament chose to adopt different language in s.117(1) of the Fair Work Act from what appeared in s.661 of the Workplace Relations Act. However, it is clear that the language in s.117(1) is different.

[28] In Ayub v NSW Trains the Full Bench reviewed the common law position in relation to termination of a contract of employment and noted the decision of the Supreme Court of NSW in Fardell v Coates Hire Operations P/L, which held:

“82 To be effective, a notice of termination of a contract of employment must specify a time when termination is to take effect, or that time must be ascertainable. The notice is to be construed according to how it would be understood by a reasonable person in the position of the recipient who had knowledge of the background of the dealings between the parties. (citations omitted)” 6

[29] The decision in Fardel v Coates Hire Operations P/L was certainly not available when the Fair Work Bill was drafted nor when Parliament debated and passed the Fair Work Act 2009. However there is nothing in relation to the above extract from Fardell v Coates Hire Operations P/L which was novel law. The texts and authorities cited in Fardell v Coates Hire Operations P/L make it clear that the above extract was a summary statement of the law as it had been for many years. S.117(1) does not reflect the broad common law approach to notice of termination of a contract of employment. The language of s.117(1) is significantly narrower than the common law concept of notice of termination of a contract of employment.

[30] The language used in s.117(1) does not speak of a requirement that the employer has given the employee written notice “specify(ing) a time when the termination is to take effect, or that time must be ascertainable”. The requirement is to give “notice of the day of the termination”. Plainly s.117(1) requires much more than giving notice of termination where the timing of the termination is ascertainable “by a reasonable person in the position of the recipient who had knowledge of the background of the dealings between the parties.” The use of the phrase “the day of the termination” is too specific to ignore. It requires that the employee who receives the notice knows at the time the employee receives the notice the actual day of termination. A notice expressed as giving the employee 4 weeks notice of termination or a notice expressed in terms that the termination will occur on a specific date would meet the requirements of s.117(1). A notice expressed in terms that termination will occur at a future time but without identifying the day on which the termination will occur would not satisfy the requirements of s.117(1).

In the case of a dismissal to which s.117(1) applies and where the exclusions in s.123 are not relevant does a notice of dismissal for the purpose of s.383(a)(i) need to meet the requirement of s.117(1)?

[31] In Ayub v NSW Trains the Full Bench made an observation about the relationship between s.117(1) and s.394(2)(a) which has some relevance to the relationship between s.117(1) and s.383(a)(i). The Full Bench said:

“[39] At least in relation to dismissals on notice, support for the conclusion that s.394(2)(a) is to be read as requiring the communication of a dismissal to the employee for it to take effect is derived from s.117(1), which is part of the National Employment Standards provisions concerning termination of employment and redundancy. It provides (underlining added):

Notice specifying day of termination

(1)  An employer must not terminate an employee's employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).

Note 1:       Section 123 describes situations in which this section does not apply.

Note 2:       Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a notice may be given. In particular, the notice may be given to an employee by:

(a)    delivering it personally; or

(b)    leaving it at the employee's last known address; or

(c)    sending it by pre-paid post to the employee's last known address.

[40] Section 117(1) prohibits a termination of employment to which it applies taking effect before the day on which notice of the termination is given. Section 123 has the effect of excluding from the operation of s.117(1), among other things, employees dismissed for serious misconduct and casual employees. These exceptions are ones in relation to which the common law does not require a period of notice of termination to be provided. However s.117(1) establishes that a termination of employment cannot occur by way of a retrospective notice.

[41] We therefore do not consider that there is any proper exception to the general proposition established by the authorities under the WR Act and the FW Act that a dismissal cannot take effect for the purposes of those statutes before it is communicated to the employee. There is little support for the existence of any such exception which may be derived from the common law. While it is not inconceivable, as earlier stated, that a contract of employment might expressly provide that it may be terminated by the employer on notice to the employee effective from a time prior to receipt of the notice by the employee, we do not consider for the reasons we have stated that any such contract could be treated as determining the date of effect of a dismissal for the purposes of s.394(2)(a). Termination of employment in accordance with such a provision would be in contravention of s.117(1).”

[32] It is the mandatory nature of the requirement in s.117(1) which is relevant. Breach of s.117 can give rise to civil penalty proceedings and the imposition of civil penalties. 7

[33] Whilst s.383(a)(i) only refers to “the time when the person is given the notice of the dismissal” it would be at odds with the scheme of the Act to treat the notice of the dismissal given for the purpose of s.383(a)(i) as being different from the notice required to be given under s.117(1). It is s.117(1) which, in the present matter, requires written notice of the day of the termination to have been given to Mr Duggan. S.383(a)(i) does not require notice to be given. It merely captures the notice that has been given and uses the time at which that notice was given as the point of time for calculating the minimum employment period. The form and content of the notice of dismissal is not set or determined by s.383(a)(i). However the form and content of a notice of dismissal will be set or determined by s.117(1) where that section applies to a particular employee.

[34] There is a further matter that needs to be taken into account and that is the purpose of s.383. The Explanatory Memorandum to the Act provides the following explanation in relation to s.382 and s.383:

“Clause 382 – When a person is protected from unfair dismissal

1511. This clause outlines the situations when a person may be entitled to an unfair dismissal remedy. It does this by providing a definition of when a person is protected from unfair dismissal – this expression is subsequently used in clause 390 to set out when FWA may order a remedy for unfair dismissal.

1512. Paragraph 382(a) provides that a person must have completed a minimum employment period with his or her employer. A requirement that an employee serve a minimum period before having access to an unfair dismissal remedy enables an employer to have a period of time to assess the capacity and conduct of a new employee without being subject to an unfair dismissal claim if they dismiss the employee during this period.

Clause 383 – Minimum employment period

1515. This clause sets out what is the minimum employment period. It is one year for employees of a small business and six months for all other employees. Whether an employee has served the minimum employment period is assessed either when the person is given notice of dismissal, or when the dismissal actually takes effect, whichever happens first. Clause 383 relies on the definition of small business employer in clause 23 when determining the length of the minimum employment period applying to employees in a particular business.” 8

[35] The effect of the requirement that an employee has served the minimum employment period is to prevent an employee from accessing the unfair dismissal provisions of the Act where the employee has not served the minimum employment period. Where the minimum employment period is determined by the giving of notice of dismissal (s.383(a)(i)) it would appear to be consistent with the purpose of the section that the notice of dismissal must be clear and specific both as to the fact of dismissal and the time of dismissal. Giving the phrase “notice of the dismissal” a broad or expansive meaning would appear to be inconsistent with the purpose of the section.

[36] Where an employer is required by s.117(1) to give an employee written notice of the day of the termination then it is that notice which will be considered for the purpose of identifying the relevant point in time for the purpose of s.383(a)(i). To hold otherwise would be to undermine, if not completely negate, the requirement set by Parliament in s.117(1).

If the answer to question 3 is Yes: then does the letter of 24 May 2016 meet the requirements of s.117(1)?

[37] The answer to this question must be: No! The letter of 24 May 2016 meets the first requirement of s.117(1) in that it is written notice, but it fails the second requirement of s.117(1) as it does not specify the day of the termination.

[38] The letter of 24 May 2016 identifies the time of the termination as follows: “the MFB will not implement this decision until the dispute between the parties has been resolved.” The day of the termination was completely unknown to anybody as at 24 May 2016. Given the discussion in relation to the second question ([26] – [30] above) the letter of 24 May 2016 does not specify the day of the termination and therefore the letter does not meet the requirements of s.117(1).

If the answer to question 3 is No: then in the case of a dismissal to which s.117(1) applies and where the exclusions in s.123 are not relevant and where the notice of dismissal for the purpose of s.383(a)(i) does not need to meet the requirement of s.117(1), what is required of a notice of dismissal for the purpose of s.383(a)(i)?

[39] For the purpose of considering this question the Commission proceeds on the basis that the correct answer to question 3 is No. Where the notice of dismissal for the purpose of s.383(a)(i) does not need to meet the requirement of s.117(1) (in relation to an employee to whom s.117 (1) applies) then a notice of dismissal for the purpose of s.383(a)(i) must be a lesser notice than that required by s.117(1). In the absence of s.383(a)(i) specifying the form and content of the notice of dismissal regard should be had to the common law approach to notice of termination of a contract of employment.

[40] The Full Bench in Ayub v NSW Trains correctly identified the common law approach to notice of termination of a contract of employment. Relevantly the Full Bench said:

“[17] At common law, a contract of employment may unilaterally be terminated by the employer with notice or by way of a summary dismissal. The general principle is that to effect the termination of a contract of employment, an employer must, subject to any express provision in the contract, communicate to the employee by plain or unambiguous words or conduct that the contract is terminated. Where the communication is in writing, the communication must at least have been received by the employee in order for the termination to be effective. 3 Where notice is given of the termination of the employment contract, then the contract will terminate at the end of the period of notice specified in the communication to the employee.4 The principles in this respect were summarised by the Supreme Court of NSW (White J) in Fardell v Coates Hire Operations Pty Ltd as follows:

‘[82] To be effective, a notice of termination of a contract of employment must specify a time when termination is to take effect, or that time must be ascertainable (G J McCarry, Termination of Employment Contracts by Notice (1986) 60 ALJ 78 at 79; Burton Group Ltd v Smith [1977] IRLR 351 at 354). The notice is to be construed according to how it would be understood by a reasonable person in the position of the recipient who had knowledge of the background of the dealings between the parties (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749 at 767-768; Carter v Hyde [1923] HCA 36; (1923) 33 CLR 115 at 126; Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 at 677; Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473 at [99]).’

[18] A notice of termination may validly operate notwithstanding that it is stated to take effect subject to a condition, provided that the notice is expressed with sufficient certainty so that conditional date of termination is ascertainable, the condition upon which the termination becomes operative has been fulfilled and the employee is in a position to know that the condition has been satisfied.” 9 [citations omitted]

[41] Applying the common law approach to the concept of “notice of the dismissal” in s.383(a)(i) means that the notice can either be conditional or unconditional and it must either specify a time when the termination is to take effect, or that time must be ascertainable.

Having answered the previous question: then does the letter of 24 May 2016 satisfy the requirements of a notice of dismissal for the purpose of s.383(a)(i)?

[42] The letter of 24 May 2016 specified that the decision to dismiss would be implemented after a future event occurred. The future event was when the dispute between the parties was resolved. The dispute was identified by reference to the Form F10 filed by the MFB with the Commission.

[43] Having regard to the decision in Fardell v Coates Hire Operations P/L that “the notice is to be construed according to how it would be understood by a reasonable person in the position of the recipient who had knowledge of the background of the dealings between the parties” would the time that the termination was to take effect be ascertainable by Mr Duggan.

[44] In Ayub v NSW Trains a letter was sent to Mr Ayub dated 23 November 2015 which advised him of the decision by NSW Trains to dismiss him. The Full Bench summarised the letter as follows:

“[6] NSW Trains then sent Mr Ayub a letter dated 23 November 2015 which advised him that the “final view of the appropriate disciplinary outcome” was “dismissal”, but that he had a right to seek a review of this decision under the “Interim Discipline Penalty Review Process Guidelines” by filling out the appropriate form within 14 days. The letter further advised that if no request for a review was made within the 14-day time period, the dismissal would take effect on 7 December 2015, but if a review was requested and the outcome of the review was that the decision to dismiss was confirmed, the dismissal would be “effective from 7 December 2015 or from the date of the outcome letter whichever one is of the latter date”. 10

[45] As to whether the letter of 23 November 2015 to Mr Ayub constituted a valid common law notice of termination the Full Bench in Ayub v NSW Trains said:

“[56] NSW Trains placed reliance upon its letter to Mr Ayub of 23 November 2015 as constituting a notice of his dismissal effective from 14 January 2016. That letter purported to give two alternative conditional dates of dismissal. The first was 7 December 2015, conditional on Mr Ayub not requesting a review of the dismissal decision within 14 days. That date was expressed in clear terms, but the condition upon which it was founded was not fulfilled since Mr Ayub did request a review within the required time period. The second date was not identified, but was described as the later of 7 December 2015 or the date of the review outcome letter. This date was subject to the double condition that a review was requested within 14 days and was unsuccessful. Although that condition was fulfilled, we do not consider that this aspect of the 23 November 2015 letter satisfied the other criteria for a valid conditional notice of termination which we have earlier identified. It was not expressed with sufficient certainty, in that in respect of any date after 7 December 2015 it depended entirely on a third person’s decision as to when to write the letter informing Mr Ayub of the review outcome and as to what date the author of the letter chose to place on the letter. That was not a date which was capable of being identified in advance by Mr Ayub, and could not therefore constitute the proper provision of notice to him.” 11

[46] In the present matter the letter from the MFB to Mr Duggan of 24 May 2016 did not contain two alternative conditional dates of termination. The letter contained only one conditional date, namely, “until the dispute between the parties has been resolved”.

[47] To the extent that the phrase “until the dispute between the parties has been resolved” identifies a conditional date of termination it suffers from the same defect as identified by the Full Bench in Ayub v NSW Trains; it was not expressed with sufficient certainty. The date was dependent upon one or more third parties determining that the dispute was resolved. The MFB contended that the dispute was resolved by the decision of a Full Bench of the Commission on 10 November 2016 in [2016] FWCFB 8120. That date was never capable of being identified in advance by Mr Duggan. As the date of 10 November 2016 was not ascertainable by Mr Duggan when he received the letter of 24 May 2016 the letter could not constitute the proper notice of termination to him.

[48] There is a further difficulty with the letter of 10 November 2016. Unlike the letter in Ayub v NSW Trains the letter of 24 May 2016 from the MFB to Mr Duggan did not state that the date of termination was when the dispute was resolved. Rather the MFB advised Mr Duggan that it “will not implement this decision until the dispute between the parties has been resolved.” That language makes very clear that the dismissal decision will not be implemented before the dispute has been resolved but it left it open as to when the dismissal decision would be implemented after the dispute had been resolved. Read this way the letter of 24 May 2016 clearly fails the common law test for being a notice of termination. It was not expressed with sufficient certainty and the actual date of termination was not capable of being identified in advance by Mr Duggan.

[49] The above discussion on the questions the Commission has proposed for itself to answer leads to the one outcome. The letter of 24 May 2016 from the MFB to Mr Duggan was not a notice of dismissal for the purpose of s.383(a)(i).

[50] The letter of 24 May 2016 was not a “written notice of the day of termination” for the purpose of s.117(1) nor was it a proper notice of termination as required by the common law. Mr Duggan was given written notice of dismissal on 10 November 2016 and was dismissed with effect on that day. For the purposes of s.383(a), 10 November 2016 is the date relevant to both subparagraphs (i) and (ii). As Mr Duggan’s employment commenced on 9 February 2016 the minimum employment period was 6 months. The notice of dismissal was given to him on 10 November 2016 well after the end of the minimum employment period. Mr Duggan is a person protected from unfair dismissal in that he had served the minimum employment period before he was given notice of dismissal.

COMMISSIONER

Appearances:

Mr M Peace SC for the Applicant.

Ms R Nelson of counsel for the Respondent.

Hearing details:

2017.

Melbourne:

February 17.

 1   [2016] FWC 5028.

 2   [2016] FWCFB 8120.

 3  Ayub v NSW Trains [2016] FWCFB 5500.

 4   Ibid at [51] to [59].

 5   Respondent’s outline of argument in respect of jurisdictional objection at para 28.

 6   [2010] NSWSC 346.

 7   Melbourne Stadium Ltd v Sautner [2015] FCAFC20 at [213] – [214]; FWO v Priority Matters P/L [2016] FCCA 1474.

 8   Explanatory Memorandum to the Fair Work Amendment Bill 2012 at paras 1511 – 1555.

 9   Ayub v NSW Trains [2016] FWCFB 5500 at [17 – 18].

 10   Ibid at [6].

 11   Ibid at [56].

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