Dec 834/99 M Print R7452

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.45 appeal against decision Print R5122

issued by Commissioner Lewin on 29 May 1999

Table Tennis Australia Incorporated

(C No. 34956 of 1999)

S.170CE application for relief in respect of termination of employment

J Grycan

and

Table Tennis Australia Incorporated

(U No. 35136 of 1998)

JUSTICE GIUDICE, PRESIDENT
JUSTICE BOULTON
COMMISSIONER CRIBB	MELBOURNE, 23 JULY, 1999

Appeal against decision - termination of employment - contract of employment for a specified period of time - leave to appeal declined

DECISION

[1] Mr Jerzy Grycan applied for relief pursuant to s.170CE of the Act in relation to the termination of his employment by Table Tennis Australia Incorporated (the appellant). The appellant took a preliminary objection to the application, submitting that Mr Grycan was employed under a contract of employment for a specified period of time and is therefore excluded from the jurisdiction of the Commission by the operation of s.170CC(1)(a) of the Act and regulation 30B(1)(a) of the Workplace Relations Regulations. On 26 May, 1999 Commissioner Lewin rejected the submission. The appeal is brought from that decision.

STATUTORY PROVISIONS

[2] Section 170CC provides where relevant that:

"(1) The regulations may exclude from the operation of specified provisions of this Division specified classes of employees included in any of the following classes:

(a) employees engaged under a contract of employment for a specified period of time..."

The relevant regulation is regulation 30B which provides where material:

"(1) For subsection 170CC(1) of the Act, the following kinds of employees are excluded from the operation of Subdivisions B, C, D, E and F Division 3 of Part 6 A of the Act:

(a) an employee engaged under a contract of employment for a specified period of time;

.....

[NOTE: The expression `employee engaged under a contract of employment for a specified period of time' used in paragraph 30B(1)(a) has been addressed in a number of cases before the Industrial Relations Court of Australia, including, in particular, Cooper v Darwin Rugby League Inc (1994) 57 IR 238, Andersen v Umbakumba Community Council (1994) 136 ALR 121, D'Lima v Board of Management, Princess Margaret Hospital of Children (1995-1996) 64 IR 19 and Fisher v Edith Cowan University (unreported judgement of Madgwick J, 12 November 1996, No. WI 1061 of 1996).]"

The legislature has directed that regard be paid to the cases referred to in the note at the foot of the regulation in construing paragraph (a).

THE CONTRACT OF EMPLOYMENT

[3] It is common ground that the contract of employment between Mr Grycan and the appellant is constituted by a written agreement. Relevant parts of the agreement include the Recitals, clause 2 and clause 5. They read as follows:

"RECITALS:

A significant object is to ensure that a high standard in the sport of Table Tennis is maintained.

To achieve this objective TTA has, through funding from the Australian Sports Commission ("ASC") developed, and continues to develop, elite and high performance programs for TTA's elite tennis players.

TTA wishes to retain the services of the Coach to work with and oversee the development of Australia's elite players within the context of TTA's strategic plan and the framework of the Olympic Athlete Program ("OAP").

The Coach agrees to provide the Services to TTA, and TTA agrees to provide the benefits to the Coach on the following terms and conditions.

...

2. SERVICES

Subject to sufficient ongoing funding from the ASC and the Coach obtaining and retaining a visa which will allow the Coach to carry out his obligations under this Agreement, the Coach shall be employed as TTA's National Coach, and agrees to provide the Services to TTA, for the Term.

...

5. TERM AND TERMINATION

5.1 Term of Agreement

Subject to clause 5, the Term of this Agreement is the period commencing in the Commencement Date, and concluding on the expiration of the period set down in Item 6 of the Schedule.

5.2 Termination

This Agreement shall be terminated at any time by:

(a) agreement;

(b) TTA, immediately without notice in the event the Coach brings TTA into disrepute or the Coach is guilty of misconduct;

(c) TTA by 30 days' notice in writing to the Coach, in the event funding from the ASC is withdrawn or restricted;

(d) TTA by 30 days' notice in writing to the Coach if, at any time during the Term, the Coach fails to provide the Services, or fails to meet any of his obligations under the Agreement and such failure cannot be remedied or continues for more than 30 days after written notice of such failure to the Coach; or

(e) The Coach, by 30 days' notice in writing to TTA if, at any time during the Term TTA fails to provide the Benefits or any part of them, or fails to meet any or all of its obligations to the Coach under this Agreement and such failure cannot be remedied or continues for more than 30 days after written notice of such failure to TTA.

Payment may be made in lieu of any period of notice required, including payment for the unexpired period of notice which has already commenced to run.

5.3 Illness

If at any time the Coach is unable to provide the Services due to illness, accident or any other cause for periods aggregating more than 1 month in any 2 month period, or the Coach is unable to resume his duties within a period of three months after the commencement of such illness or incapacity, the parties agree that it will not be harsh, unjust or unreasonable to terminate the Agreement on such terms and conditions as TTA thinks fit.

5.4 Conduct Following Termination

In the event of termination of this Agreement for any cause, the Coach agrees that he will, from the date this Agreement terminates in accordance with clause 5:

(a) not use the name of TTA in connection with his own, nor in any way hold himself out as having such ongoing connection;

(b) not use any information concerning TTA, its business or affairs, which the Coach may have acquired in the course of, or incidental to, providing the Services to TTA, for his own personal benefit or to the detriment or intended or probable detriment of TTA;

(c) forthwith and without demand for the same pay, pay or repay to TTA any monies then owing by him to TTA, and TTA may, in any event, deduct, claim or set off such monies against any part of the Benefits owing to the Coach;

(d) forthwith and without being requested to do so vacate any TTA or other premises then occupied by the Coach on a professional basis; and

(e) forthwith deliver to TTA any confidential information, documents, records, paper or computer programs for information produced by the Coach during the course of his employment or in the Coach's possession or control relating in any way to the business or affairs of TTA, and the Coach acknowledges that he is not to retain a copy of any document, record or information referred to in this clause.

Further Term

(a) In the event the Board of TTA determines TTA should employ the Coach for a further term (for such period as is agreed by the parties) ("Further Term"), TTA shall make an offer of employment to the Coach in writing no earlier than 3 months, and no later than 1 month, prior to the date on which this Agreement would terminate under clause 5.1.

(b) If the Coach accepts the offer, he shall notify the National Executive Director in writing no later than 3 weeks prior to the date on which this Agreement would terminate pursuant to Item 6 of the Schedule. In this event this Agreement would apply to the Further Term with such amendments as are incidental, necessary or appropriate to give continued effect to this Agreement, save that his clause 5.5 will not apply."

[4] The schedule to the agreement provides that it commences on 1 January, 1998 and runs for a period of 3 years and 2 months.

THE COMMISSIONER'S DECISION

[5] The Commissioner concluded that the contract was not one for a specified period of time, despite the fact that the duration of the contract was expressed to be 3 years and 2 months. He found that the appellant's right pursuant to clause 5.2 (c) to terminate the contract during its term is too broad to permit the contract to be properly characterised as one for a specified period of time. The Commissioner construed clause 5.2 (c) to mean that any restriction on funding by the named sponsor, regardless of the residual financial capacity of the appellant, gives the appellant the right to terminate the contract. On this construction, in the event of a reduction in funding the appellant could decide to allocate its reduced resources for purposes other than funding Mr Grycan's position.

[6] The appellant submitted that the Commissioner erred in characterising the contract as one which was not for a specified term. There were two bases for the submission. The first was that if a contract contains a term which specifies the time at which the contract will come to an end, a term providing for termination prior to that time will not necessarily mean the contract is not one for a specified term. Secondly, it was submitted that the Commissioner misconstrued clause 5.2 (c) in that he should have decided that the operation of the clause is limited in its application to a case in which the sponsor's funding for Mr Grycan's position had been withdrawn.

[7] In developing his submissions on the first point Mr Bourke, who appeared for the appellant, submitted that while an unqualified right to terminate a contract on notice renders the contract not one for a specified term (Andersen v Umbakumba Community Council (1994) 56 IR 102 at 106; Cooper v Darwin Rugby League Inc (1994) 57 IR 238, at 241), a qualified right to terminate the contract does not necessarily do so. Where the parties have a right to terminate for breach of its terms the contract may still be one for a specified period (Andersen IR at 107). Where the employee has a right to resign on notice the contract may be one for a specified term: see the conflicting decisions in Dadey v Edith Cowan University (1996) 70 IR 295 and Howarth v Mornington Peninsula Shire Council, 22 January, 1999 Print R0859 paras 11 & 12. Mr Bourke sought to persuade us that a principle could be deduced from a consideration of these and other cases that a qualified right to terminate based on the occurrence of some unforeseen event does not alter the character of what is otherwise a contract for a specified period of time.

[8] Although Mr Bourke's argument was well researched and presented, we think that it is not helpful to attempt to devise principles of general application when the range of contracts to which they must be applied is potentially unlimited. We think that Commissioner Lewin's approach was correct. The primary question for consideration was whether, on its proper construction, the contract between the parties is a contract for a specified period of time. In construing the contract the Commissioner made a specific finding about the effect of clause 5.2 (c). The finding was critical to his conclusion that the contract was not of the relevant kind. We turn now to the argument concerning that finding.

[9] It was contended on behalf of the appellant, by reference to the recitals and clause 2 of the contract, that clause 5.2 (c) should be interpreted as permitting the appellant to terminate the contract in the event of a withdrawal or restriction of funding which impacts on the position held by Mr Grycan, the Coach. We reject this submission. The Commissioner's construction of clause 5.2 (c) seems to us to be not only open but also correct. The terms of the contract are to be objectively construed and in the absence of ambiguity their plain meaning is to be adhered to unless absurdity or clear injustice would result from doing so. There was no suggestion of any common understanding which might be relevant to the construction of the clause. We do not think the terms of the clause are ambiguous. They give the appellant the right to terminate the contract if funding from the Australian Sports Commission is withdrawn or restricted. The words can not be read down so that the right to terminate only arises if funding of the Coach's position is withdrawn or restricted.

[10] If, as we have concluded, the Commissioner's construction of clause 5.2 (c) is correct it was open to the Commissioner to characterise the contract as one not for a specified period. The matter is not without difficulty. There was no evidence concerning the appellant's financial affairs, the nature and source of its funds or fluctuations in funding. Evidence on matters such as that might have shed some light on the context in which the agreement was to operate. Despite these difficulties we have not formed the view that the Commissioner's characterisation of the contract was wrong.

[11] Mr Irving, who appeared on behalf of Mr Grycan, took us to a range of background material emanating from the International Labour Organisation which it was urged sheds light on the construction of the regulation. He also referred us to a number of authorities which it was said require the Commission to interpret the regulation narrowly so as not to defeat the purpose of the Termination of Employment Convention 1982, the Termination of Employment Recommendation 1982 and Division 3 of Part VIA. Because of the conclusion we have reached it is not necessary that we deal with these submissions, or a number of others advanced on Mr Grycan's behalf. It should be clear from what we have said, however, that we regard the question raised before the Commissioner as principally one of construction of the contract, not one of construction of the terms of the regulation. Where construction of a contract is the issue, as we have already indicated, we doubt whether general rules are of much assistance. Each case must be dealt with on the basis of the terms of the particular contract involved to ascertain whether on its true meaning the contract is or is not one for a specified period of time.

[12] We decline to grant leave to appeal.

BY THE COMMISSION:

PRESIDENT

Appearances:

R Bourke for the appellant

M Irving for the respondent

Hearings.

1999.

Melbourne:

July 12.

Decision Summary

		Termination of employment - unfair dismissal - jurisdiction - contract of employment for specified period of time - appeal - full bench - Commissioner at first instance found that contract was not one for specified period of time - found clause in contract giving employer the right to terminate contract during its term too broad to permit contract to be characterised as one for specified period of time - full bench found Commissioner's construction of clause to be not only open but correct - not necessary to deal with submissions about construction of regulation - matter before Commissioner one of construction of contract not terms of regulation - leave to appeal declined.
Appeal by Table Tennis Australia Incorporated against decision of Lewin C of 29 May 1999 [Print R5122]
C No 34956 of 1999				Print R7452
Giudice J Boulton J Cribb C			Melbourne	23 July 1999

Printed by authority of the Commonwealth Government Printer

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