This decision of the Fair Work Commission explores in forensic detail the concept of what constitutes a dismissal in circumstances in which the employer argued that the employment came to an end as a result of frustration when the employee was unable to perform the requirements of the position.
“[1]
Mr Peter Robert Frestel (Applicant) has filed a Form F8, general protections involving dismissal application (Application) with the Fair Work Commission (Commission), under s.365 of the Fair Work Act 2009 (Act). The Applicant alleges that he was ‘dismissed’ by his former employer, Lloyd Helicopters Pty Ltd T/AS CHC Helicopters (Australia) (Respondent), in contravention of Part 3-1 of the Act.
[2]
The Respondent is an aviation provider, specialising in offshore crew transport to oil and gas overwater platforms, search and rescue, and emergency medical services for government and corporate clients. The Applicant is currently 66 years of age, and was employed by the Respondent in the full time position of helicopter Aircraft Captain based and residing in Western Australia. He has been employed by the Respondent for 23 and a half years.
[3]
The Respondent contends that it did not dismiss the Applicant. It says that the employment contract between the parties became frustrated as a result of the Applicant being declared permanently unfit to ever return to work in circumstances where the Applicant has been diagnosed with terminal cancer. I observe that where a contract is frustrated, the contractual obligations between the relevant parties are automatically discharged (as a matter of law), and the contract is brought to an end. Relevantly, where an employment contract is frustrated, termination at the initiative of the employer (i.e. a dismissal) will not occur.
[4]
The parties complied with Directions as to the filing and serving of evidence and submissions, and a hearing was conducted to resolve the Respondent’s non-dismissal jurisdictional objection on 28 July 2026. At the hearing, Mr Paris Lettau, of Counsel, instructed
[2026] FWC 2873
DECISION
[2026] FWC 2873
2
by Mr Andrew Molnar, In-House Legal Counsel, and Ms Rebekah Albrecht, Industrial Officer, Australian Federation of Air Pilots (AFAP), appeared (with permission) for the Applicant, and Mr James McLean, of Counsel, instructed by Mr Jacob Fowler, Lawyer, and Ms Elizabeth Moran, Lawyer, Mills Oakley lawyers, appeared (with permission) for the Respondent.
Facts
[5]
The Applicant is a member of the AFAP, and has been represented by the AFAP in his various dealings with the Respondent leading up to and post the cessation of his employment on 2 April 2026.
[6]
The factual matters set out in the following modified extract from the witness statement of Ms Megan Gartrell, Industrial Relations Lead for the Respondent, are not in dispute.
“5. Mr Frestel [the Applicant] has been employed by the Respondent since on or around 25 November 2002, commencing in the role of Single Engine Captain, in accordance with his contract of employment dated 28 October 2002 (Annexure MG-1). More recently, Mr Frestel has been employed in the position of ‘Aircraft Captain’, in a touring capacity, meaning that he was contracted to perform work all over Australia provided he held the correct licence and ratings for each site.
6. As Aircraft Captain, Mr Frestel’s role in substance was to fly helicopters. The primary responsibility of this role was ensuring safe and efficient flight operations. The Respondent required that Mr Frestel:
a)
Hold a Civil Aviation Safety Authority (CASA) Class 1 Medical Certificate (Certificate).
b)
Maintain license and ratings appropriate for the type of helicopter and operation they will operate.
c)
Meet the required skills and qualifications dictated by client contracts.
d)
Be qualified and current for line flying on that type and operation.
7. I have reviewed the employee records of Mr Frestel and understand that he has been absent from work since 9 December 2022 and from on or around 9 March 2023 had been receiving income protection payments. These payments ceased on or around 8 January 2025.
8. From on or around 8 January 2025, Mr Frestel used a mixture of paid annual leave and paid personal /carer’s leave in order to be absent from work. He had exhausted both his annual leave and paid personal/carer’s leave in the pay period 3 April 2026. The Respondent still required (and requires to the present) employees to work in the position of Aircraft Captain. Mr Frestel accordingly attended an assessment with an Independent Medical Examination (IME).
9. On or around 16 March 2026, [Ms Gartrell] received a copy of a report from the Applicant’s IME (IME Report).”1
1 Witness Statement of Ms Megan Gartrell, dated 30 June 2026, at [5]-[9], Digital Hearing Book (DHB), pp.217-218.
[2026] FWC 2873
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[7]
In addition to the foregoing, the payslip evidence discloses that the Applicant was utilising his long service leave accruals (as paid leave) whilst absent from work since early February 2026,2 and as at 20 February 2026, the Applicant had an accrued long service leave balance of 141.4 days (or 1131.0992 hours, or around 28 weeks, or over 6 months).3 On these accrual numbers, it appears that the Applicant has barely utilised (taken) any of the long service leave that he became entitled to take post his first 10 years of continuous service with the Respondent.
[8]
There is no evidence of the Respondent raising any concerns with the Applicant accessing his leave accruals (sick, annual and long service) during his period of extended absence from work.
[9]
On 27 February 2026, the Respondent directed the Applicant to attend the IME with a specialist medical practitioner to assess his fitness for work. The Applicant did so (without objection) on 5 March 2026. The Respondent’s correspondence to Dr Rosemary Stroud MBChB BSc FRACGP DAME MRO Dip OH, Occupational Physician Registrar, who was conducting the IME, reads:
“4 March 2026
Dear Dr Stroud,
RE: REFERRAL LETTER REGARDING EMPLOYEE PETER FRESTEL
Thank you for seeing Mr Peter Frestel, who is an employee of CHC Helicopters, Australia.
Details relating to Peter’s employment with CHC and the reasons why the Company has requested this medical assessment are set out below. This letter should be read in conjunction with the following documents which have been sent in the accompanying email to this letter.
•
Position Description, contained in Appendix A to this letter
Employment Details
Position: Aircraft Captain
Commencement Date: 1 December 2003
…
Employment status: Permanent full-time employment
Location: Touring Australia
Background
2 Applicant’s payslips, DHB, pp.170-178.
3 Ibid.
[2026] FWC 2873
4
The Company has recently become increasingly concerned with Peter’s ability to perform the inherent requirements of his role as Aircraft Pilot, due to his absence from the workplace for a significant period due to a non-work-related medical condition.
Peter has been absent from the workplace since 9 December 2022, with his date of disability recorded as being 9 December 2022. Peter received income protection from 9 March 2023 to 8 January 2025 inclusive. Peter has been on annual leave since income protection has ceased. On 06 February 2026, the Company invited Peter to meeting to discuss fitness for work and the future of his employment. This meeting has not occurred. Peter’s union representative (through AFAP) has asserted in February 2026 that discussions with Peter in relation to his future employment must take place only after he has received an appropriate medical opinion.
We note, Peter did not disclose any medical issue arising from any pre-existing non-work-related medical condition when he was interviewed for employment.
The Company is concerned that it does not have all the necessary information regarding Peter’s non-work-related medical condition and any medical history which may be relevant to understanding that condition. Without a complete understanding, it is difficult to adequately assess any potential risks to Peter’s wellbeing or the safety of others in relation to his fitness for work and Peter’s ability to safely perform the inherent requirements of his role as Aircraft Captain both currently and in the future.
Role responsibilities
Peter’s role is responsible for safe and efficient flight operations. For the purposes of defining the inherent requirements of the role, we attach a copy of the Position Description for Peter’s role as ‘Aircraft Captain’.
Please note the duties contained under both the “Role Summary” and “Key Responsibilities”. The Company regards these duties as inherent to the role. These include:
“Role Summary” – The Aircraft Captain will be responsible for safe and efficient flight operations. The primary accountability for this position is to provide compliance with the Company Operations Manual and regulations.
•
“Key Responsibilities”
o
A safety champion who will challenge unsafe acts and pursue improvements in safety behaviour within the
o
Business
o
Manage the safety of the aircraft, passengers and freight
o
Ensure allocated aircraft is fit for the proposed operation and loaded in an approved manner
o
Ensure that the crew are appropriately qualified, capable and fit for duty
o
Ensure Crew compliance with the Company Operations Manual
o
Demonstrate commitment and leadership to OHS by participating in meetings, inspections, promotions and other
[2026] FWC 2873
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o
appropriate activities
o
Provides information and assistance to aircrew on correct procedures
o
International travel may be required.
o
May perform other duties as assigned by the Senior Base Pilot/Base Manager/Flight Operations Manager
In addition to the Role Summary and Key Responsibilities, the Job Description sets out relevant required qualifications. These include:
•
Hold the license and ratings appropriate for the type of helicopter and operation they will operate
•
Pilots must meet the required skills and qualifications dictated by client contracts.
•
Have successfully completed the role training for the intended operation.
•
Be qualified and current for line flying on that type and operation.
Further details of the role requirements are included in Appendix A.
Medical clarification
We would appreciate your independent medical evaluation including a thorough review of Peter’s medical history in relation to his physical and mental health. This is for the purpose of seeking your opinion on the status of Peter’s current fitness to perform all the inherent requirements of his position, and, in the case of any unfitness, a prognosis in regard to Peter attaining fitness.
Specifically, we would appreciate your answers in relation to the following questions:
1.
What history was related to you by Peter in relation to:
a)
his relevant medical history including the nature and extent of any non-work-related medical condition symptoms he has suffered in the past;
b)
the circumstances of the alleged events that have affected his mental wellbeing;
c)
his initial symptoms and the timing of the onset of the alleged non-work-related medical condition symptoms;
d)
his current reported symptoms (if any); and
e)
the treatment he has received to date (including medication) and whether he has gained any benefit from this according to him.
2.
What clinical findings did you note upon examination?
3.
Did Peter disclose having a prior diagnosis of a non-work-related medical condition (including any relevant family history)?
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4.
Was there any evidence of Peter suffering a pre-existing non-work-related medical condition (whether diagnosed previously or not)?
5.
Did Peter disclose any medication(s) he is currently prescribed and if so, what is this and for what purposes is it used?
6.
What is your diagnosis of any current non-work-related medical condition experienced by Peter?
7.
If Peter suffers a recognised non-work-related medical condition, what treatment do you recommend and for what duration do you anticipate this will be necessary?
8.
What is the prognosis for (a) a complete resolution of any non-work-related medical condition and the timeline over which this would occur, or (b) for a partial resolution by which any current symptoms cease and the timeline over which this would occur?
9.
If you consider Peter suffers a recognised non-work-related medical condition, in your opinion, please advise the following:
a)
Does his condition currently impact his ability to perform his role as an Aircraft Captain and if so, in what respects and in relation to which duties?
b)
Is it likely or possible that his condition will impact his ability to perform his role as an Aircraft Captain in future and if so, in what respects and in relation to which duties?
c)
Do any medications which Peter is currently prescribed affect his ability to perform his role as an Aircraft Captain and if so, in what respects and in relation to which duties?
d)
Are there treatment options that can be taken to reduce the risk that Peter’s non-work-related medical condition will impact his ability to perform his role as an Aircraft Captain?
e)
Is Peter fit to return to work as an Aircraft Captain and safely perform the inherent requirements of his role?
f)
Are there any duties of his role that Peter is currently unfit to safely perform?
10.
In the alternative, if you consider Peter has previously suffered from a recognised non-work-related medical condition but no longer does, in your opinion, please advise the following:
a)
Is Peter fit to return to work safely and perform all the inherent requirements of the role? If Peter is fit to safely perform only some duties, please specify which duties.
[2026] FWC 2873
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b)
Is it possible that the performance of his role as an Aircraft Captain could have the effect of triggering a recurrence of the non-work-related medical condition?
c)
Are there preventative treatment options that could be taken to reduce the risk that Peter’s role as a Aircraft Captain would cause symptoms of a non-work-related medical condition to manifest or recur?
d)
If a recognised psychiatric condition previously suffered by Peter returns, will he be fit to work as a Aircraft Captain and safely perform the inherent requirements of his role?
11.
Are there any work restrictions that you believe are required or recommended in order for Peter to safely return to work. Please specify if these are required or recommended, including any partial work restrictions in terms of his duties and/or the manner of performing his duties.
If it is determined that Peter is not fully fit to perform all the inherent requirements of the role, please advise what nonwork-related factors are preventing a full fitness status along with details on what elements would be required to be proven to confirm full fitness at a later date. Please also detail the required steps Peter would need to improve his health to return to work and the expected timeframe of an appropriate fitness review timeframe.
If full fitness is not determined and is either likely or not likely to be achieved in the near future or at all, we kindly request that you please tick the appropriate boxes on the last page of this letter and return the page along with a signature when sending your completed report.
Please do not hesitate to contact me if you have any questions or require any additional information or documentation necessary to support this medical evaluation. Thank you for your time and expertise, we look forward to your guidance following your evaluation.
Best regards,
Robert Craker
Head of Human Resources – APAC
CHC Helicopters – Australia
(Operating on behalf of Offshore Services Australia)
Appendix A – Position Description – 1.4 to 1.5 (Authority, duties and responsibilities of the commander)”4
[10]
The IME Report reveals the following background to the Applicant’s current medical condition:
4 DHB, pp.227-230.
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“In 2021, during a Civil Aviation Safety Authority (CASA) medical assessment, [the Applicant’s] Designated Aviation Medical Examiner (DAME) noted a rising Prostate-Specific Antigen (PSA) level, although it remained within the normal range. A repeat test six months later showed a further increase, still within normal limits, but prompting a referral to Dr Richard Pemberton, a urologist. A physical examination was abnormal, leading to a prostate MRI and subsequent biopsy. The biopsy revealed a rare and aggressive form of prostate cancer with a Gleason score of 9. He underwent a roboticassisted radical prostatectomy, which was delayed by two weeks due to a COVID-19 infection.
During the surgery, the surgeon noted hardening of the urethra, suggesting potential residual cancer that could not be further resected. A subsequent PET scan detected a small growth on a pelvic lymph node. Oncology was consulted, but the growth was considered too small for radiation at that time. He then underwent approximately six weeks of radiotherapy and was discharged from the radiation oncology service. He was started on testosterone-lowering injections (Lucrin/leuprorelin acetate).
After four months, his PSA was noted to be rising again. Another PET scan revealed bony metastases in his left hip. He was referred back to radiation oncology and received five further radiation treatments. A subsequent PET scan showed clearance of the bony metastases and no involved lymph nodes. However, it was determined that the cancer had metastasised through the bloodstream. Approximately one year ago, he was informed that the cancer was terminal, with a life expectancy of two to five years.
He is currently under the care of medical oncologist Dr Lau at Sir Charles Gairdner Hospital (SCGH). He has been advised that he will likely develop resistance to his current treatment (enzalutamide), at which point he will be switched to chemotherapy. Further treatment options, such as Lutetium177 (Lu-177), may be available but are not currently funded by the Pharmaceutical Benefits Scheme (PBS) which may limit access.”5
[11]
It is unnecessary to delve into the remaining details of the IME Report6 given the agreed facts set out at paragraph [16] of this decision below.
[12]
On 19 March 2026 the Respondent sent the Applicant the following letter:
“Dear Peter,
Fitness for Work – Your Employment
I refer to your employment with Lloyd Helicopters Pty Ltd t/a CHC Helicopters Australia (Company) in the position of Aircraft Captain and the letter titled ‘Referral to Complete Independent Medical Examination’ dated 27 February 2026.
On Thursday, 5 March 2026 you attended a Fitness for Work Assessment with Dr Rosemary Stroud MBChB BSc FRACGP DAME MRO Dip OH, an Occupational
5 DHB, p.200.
6 IME Report by Dr Stroud, dated 5 March 2026, DHB, pp.236-247.
[2026] FWC 2873
9
Physician Registrar (Assessment). The purpose of this Assessment was for Dr Stroud to undertake an independent and comprehensive review of your current fitness for work and ability to perform the inherent requirements of your role as Aircraft Captain.
As part of the Assessment, Dr Stroud completed a Report into your fitness for work and unfortunately has found that you are and will remain unfit to complete all inherent requirements of your role, due to your metastatic prostate cancer and side effects from your treatment (Report). We have enclosed a copy of the Report.
In addition, as you will note in the Report, Dr Stroud answered “No” with respect to each of the following questions:
9. (d) Are there treatment options that can be taken to reduce the risk that Peter’s non-work related medical condition will impact his ability to perform his role as an Aircraft Captain?
9. (e) Is Peter fit to return to work as an Aircraft Captain and safely perform the inherent requirements of his role?
It is an essential requirement of your position of Aircraft Captain and ongoing employment with the Company that you are able to safely perform the inherent requirements of position as an Aircraft Captain.
Accordingly, based on the findings of the Report, the Company has formed a preliminary view that you can no longer perform the inherent requirements of your position of Aircraft Captain and that therefore your contract of employment may have been frustrated, causing the end of the employment relationship.
However, before the Company reaches any final view in relation to your ongoing employment, it invites you to provide a written response to this letter and requests that as part of any response you:
•
provide any additional medical information concerning your current fitness for work that you may wish the Company to consider; and/or
•
respond to the Company’s view that the contract of employment may have been frustrated because you are no longer capable of performing the inherent requirements of the job, thereby putting an end to the employment relationship.
Any response should be provided by no later than 4:00pm (AWST) Thursday 26 March 2026.
The Company will carefully consider your response (if you choose to make one) together with all the information available to it in order to determine the appropriate course forward. Please note that in the event you do not provide any written response, it will be open to the Company to reach its final view about your employment based on the information before it, which may include concluding that your employment has been ended at law on the basis of frustration of contract.
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The Company does deeply sympathise with your personal circumstances and has great appreciation for your history of service with the Company. However, it needs to consider whether you can perform the inherent requirements of your role and whether the contract has been frustrated.
If you have any questions in relation to the above matter, please contact myself on ….
Yours sincerely
Robert Craker
Senior Manager, Human Resources
CHC Helicopters (Australia)”7
[13]
On 24 March 2026, Ms Gartrell and the Applicant shared the following text message exchange:
[Ms Gartrell]: “Hi Peter – it looks like you could hear me when I just called. It’s Megan Cartrell from CHC, I was following up to confirm that you received my email last week. Regards Megan Gartrell”
[Ms Frestel]: “Hi Megan. Apologies. We are travelling back to Perth from my daughter’s wedding. Yes I did receive your email and I’m not sure where the Company is going with me. I can’t really think of much I can add to my previous communications. I am available any time on the phone if you could enlighten me as to the Company’s intentions. I’m also wondering why the others like Lincoln haven’t been asked to do the same as me. I’m afraid that my interpretation of your letter indicates you wish to simply dismiss me without any redundancy package? Regards Peter F.”8
[14]
On 2 April 2026, the Respondent sent the Applicant the following letter:
“Dear Peter,
Frustration of Employment Contract
I refer to your employment with Lloyd Helicopters Pty Ltd t/a CHC Helicopters Australia (Company) in the position of Aircraft Captain and the following correspondence:
a)
Letter titled ‘Referral to Complete Independent Medical Examination’ dated 27 February 2026 (1st Letter).
7 DHB, pp.196-197.
8 DHB, p.250.
[2026] FWC 2873
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b)
Fitness for Work Assessment conducted by Dr Rosemary Stroud on Thursday, 5th March 2026 and the associated Fitness for Work Report of the same date (Report).
c)
Letter titled ‘Fitness for Work Your Employment’ dated 19 March 2026 (2nd Letter).
d)
Text message conversation with Ms Megan Gartrell dated 24 March 2026 (Texts).
I write to confirm with you that the Company considers your contract with the Company has been frustrated, and your employment has come to an end by virtue of law effective today, Thursday 2 April 2026.
In the 2nd Letter, I referred to the Report (as provided to you), in which Dr Stroud found that you are and will remain unfit to complete all inherent requirements of your role, due to your metastatic prostate cancer and side effects from your treatment. In addition, Dr Stroud determined that there were no treatment options available which could reduce the risk that your non-work related medical condition would impact your ability to perform your role and that you were not fit to return to work as an Aircraft Captain and safely perform the inherent requirements of your role.
The Company offered the opportunity to you to provide a response to the Company’s preliminary view that you can no longer perform the inherent requirements of the position of Aircraft Captain and therefore your contract of employment may have been frustrated, causing the end of the employment relationship.
The 2nd Letter requested that you provide a written response, providing any further detail with respect to medical information concerning your current fitness for work and or respond to the Company’s view that the contract of employment may have been frustrated because you are no longer capable of performing the inherent requirements of the role.
On 24 March 2026, the Company having not yet received a response to the 2nd Letter, contacted you via phone and text message to confirm that you had received the 2nd Letter. In response, you texted Ms Megan Gartrell stating: “… Yes, I did receive your email and I’m not sure where the Company is going with me. I can’t really think of much I can add to my previous communications …”.
The Company has considered the content of the above response, as well as all the information available to it. It is evident that your non-work related medical condition significantly impacts your ability to safely perform the inherent requirements of your role and that you are permanently unfit to do so. Furthermore, having considered your skill set, the Company is unable to find any suitable re-deployment opportunities for you within the business.
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This outcome is not a reflection of your performance in the role or your contributions to the Company over the course of your employment. This situation unfortunately arises due to the medical circumstances outlined in the Report.
In recognition of your service, the Company has provided a five-week ex gratia payment in good faith. This is equivalent to the notice period payment you would ordinarily receive, notwithstanding that this is not a termination of your employment.
Any outstanding accrued but untaken leave entitlements will be paid in the next available pay cycle. Please ensure that all Company property in your possession, custody or control is returned within fourteen (14) days.
We wish you and your family all the best.
Yours sincerely
Robert Craker
Senior Manager, Human Resources
CHC Helicopters (Australia)”9
[15]
As at 2 April 2026, the Applicant had an accrued long service leave balance of exactly 119 days,10 which was paid out to him in his final pay by the Respondent, along with the five week ex gratia payment.
[16]
The parties are in agreement as to the following facts:
“As at 2 April 2026:
1.
Mr Frestel was 65 years of age;
2.
Mr Frestel had been diagnosed with a terminal illness, and the medical prognosis was that there was no prospect of him returning to the role of Aircraft Captain at any stage in the future;
3.
Mr Frestel had not sought to contradict that medical prognosis;
4.
Mr Frestel did not hold a valid CASA medical, and given his condition, there was no prospect of him holding a valid CASA medical at any stage in the future;
5.
a valid CASA medical was a requirement of Mr Frestel being legally permitted to perform the role of Aircraft Captain; and
6.
in the premises of the above, Mr Frestel would not again be legally capable of performing his role of Aircraft Captain at any stage in the future.”11
The Applicant’s employment terms and conditions
[17]
The employment contract between the parties was signed by the Applicant on 31 October 2002 (Employment Contract), and appears to contain standardised terms and
9 DHB, pp.251-252.
10 DHB, p.177.
11 Email from Mr Jacob Fowler, Respondent’s lawyer, to Chambers re “six agreed facts between the Applicant and the Respondent”, 28 July 2026, 10:20am.
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condition of employment.12 There is no dispute between the parties as to the validity of the Employment Contract, which provides that:
(a)
the Applicant’s general terms and conditions of employment are as set out in the certified agreement that applies to the Respondent and the Applicant (at the time, being the Lloyd Helicopter Group (Pilots) Certified Agreement 2000);
(b)
termination of the Employment Contract is to occur via the provision of 4 weeks’ notice by either party, which may be paid in lieu by the Respondent, except in cases of serious misconduct (where no notice is payable); and
(c)
long service leave is accrued and payable in accordance with South Australian (long service leave) legislation, being the Long Service Leave Act 1987 (SA).13
[18]
As at 2 April 2026, when the Respondent notified the Applicant that it considered the Employment Contract had been frustrated, the CHC Helicopter (Australia) Pilots Offshore Enterprise Agreement 2023 (Enterprise Agreement)14 applied to his employment with the Respondent. Clause 35 of the Agreement reads:
“35. Long Service Leave
35.1 An Employee will be entitled to Long Service Leave in accordance with provisions of the Long Service Leave Act 1987 (SA), as amended from time to time. Notwithstanding this clause, if the Long Service Leave Act 1987 (SA) is amended or repealed during the term of this Agreement and the effect is to reduce the entitlement to long service leave, Employees will be entitled to long service under the conditions of the Long Service Leave Act 1987 (SA) immediately prior to the amendment or repeal.
35.2 If there is more beneficial long service leave term in the employee’s applicable State or Territory legislation or the [National Employment Standards (NES)], the more beneficial term will apply.
35.3 The Company will have available to each Employee the procedures and rules governing the application for the taking of and payment of long service leave.
35.4 The Company may at the request of the Employee grant the Employee long service leave on half pay for a period not exceeding twice the period specified in the appropriate legislation.
35.5 In accordance with the provisions of the Long Service Leave Act 1987 (SA), an Employee may request the cash out of some or all of his/her long service entitlement in each calendar year. Such a request is subject to Company approval.
12 DHB, pp.222-226.
13 Ibid.
14 DHB, pp.79-169. Clause 7, “Parties Bound and Coverage”, of the CHC Helicopter (Australia) Pilots Offshore Enterprise Agreement 2023 (DHB, p.87).
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35.6 An Employee will be paid his/her Gross Annual Salary for the period of leave to the be taken.”15
[19]
It is unnecessary to resolve the issue raised by clause 35.2 of the Agreement (as to whether particular long service leave terms in South Australian or Western Australian legislation apply on the basis of them being more beneficial to the Applicant).16 For the purposes of these proceedings, it is sufficient to accept that both pieces of legislation provide for the accrual, taking, and payment of long service leave (subject to relevant continuity of employment thresholds being met).17
[20]
I equally observe that there is no evidence before me as to the Respondent’s “procedures and rules governing the application for the taking of and payment of long service leave” (see Clause 35.3 of the Agreement). Nor is there any evidence of:
(a)
the Applicant requesting or applying for, being approved or refused to take, or having been directed not to take, his accrued long service leave as leave; or
(b)
the Respondent’s position or view as to the Applicant continuing to access his long service leave accruals (as paid leave) as at or prior to the time of purported frustration (on 2 April 2026).
Legislation
[21]
Sections 12, 365, and 386(1) of the Act read:
“12 The Dictionary
In this Act:
dismissed: see section 386.”
…
“365 Application for the FWC to deal with a dismissal dispute
If:
(a)
a person has been dismissed; and
(b)
the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
15 DHB, p.132.
16 Transcript, PN168-PN173.
17 Long Service Leave Act 1987 (SA), ss.7-8. Long Service Leave Act 1958 (WA), ss.8-9.
[2026] FWC 2873
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the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.”
…
“386 Meaning of dismissed
(1)
A person has been dismissed if:
(a)
the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b)
the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”
[22]
Section 365 requires that an applicant (employee) must have been “dismissed” (within the meaning of s.12 and s.386 of the Act) in order to be able to file a general protections involving dismissal application.18
The law of frustration
[23]
In Codelfa Construction Pty Ltd v State Rail Authority of NSW19 (Codelfa), Mason J endorsed Stephen J’s acceptance (with whom Murphy J agreed) of the test and analysis task for ‘frustration’ in Brisbane City Council v Group Projects Ltd20, being that set out by Lord Reid and Lord Ratcliffe in Davis Contractors Pty Ltd v Fareham Urban District Council,21 as follows:
“39. In Brisbane City Council v Group Projects Pty Ltd [1979] HCA 54; (1979) 145 CLR 143, at pp.159-163, Stephen J discussed the authorities. The more recent authorities, National Carriers Ltd v Panalpina (Northern) Ltd [1980] UKHL 8; (1981) AC 675 and Pioneer Shipping v. BTP Tioxide (1982) AC 724, do not call for any revision of that discussion. I agree with Stephen J’s acceptance of the approach adopted by Lord Reid and Lord Radcliffe in Davis Contractors Pty Ltd v Fareham Urban District Council [1956] AC 696. Lord Reid said that the task of the court is to determine “on the true construction of the terms which are in the contract read in light of the nature of the contract and of the relevant surrounding circumstances”, “whether the contract which they did make is . . . wide enough to apply to the new situation: if it is not, then it is at an end” (1956) AC, at pp. 720-721. Later he described frustration as “the termination of the contract by operation of law on the emergence of a fundamentally different situation” (1956) AC, at p.723. (at p.357)
18 For case law as to the meaning of “dismissed” under s.386(1)(a) of the Act, see: Mohazab v Dick Smith Electronics (2005) 62 IR 200, at 205 to 206. See also: O’Meara v Stanley Works Pty Ltd [2006] AIRC 496, at [19] to [23]; Mahony v White [2016] FCAFC 160, at [23]; Khayam v Navitas English Pty Ltd [2017] FWCFB 5162, at [75]; Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154, at 160; Quirk v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 1587, at [218], and [221]-[223].
19 (1982) 149 CLR 337, at [39]-[40], 356-357.
20 (179) 145 CLR 143, at 159-163.
21 [1956] AC 696.
[2026] FWC 2873
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40. Lord Radcliffe (1956) AC, at p.729 said:
“. . . frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract …. It was not this that I promised to do.”
His Lordship, noting that special importance attaches to an unexpected event, observed “There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for”. (at p.357)”
…
“43. … Lord Radcliffe in Davis Contractors (1956) AC at p.729 quoted with approval the remarks of Lord Wright in Denny, Mott & Dickson (1944) AC, at pp.274-275:
“The data for decision are, on the one hand, the terms and construction of the contract, read in the light of the then existing circumstances, and on the other hand the events which have occurred.”
[24]
The law as to frustration (per Codelfa) applies to an employment contract as much it does to any other common law contract in Australia. A determination as to frustration is made irrespective of the intentions of the parties. The party asserting that frustration has occurred carries the onus to prove it.22
[25]
Each case will come down to its own facts and circumstances. Case law examples of determinations as to frustration of contract in an employment context include: Notcutt v Universal Equipment (London) Ltd [1986] 1 WLR 641; Morgan v Manser 1948 1 KB 184; Geselle v Department for Health and Wellbeing [2021] SAET 167; Patel v Chief Executive Officer, Southern Adelaide Local Health Network [2025] SAET 3; Hilton Hotels of Australia Limited v Pasovska [2003] NSWIRComm 17; (2003) 122 IR 248; Finch v Sayers [1976] 2 NSWLR 540; Australian Manufacturing Workers’ Union (AMWU) v BAE Systems Australia Ltd [2015] FWC 49; Filsell v District Council of Barossa [1992] SAIR 102; Cachia v State Authorities Superannuation Board (1993) 47 IR 254.
Consideration
[26]
There is no doubt that the Applicant’s medical diagnosis and prognosis, and his unfitness to ever work again in the role of Aircraft Captain or pilot, is a significant supervening event not contemplated by the parties (occurring post entry into the Employment Contract) that goes to the root of the work-wages bargain between the parties. An inability for one party to perform an essential requirement of a contract (actual or anticipatory) is a basis or reason for one party to bring a contract to an end upon applicable notice (i.e. terminate the contract). But
22 Hilton Hotels of Australia Limited v Pasovska [2003] NSWIRComm 17; (2003) 122 IR 248.
[2026] FWC 2873
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was the contract between the parties in this case ‘frustrated’ as at 2 April 2026, such that it was not terminated at the Respondent’s initiative, but brough to an end as a matter of law?
[27]
Applying the test set out in Codelfa, and taking into account the terms of the Employment Contract as to long service leave, and the surrounding circumstances as at, or in the immediate lead up to, 2 April 2026 (that being the date when the Respondent advised (asserted to) the Applicant that the Employment Contract had been frustrated), I highlight the following:
(a)
the Employment Contract, the Enterprise Agreement, and applicable state legislation all make provision for the Applicant to be entitled to accrue, and thereafter take and be paid long service leave. Long service leave entitles (or gives permission) for an employee to be released from their obligation to perform work, whilst at the same time receiving payment.23 The concept of leave carries with it an inherent requirement or understanding that when a period of leave comes to an end, the employee will be returning to work. That said, there are many examples of employees and employers coming to an agreement for an employee to use up their leave (accrued days off, annual leave, and/or long service leave) before their employment comes to an end (including, preceding retirement);
(b)
up until 2 April 2026, the Applicant had been accessing his long service leave entitlement so as to continue to be paid whilst he was absent from work. There is no evidence before me to suggest that his continued use of his long service leave entitlements would not, or could not, continue to occur as at or post 2 April 2026 (i.e. for at least as long as he had long service leave accruals and an entitlement to access them in the form of leave). In this case, the Applicant had 119 days (or just under 24 weeks) of long service leave accruals available to him as at the date of the asserted frustration;24
(c)
the Respondent’s submissions, as Mr Lettau pointed out, are cast at a level of generality. They refer to the correct principles as to the law of frustration, but seek to apply them in a manner that fails to adequately engage with the contractual and statutory terms applicable to the parties in this case;
(d)
notwithstanding that the performance of work is fundamental to the Employment Contract between the parties, there are also other terms of the Employment Contract that are fundamental, at least to the employee. For example, entitlements to take leave after a relevant qualifying period of service. This is not a case based upon pro rata accruals that are yet to crystalise into an entitlement to take paid leave; and
(e)
as to the Respondent’s submission that there is no evidence of the Applicant and the Respondent having an agreement, arrangement or understanding as to the Applicant (as at, or post, 2 April 2026) continuing to access his entitlement to paid long service leave, such absence of evidence does not assist the Respondent’s case. The issue as
23 Transcript, PN156-PN157.
24 Even if some of these 119 days were yet to crystalise as an entitlement to be taken as leave (as a relevant period of continuous service had not yet arrived), a significant majority of these days had crystalised or become available for the Applicant to take as leave.
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to the Employment Contract not being capable of frustration (or not being frustrated) due to the Applicant being entitled to long service leave was raised in the Applicant’s submissions of 16 June 2026.25 The Respondent engaged with the issue briefly in its submissions on 30 June 2026,26 but Ms Gartrell says absolutely nothing about long service leave in her evidence, and no document was tendered as to the procedures and rules governing the application for the taking of and payment of long service leave (see clause 35.3 of the Agreement, reproduced at paragraph [18] of this decision).27 The Respondent was in the best position to tender such a document or explain its absence, but did neither. In these circumstances, I consider that any such evidence would not have assisted the Respondent’s case, and that I can confidently infer that the Applicant continuing to utilise (or access) his paid long service leave post 2 April 2026 (until its depletion to zero) would have occurred (or continued), but for one party (the Respondent) bringing the Employment Contract to an end.
[28]
One starts the analysis as to frustration by construing the Employment Contract.28 In my view, the difficulty with the Respondent’s assertions as to frustration29 in this case is that, as at 2 April 2026, the Employment Contract between the parties was continuing to operate according to its terms (at least in respect of long service leave). This is notwithstanding the accepted conclusions set out in the IME Report that the Applicant would never be returning to his role of Aircraft Captain with the Respondent. To be clear, as at the time that the Applicant was accessing his long service leave, the Applicant was on a period of leave that he was entitled to access pursuant to the terms of his Employment Contract, and the time for him to return to work (and undertake his role or perform his duties) had not yet arrived.30 Hence, the only way in which the contract could be brought to an end (as at 2 April 2026) was in accordance with its terms (i.e. in this case, one party terminating the employment contract (and the employment relationship), via notice of termination).
[29]
In the ultimate sense, I find that there was no frustration of the Employment Contract in the facts and circumstances of this case as at 2 April 2026. As the parties acknowledge, if the Employment Contract was not frustrated on 2 April 2026, it was terminated at the Respondent’s initiative, which gave rise to a dismissal within the meaning of s.386(1)(a) of the Act.31 Those who take a mistaken view as to frustration must deal with the consequences of that mistake, which is a finding that they have themselves have terminated or repudiated the contract.
[30]
Some evidence was received at the hearing from the Applicant in support of his contentions as to the operative (or one of the operative) reasons for his dismissal being the avoidance of a redundancy payment (in circumstances where he had submitted a form identifying his interest in a voluntary redundancy in January 2026). He says that the issue of frustration (noting its timing) is but a ruse to deflect, mask or muddy the waters around the real reason/s for his dismissal. The Respondent wholly denies these contentions. None of these issues are matters that I have been required to consider in resolving the Respondent’s non-
25 Applicant’s Submissions, at [14]-[16]. DHB, pp.72-73.
26 Respondent’s Submissions, at [11]. DHB, p.216.
27 The only evidence in relation to long service leave in this case is contained in payslips.
28 The Eugenia [1964] 2 QB 226, per Lord Denning at 239-40.
29 For example, Transcript, PN185-PN186, and PN196-PN229.
30 Transcript, PN210.
31 Ibid, PN177.
[2026] FWC 2873
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dismissal (or frustration) objection. Rather, they are matters for a court to determine if the parties are unable to resolve their dispute by agreement. This decision merely confirms that (in the Commission’s determination) the Applicant has filed a valid general protections involving ‘dismissal’ application with the Commission, and that the Commission has jurisdiction to conduct a conciliation conference between the parties. If the matter fails to settle at conciliation, I observe that s.370 of the Act is to be interpreted against the background that while the Commission may determine the question of a person’s entitlement to make an application, such a determination may not be conclusive when the matter comes before a court.
[31]
I will issue an order contemporaneously with this decision (PR812773) dismissing the Respondent’s no-dismissal objection. The matter will now be set down for a conciliation conference before me pursuant to s.368 of the Act.”
Frestel v Lloyd Helicopters Pty Ltd Trading as CHC Helicopter (Australia) [2026] FWC 2873 delivered 10 August 2026 per Boyce DP