Fair work law; length of service vs employment

The distinction between a period of service and a period of employment is important in various areas of employment law, for example when determining whether a casual employee is protected from unfair dismissal, thus;

“To determine this question, the facts, as objectively found and properly characterised, need to be applied to the law (including the statutory definition in section 22).

[73] An employment relationship is inherently contractual 20. Whilst it is necessary for a contact of employment to exist for there to be “employment” from which a person is terminated, the FW Act’s unfair dismissal jurisdiction concerns itself with termination of the employment relationship and not necessarily termination of the contract:21

“[50] Thus it is clear, contrary to the first proposition stated in Lunn to which we have earlier referred, that a termination of the employment relationship might constitute a termination at the initiative of the employer under the WR Act notwithstanding that the contract of employment remains on foot. That is, under the WR Act, termination at the initiative of the employer did not, on its ordinary meaning, refer to termination of the contract of employment. The first proposition in Lunn to which we have earlier referred was therefore not a correct statement of the law under the WR Act, and as a result the Full Bench’s analysis in Lunn proceeded on the wrong premise that it was necessary to analyse whether the final employment contract was terminated at the initiative of the employer, not whether the employment relationship was terminated at the initiative of the employer. The correct position remained as stated in Mohazab, namely that a termination of employment at the initiative of the employer occurs where the action of the employer is the principal contributing factor which leads to the termination of the employment relationship.”

[74] Indeed, termination of the employment relationship is a different concept from the termination of an employment contract 22.

[75] Whilst the phrase “continuous service’ is not defined in the FW Act, the ordinary meaning of “continuous service” is a period of unbroken service by an employee with an employer 23. That Part 3-2 of the FW Act concerns itself with unfair dismissals from the employment relationship and not simply from an employment contract is a relevant contextual consideration in determining the proper construction of the phrase “continuous service” in section 384. Subject to statutory exceptions in section 22, “continuous service’ for the purposes of sections 384 and 22 of the FW Act is to be understood as requiring the employment relationship to have been unbroken.

[76] Such an approach is not novel. As observed by the Supreme Court of South Australia, “service pursuant to an employment contract can consist of standing and waiting to perform work as much as the active performance of work duties” 24. By way of example, it is well established that continuously rostered casual employees remain in service notwithstanding that each engagement may be by separate casual contracts. Gaps in time between such contracts do not necessarily break service because it is the employment relationship and not the contract that is assessed for continuity. As stated by a full bench of the Commission in Shortland v Smiths Snackfood Co Ltd: 25

“[11] The criteria in s.384(2)(a) make it clear that s.384 does not proceed on the basis that a casual employee’s period of employment for the purposes of the unfair dismissal remedy starts and ends with each engagement as understood in the common law of employment.

[12] Moreover, it is more than tolerably clear that s.384 is concerned with how an employee’s period of employment is calculated for the purposes of s.382(a). Section 384(2) draws a distinction between a period of service and a period of employment. It also draws a distinction between a period of continuous service and a period of service: a period of continuous service can be made up of a series of periods of service, some of which count towards the period of continuous service (ie. where the conditions in s.384(2)(a)(i) and (ii) are met) and some of which do not (ie. where one of the conditions in s.384(2)(a)(i) or (ii) is not met). It is clear from the language of s. 384(2) that an employee may have series of contiguous periods of service with an employer that may count towards a single period of employment with that employer. Any given period of service in such a contiguous series of periods of service will count towards the employee’s period of employment only if the requirements in s.384(2)(a)(i) and (ii) are met. Section 384(2) is concerned only with determining which periods of service in such a contiguous series count toward the employee’s period of employment with the employer for the purposes of s.382(a).”

[77] For these reasons, the phrases “period of employment” and “continuous service” in section 384 and the phrase “continuous service” in section 22 are best read as relating to a period of an unbroken employment relationship and not necessarily an unbroken employment contract (subject of course to the further statutory provisions in section 22 which deem certain service to be continuous despite a break in the employment relationship).”

Rankine v Aboriginal Sobriety Group Indigenous Corporation (2021) FWC 3945 delivered 12 July 2021 per Anderson DP