Dr Daniel White, Executive Director of Catholic Schools and legal representative of the Catholic Education Office, Sydney v Mr Gerald Mahony [2015] FWCFB 4952

In a decision which departs from previous approaches, the Full Bench of the Fair Work Commission (the “Full Bench”) has held that a school teacher with pending criminal charges relating to children cannot pursue an unfair dismissal remedy following the termination of his employment in 2013.

At first instance, the Fair Work Commission (the “FWC”) rejected the argument of the Catholic Education Office (the “CEO”) that the applicant’s contract of employment had been “frustrated” (that is, terminated by an event entirely outside the control of the parties) by the introduction of the Child Protection (Working With Children) Act 2012  (NSW) (the “Child Protection Act”). On its terms, the Child Protection Act prevented anyone charged with offences relating to children from performing child-related work. The FWC held that the contract had not been frustrated because the action which brought it to an end was the CEO sending the applicant a termination of employment letter explaining the reasons for his dismissal. Commissioner McKenna said:

“How the contentions about the doctrine of frustrations as against what was, in form and substance, a dismissal for cause –the reasons… described… in the CEO’s letter advising of the termination of employee – are to be reconciled is not immediately apparent… A contract of employment cannot be terminated twice”.

In a judgment comprising just seven paragraphs, the Full Bench overturned the FWC’s decision. The CEO argued not in terms of frustration, but on the basis that the applicant’s employment was “not permissible” under and “inconsistent” with the Child Protection Act. The Full Bench agreed, holding that the Child Protection Act made the continuing employment of the applicant illegal. It could therefore not be said that the applicant’s employment had been unfairly terminated at the initiative of the CEO.

Lessons for employers

• Although this case is significant in that it means that the employment of employees working with children will automatically terminate if they are charged with offences relating to children, in considering whether the reasoning of the Full Bench will extend to other types of criminal charges, the terms of relevant legislation will be of prime importance. The Child Protection Act is unusual in that it allows for termination of employment prior to a final conviction.

• Employers should ensure that their contracts of employment include provisions which allow them to take disciplinary action against employees who fail to promote the best interests and reputation of the organisation, both during and after work hours.