Frustration and unfair dismissal: Gerald Mahony v Dr Daniel J White T/A Catholic Education Office Sydney [2015] FWC 1593

Published 6 May 2015

An employee of the Catholic Education Office has been allowed to pursue his unfair dismissal application after the Fair Work Commission found that the employee’s contract of employment was not frustrated due to his arrest for sexual assault.

Mr Gerald Mahony was employed by the Catholic Education Office (CEO) from 1986. He worked as a teacher and religious education coordinator in secondary schools. In September 2012 he was arrested and charged with a number of offences concerning sexual assault. Mr Mahony pleaded not guilty, was defending the charges and had been bailed.

As a result of the charges, the CEO suspended him from work with pay until the determination of the criminal trial, which was set down for May 2014.

In December 2013 the CEO proposed that Mr Mahony be suspended without pay until the case was resolved. The CEO offered that if Mr Mahony was acquitted and deemed suitable to teach following an internal review, it would pay him the full amount that he had lost. Mr Mahony refused to take leave without pay claiming that this option would leave him unable to fund his defence and that he was innocent and entitled to the presumption of innocence.

The CEO then terminated Mr Mahony’s employment claiming it had obligations to ensure “the welfare and best interests of children and our responsibility to the wider catholic and public community.”

Mr Mahony filed an application with the Fair Work Commission (FWC) claiming that he had been unfairly dismissed. The CEO filed a jurisdictional objection claiming that the termination had not been of the employer’s initiative and that the employment came to an end by the operation of the doctrine of frustration.

The CEO claimed that when the Child Protection (Working with Children) Act 2012 (NSW) commenced in June 2013, Mr Mahony’s contract of employment had been frustrated by his inability to obtain a working with children clearance.


The FWC accepted the CEO’s submission that the child protection legislation could operate to frustrate a contract of employment if the employee was unable to hold a working with children clearance. However, the FWC pointed out that Mr Mahony had continued to be employed for 7 months after the legislation came into effect.

The FWC found that at the time of termination, Mr Mahony could continue to be employed whilst on suspension with or without pay, by accessing his annual or long service leave or could have been re-deployed to perform other work. Indeed at the time of his dismissal, Mr Mahony was suspended with pay and did not require a working with children clearance for this.

It was found that at the time of the termination, the CEO did not seek to rely upon the doctrine of frustration and that this had only been asserted once proceedings commenced. Further, had the CEO’s submissions been accepted, this would have meant that the termination occurred in June 2013. The FWC stated:

“A contract of employment cannot, however, be terminated twice…termination of the applicant’s employment by operation of the doctrine of frustration cannot have occurred on the commencement of the child protection legislation on 15 June 2013 and then also have terminated on that same basis on 20 December 2013.”

The FWC dismissed the CEO’s jurisdictional objection. Mr Mahony is now free to pursue the unfair dismissal application.

Read the full decision here