A person who suspects that they have been unfairly ‘dismissed’ from their employment may have access unfair dismissal remedies under section 394(1) of the Fair Work Act 2009 (Cth) (FWA). Section 386(1) specifies that a person has been ‘dismissed’ if their employment was ‘terminated at the employer’s initiative’.
Generally, a fixed term contract specifies the date on which the employment contract will automatically expire. Traditionally, when the fixed employment contract ends, so too does the employment on a contractual basis as opposed to ‘at the employer’s initiate’, providing an exemption from potential unfair dismissal claims. However, the line blurs between a genuine fixed term agreement and a regular ongoing employment relationship in instances where an employee is engaged on multiple consecutive fixed term contracts.
Nasr v Mondelez Australia Pty Ltd
This issue was recently addressed in Nasr v Mondelez Australia Pty Ltd  FWC 2802 (Nasr). Ultimately the Commission held that an employee engaged over a 30-month period under eight separate and successive fixed term contracts, was not dismissed within the meaning of section 386(1)(a) of the FWA when his last contract expired and therefore did not have jurisdiction to bring an unfair dismissal claim.
In reaching this decision, the Commission relied on the principles established in Saeid Khayam v Navitas English Pty Ltd t/a Navitas English  FWCFB 5162 (Navitas) in determining whether a dismissal occurred ‘at the initiative of the employer’. Operative factors considered included:
- That each fixed term employment contract contained clear and unambiguous terms with a clear end date;
- That the employee had read and signed the employment contracts with the understanding that the employment was for a maximum period and that there was no guarantee of future employment;
- The use of time-limited contracts were as a result of genuine operational needs of the business. This was evidenced by the changing nature of the work performed, the allocation of department and the shifts contained within each employment agreement;
- The contracts were not inconsistent with the applicable Enterprise Agreements in place; and
- No other applicable vitiating factors, as identified in Navitas, were present in the matter.
While the Commission recognised that Mr Nasr had been employed under successive fixed-term contracts for a “greater period than is ordinarily the case”, the Commission accepted that there were genuine operational reasons for him to be engaged in this manner. New contracts were not merely rolled out as part of an automatic administrative process.
The decision in Nasr sheds some useful light on how employers may still be protected under section 386(2)(a) of the FWA in circumstances where an employee’s employment is terminated at the end of a fixed term contract.
While the Commission recognises the genuine and useful roll fixed term employment contracts can have within a business, it also clearly identifies that the face of the agreement alone is not sufficient to determine the true employment relationship. Hence there is a risk that the expiry of a fixed term contract may amount to a dismissal in certain circumstances.
This decision is stark reminder to employers that when utilising fix term contracts to engage staff, care must be taken to ensure contracts are effectively drafted and relevant staff are appropriately managed.
Saines Legal is a full-service employment law firm available to provide tailored advice and guidance in relation to any workplace issues, including fix term contracts. We have also developed a small business retainer package designed to provide complete employment support at a fixed weekly fee, affording our small business clients complete peace of mind regarding workplace legal obligations and insurance against the costs of any unexpected issues. Do not hesitate to contact us via firstname.lastname@example.org or (07) 3324 1055, to arrange a consultation.
The contents of this article are general in nature and is for information purposes only. The content of this article does not constitute legal advice and should not be used as such. Should you require assistance with a specific legal matter, it is recommended that you seek appropriate advice.
Authors Emma Marshall (Lawyer) and Nigel Saines (Principal).