Important Fair Work Commission Decision Relating to Fixed Term and Maximum Term Contracts
On 8 December 2017, a Full Bench of the Fair Work Commission handed down its decision in Khayam v Navitas English  FWCFB 5162. This decision dealt with the effect of fixed term and maximum term contracts, and whether employees covered by these contracts have access to unfair dismissal laws when employment ends due to the expiry of the contract.
In the case, Mr Khayam was employed by Navitas on a series of time-limited contracts. On completion of the last contract, Navitas (due to concerns with Mr Khayam performance) did not to offer a further contract. Mr Khayam contended that, for the purposes of an unfair dismissal claim, this constituted dismissal by Navitas. Navitas argued the contract ended simply by the passing of time and no dismissal occurred.
Importantly, the Full Bench held that:
- The exclusion in section 386(2)(a) of the Fair Work Act which deems a person to not be dismissed if their employment ends due to a specified time period ending, does not apply if a contract is able to be terminated during its term through the giving of notice; and
- Where termination of employment occurs at the expiry of an ‘outer limit’ contract, in most circumstances the termination will arise from the expiry of that time and not at the initiative of the employer, but, “in the case of an employment relationship made up of a sequence of time-limited contracts of employment, where the termination has occurred at the end of the term of the last of those contracts. In that situation, the analysis may, depending on the facts, require consideration of the circumstances of the entire employment relationship, not merely the terms of the final employment contract.”
The interpretation of the Fair Work Act adopted by the Majority of the Members of the Full Bench will lead to more uncertainty about whether or not an employee engaged under a fixed term or ‘outer limit’ contract can pursue an unfair dismissal case if the employment ends when the contract expires.
If you would like more information about the ability of an employee to bring an unfair dismissal claim, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.
Alternatively, if you would like advice regarding the structure of an employment contract to fix the term of the contract, terminating an employment contract, or defending an unfair dismissal claim, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane or email Ai Group Workplace Lawyers at email@example.com.
Published - 27/03/18