There are many employers that find fixed-term employment contracts appealing because they believe they cannot be subject to an unfair or unlawful dismissal claim if the employment ends upon the expiration of the contract. This is on the basis that when an employment contract expires, there is no dismissal. Rather, the employment has simply ended due to the effluxion of time. However, a recent decision of the Full Bench of the Fair Work Commission serves as an important reminder to employers that this is not always the case.
In the case of Alouani-Roby v National Rugby League Limited & Others  FWCFB 171, Mr Roby was employed by National Rugby League Limited (NRL) as a Referee. Mr Roby’s employment with the NRL was governed by a series of 5 consecutive fixed term written employment contracts, the first of which commenced on 25 March 2015. The final contract of employment commenced on 1 December 2019 and had an expiration date of 30 November 2020. When offered this contract, Mr Roby was informed that it was likely it would be his last with the NRL. Mr Roby’s employment consequently ended when the contract expired on 30 November 2020.
In response, Mr Roby lodged a claim with the Fair Work Commission alleging that he had been dismissed in contravention of the general protections provisions of the Fair Work Act 2009. The claim was opposed on the basis that Mr Roby had not been dismissed but rather his employment had automatically ended upon the expiry of the contract.
The Fair Work Commission Decision
When considering this matter, the Full Bench of the Fair Work Commission drew a distinction between a “true” fixed-term employment contract and an “outer-limit” employment contract. In the case of a “true” fixed-term employment contract, there is no provision for either party to terminate the employment prior to the expiration of the fixed-term by providing notice. When the employment ends upon the expiration of such a contract, this will not constitute a dismissal for the purposes of the unfair dismissal and general protections provisions of the Fair Work Act.
On the other hand, an “outer-limit” employment contract is one which expressly allows either or both parties to terminate the employment at any time during the fixed-term on specified notice. When the employment ends upon the expiration of such a contract, a dismissal may have occurred. This needs to be determined “by reference to termination of the employment relationship, not by reference to the termination of the contract of employment”. That is, the entire employment relationship must be considered, not just the employment contract. The relevant factors to be considered may include the field of employment in which the contract operates; the terms of any industrial instruments applicable to the employment; the context in which the contract of employment and the employment relationship operated; and the conduct of the parties during the relationship and the circumstance in which the employment ended.
In the case of Mr Roby, it was held there was no dismissal. In particular, the Full Bench of the Fair Work Commission found that the final employment contract between Mr Roby and the NRL reflected a genuine agreement between the parties that the employment relationship would not continue after 30 November 2020. Further, the use of “outer-limit” contracts was not just for the NRL’s administrative convenience but rather was appropriate in the field of elite professional sports where the intention was to ensure that the best available match officials would be engaged each season.
Implications for Employers
The above case serves as an important reminder that employers should not assume that they are protected from unfair dismissal and general protections claims simply because an employees’ employment has ended upon the expiration of an “outer-limits” contract. Indeed, if the employee has been employed consecutively on more than one such contract, employers should carefully consider whether allowing the employment to end at the expiration of the contract could still be viewed as a dismissal in the circumstances.
For further information regarding the above, please contact the author or any member of our Employment, Workplace Relations & Safety team.
This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.