Can you be dismissed at the end of a fixed term contract?  

Can you be dismissed at the end of a fixed term contract or can you claim ‘unfair dismissal’?  The Full Bench of the Fair Work Commission has recently overturned the longstanding principle that precluded an employee subject to a contract with a specified end date from seeking unfair dismissal relief upon the expiration of the contract term. 

In Khayam v Navitas English Pty Ltd t/as Navitas English [2017] FWCFB 5162, the employee was employed as a teacher of English, first as a casual employer from 2005 to 2012, and then on a series of fixed term contracts from 2012 to 2016. 

In late 2015, the employee was subject to disciplinary processes regarding the use of unsuitable material (being materials which allegedly promoted scientology) and punctuality. In May 2016, the employee attended a meeting in which he was advised that he would not be offered a new contract on the expiry of the existing contract due to disciplinary concerns. 

The employee lodged an unfair dismissal claim in that his employment had been terminated at the initiative of the employer. The employer contended that there had been no dismissal and that the employment contract had terminated simply through an effluxion of time. The employer's argument succeeded at first instance so the employee appealed to the Full Bench of the Fair Work Commission. 

Prior to this decision, the Fair Work Commission had held that a) when a contract for a specified period or a maximum term contract reached the nominated end date, the contract terminates through the effluxion of time and there is no termination of employment at the initiative of the employer.  b) Termination of employment at the initiative of the employer is a pre-requisite to seeking relief from unfair dismissal under the Fair Work Act. 

In this case a new principal was established:-  

Where the terms of an operative time limited contract reflect a genuine agreement on the part of the employer and the employee that the employment relationship will not continue after a specified date and the employment relationship comes to an end on the specified date.  Without any other influencing factors, the employment relationship will have been terminated by reason of the agreement between the parties and not at the initiative of the employer (invoking the unfair dismissal jurisdiction of the Fair Work Commission). 

However, if the time limited contract does not in truth represent an agreement that the employment relationship will end at a particular time, the decision not to offer a further contract will be one of the factual matters to be considered in determining whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment. For example, the employment contract may not be limited to the terms of a written document and may, for example, be one of a series of standard form contracts which operated for administrative convenience and did not represent the reality or totality of the terms of the employment relationship.