The Fair Work Commission (FWC) recently dealt with a case involving an employee who filed an application claiming that he was dismissed by his employer on 4 February 2024. However, the employer argued that the employee was not dismissed but rather that his employment ended due to the expiration of his fixed-term contract.
The employee’s claim
The employee asserted that his employment was not ended due to the expiration of his fixed-term contract, but was terminated at the initiative of the employer. He argued that the wording in his contract, which stated, “Your employment will continue until terminated in accordance with the terms of the enterprise agreement,” could be interpreted in several ways.
- The contract would end on the specified date, but the employment relationship would continue until terminated pursuant to the agreement.
- The contract was an outer limit contract that would continue until either the specified date or termination in accordance with the agreement.
The employee also highlighted an email from the employer’s HR advisor, which referred to his departure as a “termination,” further supporting his claim that he was dismissed.
The employer’s defence
The employer argued that the employment relationship simply came to an end due to the expiry of the term in the employment contract. The employer submitted that the term provision in the contract did not contain any ambiguity but rather an “expression of a maximum-term contract.” The employer also challenged the relevance and significance of the alleged representations made by the employee.
The FWC’s decision
The FWC took into consideration an email from the general manager to the employee, which stated: “We are committed to your growth and development, and I would like to thank you for your hard work.” The FWC was satisfied that the employee was entitled to believe that his employment would be ongoing based on this email and that the employer also believed the same.
The Commission also noted the email from the employer’s HR advisor, which referred to the employee’s departure as a “termination.” It read “Could you please return the ID access card and uniforms at your earliest convenience so we are able to process your termination and final pays this week?”
After carefully considering the evidence and the terms of the worker’s final letter of offer, the FWC concluded that they were satisfied and found that both the employee and the employer believed that the employee’s employment was on-going based on the employer’s email on 22 December 2023. The FWC did not accept that the employer’s general manager would provide the employee with his ‘full support’ to continue to ‘grow and develop’ if it was the employer’s understanding that the employee’s employment would cease in 6 weeks.”
The Commission determined that there was no indication in the contract that the employee’s employment would cease on 4 February 2024. Ultimately, the FWC was satisfied and found that the employee was dismissed by the employer on 4 February 2024 and not due to the contract’s alleged term.
Key Takeaways
In this case, the FWC had to determine whether the employee’s employment was terminated at the initiative of the employer or if it simply came to an end due to the expiry of the agreed-upon term in the employment contract. The Commission also needed to determine what the employer did to initiate the termination of the employment relationship and whether the expiry of the contract term or the employer’s actions were the principal motivating factor for the end of the relationship.
The Commission’s decision demonstrates the importance of having clear and unambiguous wording in employment agreements in line with the requirements of the business and the expectations of the employment relationship. Just as important are any communications in relation to end-of-employment, as these can be used by the FWC to provide context and characterise the employment relationship when coming to a decision.
Our team can assist in the development and implementation of employment contracts that meet applicable laws, regulations, and best practice, aligned with the requirements of your business and the expectations of the employment relationship. Need assistance navigating end of employment for your employees? Want to avoid dealing with the FWC? Get in touch with our team today, we can help! Find our articles helpful? Remember to follow us on Facebook, Instagram or LinkedIn to keep up to date with our practical tips and information for business owners and managers.