Two senior employees. Fifteen years of service between them.
Promotions. Team leadership. Expanding responsibilities. And yet, no redundancy pay.

In a decision handed down on 5 February 2026, the Fair Work Commission (FWC) confirmed that two long-serving employees of The Florey Institute of Neuroscience and Mental Health were fixed-term employees, not ongoing, despite years of consecutive contract renewals.

The case [Cox v The Florey Institute Of Neuroscience And Mental Health Trading AS The Florey [2026] FWC 335] is a timely reminder of how carefully structured fixed-term arrangements can withstand challenge – even after a decade or more.

The background – Long service, short-term contracts

Susan Cox commenced employment in 2010.
Soniya Survase joined in 2017. Both worked within Neuroscience Trials Australia, a subsidiary operating entirely on externally funded clinical trials, government grants, philanthropy, donations, and commercial contracts.

Their employment followed a familiar pattern.

  • 12-month maximum-term contracts
  • Renewed year after year
  • Promotions over time
  • Increasing managerial responsibility
  • Supervision of staff

By 2024, both had reached Associate Project Director level. Then, in November 2024, they were notified their employment would end on 31 December 2024 “by effluxion of time” due to funding constraints. They argued they were, in substance, continuing employees under the enterprise agreement, and therefore entitled to redundancy pay.

When do rolling contracts become ongoing employment?

This is the question we get asked a lot and the answer isn’t always cut and dried. At what point does a series of consecutive fixed-term contracts start to look like permanent employment?

The employees argued:

  • Their roles were managerial and ongoing in nature
  • They had continuous service for many years
  • The Institute’s reliance on fixed-term arrangements was inconsistent with how they actually worked

They even annotated renewal letters, stating they believed they were ongoing employees and reserving their rights. But the Commissioner focused on something far more technical, and far more decisive.

Why the Commission found they were fixed-term

The decision turned on the enterprise agreement’s definition of fixed-term employment. The most recent engagement letters:

  • Specified clear start and end dates
  • Incorporated the enterprise agreement
  • Stated employment would end unless renewed in writing
  • Limited termination outside probation, misconduct, or underperformance

Importantly, the agreement restricted when fixed-term contracts could be used, but it did not redefine what fixed-term employment meant. Because Neuroscience Trials Australia was entirely externally funded, the Commission found the employer was permitted to use fixed-term contracts for these roles.

The outcome?

  • They were fixed-term employees
  • Their employment ended by effluxion of time
  • There was no redundancy
  • No redundancy pay was owed

The “what if” that matters

The Commissioner made an important observation. Had they been found to be continuing employees, their service would have dated back to:

  • 14 January 2010 (Cox)
  • 20 November 2017 (Survase)

The redundancy liability would have been significant. That hypothetical underscores the real risk in this space.

What this means for employers

This case highlights several key points.

Drafting matters (a lot) – Clear engagement letters aligned with the enterprise agreement were pivotal. Earlier contracts had broader termination provisions, but later documentation tightened the framework.

Funding-based roles still support fixed terms – Where roles are genuinely dependent on external funding, fixed-term arrangements remain defensible – even long term.

Promotions don’t automatically convert status – Advancement, increased responsibility, and longevity alone do not transform fixed-term employment into ongoing employment.

Employee objections don’t override legal characterisation – Even though the employees expressly stated they believed they were ongoing, the objective terms of the contract prevailed.

The bigger picture, fixed-term contracts in 2026

This decision lands in a regulatory environment where fixed-term contracts are under heightened scrutiny. With legislative reforms in recent years limiting rolling maximum-term arrangements in many contexts, employers must now be even more deliberate about:

  • Why fixed-term contracts are being used
  • Whether statutory exceptions apply
  • Alignment with enterprise agreements
  • Funding-based justifications
  • Renewal processes and documentation

The days of “automatic annual rollover” without risk assessment are over.

Now is the time to review your arrangements

If your business relies on externally funded roles or long-term fixed-term contracts, this case is a clear reminder to proactively review your documentation and practices.

  • Are your contracts clearly drafted?
  • Do they align with your enterprise agreement?
  • Do you meet the legislative requirements and exceptions?
  • Could a long-serving fixed-term employee argue they are ongoing?

A short review now can prevent significant liability later. If you would like us to review your fixed-term arrangements, enterprise agreement provisions, or funding-based employment structures, please get in touch.

We are assisting several businesses in this space and would be happy to support you in ensuring your arrangements are both compliant and commercially sound.

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.