FWC looks into industry's needs, decides if dismissal was employer's decision
The Fair Work Commission (FWC) recently dealt with a case involving a worker who claimed he was unfairly dismissed from his employment with his employer.
The worker, employed as a data engineer supporting the employer's Consumer Data Ingestion Project, argued that his employment was terminated at the employer's initiative and was unfair as there was no consultation or severance payment, nor an offer of a further extension.
The worker also submitted that the practice of extensions to fixed-term contracts was evidence of continuous employment. The employer, on the other hand, argued that the worker was not dismissed; rather, the offer of employment described as a fixed-term contract was for a specified time, and the offer for extension was a further fixed-term contract.
The case centred around the interpretation of the worker's employment contract and whether the termination of his employment was at the employer's initiative or simply the result of the expiration of a fixed-term contract.
The FWC had to determine if the worker was genuinely employed under a fixed-term contract and if the employer's conduct amounted to a dismissal under the Fair Work Act 2009 (Cth).
Background of the case
The worker was employed as a data engineer supporting their Consumer Data Ingestion Project on a fixed-term contract that commenced on 21 February 2022 and was set to end on 17 February 2023.
Before the end of the contract, the parties agreed to an extension, and on 20 February 2023, they executed the written terms for an extension until 31 December 2023.
The worker argued that all of the data engineers in his team were employed under fixed-term contracts, including his supervisor. He submitted that his employment was dismissed, notwithstanding the two fixed-term contracts he signed and that the conduct of the employer enlivened s.386(3) of the Fair Work Act.
The employer submitted that the worker was employed under a contract of employment for a specified period, and the employment terminated at the end of that period. Therefore, he was not dismissed within the meaning of s.386(1)(a) of the Act because the employment ended by the effluxion of time.
The worker was self-represented and gave evidence, while witnesses for the employer included a senior data engineer and the head of HR Business. The senior data engineer was responsible for hiring and supervising the worker for the data pipeline build for the consumer data ingestion project.
The worker’s submissions
The worker said that his one-year fixed-term contract of employment started on 21 February 2022 and ended on 17 February 2023. He said that all of the data engineers in his team were employed under fixed-term contracts, including his supervisor.
He said that his employment was “subject to one fixed-term contract (the first) and the second was a 'rolling contract.'"
The worker said that the other data engineers were either made redundant before their contracts expired or had their contracts extended. He requested a further extension until February 2024 so that he could address his performance standard or, at least, so that by not having a gap in employment, it would be easier to find new employment.
During cross-examination, the worker confirmed his understanding that his employment was only guaranteed until the end of the contract period, 31 December 2023, and that his supervisor never stated to him that his second contract would be extended.
The employer's submissions
The employer submitted that the worker was employed under a contract of employment for a specified period, and the employment terminated at the end of that period.
Therefore, he was not dismissed within the meaning of s.386(1)(a) of the Act because the employment ended by the effluxion of time.
"[The senior data engineer] gave evidence that he was responsible for hiring and supervising [the worker] for the data pipeline build for the consumer data ingestion project. He says that on 9 January 2024, he sought approval for an extension to [the worker's] contract for a further fixed period because the project work had not yet been completed."
The senior data engineer further gave evidence that at no time had the worker been offered an extension to the second contract. Instead, he had advised in the one-on-one meetings between them that, despite seeking a further extension, there was no guarantee.
Meanwhile, the head of HR Business gave evidence that the employer engaged employees under fixed-term contracts where the work is not ongoing but is part of discrete stages of a project.
The project manager then ascertains whether internal staff have the necessary skills and experience before an estimation of time, cost, and milestones of a project are approved with a budget prior to the engagement of fixed-term contracted staff.
The FWC’s consideration
The FWC considered the leading authority on fixed-term and outer-limit contracts. The FWC found that the worker's contract of employment was not a contract for a specified period but an outer-limit or maximum-term contract of employment.
The Full Bench in Alouani-Roby affirmed that termination at the initiative of the employer is a reference to the employment relationship and not a reference to the contract of employment in s.386(1)(a).
The FWC also considered the principles outlined in Khayam v Navitas, which provided guidance on the interpretation and application of s.386(1)(a) of the Fair Work Act.
The majority in Khayam v Navitas held that the analysis of whether there has been a termination at the initiative of the employer should be conducted by reference to the termination of the employment relationship, not by reference to the termination of the contract of employment operative immediately before the cessation of the employment.
"I find that [the worker] was engaged on a maximum-term contract with an end date of 31 December 2023 that was genuinely agreed containing written express terms. The termination of employment is not a termination at the initiative of the employer but rather a maximum-term contract that ended with the effluxion of time," the FWC said.
Based on the authorities and the evidence, the FWC found that the worker was not dismissed pursuant to s.386(1)(a), s.386(2)(a) applied, and s.386(3) did not.
"Consequently, [the worker's] application is dismissed, and an order to that effect will be issued concurrently with this decision," the FWC said.
The case serves as an important reminder for both employers and employees to carefully consider the terms of their employment contracts, particularly when dealing with fixed-term or maximum-term arrangements.
The decision emphasises the significance of clear and unambiguous contract terms and highlights the need for employers to use fixed-term contracts appropriately, in line with the genuine operational requirements of their business.
