Does the expiration of a fixed-term contract mean dismissal?

The Fair Work Commission (FWC) recently dealt with the dismissal claim of a worker who said she was dismissed despite the end of her time-limited contract. She said the employer considered terminating her employment based on performance issues even before their agreement’s expiration date.

The worker, Kerrie Anne Hughes, sought the FWC’s intervention in a general protections dispute related to her alleged dismissal. She said that Alcoa Portland Aluminium Pty Ltd unlawfully terminated her.

The employer raised a jurisdictional objection, arguing that Hughes was not dismissed. According to Alcoa, Hughes was engaged under a "fixed-term" or "time-limited" contract that had reached its expiration, resulting in the termination of her employment by mutual agreement.

Employer’s offer to extend contract

Hughes started working as a fixed-term or time-limited employee with Alcoa on August 22, 2022, as an operator. An extension to her contract was offered, and she agreed to it, with the employment ultimately ending on September 3, 2023, as per the extended contract.

After a while, alleged performance concerns were raised by Alcoa in March 2023, leading to a performance review meeting. Hughes was informed then that she would not be offered a permanent position, but an extension to her time-limited contract was proposed.

An incident in May 2023, where equipment operated by Hughes hit a bollard, led to an investigation and her temporary suspension. The subsequent termination, based on her failure to report the incident, was communicated to Hughes, who then responded, expressing discrimination claims and potential legal action.

Following this exchange, Hughes continued her employment. Despite the option to offer ongoing employment, Alcoa chose not to do so, citing alleged ongoing issues with her performance and safety compliance.

Threatened to dismiss?

According to records, Alcoa submitted that it did not terminate Hughes, but that her employment ended on 3 September 2023 by previous agreement between the parties. It submitted that the terms of her employment were contained first in the contract of employment dated 26 July 2022, and extended in accordance with the extension letter and acknowledgement dated 24 March 2023.

Under the extension the parties agreed the employment contract and relationship would come to an end on 3 September 2023.

“The fact [it] may have considered terminating Hughes’ employment in June 2023 had no bearing on the fact that ultimately Ms Hughes’ employment ended on 3 September 2023 by way of the employment agreement expiring,” the employer said.

Meanwhile, the worker argued that “Alcoa has an ongoing operational need for operators.” She said that her “termination was at the initiative of the employer, rather than just the expiry of the employment contract, because Alcoa wanted to terminate [her] as a result of her exercising a workplace right to defend herself against allegations of misconduct.”

Was it dismissal?

“It appears the parties, through genuine agreement, have entered into a time-limited contract with an agreed expiry date. The terms of the time-limited contract as set out in very clear and explicitly emphasise the time-limited nature of the contract on numerous occasions,” the FWC said.

The FWC found that the worker’s “employment relationship with Alcoa terminated in accordance with the terms of the time-limited contract she entered into.”

“Alcoa’s decision not to offer any further contract of employment to Ms Hughes is not relevant to the question of whether there was a termination of employment at the initiative of the employer,” it added. Consequently, it dismissed the worker’s application against the employer.