Entitled to contract renewal? Worker insists on extension after maximum term reached

The Fair Work Commission (FWC) recently dealt with a case involving a casual employee who claimed unfair dismissal after her maximum-term contract was not renewed.

This case highlights important considerations around casual employment, fixed-term contracts, and what constitutes dismissal under Australian employment law.

It provides valuable insights for HR professionals on managing casual employees and contract renewals.

Background of the case

The worker was employed as a casual service centre consultant at a university from March 2022 to December 2023. She worked under four separate maximum-term contracts, with the final contract running from October to December 2023.

The worker's role involved interacting with university staff concerning human resources and financial issues arising from their employment. Her employment was structured as a series of maximum-term casual contracts, each lasting approximately six months.

In October 2023, the university sought expressions of interest for ongoing positions in the worker's team. This process aligned with a broader project across the university to reduce reliance on casual employees. Though invited to apply, the worker did not submit an application due to communication issues and personal circumstances.

The worker explained that she had missed the initial email advertising the roles internally due to issues with her university email.

When she learned about the opportunity, she reached out to her manager, but due to a combination of timing and personal health issues, she was unable to submit an application before the extended deadline.

Key arguments presented

The worker argued she had a reasonable expectation of continued employment based on past practice of contract renewals.

She claimed there were "explicit and implicit assurances" regarding renewal and that her consistent performance and positive feedback contributed to this expectation.

The university contended the employment simply ended with the expiry of the fixed-term contract as agreed. They argued there was no dismissal at their initiative, and the worker could not have reasonably expected continued employment given the clear contract terms.

The university also explained that the use of successive six-month casual contracts was due to ongoing reviews of work absorption and resource requirements in the Client Services team.

Analysis of contract terms and expectations

The Commission closely examined the terms of the final contract, which stated:

"Employment with the University ceases at the end date of the Period of Engagement unless otherwise ended earlier by the University. The University is under no obligation, does not guarantee, nor make any representation that it will offer employment to you beyond the Period of Engagement."

This unambiguous wording was seen as crucial in determining whether there was a genuine agreement for the employment to end on a specific date.

The Commissioner noted that while the worker may have subjectively expected renewal based on past practice, this expectation was not objectively reasonable given the clear contract terms and the worker's awareness of workforce changes in her team.

Dismissal and minimum employment period

The Commission had to determine two key issues:

1. Whether the worker was actually dismissed, or if her employment simply ended with the contract expiry.
2. If dismissed, whether she met the minimum employment period to be eligible for unfair dismissal protections.

As a casual employee, the worker needed to show she had a "reasonable expectation of continuing employment on a regular and systematic basis" for her service to count towards the minimum period.

The Commissioner considered the context of the worker's employment, including the university's practice of conducting six-monthly reviews of work requirements and offering casual contracts in line with this planning cycle.

The decision to create new continuing positions at the end of 2023 was part of this ongoing review process.

The Commissioner ultimately found:

"I accept that on or about 7 October 2023, [the worker] entered into a genuine agreement which included an express term that her contract would expire on 22 December 2023. There were no vitiating circumstances that affected the genuineness of the agreement she had reached."

This meant the employment ended by agreement, not at the university's initiative. The Commissioner elaborated:

"I consider the termination of her employment was not initiated by the employer. It merely expired according to the terms of her contract of employment. It follows she was not 'dismissed' as defined by s 386 and required under s 385(a)."

Even if found to be dismissed, the Commissioner determined the worker could not have reasonably expected continued employment given the contract terms and circumstances.

The worker was informed on 11 and 12 December 2023 that her contract would not be renewed, which was well before the maximum term expired on 22 December 2023. As such, she did not meet the minimum employment period for unfair dismissal protections.

This case emphasises the importance of clear communication and contract terms when engaging casual employees, particularly for fixed periods. While past practice may create certain expectations, unambiguous contract wording can be decisive in determining employment rights.

The decision also highlights that subjective employee expectations must be balanced against objective factors like contract terms and organisational changes when assessing the reasonableness of continued employment expectations.