Fixed-term worker asserts transition to permanent employment

The Fair Work Commission (FWC) recently dealt with a case involving a dispute between a worker and her employer over the ending of a fixed-term contract.

The worker, an associate teacher in cyber security, argued that her employer's actions prevented her from completing a required qualification, effectively leading to her dismissal.

She also claimed that a colleague received more favourable treatment and that there was an expectation of transitioning to permanent employment.

Fixed-term worker to permanent employee?

The worker was employed by TasTAFE, a vocational education and training provider. The employer had a program where industry professionals were offered fixed-term contracts, typically for 12 months, to become qualified teachers. During this period, employees were expected to obtain necessary qualifications, including a Certificate IV in Training and Assessment (TAE).

The worker started employment on 1 March 2023 under a fixed-term contract set to end on 5 March 2024. The contract clearly stated:

"For the avoidance of doubt, no notice is required to bring your employment to an end on this date. You acknowledge and agree that nothing in this contract is to be construed as providing you with an entitlement to ongoing employment with [the employer]."

As the end date approached, it became clear that the worker would not complete her TAE qualification in time. The employer offered a two-month extension, moving the end date to 3 May 2024. This extension was communicated via email, which stated:

"This is the only extension that you can receive... If you do not complete your TAE in that time frame your employment will be terminated."

Expiration of fixed-term contract

The worker's employment ended on 3 May 2024 when she had not completed the TAE qualification.

She then filed an application with the FWC, arguing she had been dismissed in violation of the Fair Work Act.

The employer said that there was no dismissal, as the employment simply ended when the fixed-term contract expired. They maintained that the decision not to offer further employment was separate from the agreed end of the contract.

Alleged lack of employer’s support

The worker argued that the employer's actions had prevented her from completing the TAE qualification, effectively causing the termination of employment. She said that the employer's determination that she wouldn't complete the TAE in time was speculative and that she wasn't given adequate support in the final weeks of the contract.

The worker also claimed that a colleague was given an additional two weeks to complete his TAE, and that there was an expectation of guaranteed unconditional transition from fixed-term contract to permanency.

The employer said that the worker had been given 14 months to complete a qualification that typically takes 6 to 9 months. They also pointed out that they had provided clear guidance on assessment submission timelines, which the worker did not meet.

Dismissal in fixed-term contracts

The Commission considered these arguments in light of previous decisions, particularly the Navitas case, which established principles for determining whether a termination occurred at the employer's initiative in fixed-term contract situations.

Applying these principles, the Commission found:

"There has been no termination at the initiative of [the employer] as required by s.386(1) because: a) There was an operative time-limited contract between [the worker] and [the employer] which reflected a genuine agreement that the employment relationship would not continue after 3 May 2024 and the employment relationship came to an end on 3 May 2024 (Genuine Agreement)."

The Commission further said:

"[The worker] was afforded 14 months to complete the TAE qualification which on [the employer's] evidence only requires 6 to 9 months to complete. It was [the employer] on its own initiative that provided a further eight week contract to allow [the worker] to complete her TAE. It was made clear if it was not completed in the time frame there would be no further offers of employment."

The Commission upheld the employer's jurisdictional objection and dismissed the application. The key findings were:

"[The worker] was not 'dismissed' in accordance with the meaning of that term in section 386(1) because her employment did not end at the initiative of [the employer]. Rather, the employment ended by reason of the agreement between the parties which is evidenced in the employment contract."

"Consistent with majority in Navitas, [the employer's] decision not to offer any further contract of employment (including as a Teacher) is not relevant to the question of whether there has been termination at the initiative of [the employer]."

"[The worker's] employment ended on 3 May 2024 by way of agreement between [the worker] and [the employer]. With respect to s.365(a), [the employer] [the worker] was not dismissed within the meaning of that term in s.386 of the Act."

This case highlights the importance of clear communication about contract terms, expectations for qualification completion, and the consequences of not meeting those expectations.

Employers should ensure that their fixed-term contracts clearly outline the terms of employment and any conditions for potential ongoing employment beyond the contract period.