Was it the employer's prerogative or outright termination?
The Fair Work Commission (FWC) recently dealt with a case involving a worker's general protections application claiming adverse action taken by her employer.
The decision highlighted the complexities surrounding the termination of employment contracts and the interpretation of dismissal under the Fair Work Act.
Additionally, the FWC had to determine whether the worker's employment had ended due to the “effluxion of time” or if the employer had taken steps to terminate the employment relationship.
The worker started her employment with the employer on October 18, 2021, as a marketing manager on a full-time basis.
The employment agreement specified that the worker's employment was set to end on October 18, 2023. On July 15, 2022, the worker began a period of unpaid maternity leave.
In February 2023, the worker contacted the employer's acting chief executive officer regarding her return-to-work date, proposing a part-time arrangement from July 17, 2023.
Throughout 2023, the worker and the employer engaged in discussions about her return to work. The worker expressed her desire to return on a part-time basis, working three days a week from November 6, 2023.
However, the employer informed the worker that their financial resources were limited, and they identified the risks of not having a full-time dedicated marketing manager in the months leading up to an event in late May or early June.
On October 4, 2023, the employer sent the worker a letter stating that her proposals were not financially viable or within the best interests of the employer’s event and its business obligations.
The letter also informed the worker that her employment agreement would not be extended and would end on October 18, 2023, in accordance with the original term of the contract.
The employer had further decided to adopt a new model of employing a full-time marketing manager on a six-month contract from January to June 2024.
The FWC considered the principles outlined in case law regarding the interpretation of s.386(1) of the Fair Work Act, which defines dismissal.
The FWC stated that "where the terms of an operative time-limited contract reflect a genuine agreement on the part of the employer and employee that the employment relationship will not continue after a specified date and the employment relationship comes to an end on the specified date, then, absent a vitiating or other factor, the employment relationship will have been terminated by reason of the agreement between the parties and there will be no termination at the initiative of the employer."
The FWC found that there was no vitiating factor demonstrated by the worker, and the employment agreement appeared to have been entered into with genuine agreement on October 18, 2021.
“The [worker’s] contract lasted two years, and there were reservations by the [employer’s] board about the financial viability of a marketing manager position. [The worker] was aware that a full-time manager would be needed near the timing of the [anticipated event] around May,” the FWC said.
“The contract was shortened to reflect the requirements of the [employer] as the marketing manager role would only be a 6-month full time contract from January to June 2024 to save costs.”
“There was a gap of at least two and half months from 4 October 2023 to early January 2024 where the [employer] would not engage a marketing manager. It indicates that the effluxion of time was genuine, and not an action taken by the [employer] to terminate the [worker’s] employment,” it added.
The FWC emphasised that the worker’s contract's duration was reflective of the employer's requirements, and there was no indication of successive short-term contracts or a standard administrative contract used for convenience.
The FWC said that although the employer made representations about looking into a role for the worker upon her return, there were no promises made that her contract would be renewed.
The FWC concluded that the worker was not dismissed in accordance with s.386(1) of the Fair Work Act, as there was no termination at the initiative of the employer. The jurisdictional objection was upheld, and the worker’s application was dismissed.
