Referee argued consecutive maximum-term contracts created expectation of continued employment
Fixed-term contracts have long been a popular tool for employers seeking flexibility in their workforce. Many assume that when such contracts expire, employment simply ends without any risk of unfair dismissal or general protection claims.
But what happens when an employee has been engaged on consecutive fixed-term contracts for years? Does the non-renewal of their final contract amount to dismissal, or is it simply the agreed conclusion of the employment relationship?
These were the key questions at the heart of the decision in Alouani-Roby v. National Rugby League Ltd [2024] FCAFC 161, a case that tested the legal boundaries of fixed-term employment and unfair dismissal protections.
Tim Alouni-Roby, a professional rugby league referee, was employed by the National Rugby League (NRL) on a series of consecutive maximum-term contracts between February 2015 and November 2020. In June 2020, Alouni-Roby was informed that his final contract would not be renewed, and his employment ended following the expiry of the final employment contract in November.
Believing that the non-renewal of his contract was linked to the exercise of his workplace rights, Alouni-Roby filed a general protections claim with the Fair Work Commission (FWC), arguing that the non-renewal of his most recent maximum-term contract should be classified as a dismissal. However, the FWC dismissed his claim, ruling that his employment ended due to the expiration of his contract.
Dissatisfied with this outcome, Alouni-Roby made several appeals, firstly to the Full Bench of the FWC, then seeking judicial review before the Federal Court of Australia. He finally took his case to the Full Court of the Federal Court of Australia in February 2024. He argued that the primary judge of the Federal Court erred in the findings in interpreting the law, relying on four grounds of appeal.
One of the central questions before the Full Court was whether outer-limit contracts – fixed- or maximum-term contracts that allow for early termination - fall under the exception of whether a person has been “dismissed” under s. 386(2)(a) of the Fair Work Act 2009 (FW Act). Whether a person has been dismissed is a critical factor in determining eligibility for unfair dismissal or a general protections claim.
Section 386(2)(a) of the FW Act states that an employee is not considered dismissed if they are employed under an employment contract for a specified period of time, task or season, and the employment ended as a result of the expiry of the time, task or season.
In reviewing the legislative intent behind this provision, the Full Court confirmed that fixed-term or maximum-term contracts, including those that allow for early termination, still fall within this exception. The Explanatory Memorandum for the Fair Work Bill 2008 (Cth) reinforced this interpretation, explicitly stating that the “…fact that an employment contract may allow for earlier termination would not alter the application of [s. 386(2)(a)].”
Previously, under the predecessor legislation, the term “contract of employment for a specific period of time” was often interpreted as excluding outer-limit contracts that allowed for early termination. However, the Full Court ruled that the phrase must be construed in the context of the current, differently crafted, legislative provision as a whole.
The Full Court found that s. 386(2)(a) was intended to function differently from past provisions, aligning with the statutory purpose of excluding employees from unfair dismissal protections whose employment is terminated by agreement - rather than by or in response to some unilateral act of an employer - upon the completion of an agreed (and specified) period, task or season.
Alouni-Roby further argued that the FW Act should interpret “dismissal” to include an employer’s decision not to renew a fixed-term contract, even when an employee had been repeatedly engaged on similar contract. His argument was based on the idea that, in “practical reality,” his ongoing employment through a series of renewed maximum-term contracts created a legitimate expectation that his contract would be renewed.
However, the Full Court rejected this argument, emphasising that employment is contract-based. When a contract expires naturally, the employment ends as agreed, not because of the employer’s action. Alouni-Roby’s expectation after the expiry of the contract was “irrelevant” to the question (except to the extent that it might reflect a sham transaction).
Furthermore, the suggestion by Alouni-Roby that the NRL engineered his non-renewal by manipulating performance rankings was irrelevant and not instructive. Even if the reasons for non-renewal was unfair, it was not for the Full Court to say. The matter at hand was about how his employment ended, not why the contract was not renewed.
Alouni-Roby’s final argument was that the FWC failed to perform its functions to take into account the objects of the FW Act and the equity, good conscious and merits of the matter when considering the NRL’s conduct throughout his employment, as required under s. 578 of the FW Act. He claimed the FWC should have investigated whether:
The Full Court dismissed this argument, stating that s. 578 does not override or modify s. 386. The FWC’s role was simply to determine whether his contract expired naturally or was terminated by NRL’s initiative - which it correctly did. Section 578 does not allow the FWC to ignore or alter legal rules based on fairness or merit.
Accordingly, for the reasons outlined above, the Full Court dismissed the appeal.
This decision reinforces that well-drafted fixed-term or maximum-term contracts, including those allowing early termination, do not trigger unfair dismissal or general protection claims, provided the contract expires naturally. This existence of a legitimate expectation of ongoing employment is irrelevant, as the court made clear that “there can be no expectation of an ongoing employment relationship without an ongoing employment contract.”
However, employers must still exercise caution, as fixed- or maximum-term contracts may still be deemed ongoing if their contract does not clearly define a specified period, task or season. Employers must also be mindful of the new rules which apply to the engagement of employees on fixed-term contracts, in particular that provision which limits the term of a fixed-term contract (including extensions or renewals) to a period of no longer than two years.
To mitigate risks, employers should review their employment contracts in light of this decision, ensuring they are clearly drafted and legally compliant to avoid potential unfair dismissal or general protection claims.
Lucy Shanahan is a Partner at Kingston Reid in Sydney. Matt Wichlinski is a Senior Associate at Kingston Reid in Brisbane. Upoma Chowdhury is a Lawyer at Kingston Reid in Brisbane.
