Case tackles verbal promises in employment contracts
The Fair Work Commission (FWC) recently dealt with a case where a worker challenged whether the end of his fixed-term contract was actually a dismissal under the Fair Work Act 2009.
The worker argued that various conversations and contract terms suggested his role could continue beyond the contract's end date.
At the heart of this dispute were questions about what constitutes a genuine fixed-term agreement, how verbal assurances affect contract terms, and when the end of a contract counts as a dismissal.
The worker was hired as an engineering specialist for the Sydney Basin Airspace Modernisation Project (SBASM Project) at Airservices Australia. He had a written contract that started on 11 April 2023 and was set to end on 11 October 2024.
Before the contract's end date, it became clear the SBASM project wouldn't be finished by October 2024. The worker's team leader wanted him to continue until April 2025, though only at 20% capacity. Another program manager offered to use the remaining 80% of the worker's time on a different project.
However, the aerodrome platform head, who had final approval authority, turned down this proposal to extend the worker's employment. This decision became a key point of contention in the case.
The employment contract clearly stated its temporary nature: "Your employment is for a fixed term... There is no prospect of ongoing employment in this role beyond the cessation date, nor any entitlement to permanent employment with [the employer] after this time."
The worker argued that other sections of his contract suggested possible ongoing employment. Specifically, the contract mentioned that he "may subsequently be employed in other roles as determined by [the employer]."
During his initial job interview, the team leader discussed possibilities for future employment. While mentioning potential extensions, the team leader also stated there were "no promises" about ongoing employment, and any future opportunities would depend on "work requirements and funding approval."
The Fair Work Act 2009 specifically addresses when someone has been "dismissed." Section 386(2)(a) states that a person hasn't been dismissed if "the person was employed under a contract of employment for a specified period of time... and the employment has terminated at the end of the period."
The Commission examined whether any factors might have invalidated the fixed-term nature of the contract, including possible misrepresentations or misleading conduct. This examination included looking at both written terms and verbal discussions.
The Commission also considered recent amendments to the Fair Work Act regarding fixed-term contracts, which took effect from December 2023, and how these influenced employment decisions at the organisation.
The Commission ruled that "[the worker] was engaged by [the employer] under a contract of employment for a specified period of time. His employment came to an end because the date stated in that contract as the end of the employment was reached."
Regarding the suggestion of other potential roles, the Commission noted: "Even if the mention of 'other roles' created a suggestion that such roles might be offered, there seems to be no obligation that this occur."
The Commission concluded: "While [the worker's] sense of injustice about all of this is palpable, I cannot find... that the genuine agreement... that the employment relationship would end on 11 October 2024 was vitiated because of a misrepresentation or misleading conduct." The worker's application was dismissed.
