When is the expiry of a fixed-term contract considered a dismissal?

The Fair Work Commission (FWC) has confirmed that limits apply to the definition of ‘dismissal’ for the purposes of unfair dismissal or general protections claims pursuant to the Fair Work Act 2009 (Cth) (FW Act). In the case of Timothy Andrew Alouani-Roby v National Rugby League Limited & Ors [2022] FWCFB 171, the Full Bench of the FWC considered how the term ‘dismissal’ may be defined in the context of an employee employed pursuant to consecutive fixed-term contracts.

Facts

The Applicant, Timothy Alouani-Roby, was employed as a match official by the National Rugby League Ltd (NRL) on a series of maximum term employment contracts from March 2015 to November 2020. Generally, these contracts lasted for a period of twelve months.

Mr Alouani-Roby was unwell for many weeks after contracting an illness whilst on holidays in Vietnam in 2017. He returned to pre-season training in January 2018 whilst still feeling unwell.

Following his illness, Mr Alouani-Roby felt that he had been subject to bullying and other damage to his mental and physical health.

In November 2019, when negotiating what turned out to be his final employment contract, Mr Alouani-Roby was advised that the contract may be his last if his performance did not improve. During his final contract, Mr Alouani-Roby commenced a period of stress leave and began to correspond with the NRL about potential terms of severance. Mr Alouani-Roby’s employment ceased at the end of his contract on 30 November 2020.

Mr Alouani-Roby subsequently commenced an application in the FWC claiming he had been dismissed and seeking relief under the general protections provisions of the FW Act.

Decision at first instance

At the first instance, Deputy President Cross (the Deputy President) held that the FWC only had jurisdiction to determine whether the NRL had contravened the general protections provisions of the FW Act if Mr Alouani-Roby had been dismissed as he claimed. The Deputy President was satisfied that the NRL did not terminate Mr Alouani-Roby’s employment on its own initiative. Rather, in entering into the maximum term contract, the parties had genuinely agreed that another contract would not necessarily be offered. Thus, the Deputy President found that Mr Alouani-Roby’s contract simply expired by the effluxion of time and dismissed Mr Alouani-Roby’s application for want of jurisdiction.

Appeal

Mr Alouani-Roby sought permission to appeal to the Full Bench of the FWC, asserting that the Deputy President was wrong to conclude that he had not been dismissed. The appeal was allowed on the grounds of public interest.

He appealed the primary decision on ten grounds, however, this article will focus on four of those grounds, in which Mr Alouani-Roby asserted that the Deputy President had misstated and/or failed to correctly apply the statutory and case law tests for ‘dismissal’ in the context of maximum term contracts.

Pursuant to section 386(1) of the FW Act, an employee is dismissed if their employment has been terminated ‘on the employer’s initiative.’

The well-known decision of the Full Bench of the FWC in Khayam v Navitas English [2017] FWCFB 5162 (Khayam) was critical in this case. In that case, the employee was not offered a further contract due to concerns the employer had about his performance. The majority held that the analysis of whether there had been a termination at the initiative of the employer was to be conducted by reference to the employment relationship rather than the employment contract, particularly in instances where the employment relationship is made up of a sequence of time-limited employment contracts. This requires the analysis of factual matters to determine whether an action of the employer was a ‘principal contributing factor’ which results in the termination of the employment.

The Full Bench held that, in circumstances where Mr Alouani-Roby was informed before he signed his final contract that it may be his last contract, and he nevertheless signed the contract, the parties had genuinely agreed that the employment relationship would not continue after 30 November 2020. Thereafter, the employment contract was passively allowed to expire. This genuine agreement was found to be the ‘principal contributing factor’ to the termination of the employment.

The Full Bench also agreed with the Deputy President’s finding that the use of maximum term contracts for the engagement of match officials was legitimate and commonplace in professional sport, to ensure that the best available officials were engaged each season. Further, it was noted that the use of maximum term contracts was authorised under the match officials’ enterprise agreement.

While Mr Alouani-Roby asserted that the NRL engaged in conduct which may have prevented him from being able to recover fully from his illness or attempted to force him to resign, the Full Bench was satisfied that any such conduct (if it did indeed take place) was not the principal contributing factor resulting in the termination of Mr Alouani-Roby’s employment. There was no causal connection between the alleged conduct and the ending of the employment consistent with the terms of the contract.

It was also noted that recent case law (for example, the decision of the High Court in Workpac Pty Ltd v Rossato [2021] HCA 23) supports the primacy of the written contract, where one exists. In general, such case law indicates that a legal relationship between parties should only be determined by reference to the legal rights and obligations which constitute the relationship.

Ultimately, the Full Bench dismissed Mr Alouani-Roby’s appeal on a jurisdictional basis. The Full Bench noted that it was possible that the NRL had taken adverse action against Mr Alouani-Roby in the course of his employment, or as a potential employee (should he be offered a further employment contract), but that the adverse action of dismissal had not occurred in this situation.

Take Home Messages

It is clear that in situations where an employee’s maximum term contract has simply been passively allowed to expire (absent any representation that a further contract will be offered, any indication that the contract is a sham or does not otherwise represent the reality of the employment relationship, or the existence of any other circumstances in which the law excuses parties from performance of a contract) the employee is not said to be ‘dismissed’ for the purposes of the FW Act.

This case is also a reminder that the FWC’s jurisdiction to hear unfair dismissal and general protections applications is strictly limited. Even in situations where adverse action may have occurred, the FWC does not have the discretion to make a finding of ‘dismissal’ if the cessation of employment does not fit within the strict definition set out in the FW Act and Khayam.

For more specific information on any of the material contained in this article please contact Lincoln Smith on + 61 8210 1203 or lsmith@normans.com.au, Anastasia Gravas on + 61 8 8210 1331 or agravas@normans.com.au, or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.