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End of contract means no dismissal? Maybe not …

August 16, 2017

By Alex Millman and Angela Szczepanski, NRA Legal

Khayam v Navitas English Pty Ltd T/A Navitas English [2017] FWCFB 4092

The Full Bench of the Fair Work Commission has granted a teacher leave to appeal against the decision dismissing his unfair dismissal application, challenging long-established precedent claiming that his employment was not truly brought to an end by the term of his contract coming to an end, but by the actions of his employer.


Mr Khayam was employed by Navitas as a teacher of English, first as a casual employee from 2005 to 2012, and then on a series of fixed-term contracts from 2012 to 2016.

Mr Khayam’s casual employment was, strangely, stipulated in a series of fixed-term contracts, however, although there was sometimes a break between the end date of one contract and the start of another contract, there was no discernible break in his service with Navitas.

In April 2012 Mr Khayam accepted permanent employment on a fixed-term contract with a nominal expiry date of 30 June 2013. In the lead-up to the expiry of this contract, Mr Khayam was offered and accepted an extension of this contract until 30 June 2014.

In June 2014, Mr Khayam entered into negotiations regarding his ongoing employment. He was initially informed that he would not be offered a new contract because of performance issues. When Mr Khayam was able to provide evidence to the contrary, he was offered a new contract with an expiry date of 30 June 2016.

Each new contract commenced immediately after the expiry of the previous contract.

In late 2015 and into 2016, Mr Khayam was subject to disciplinary processes regarding the use of unsuitable material (being materials which allegedly promoted Scientology) and punctuality.

In May 2016, Mr Khayam attended a meeting in which he was advised that he would not be offered a new contract on the expiry of his existing contract due to disciplinary concerns.

Why so serious?

Under section 386 of the Fair Work Act 2009 (FW Act) an employee is only dismissed if their employer engages in a positive act that brings the employment relationship to an end.

The Fair Work Commission and its predecessors have long established that when an employee is employed under a contract of employment which specifies a date on which employment will end, then the employee is not dismissed if their employment ends on that date.

Instead, their employment ends simply by the reaching of that date, which has been agreed to between the employer and the employee.

If the Full Bench of the Fair Work Commission decides, in the appeal, to overturn the established precedent, then it will introduce a great deal of uncertainty for those employers who use ‘rolling’ fixed-term contracts.

The Full Bench, in its decision, indicated that it may consider overturning its own precedent.

The argument

In the appeal, Mr Khayam is arguing that:

  • the basis of the original decision would appear to make other provisions of the FW Act redundant;
  • the old precedent focusses on the employment contract rather than the employment relationship, a distinction that the Commission has made in the past; and
  • the old precedent is contradictory to the extension of unfair dismissal laws to casual employees, who are effectively employed on very short fixed-term (shift-by-shift) contracts.

Where to from here?

The Full Bench has decided that it will hear the appeal, and will issue directions to the parties about when the matter will be heard in due course.

What does this mean for you?

If the Full Bench decides to favour Mr Khayam’s arguments, employer’s may no longer be able to protect themselves from unfair dismissal claims by asserting that an employee’s employment ended purely by reaching the end date of the contract, rather than by any act of the employer.

This would mean that greater care would need to be taken when using employees on fixed-term contracts, and we would strongly recommend obtaining professional legal advice in these circumstances.

If you have concerns about the arrangements you have made for the employment of your workers, call NRA Legal on 1800 RETAIL (1800 738 245).

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