Fixed-Term Contract Dismissal FWC: A Landmark Ruling
The Fair Work Commission (FWC) recently issued a pivotal ruling. In Warren George Francis v. Volunteer Marine Rescue Assoc Qld Inc [2024] FWC 978, the commission decided that early notice of non-renewal for a fixed-term contract can count as a dismissal. This landmark decision highlights why employers must handle contract terminations with extreme care.
The Case Background
Warren Francis began working for the Volunteer Marine Rescue Association (VMRA) in January 2021. He originally signed a six-month contract as a State Training Officer. Over time, he signed multiple extensions, including a final contract in December 2022.
In January 2023, the VMRA suspended Francis following an allegation of misconduct. While an investigation could not substantiate the claim, it revealed significant workplace tension. Just two days after the investigation ended, the VMRA told Francis in writing that his contract would expire on June 30, 2023, without a further extension.
FWC Findings on Fixed-Term Contract Dismissal
Francis filed a claim asserting that this was a dismissal in violation of the Fair Work Act 2009 (FWA). The FWC had to decide if the non-renewal met the definition of dismissal under section 386(1). Typically, a contract ending on its specified date is not a dismissal. However, this case proved different.
Why the Expectation of Renewal Was Reasonable
The FWC found that Francis reasonably expected his employment to continue. Several factors supported this:
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Past Renewals: The VMRA had extended his employment multiple times before.
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Contract Clauses: The agreement allowed both parties to renew the contract through negotiation.
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Work Continuity: The VMRA kept Francis employed even after previous contracts had formally expired.
Active Severance vs. Passive Expiry
The FWC noted a deliberate move by the employer to end the relationship. In previous cases, contracts simply lapsed passively. Here, the VMRA actively communicated their decision to sever the bond on June 16, 2023. Because the VMRA had the funding to keep the role but chose to end the employment for other reasons, the FWC ruled it a fixed-term contract dismissal FWC.
How to Avoid a Fixed-Term Contract Dismissal FWC Claim
This ruling creates new risks for Australian employers. To protect your organization, follow these steps:
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Avoid Hasty Decisions: Do not rush into a non-renewal notice without a clear legal strategy.
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Review All Terms: Meticulously check contract clauses regarding expiration and renewal.
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Assess Individual Risk: Consider if the employee has a “reasonable expectation” of staying on.
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Seek Legal Counsel: Use expert advice to navigate the complexities of the Fair Work Act.
Conclusion
The FWC’s decision reminds us that non-renewal is not a “safe” way to end employment. By understanding the rules surrounding fixed-term contract dismissal FWC cases, you can avoid costly litigation.
About the Authors: Rachel Drew, David Chambers, and Maud Beach are workplace relations specialists at Holding Redlich.
