Jurisdictional objection upheld over an unsigned contract

The Fair Work Commission (FWC) has found that employment ended due to the cessation of an unsigned fixed term contract rather than the claimed unfair dismissal argued by the employee.

An executive manager engaged on a five-year fixed term contract claimed general protections that his employment was terminated arguing: –

  • The employer contravened various parts of the Fair Work Act in terminating him
  • Fixed term contracts were widely used by their employer and seldom ceased on expiry
  • The contract was unsigned
  • The contract did not contemplate termination of the employment relationship on expiry

The employer argued jurisdiction based on the employment arrangement simply ending at the cessation of the fixed term and provided the following reasons for not offering an extension or new contract:-

  • Negative feedback from his colleagues
  • The Manager’s lack of commitment to the employer’s new cultural program
  • Discovery that the manager had failed to escalate serious staff and cultural issues
  • The Manager’s failure to submit updated KPIs for his 20/21 performance plan
  • The Manager spread unfounded rumours about a director.

The Manager was also offered time off to arrange alternative employment or apply for other vacant roles at the employer.

The Manager claimed that when he questioned why his employment would end, he received vague responses including that his team were being difficult to deal with, and a need for restructure and realignment.

The employer argued that they were under no obligation to offer continued employment and were not prepared to do so.  Further argument was although the contract was unsigned, the employee had adhered to its terms and worked in accordance with its provisions for 5 years.

In addition, funding, budgets and the needs of the employer were used to determine the engagement of senior managers.

In response, the Commission deemed that the Manager was aware of the contract terms finding that the Manager simply stated that he could not recall receiving a copy, that the contract held by the employer had been amended at the request of the manager evidencing his receipt of the contract at commencement of employment, and his acceptance based on his specific performance of the role within the contract and the receipt and acceptance of the associated benefits.

In determining if there was any ‘promise’ of ongoing employment, the Commissioner found that the assertions of the manager being asked to prepare plans for staffing and resourcing 5 to 10 years into the future, did not represent a promise that he would be provided a further contract.

The jurisdictional objection of the employer was upheld. The employment ceased in accordance with the contract terms and the employee was not dismissed.

For assistance with your long service leave obligations or any other HR matter, please contact us at [email protected] or 1300 720 004.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors, such as government legislation changes, may not be up to date at the time of reading. It is not legal advice and should not be treated as such.


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