The Fair Work Commission has reinforced that the expiry of a genuine fixed-term employment contract does not automatically amount to a dismissal, following a decision involving two employees whose contracts ended after reaching their agreed finish date.
The workers argued they had been dismissed when their employment ceased at the end of their contracts and sought to pursue unfair dismissal claims. However, the Commission found their employment ended because the contracts had simply run their course, rather than through any action taken by the employer to terminate the relationship.
The decision highlights an important distinction for employers across the cleaning and facilities management sectors, where fixed-term contracts are commonly used for project work, contract transitions and temporary operational requirements.
What the commission found
While the Commission accepted the contracts had expired, it also noted that each case depends on its individual circumstances. A contract that genuinely ends on an agreed date will generally not constitute a dismissal under the Fair Work Act. However, contracts that include broad termination provisions or create an expectation of ongoing employment may be assessed differently.
The ruling comes as employers continue adapting to Australia’s tightened fixed-term contract laws, which came into effect on 6 December 2023. The reforms limit the use of consecutive fixed-term contracts and generally prevent employers from engaging workers on contracts exceeding two years, unless a specific exemption applies. Employers are also required to provide eligible employees with a Fixed Term Contract Information Statement.
Why cleaning employers should take notice
For cleaning businesses, the decision serves as a reminder that well-drafted employment contracts remain critical. Employers should ensure fixed-term arrangements clearly state the reason for the engagement and the contract’s end date, while avoiding practices that could suggest ongoing employment beyond the agreed term.
The Commission has also established a dedicated process for resolving disputes relating to fixed-term contracts where disagreements arise between employers and employees.
Although the decision provides reassurance that genuine fixed-term contracts will generally be treated as ending by agreement, employers should continue reviewing their employment practices to ensure they comply with the post-2023 legislative framework. Businesses relying on rolling or repeatedly renewed contracts may still face legal risks if the arrangements fall outside the Fair Work Act‘s limitations or create an expectation of continuing employment.
