A recent Federal Court decision in Alouani-Roby v National Rugby League Ltd  FCA 12 (18 January 2024), has made it more difficult for employees on time limited contracts to argue they were dismissed if their employment comes to end upon the expiry of the contract’s term.
Under the Fair Work Act 2009 (Cth), an employee may only bring a General Protections Application involving a dismissal or an unfair dismissal claim if they have been “dismissed” within the meaning of s.386 of the Act.
Section 386 defines “dismissed” as including when –
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time.
Historically, Courts have decided that a contract is not for a “specified period of time” (usually referred to as fixed term contracts) if either party is able to terminate the contract before the expiry of the maximum term in the contract which meant that the exception to being dismissed under s. 386(2) of the Fair Work Act (or its predecessor provisions) would not apply. This principle was upheld by the Fair Work Commission’s Full Bench in Khayam v Navitas English Pty Ltd  FWCFB 5162.
The Court’s decision in Alouani-Roby
Mr Alouani-Roby, a rugby league referee, alleged that his employment was dismissed, when after a series of fixed term agreements spanning 4 years, his final contract came to an end on 30 November 2020.
Mr Alouani-Roby’s contract allowed both parties to terminate the contract on notice.
Before Mr Alouani-Roby’s final contract was offered, he alleged that NRL engaged in various acts of bullying, and “a deliberate course of action to remove him from his match official position”. He argued it was not the expiration of the Contract, but the “hostile work environment, and the bullying and retaliatory conduct” that resulted directly in the termination.
At the Fair Work Commission hearing (upheld on appeal from the Full Bench of the Fair Work Commission), Mr Alouani-Roby’s employment was held to have ceased not at NRL’s initiative, because the parties reached a genuine agreement for his employment to end upon the expiry of the time limited contract. Therefore, Mr Alouani-Roby was found not to be dismissed under s.386(1). Mr Alouani-Roby then appealed his case to the Federal Court
In the Federal Court, Justice Raper dismissed Mr Alouani-Roby’s appeal finding he was not dismissed under s.386(1).
However, Justice Raper also held that the employer (NRL) would have been successful in arguing that they did not dismiss Mr Alouani-Roby’s employment under s.386(2), even if his time limited contract provided for a right by either party to terminate, because the contract would have (and did) expire by agreement.
What makes the decision significant is that the Court’s decision represents a departure from previous interpretations of s.386(2) including the FWC’s Full Bench in Khayam (regarding the exception to dismissals for time limited contracts).
The Court considered whether there were any other factors which may have otherwise meant that Mr Alouani-Roby’s employment was terminated at NRL’s initiative, including whether he was misrepresented as to the nature of his employment (irrespective of his contract); whether the contract was offered to avoid the employer’s obligations under the Fair Work Act and the other factors set out in Khayam (including whether his bullying complaints caused the employer to end his employment).
Having given weight to the Commission’s factual findings, Justice Raper found that the Mr Alouani-Roby’s grievance regarding his employer’s conduct, were not a significant principal factor which caused NRL to terminate his employment because his final time limited contract of employment was offered after the employer’s conduct allegedly occurred. 
Employees on time limited contracts may still claim a “dismissal” in certain circumstances
Alouani-Roby’s decision does not prevent employees on time limited contracts from arguing their employment was dismissed.
The Courts and the FWC have consistently applied a distinction between the “employment contract” and an “employment relationship” when deciding whether an employee is dismissed. If the employment relationship was terminated (as opposed to an employment contract) at the initiative of the employer, then an employee may still argue that their employment was dismissed. The decision in Navitas also sets out instances where there could still be a dismissal even when there exists a time limited contract with an end date including where –
- there was no agreement to end the employment on a specified date;
- any decision (or conduct) by the employer to bring the employment to an end was a principal contributing factor which resulted in the termination of employment, not the expiry of the time limited contract;
- the employer has engaged in misrepresentation including representations that the employment would continue beyond the time limited contract.
It remains to be seen on whether the Federal Court’s decision in Alouani-Roby’s case will be appealed on the Court’s interpretation of s.386(2)(a).
We are likely to see further litigation on this point and the latest Court decision raises uncertainty regarding whether employers can rely on time limited contracts to defend General Protection (dismissal) or Unfair Dismissal claims in circumstances where the contract of employment allows either party to terminate within its period of operation by giving notice.
 D’Lima v Board of Management, Princess Margaret Hospital for children  IRCA 407 and Andersen v Umbakumba Community Council (1994) 126 ALR 121
  FWCFB 5162, VP Hatcher; DP Colman and Commissioner Saunders
 This was his fifth time limited contract.
  FWCFB 171.
 Paragraph 63 and 76.
 Ibid para 75
This article does not constitute nor should be taken as legal advice. If you require advice regarding the specific circumstances of your case, please contact our office to arrange a conference.