Recently, several people including two small business proprietors have asked me whether redundancy is payable to employees who lose their jobs but which were subject to fixed term contracts.
I regard this as a slightly odd development, since fixed term contracts are very much the exception rather than the rule in the contemporary workplace. Of course, I have often come across them in specialized contracting work, where self evidently a construction component will come to an end, but not so much in ordinary industry and commerce.
The answer is as is so often the case in the law, it depends.
Under sec 123(1) of the Fair Work Act 2009, a number of classes or categories of employees are excluded from entitlements to statutory notice of termination and redundancy pay. They include employees who are employed for a specified period of time, for a specified task or for the duration of a specified season, employees whose employment is terminated because of serious misconduct, casual employees and a limited number of other employees.
However, despite the incongruity of the notion, many fixed term contracts of employment actually contain clauses which confer on either party (and sometimes on just the employer alone) the right to bring the contract to an end before the nominated end date; as illogical as that is to the concept of a fixed term.
In that event, an employee who finds his or her employment terminated because of redundancy before the end of the term will be able to claim statutory redundancy pay and an employee whose employment comes to an end with the effluxion of time will not