For an employee to be able to claim that he or she was dismissed for the purposes of the unfair dismissal regime under the Fair Work Act, the termination of employment must be “at the initiative of the employer”; see sec 386(1) of the Fair Work Act 2009. This can be a tricky proposition in the case of the expiration of fixed term contracts, thus
“Relevant Law
Dismissal at the initiative of the employer and contracts for a specified period
[25] Before I can determine whether Ms. Zeybek has been “unfairly dismissed”, I must be satisfied that she has been “dismissed” under s 385(a). Under s 386(1), a person is dismissed if the person’s employment has “terminated at the initiative of the employer”. However, under s 386(2)(a), a person is not dismissed if the person is employed under a contract of employment for a specified period of time and the employment is terminated at the end of the period.
Minimum employment period
[26] Section 382 provides that a person is protected from unfair dismissal if the employee has completed a period of employment with her employer of “at least the minimum employment period”.
[27] As UniMelb is not a small business under s 383, the minimum employment period is 6 months.
[28] Ms. Zeybek was a casual employee. The term of the Fourth Contract was for a period of two months and fifteen days. Under s 384(2), her employment does not count towards her “period of employment” unless she was employed as a “regular casual employee” and during the period of service Ms. Zeybek had a “reasonable expectation of continuing employment by the employer on a regular and systematic basis”.
Was Ms. Zeybek dismissed at the initiative of UniMelb?
[29] Ms. Zeybek argues that the cessation of her employment on 22 December 2023 was initiated by UniMelb.
[30] UniMelb relies on a number of arguments why the ending of the Fourth Contract at the expiration of its maximum term should not be regarded as a termination at the initiative of the employer under s 386(1):
“• Ms. Zeybek was not dismissed at the University’s initiative because the Fourth Contract naturally expired on 22 December 2023, thereby ending the employment relationship between the Applicant and the University. There was no action by the University that either intended to bring the employment relationship to an end or had that probable result.
- The Fourth Contract is a maximum-term casual contract. There is no inconsistency between casual employment and a maximum term contract. The Fourth Contract reflects a genuine agreement between the University and the Applicant that the employment would end on the End Date. The leading case of Khayam15 indicates that where there is such genuine agreement, and in the absence of vitiating factors, dismissal at the End Date will not be at the employer’s initiative.
- None of the vitiating factors described in Khayam exist The use of successive maximum-term casual contracts by UniMelb did not reflect the use of standard-form contracts used for merely administrative convenience. UniMelb used successive sixmonth casual contracts because the Client Services team was in a state of flux, with new work being absorbed into the team as part of the evolving service delivery model. UniMelb conducted six-monthly reviews of work absorption and resources required, with casual contracts offered in line with that planning cycle. At the end of 2023, the University concluded that the workflow justified the creation of new continuing positions.
- UniMelb made no representation to Ms. Zeybek that following the end of the Fourth Contract, there would be another. There was no broken promise of future work. There is no evidence that the agreement to end the employment relationship on 22 December 2023 was not genuine.
- In Drakoulis v. TAFE Online,16 Commissioner Johns accepted that the expiry of a casual contract with an anticipated expiry date was not at the employer’s initiative. In its decision regarding Ms. Drakoulis’ unsuccessful appeal, the Full Bench noted that the terms of the particular casual contract included an “anticipated expiry date” but also provided that employment would end when the employee was notified she would not be offered further hours of work. The Full Bench said that it would have regard to all the terms of the contract to assess whether an employment relationship ended on an “anticipated expiry date” by operation of the contract.
- By contrast with the terms. of the contract in Drakoulis, the Fourth Contract very clearly states that “Employment with the University ceases at the end date of the Period of Engagement unless otherwise ended earlier by the University”. The Commission should find that the terms of the Fourth Contract demonstrate that the employment relationship between the parties ended on the End Date by operation of the Contract.”
[31] It also relied on an alternative argument in relation to s 386(2)(a) that I should not follow the Full Bench decision in Khayam and find that a maximum term contract is not a contract “for a specified period of time”. This argument relies on adopting obiter statements of Justice Raper in the Federal Court in Alouani-Roby v. National Rugby League Ltd.17
Consideration
[32] Khayam is the principal authority on whether the failure to renew a maximum term contract is a dismissal for the purposes of s 386. It stands for the proposition that a maximum term contract is not a “contract of employment for a specified time” under s 386(2)(a). I see no reason to depart from that decision and therefore reject the alternative argument of UniMelb in relation to s 386(2)(a).
[33] The Full Bench in Khayam did not decide whether Mr. Khayam was dismissed “on the employers’s initiative” within the meaning of s 386(1)(a). That matter was referred back to Commissioner Hunt. In the course of its decision, the Full Bench provided an interpretation of s 386(1)(a) based on its analysis of relevant case law. At paragraph [75] subparagraph (4), the Bench stated (with emphasis added and excluding case names):
“Having regard to these propositions and the court decisions to which we have earlier referred, we consider that s 386(1)(a) should be interpreted and applied as follows:
…
(4)Where the terms of an operative time-limited contract reflect a genuine agreement on the part of the employer and employee that the employment relationship will not continue after a specified date and the employment relationship comes to an end on the specified date, then, absent a vitiating or other factor , the employment relationship will have been terminated by reason of the agreement between the parties and there will be no termination at the initiative of the employer. Further, in those circumstances a decision by the employer not to offer any further contract of employment will not be relevant to the question of whether there was a termination of employment at the initiative of the employment. The decision not to offer further employment is separate and distinct from the earlier agreement between the parties to end the employment relationship on a particular date. However if the timelimited contract does not in truth represent an agreement that the employment relationship will end at a particular time the decision not to offer a further contract will be one of the factual matters to be considered in determining whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.”
[34] The relevant “vitiating factors” referred to in that paragraph include:
- Whether the employment was constituted by successive short-term contracts or the use of time-limited contracts was appropriate in the relevant field of employment may be a consideration relevant to an examination of the employer’s purpose for entering into such contracts;
- The employment contract may not be limited to the terms of a written document. It may be one of a series of standard-form contracts which operated for administrative convenience and did not represent the reality or the totality of the terms of the employment relationship; and
- During the term of the employment relationship, the employer may have engaged in conduct or made representations which provide a proper legal foundation to prevent the employer from relying upon the terms of the contract as the means by which the employment relationship has been terminated
[35] It is clear the Full Bench in Khayam considered a maximum term contract could be a genuine agreement that the employment relationship will not continue after a specified date, and that the employment relationship comes to an end on that date. In those circumstances (and absent one of the “vitiating factors”), the employment relationship will have terminated by reason of the agreement and there will be no termination at the initiative of the employer.
Was there a genuine agreement here?
[36] The terms of the Fourth Contract which Ms. Zeybek accepted two months and fifteen days before the expiration of the maximum term are pellucidly clear and unequivocal. The “employment would end at the end date of the period of engagement”, which was 7 October 2023 until 22 December 2023. It also clearly states that UniMelb is under “no obligation and does not guarantee, nor make any representation that it will offer employment beyond the period of engagement”.
[37] Ms. Zeybek does not dispute that she accepted these terms. Following Khayam, unless there are vitiating circumstances the effect of those terms is that the contract terminated according to its terms and therefore there was no termination at the initiative of UniMelb.
Are there vitiating circumstances?
[38] I accept the evidence of Ms. Whyte (which was not contested by Ms. Zeybek) that the reason Ms. Zeybek was offered casual employment for six-month periods was because of an ongoing review of work coming into the client services team. Reviews of the required resources occurred every six months. Casual contracts were offered in line with the planning cycle where it was determined there was a need for casual resources.18 I consider the use of maximum term contracts was appropriate in the relevant field of employment and was not merely for administrative convenience. There were appropriate reasons why the contracts were used.
[39] Ms. Zeybek relies on “past practice and custom’ to argue that the renewal of her maximum term contract three times established “a pattern of behaviour that created a legitimate expectation on my part that my contract would be renewed”. She also relies on “explicit and implicit assurances and representations regarding renewal” of her contract.
[40] I do not consider Ms. Zeybek’s expectation that she would be offered a new contract on the basis that she had been offered three previous contracts is sufficient as a “representation” that her contract would be renewed.
[41] Ms. Zeybek provides no evidence of explicit representations that another contract would be offered to her. The evidence before me establishes the opposite. She was informed on 11 and 12 December 2023 that her contract would not be renewed. This is well before the maximum term expired on 22 December 2023.
Finding
[42] I accept that on or about 7 October 2023, Ms. Zeybek entered into a genuine agreement which included an express term that her contract would expire on 22 December 2023. There were no vitiating circumstances that affected the genuineness of the agreement she had reached.
[43] In those circumstances, applying the test in Khayam, I consider the termination of her employment was not initiated by the employer. It merely expired according to the terms of her contract of employment. It follows she was not “dismissed” as defined by s 386 and required under s 385(a).
Did Ms. Zeybek have a “reasonable expectation of continuing employment” and meet the minimum employment period?
[44] If I am wrong in finding that Ms. Zeybek was not dismissed, I must consider whether or not she had a “reasonable expectation of continuing employment” under s 384(2) for the purpose of determining whether she had been employed for the minimum employment period as defined by s 3s84 and 385 and as required by s 382(a).
[45] The period of her last contract was two months and 15 days – well short of the minimum employment period of six months. As a casual employee, her total period of employment with UniMelb under the successive contracts will only count if, during the period of her employment, she had a “reasonable expectation of continuing employment on a regular and systematic basis” under s 384(2).
Ms. Zeybek’s arguments
[46] Ms. Zeybek argues that despite the length of the maximum term of the Fourth Contract, she has a “reasonable expectation of continuing employment”. She makes a series of arguments why she had a “reasonable expectation of continuing employment”:19
- Ms. Zeybek’s employment contract had been “consistently renewed without fail. This established pattern of behaviour created a legitimate expectation on her part that her contract would be renewed for subsequent periods of employment”.
- Ms. Zeybek had “consistently demonstrated exemplary performance and conduct in my role, consistently meeting and exceeding performance expectations.” She explains: “My performance appraisals and feedback from supervisors have consistently reflected my dedication, reliability, and contribution to the success of the team and the organisation.”
- UniMelb had made “assurances and representations either explicitly or implicitly, regarding the renewal of my contract. Positive performance feedback and discussions about future plans within the organisation have all contributed to my reasonable expectation of contract renewal”.
- Ms. Zeybek had “relied on the expectation of contract renewal to my detriment, making financial commitments and turning down other employment opportunities based on the assurance of continued employment with the University of Melbourne. The sudden and unexpected non-renewal of my contract has therefore caused significant financial and emotional hardship”.
UniMelb’s arguments
[47] UniMelb’s argument is that Ms. Zeybek could not have had a reasonable expectation of continued employment. It argues that:
- Ms. Zeybek “may have had a subjective expectation of continuing employment but that expectation was not reasonable”.
- The clear terms of the contracts take primacy over other factors including Ms. Zeybek’s own expectations. Each of her contracts (including the Fourth Contract) clearly provide UniMelb is under no obligation and does not guarantee or make any representation that it will offer employment beyond the end point of the contract.
- UniMelb made no representations to Ms. Zeybek that she would be offered a further employment contract after the Fourth Contract. She was not rostered to any shifts after the end date.
- Ms. Zeybek was aware of changes to the Client Services team workforce. She was invited to apply for a continuing position within the team such that she could not reasonably have anticipated that the University’s need for casual employment.
Consideration
[48] Ms. Zeybek’s argument that she had an expectation that she would be offered a further contract because she was offered three continuous casual contracts previously could not have been reasonable in the circumstances in which the Fourth Contract came to an end:
- In October, just over two months before her employment ceased, Ms. Zeybek had entered into a contract which included a clear and express terms that “Employment with the University ceases at the end date of the Period of Engagement unless otherwise ended earlier by the University. The University is under no obligation, does not guarantee, nor make any representation that it will offer employment to you beyond the Period of Engagement”.
- She was informed by Ms. Whyte on 11 December 2023, 11 days before the end of the contract period, that “no further casual employment would be offered, and her employment would end on 22 December 2023”.
- On 12 December 2023, she asked for an explanation “why my contract is not being renewed”. Later that day Ms. Whyte replied by e-mail with an explanation.
- In cross examination, Ms. Zeybek conceded that at the meeting on 11 December 2023,
Ms. Whyte “confirmed her contract would not be renewed” and that “she did not have an expectation of employment after that conversation”; she added, “Especially after the 12th December when I received more information in writing.”
[49] Ms. Zeybek argues she had explicit or implicit assurances and representations regarding the renewal of her contract. Other than an implication arising from the fact that she had her contracts renewed on three earlier occasions there is no evidence before me of any assurances or representations that the Fourth Contract would be renewed. I accept the evidence of UniMelb that there were none.
[50] The evidence shows to the contrary, Ms. Zeybek was explicitly told orally on 11 December 2023 and in writing on 12 December 2023 that her contract would not be renewed. Further, Ms. Zeybek herself concedes that by 12 December 2023 she knew the Fourth Contract would not be renewed.
CONCLUSION
[51] Ms. Zeybek presents as an intelligent and competent person. I accept that during her employment with UniMelb her work was often praised. Through a series of unfortunate events, in October 2023 she missed the chance of securing ongoing employment when she failed to reply to the expressions of interest for those positions. Had Ms. Zeybek applied she may have continued to be employed at UniMelb.
[52] None of those facts change my decision that her application fails for want of jurisdiction on the following bases:
- She was not dismissed. Her employment was not terminated at the initiative of the employer as required by s 385(a). Her employment was terminated by the expiration of the maximum term in the Fourth Contract; and
- She could not have had a reasonable expectation of continuing employment under s 384(2) and therefore she did not meet the minimum employment period required by s 382(a).
[53] The application in this matter is therefore dismissed.20”
Zeybek v University Of Melbourne [2024] FWC 1988 delivered 26 July 2024 per Perica C