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Full Bench rules on maximum-term contracts

In a recent decision of the Full Bench of the Fair Work Commission, a former NRL referee has had his general protections application dismissed on the basis that his maximum-term employment with the NRL was not terminated at the initiative of the NRL.

In a recent decision of the Full Bench of the Fair Work Commission (Full Bench), a former NRL referee has had his general protections application dismissed on the basis that his maximum-term employment with the NRL was not terminated at the initiative of the NRL.

In the matter of Alouani-Roby v National Rugby League Limited, Bernard Sutton and Graham Annesley [2022] FWCFB 171, the Full Bench heard that the employee had been employed on a series of maximum-term contracts since 2015, with his last contract operating for a maximum term from 1 December 2019 to 30 November 2020. On the expiry of this term, his contract was not renewed.

The employee claimed that it was the conduct of the NRL as well as the General Manager of Elite Officiating, Mr Bernard Sutton, and the Head of Football Elite Operations, Mr Graham Annesley (together, the Respondents), which brought about the end of the employment relationship and was in breach of the general protections provisions of the Fair Work Act 2009 (Cth).

Specifically, the employee claimed that the NRL had engaged in a process aimed at ending the employment relationship before they entered into the last employment contract. Amongst his complaints was that he had been subject to bullying and victimisation, suffered damage to his physical and mental health, was constructively dismissed and was made to work in an unsafe workplace with a toxic culture.

However, at first instance, the Fair Work Commission (FWC) dismissed the application. It found that a pre-requisite to making a general protections application involving dismissal was that the employment must have been terminated at the initiative of the employer. In this case, the employee’s employment was not terminated at the initiative of the NRL; rather, his employment ceased through the effluxion of time upon expiry of the contract, and the FWC therefore did not have jurisdiction to determine the dispute.

Whilst the employee appealed this decision on a number of grounds, the Full Bench confirmed that the key issue that had to be determined was whether or not the employee’s employment was terminated at the initiative of the NRL.

In coming to its decision, the Full Bench had regard to the principles enunciated in Khayam v Navitas English Pty Ltd [2017] FWCFB 5162 (Navitas) – specifically, that a decision by an employer to not offer a new contract of employment at the end of a time-limited contract (where it is a genuine agreement between the parties) will not, by itself, constitute termination of employment. However, there may be cases, particularly where the employment relationship is made up of a series of time-limited contracts, that it will be necessary to analyse the entire employment relationship to determine whether an employee has been dismissed.

The Full Bench went on to state that, when analysing the employment relationship, the contract of employment is fundamental to, and underpins, that relationship. In addition, it will also require consideration of a range of matters including:

  • the field of employment in which the contract operates;
  • the terms of any industrial instruments;
  • all contracts in a series of time-limited contracts;
  • the context in which the contract of employment and relationship operated;
  • the conduct of the parties during the relationship;  
  • the circumstance in which the employment ended; and
  • any vitiating factors which could mean that there is no legally effective time limit on the employment.

In the present case, the Full Bench was satisfied that the employment contract was a genuine agreement between the employee and the NRL. Specifically, it included a provision where the employee had agreed that the relationship would end on the completion of the contract term and that any decision as to whether to offer further employment would be separate and distinct from the contract. The Full Bench also noted that, on the employee’s own evidence, at a meeting in which the final contract was discussed, he was informed that it could be his last contract if his performance did not improve.

The Full Bench also had regard to the existence of the applicable enterprise agreement which provided that full-time referees would be employed pursuant to a maximum-term contract for a minimum period of twelve months. It was noted that the employee was involved in negotiations for that enterprise agreement and voted in favour of its approval. Therefore, the contract was authorised and underpinned by the industrial instrument.

The Full Bench also rejected the employee’s submission that it should take into account any conduct by the Respondents pre- or post- the last contract. It was of the view that the only conduct of the Respondents that should be considered is any conduct which initiated the termination of employment. In this case, the NRL had simply allowed the employment to end at the expiry of the term but, even if the Respondents’ conduct was considered, there was no causal connection between the alleged conduct and the ending of the contract by effluxion of time.  

The Full Bench was also not satisfied that the NRL was using contracts for mere administrative convenience. It accepted the findings made at first instance that the use of maximum-term contracts was appropriate in the field of elite professional sports and that the intention was to ensure that the best available match officials would be engaged each season.

Further, the Full Bench did not accept the employee’s submission that the NRL was using the maximum-term contract as an attempt to evade the unfair dismissal and general protections provisions of the FW Act. It noted that the FW Act contains provisions which exclude employees whose employment ends pursuant to the expiry of a genuine outer limit from remedies for dismissal. These exclusions are predicated on the legitimate existence of time-limited contracts and the fact that an employer initiates and makes such a contract with an employee cannot, of itself, constitute an attempt to evade the provisions of the FW Act.

The Full Bench stated that the FWC is not empowered to determine that a person has been dismissed merely because it would be fair or just for the person to be eligible to seek a remedy, when the employee has not in fact been dismissed.

The Full Bench therefore dismissed the appeal and the employee’s application.

Lessons for employers

This recent decision of the Full Bench clarifies the principles enunciated in Navitas. In particular, when analysing the entire employment relationship in cases where there are rolling maximum-term contracts, the FWC will still have regard to the terms of the contract as long as the contract is a genuine agreement between both the employer and the employee.

Whilst post-Navitas saw employers adopt a particularly cautious approach to the use of maximum-term contracts, this decision illustrates that the use of these contracts may still be found to be legitimate having regard to the field in which the employer operates and the circumstances in which the contracts have arisen.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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