Unlike traditional employment, successive short-term contracts with a company or an employer do not lend themselves to being classified as creating an ongoing employer/employee relationship. Instead, short term contracts are considered finite and renewable only upon the agreement of all involved. Hence, these types of contracts do not tend to create an indefinite employment relationship between the parties.
There are a couple cases within the last few years which have been influential in regard to this issue.
Past Decision of 2017
In December of 2017 there was a decision that slightly changed the focus of determining if short term contracts rose to the level of continuous employment status upon their completion. In Saeid Khayam v Navitas English Pty Ltd [2017] FWCFB 5162 (‘Navitas’) the Court found that factors such as the overall employment relationship could be taken into consideration, even in what initially appears to be a short-term contract. For example, the Court might look to;
- The clarity of the termination date in the short-term contract
- Continuous work performed subsequent to the expiry date sans a new short-term contract
- Verbal or written agreement that changes the nature of the short-term contract to reflect actual employee status
Current Decision of 2020
However, more recently a case was decided that supported the traditional understanding of the lack of an employer/employee relationship in successive short-term contracts between a business and a worker. See: Michael Nasr v Mondelez Australia Pty Ltd [2021] FWC 2802. In this case the Court took a more expected stance in supporting the lack of a permanent employment relationship in a series of short-term contracts.
In this case, the person engaged in the successive short-term contracts worked with the employer for approximately 2.5 years. During this time the employer entered into several short-term contracts with the individual and each was completed in accordance with its terms. At the end of each contract a new contract was entered into by the parties. Each contract that was entered into contained specific terms for the work that was to be completed, the time frame in which it was to be finished and a definitive expiry date. At the end of the last successive contract, the employer elected not to continue with a new contract. The worker filed a lawsuit claiming unfair dismissal.
Findings
The Court found in favour of the company and dismissed the claim. The Court’s reasoning was as such;
- The terms of the contract were clear and unambiguous; meaning the beginning and end dates of the term of employment were defined within the contract
- The employment end date was contained within the terms of the contract
- There were no terms within the contract that allowed for continuation of the duties being performed sans a new contract
- Both parties had read and exhibited an understanding that the contracts were each for a short period of time with no guarantee of continued employment
For those who prefer to engage in short-term contracts, both as employers and employees, it is important to use the guidelines for contracting as stated above. If you are an employer, be sure that each contract contains clear and unambiguous terms defining the start and end of the relationship. In addition, be sure that the work does not continue beyond the end date sans a new contract. As a person working in a short-term arrangement, be sure to read the terms of the contract and fully understand that your engagement is limited. And know that the lack of the employer to offer you future work will not rise to the level of an unfair dismissal claim.
