University's attempt to deny promised permanent position rejected by FWC
The Fair Work Commission (FWC) recently dealt with a dispute concerning the conversion of fixed-term employment to continuing employment.
The case explored whether verbal and written representations made to a worker about future conversion opportunities created enforceable rights despite contractual terms stating otherwise.
The worker argued her employer had promised to convert her fixed-term position to permanent after 12 months, pending satisfactory performance. When her performance was confirmed as satisfactory, she believed this triggered her conversion rights.
However, the employer later attempted to end her employment, claiming organisational changes had eliminated her position.
The dispute hinged on whether the university's discretion to convert employment under the enterprise agreement had effectively been exercised when the worker's performance was deemed satisfactory, creating an obligation that couldn't be reversed despite subsequent changes to her role.
The senior lecturer accepted a two-year fixed-term role at a university's rural campus in Wagga Wagga. Before accepting, she expressed reluctance to relocate from Melbourne for a temporary position.
In response, the head of school emailed: "As discussed, I can offer a 2-year contract with the opportunity to convert after 12 months, pending satisfactory performance."
After receiving her contract, which stated she had "not relied on any representations" outside the contract, the lecturer sought written confirmation about conversion. The head of school confirmed in writing that "this position will be offered as a 2-year contract initially with the opportunity to convert to permanent after 12 months, pending satisfactory performance."
The two-year timeframe was explained as allowing for "the time it takes for the HR processes to take place if satisfactory performance."
When the lecturer passed her probation, her supervisor confirmed he would inform human resources to "commence the process for conversion from fixed-term to permanent."
In March 2025, two months before her contract would end, the university informed the lecturer her contract wouldn't be renewed. The university claimed a medicine program redesign had eliminated the Coordinator role, which comprised 30% of her duties.
This reversal came despite the campus manager's earlier email stating: "[Your supervisor] has confirmed your satisfactory performance during the probationary period and I will discuss the conversion of your role to 'continuing employment' with HR."
The university later argued they weren't required to convert her employment because she didn't have two years' continuous service.
During the hearing, the head of school admitted she didn't disagree with the lecturer's assertion that the university was "under a contractual obligation to convert my position to permanent."
She testified that "the only reason that [the lecturer's] employment was not converted to a continuing is because of the University's decision that it no longer requires the position of Phase 1 Coordinator."
The FWC determined the university had made representations under the Enterprise Agreement's provision allowing it to "at its discretion, make an offer to convert a Fixed-term Employee to Continuing Employment at any time."
The Commissioner rejected the head of school's claim that she didn't understand the conversion rules, finding this explanation "not credible" given her long employment with the university since 1999 and her senior position.
The Commissioner found the university's communications were "unequivocal" about converting the lecturer's employment and criticized their conduct in delaying notification about their reversal of the conversion decision despite knowing its importance to the lecturer as "it impacts mortgages and a variety of other life factors."
The Commissioner concluded: "I have decided that clause 16.5(e) of the 2023 Enterprise Agreement operated to convert [the lecturer] to continuing employment on 1 May 2024 with effect from 1 May 2025." The university was directed to implement this decision.
The case demonstrates that representations made to employees about conversion opportunities may create binding obligations under enterprise agreements, even when contracts contain provisions limiting external representations.
