Client concluded the contract before the expected two-year date, and the worker expected to transfer to a new provider upon his release, but he wasn’t engaged
A security manager challenged his dismissal, arguing he had completed the sufficient employment period and was unfairly dismissed.
The worker contended he was employed for a period exceeding the minimum requirement, and termination was at the employer's initiative.
The employer maintained worker was a small business employee who did not serve a minimum 12-month employment period; employment was conditional on the client services contract continuing, and the worker himself terminated the services contract, leading to his employment ending.
Employment conditional on the client's contract
The employer contended it was a small business employing fewer than 15 employees, and the worker did not serve the minimum required employment period of 12 months.
The worker commenced employment on 9 September 2024, verbally had been advised of his termination of employment on 30 May 2025 and had the dismissal confirmed in writing on 16 June 2025.
The reason for the termination of employment was that on 30 May 2025, the worker, as the client's representative, informed the employer in writing that the employer was given 30 days' notice of termination of the services contract with the client. The termination of the contract resulted in the worker's termination of employment.
The employer submitted that the worker's employment was confirmed in an employment contract dated 14 August 2024. The contract was tendered into evidence. The Commissioner observed that the contract stipulated that employment was for a maximum of two years for the duration of the client contract.
The worker's ongoing employment was conditional on retention of the services contract with the client. Further, the contract of employment stated that should the contract with the client be lost, the employment would be terminated and there would be no entitlement to redundancy pay.
Specifically, the relevant clause of the contract of employment provided that the worker acknowledged and understood that the employer provided services to clients under fixed term contracts, it was a customary feature of the business and the industry that contracts were won and lost, the worker was being employed for the purposes of the employer servicing its fixed term contract with whatever client was available, the worker's ongoing employment was dependent upon the contract continuing with the client, the worker had no expectation of continuing employment with the employer if the contract with the client was lost, and if the company lost the contract with its client the worker's employment would cease unless the worker was redeployed.
Worker expected a transfer to the new provider
The employer submitted that it employed 10 employees at the time of the worker's dismissal. It provided a list of employees, consisting of seven full-time and part-time employees, and three regular casuals.
In addition, on a confidential basis, the employer provided a full, unredacted payroll report to the Commission to satisfy itself of the list of employees relevant to the calculation of the number of employees.
In response to the worker's list of employees that contained an additional five names, the employer's director confirmed that none of the listed names were employees. Among the identified individuals were contractors engaged briefly, a casual employee for one shift, a family member residing overseas, and an accountant engaged as a contractor overseas.
The worker submitted that he was employed on 9 September 2024, and his employment terminated on 1 July 2025. Prior to commencement of employment, the worker was engaged through another employer that had the security contract to service the client.
The client concluded the contract with the employer before the expected two-year conclusion date, and the worker expected to transfer to the new provider upon being awarded the contract and upon his release from the employer.
However, the incoming service provider did not engage the worker, and neither did the client. This failure to be engaged by the new service provider prompted this unfair dismissal application.
The worker's outline of evidence confirmed that he was given verbal notice of the termination on 30 May 2025. However, unlike his application form, the worker now submitted that he had commenced employment on 2 September 2024.
With respect to the submission that he received written notification of his dismissal on 11 July 2025, he said that he did not initially receive the letter of termination that was posted to him.
During the hearing, the worker confirmed that he received verbal notification of his dismissal on 30 May 2025. His outline of argument also stated that he was employed for a period of 43 weeks.
Outer limit contract principles
Having reviewed the correspondence of 11 July 2025, it clearly stated that the email attached the letter of termination that was also previously sent on 16 June 2025, in line with the notice following the worker's termination of the employer's service contract with the client.
While neither party raised the issue of the contract of employment being an outer limit contract as a jurisdictional objection, the Commissioner raised this in the hearing while considering the details of the contract of employment.
Both parties confirmed their understanding that the employment was conditional on the existence of the service contract with the client. On this basis, it was appropriate to consider the outer limit contract as a jurisdictional matter.
The Commissioner found there was a contest that the employer was a small employer, and the minimum employment period was 12 months. The Commissioner was satisfied that the employer was a small employer; therefore, a minimum 12-month employment period must be met. The worker only served for nine months with the employer.
The employer provided sworn evidence and tendered their confidential payroll report. The Commissioner accepted this evidence over the unsupported assertions made by the worker regarding the size of the business and related entities.
Furthermore, the worker's contract was for a specified time, but importantly, conditional on the continuation of the service contract with the client. The employment contract provided circumstances where a decision may be made by the employer to terminate the employment relationship; however, none of these were the circumstances relevant in the worker's matter.
The Commissioner was satisfied that the contract was considered an outer limit contract, and the termination of the employment relationship was not at the employer's initiative alone; it was because of the loss of the contract with the client. Interestingly, the worker appeared to have used his authority as manager to terminate the employer's service contract himself.
Genuine agreement on employment conditions
The Commissioner found the relevant authority of outer limit contracts was a Full Bench decision dealing with fixed-term or outer limit contracts. While the Full Bench considered the effect of rolling fixed-term agreements between the parties, which was not relevant to the worker as there was no evidence of rolling fixed-term arrangements but one contract, the rest of the principles, other than those dealing with rolling arrangements, were relevant.
The Full Bench held that where the terms of an operative time-limited contract reflected a genuine agreement on the part of the employer and employee that the employment relationship would not continue after a specified date and the employment relationship came to an end on the selected date, then, absent a vitiating or other factor, the employment relationship would have been terminated by reason of the agreement between the parties and there would be no termination at the initiative of the employer.
In this matter, there were no vitiating circumstances. The parties were clear on the employment conditions that the worker's employment was simply for the period of the operational services contract between the employer and the client.
The Commissioner was satisfied that the employment contract was entered into genuinely; this was confirmed by the parties during the hearing.
Furthermore, it cannot be suggested that the employer terminated the services contract; rather, the worker made the decision, with the client's support, to terminate the services contract.
The worker understood that the consequences of the termination of the services contract would also result in the employer terminating his employment.
The Commissioner was satisfied that the worker's application did not meet the requirements because he did not meet the minimum employment period, but also was engaged on an outer limit contract.
Both of these circumstances were excluded from the definition of dismissed under the Act. The worker's termination of employment with the employer was not captured by the definition of dismissed, and therefore, the application was not properly made. On this basis, the application was dismissed.
