NSW Commission examines whether informal assurances can override written contract terms
The Industrial Relations Commission of New South Wales recently dealt with an employment dispute involving a worker who challenged the end of his maximum-term contract, claiming he had been unfairly dismissed and victimised.
The worker argued his employment should have been considered permanent rather than temporary, and that his employer had breached industrial award provisions when creating his position.
The worker maintained that his employer had made representations suggesting his temporary role would lead to permanent employment, and that he had been led to believe his contract would continue beyond its specified end date.
He claimed the employer's decision to advertise a new permanent position externally, rather than internally, demonstrated discriminatory treatment linked to his previous involvement in industrial proceedings against another organisation.
The worker's employment began after he was initially engaged through a labour hire agency to work within the local council's financial services team on a casual basis in July 2023.
When a nearby council offered him a permanent senior finance business partner role, he informed his current manager about the offer. The manager, keen to retain his services, told him that he could only be offered employment for 12 months due to local government recruitment requirements.
The manager explained that "in local government we are required to advertise roles and recruit them through a meritorious selection process."
Under the Local Government Act 1993, when councils propose to make appointments to positions within their organisation structure, those positions must be advertised unless the term of employment is for not more than 12 months.
The council had been conducting a service review of its finance department through external consultants, which recommended refreshing the finance team structure.
The workplace change proposal form stated the position was created to "replace finance undergraduate officer until the implementation of the Service Review Recommendations" and noted that "circumstances have changed within the finance team with the retirement of the CFO."
The worker's contract stated it was "made in accordance with the Local Government (State) Award 2023, Clause 36 (i) (g)" for someone "engaged as a temporary employee for the purpose to perform the duties associated with a vacant position during the intervening period between when the employer has made a definite decision to introduce major changes in production, program, organisation structure or technology."
In May 2024, the worker attended a meeting about proposed changes to the council's finance department. He was given an information pack that included details about a newly created business partner/process improvement finance position. The letter from the director corporate services stated:
"The role of business partner/process improvement finance is a newly created role and will be an ongoing position in Council's staff establishment. This position will be advertised externally in accordance with the requirements of the Local Government Act 1993."
The worker claimed his manager had previously told him that someone doing well in their job would get the permanent role when it became available. However, the manager strongly disputed making such statements, explaining she was aware that permanent positions had to be advertised and recruited through a meritorious selection process.
During cross-examination, the worker suggested his manager had told him "so many times that this position will never be advertised externally. It will be advertised internally." The Commission didn't accept this evidence, noting the worker only gave this testimony during cross-examination despite its importance to his case.
The Commission found that even on the worker's version of events, "it is clear that he was told prior to signing the contract that he would only have a twelve-month contract and that after that time he would have to apply for 'the permanent role' and go through a selection process that may involve other candidates." The worker applied for the new permanent role in July 2024 but was unsuccessful.
The central question was whether the worker had been dismissed when his contract ended or whether his employment simply expired according to its agreed terms.
The Commission explained the established principle that "an employer does not 'dismiss' an employee when his or her term of employment expires" and that employment "comes to an end by agreement, or, where the term is fixed by award or statute, by operation of law, and the effluxion of time."
The worker argued that his employment should be considered ongoing rather than fixed-term, claiming the council had breached award provisions by incorrectly categorising his employment.
He maintained that because his role didn't truly fall within the permitted categories for temporary employment under the Local Government (State) Award, his employment must be considered permanent by default.
The Commission rejected this argument, explaining that "doing an act in relation to a contract that is prohibited by a statute or an industrial award is not transmogrified into an act compliant with the statute by virtue of the contravention."
Even if there had been a breach of award provisions, this wouldn't automatically convert the employment into a permanent arrangement.
The worker also argued his employment was terminated earlier than the contract end date when the restructure was implemented in July 2024. However, the Commission found that the worker continued working until 30 July 2024 and wasn't made redundant.
The worker's victimisation claim was based on his participation in separate industrial proceedings against another council before starting his current employment.
He alleged that when his current employer became aware of these proceedings through a legal summons, they victimised him by making his position redundant, not offering retraining opportunities, and treating him differently from other staff.
Under Section 210 of the Industrial Relations Act 1996 (NSW), employers are prohibited from victimising employees who "participate, or propose to participate, in proceedings relating to an industrial matter."
According to the Commission, the Act creates a presumption that if an employee suffers detriment, it was due to the prohibited conduct, placing the burden on the employer to prove otherwise.
However, the Commission found the worker hadn't established he suffered any detriment as a result of the employer's actions.
Since the worker's contract ended according to its agreed terms rather than through employer action, and because the contract was entered into before the employer knew about the protected activities, no victimisation occurred.
The Commission dismissed both applications after finding it lacked jurisdiction for the unfair dismissal claim and that no victimisation had occurred. On the unfair dismissal application, the Commission concluded:
"[The worker's] employment came to an end due to the agreed effluxion of time and [the worker] was therefore not dismissed by [the employer] within the meaning of s 83."
Regarding the victimisation claim, the Commission found: "[The worker] has failed to establish that he has suffered a detriment within the meaning of s 210(2) of the IR Act."
The decision noted that the alleged detriments "did not arise as a result of action by the employer, but rather were the result of the application of the terms of a contract entered into well before [the employer] had any knowledge of the alleged protected attribute."
The Commission stated that "the breach as I have found occurred would not result in the time limit stipulated in the contract being invalid or ineffective at law generally."
The decision reinforced that properly structured fixed-term employment arrangements will be recognised as legitimate even where employees hope for permanent positions, and that contract expiration according to agreed terms doesn't constitute dismissal.
