s.394 - Unfair dismissal

Application for an unfair dismissal remedy - whether Applicant was dismissed - no dismissal at the initiative of the employer.

• [1] This decision concerns an application by Mr Ekrem Alija (Applicant) for an unfair dismissal remedy involving his alleged dismissal by the Embassy of the Republic of Kosovo (Respondent).

• [2] The Respondent has raised a jurisdictional objection that the Applicant was not 'dismissed' within the meaning of s.386 of the Act. It argues that the Applicant was engaged on a fixed term contract which had reached its expiry date and accordingly his employment ended by reason of agreement between the parties, not dismissal.

• [3] The meaning of 'dismissed' in s.386 of the Act relevantly provides as follows:

(a) the person's employment with his or her employer has been terminated on the employer's initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

• [4] A dismissal is a fundamental prerequisite that must be established before the Commission can deal with an application for an unfair dismissal remedy. There is no dispute the Applicant did not resign. The issue then is whether his employment was terminated on the Respondent's initiative.

• [5] A hearing was conducted on 30 June 2025 to determine the jurisdictional objection. The Applicant was self-represented and the Respondent was represented by Ms Shala (the Ambassador).

• [6] For the reasons set out below, I find the Applicant was not dismissed within the meaning of the Act and as a result the application is dismissed.

• [7] The Applicant worked as a driver for the Respondent from September 2019, initially on a fixed term contract to September 2021. In September 2021 the parties entered into a second fixed term contract for a period of one year, which was extended by agreement for a further six months. On 27 February 2023 the parties entered into a third contract (the Final Contract) for a period of one year, expiring on 25 February 2024. It was a term of this contract that there would be no possibility of a further extension after this date.

• [8] The Applicant's employment did come to an end on 25 February 2024, in accordance with the terms of the contract.

• [9] As noted above, s.386 sets out the meaning of 'dismissed', which has been considered in a number of decisions of the Commission.

• [10] In Saeid Khayam v Navitas English Pty Ltd t/a Navitas English[1] (Navitas), the majority of the Full Bench summarised the proper approach to the operation of s.386(1)(a) as follows:

"[75] Having regard to these propositions and the court decisions to which we have earlier referred, we consider that s 386(1)(a) should be interpreted and applied as follows:

(1) The analysis of whether there has been a termination at the initiative of the employer for the purpose of s 386(1)(a) is to be conducted by reference to termination of the employment relationship, not by reference to the termination of the contract of employment operative immediately before the cessation of the employment. This distinction is important in the case of an employment relationship made up of a sequence of time-limited contracts of employment, where the termination has occurred at the end of the term of the last of those contracts. In that situation, the analysis may, depending on the facts, require consideration of the circumstances of the entire employment relationship, not merely the terms of the final employment contract.

(2) As stated in Mohazab, the expression "termination at the initiative of the employer" is a reference to a termination that is brought about by an employer and which is not agreed to by the employee. In circumstances where the employment relationship is not left voluntarily by the employee, the focus of the inquiry is whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.

(3) In Mahony v White the Full Court stated that a termination of employment may be done at the initiative of the employer even though it was not done by the employer. In circumstances where the parties to a time-limited contract have agreed that their contract will expire on a specified date but have not agreed on the termination of their employment relationship, it may be the case that the termination of employment is effected by the expiry of the contract, but that does not exclude the possibility that the termination of employment relationship occurred at the initiative of the employer - that is, as a result of some decision or act on the part of the employer that brought about that outcome.

(4) Where the terms of an operative time-limited contract reflect a genuine agreement on the part of the employer and employee that the employment relationship will not continue after a specified date and the employment relationship comes to an end on the specified date, then, absent a vitiating or other factor of the type to which we refer in (5) below, the employment relationship will have been terminated by reason of the agreement between the parties and there will be no termination at the initiative of the employer. Further, in those circumstances a decision by the employer not to offer any further contract of employment will not be relevant to the question of whether there was a termination of employment at the initiative of the employment. The decision not to offer further employment is separate and distinct from the earlier agreement between the parties to end the employment relationship on a particular date. However if the time-limited contract does not in truth represent an agreement that the employment relationship will end at a particular time (as, for example, in D'Lima), the decision not to offer a further contract will be one of the factual matters to be considered in determining whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.

(5) In some cases it will be necessary to go further than just examining the terms of any contract in which the parties have ostensibly agreed to terminate the employment relationship at a particular time. It is not necessary or appropriate that we attempt to identify exhaustively all relevant matters, but the authorities to which we have earlier referred indicate that the following are likely to be relevant and may in some cases be determinative:

(a) The time-limited contract itself may be vitiated by one of the recognised categories by which the law excuses parties from performance of a contract. The categories potentially relevant in an employment context include the following:

• the employee entered into the contract as a result of misrepresentation or misleading conduct by the employer;
• the employee entered into the contract as a result of a serious mistake about its contents or subject matter;
• there has been unconscionable conduct associated with the making of the contract, which may relevantly include that the employer took advantage of a disability affecting the employee such as lack of education, lack of information, lack of independent advice or illiteracy;
• the employment contract was entered into by the employee under duress or coercion (which might include the types of coercion prohibited in ss 343(1)(a), 348 and 355) resulting from illegitimate pressure on the part of the employer;
• the employee lacked the legal capacity to make the contract; or
• the contract was a sham in the sense that it was not intended by the parties to give legal effect to its apparent terms or in the broader sense dealt with in Pt 3-1 Div 6 of the FW Act.

If any of the above applies there will be no legally effective time-limit on the employment.

(b) The time-limited employment contract may be illegal or contrary to public policy (for example, it contains relevantly objectionable terms as defined in s 12 of the FW Act or has the purpose of frustrating the policy or operation of the FW Act or preventing access to the Commission's unfair dismissal jurisdiction). Whether the employment was constituted by successive short term contracts or the use of time-limited contracts was appropriate in the relevant field of employment may be some of the considerations relevant to an examination of the employer's purpose for entering into such contracts.

(c) The contract may have been varied, replaced or abandoned by way of a separate agreement, whether in writing and/or orally, such that its ostensible time limit no longer applies.

(d) The employment contract may not be limited to the terms of a written document and may, for example, be one of a series of standard-form contracts which operated for administrative convenience and did not represent the reality or the totality of the terms of the employment relationship.

(e) During the term of the employment relationship the employer may have engaged in conduct or made representations (for example, representing to the employee that the employment will continue subject to conduct and performance notwithstanding a contractual time limit on the employment) which provide a proper legal foundation to prevent the employer from relying upon the terms of the contract as the means by which the employment relationship has been terminated.

(f) The terms of the contract time-limiting the employment may be inconsistent with the terms of an award or enterprise agreement given effect by the FW Act which prohibit or regulate fixed-term employment, in which case the terms of the award or agreement will prevail over the contract." (citation and references omitted)

• [11] As is clear above, the decision in Navitas deals in detail with the operation of time limited contracts, including maximum term contracts. Relevantly, where there has been genuine agreement to enter into a maximum term contract then any decision not to extend such a contract does not constitute a termination at the initiative of the employer.

• [12] Time limited contracts were recently considered by the Federal Court of Australia in Alouani-Roby v National Rugby League Ltd[2] (NRL), in which the following principles, as relevant to this application, were expressed:

1. Nothing in the statutory framework within which the employment relationship is established inhibits the freedom of parties to enter into a maximum term contract.
2. Remedies for dismissal available under the Act are not available for employees whose employment ends pursuant to the expiry of a genuine outer limit contract.
3. It cannot be that the mere act of the entering into such a contract can, of itself, be the principal contributing factor resulting in the termination of employment if employment terminates as provided for in the contract.
4. A contract cannot be contrary to public policy or be found to evade the dismissal provisions simply because statutory exclusions operate upon it.
5. Employers are entitled to structure their employment arrangements on the basis that such exclusions will operate.
6. The exclusion from the meaning of 'dismissed' contained in s.382(2)(a) of the Act applies to outer limit contracts which allow for early termination, in circumstances where an employee's employment has been terminated at the end of the specified period of time.

• [13] For the following reasons, I find that the Applicant was not dismissed within the meaning set out in s386(1) of the Act, in that the cessation of his employment was not at the initiative of the Respondent.

• [14] The Final Contract is clear in its terms that the employment was for a fixed term and that there was no possibility of an extension.

• [15] There was no evidence to suggest that the terms of the Final Contract reflected anything other than a genuine agreement between the parties, including that the employment relationship would end on the date specified in the Final Contract.

• [16] There was no evidence of conduct of the Respondent which had the effect of varying or replacing the express terms of the Final Contract, such that the time limit no longer applied.

• [17] There was no evidence which supports a finding that the Respondent engaged in conduct which could reasonably be considered misleading or would otherwise have the effect of vitiating the Final Contract. As a result, I am satisfied that the Applicant entered into a valid contract freely and willingly.

• [18] I do not accept that the Applicant was dismissed because he was 65 years old. There is no evidence to support such a finding. Further, there was obviously no requirement for the Respondent to go through any redundancy process or performance process with the Applicant, as he suggested, as he was not made redundant, nor were there any stated performance concerns.

• [19] Finally, in the context of determining whether the Applicant was dismissed within the meaning of the Act, it does not matter whether the Respondent was justified in its decision not to offer further employment. The only issue for the Commission to decide here is whether the Applicant was dismissed, nothing further.

• [20] In conclusion, the employment contract and the employment relationship came to an end based on terms agreed by the parties. There was no dismissal at the initiative of the Respondent. This application is therefore dismissed.

[1] [2017] FWCFB 5162.

[2] [2024] FCA 12.

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