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Task-based contract employee wins unfair dismissal claim

By Charles Power on November 14th, 2018
  1. Industrial Instruments
  2. Fair Work Act

 

The Fair Work Act 2009 (Cth) (FW Act) unfair dismissal laws will not apply unless the claimant was dismissed.

To this end, a person will not have been dismissed if they were employed under a contract of employment for a specified task and the employment has terminated on completion of the task.

In Newton v Lendlease Engineering Pty Ltd (2018) an employee was employed under an employment contract that described his position as a labourer on a Pacific Highway road development project.

The contract stated that the employee’s engagement was ‘limited to this project only’ and would end ‘either when the project concludes, or the work for which [he was] employed on this project concludes’. At the end of the engagement and subject to his performance and the employer’s operational requirements, the employee may be offered a new engagement.

In a provision headed ‘Termination of Employment’ the contract provided that if, at the end of the engagement, the employee was not offered, or he did not accept, a new engagement, his employment would be terminated in accordance with the employment agreement.

The employee was notified that ‘due to the successful completion of your engagement’ on the project his employment would end that day and he would receive one week’s pay in lieu of notice.

The employee challenged the dismissal under the FW Act’s unfair dismissal scheme. However, the employer argued the employee had not been dismissed because he was employed under a contract of employment for a specified task and the employment has terminated on completion of the task.

In past decisions the Fair Work Commission (FWC) has ruled that a ‘task’ is a piece of work to be performed or undertaken. Task does not necessarily mean the same as a role, job or project which the employee is engaged to perform.

To be a contract of employment for a specified task, the contract must require the employee to carry out a specified task.

The task must be specified, i.e. it must be identified in definite terms, so that there is no doubt when it is completed.

The contract of employment must have been entered into for the purpose of the performance and completion of that task.

If an employee engaged under a contract for a specified task agrees, during the performance of the contract, to undertake some other work for the employer that was peripheral to the original contract, this might jeopardise the task-based nature of the contract.

In the Lendlease decision, the FWC ruled that the employment contract did not specify the task that was required to be performed by the employee, or when it would be completed. Rather, the contract permitted the employer to direct the employee to perform any duties or tasks and to unilaterally determine, at any time, when the work for which the employee was employed on the project had been completed. Therefore, the employee was not employed under a contract of employment for a specified task.

Moreover, the employee’s employment did not end because he had completed any particular task.

Instead, the employer decided to end the employment because it decided it did not need as many employees as it did performing the tasks performed by the employee. The employee’s employment relationship did not terminate according to the terms of the employment contract – it was initiated by the employer.

The FWC found the dismissal was harsh and unreasonable and ordered the employer to pay the employee $728.62 in compensation.

Need to know more about employment contracts?

The Employment Law Practical Handbook contains a three part chapter dedicated to employment contracts:

E1 Employment Contracts: Part 1 – Drafting a Legally Enforceable Contract

E1 Employment Contracts: Part 2 – Terms and Clauses

E1 Employment Contracts: Part 3 – Interaction with Industrial Instruments

This is just one of more than 80 chapters in the Handbook that cover all aspects of employment law.

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