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Some seasonal workers can make unfair dismissal claims

Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 80, 17 May 2005

The Federal Workplace Relations Act excludes certain workers from bringing an unfair dismissal claim, including workers engaged for a ‘specified period of time’ or a ‘specified task’. The recent decision of the Full Bench of the Australian Industrial Relations Commission in SPC Ardmona Operations Ltd v Esam & Organ limits the circumstances in which a worker is excluded by the operation of these two exemptions.

The Full Bench rejected the employer’s contention that two seasonal fruit processors had been engaged for a ‘specified period of time’. The Full Bench determined that as the employment contracts were stated to run until the end of the fruit season (the timing of which was uncertain and depended on factors such as weather conditions), and contained a broad right to terminate on two days’ notice, the period of the employment contracts was indeterminate and not for a ‘specified period of time’.

The Full Bench also rejected the employer’s contention that the contracts were for a specified task, as the contracts could be terminated by giving two days’ notice prior to the completion of the task.
The Full Bench set out general principles for determining whether a contract is for a ‘specified period of time’ as follows: A contract could still be for a ‘specified period of time’ if it provided that after a specified period, it may be reviewed and extended by consent of the employer and the worker.

Further, where a contract provides for termination on the basis of misconduct or other breach, it may still be for a ‘specified period of time’ even though it may be terminated early in these limited circumstances. However, where a contract contains a broad or unconditional right of termination, the period of the contract is indeterminate and not for a ‘specified period of time’.
Unsurprisingly, given the number of seasonal workers affected by this decision, there is discussion of pressure by employers on the Howard Government to legislate to overcome this ruling.

HR Tips

If an employer wishes to improve the chances that an employee is engaged for a ‘specified period of time’ or ‘specified task’, and therefore excluded from making an unfair dismissal claim:

• the contract of employment should specify exactly when the employment will end. The contract should not contain a broad or unconditional right of termination, but can contain a provision relating to dismissal for reason of serious misconduct; and

• depending on the circumstances, consider including a termination provision which clearly states that the employer can terminate the employment by providing notice (or payment in lieu of notice), if the employee materially breaches the contract.