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Your fixed-term employees can claim unfair dismissals! Don't let this happen to you

by , 12 April 2016
When it comes to fixed-term employees, the general understanding is that their employment with you is temporary, and that you don't have to renew their contracts.

But did you know that if you're not careful, the expiry of your employee's fixed-term contract could lead to an unfair dismissal?

'How can that be?' you may ask.

The answer has to do with whether or not your employee had a 'reasonable expectation' of renewal.

What this means is that if an employee, at the end of his fixed-term contract, had reasonable grounds to believe you'd renew his contract, and you don't renew it, it could end up being an unfair dismissal.

This may seem a little harsh. But all that's required of you, to stop this from happening, is to simply avoid certain situations which could bring about a 'reasonable expectation' of renewal in the first place.

And one of these situations has to do with what you say, promise, or even imply to an employee...

Let's take a look at this in more detail...


Be warned! The Labour Relations Amendment Act changes the way you treat fixed-term and temporary employees!

Click here to learn more...

Be careful of what you promise your employee

Be careful what you verbally say when you agree to the terms of the contract. For example, don't say, if there's still work to be done at the end of his contract, then you'll renew it.

This also includes what you say before you hire him, such as: 'If everything works out…' This can place you on thin ice when the fixed-term contract comes to an end and you don't want to renew it. Because whether you like it or not, you've probably planted the seed of expectation firmly in the fixed-term employee's mind.

NOTE: In order for this 'expectation of renewal' to be there, the promise needs to have come from a person with authority to enter into a contract with a prospective employee.

TIP: If you're adamant that you won't be renewing a fixed-term contract, don't just tell the employee! Write it down! Doing this will add more weight to the evidence that there couldn't have been a reasonable expectation of renewal.

*There is a situation to definitely avoid, otherwise your fixed-term employee could hold you for unfair dismissal.

To learn of several other situations which could lead to a 'reasonable expectation', simply page over to Chapter F 01 in your Practical Guide to Human Resources Management handbook.

If you don't already have this invaluable HR resource, click here to order your copy today. 

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