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22 March 2016 If you employ a worker for a particular project, can you terminate them at the end of that project?

By Warwick Ryan, Partner

IN BRIEF

Today in the world of Australian property, contingent workers fit the bill.

Contingent workers are the freelancers, or independent professionals and consultants, or temporary contract workers, who provide their services to an organisation on a non-permanent or contract basis.
 
There's recently been a big increase of fit-outs in residential property across the country. From Warringah Mall in NSW, to the Pacific Fair Centre in Brisbane, to Ringwood's Eastland Shopping Centre in Victoria (to name a few), refurbishments are increasing the appetite for contingent workers in every state.
 
However, the fear of 'unfair dismissal' claims often haunts employers as they weigh up the decision of whether to hire a casual worker.


The Facts:

It is important to remember that unfair dismissal is not available for everyone. If someone is truly a 'casual employee' (i.e. only works for you sporadically), then they are not entitled to access an unfair dismissal claim. Likewise, if someone is under probation (formerly known as the minimum employment period), you can terminate them during that period without any fear of the FWC barging down your doors. For businesses with less than 15 staff, that period is 12 months and for larger businesses six months.

But what if you hire an employee for a particular project or task and at the end of that you dismiss them. Are you allowed to do that?

One of the exceptions to unfair dismissal is if a person is employed:

"…for a specified period of time, for a specified task, or for the duration of a specified season and the employment has terminated the end of the period, on the completion of the task or at the end of the season".

Nominating a period of time can be tricky because you don't know exactly how long a project is going to run.  Instead, engaging them until the completion of a particular task can be a better approach.  

One central question that I am often asked is: how do you define a "task"? Given a recent decision of the FWC as to what a task is, the message is that if you want to employ people for a specified task or project, you can.  However, it is important that it be clear to all parties when that arrangement comes to an end.  That will be the case by ensuring the definition of the task is specific, so that there is no uncertainty as to when it finishes.

In Shop Fitting, the projects are often short – so this may not often arise as an option– noting that the probation period will generally be a sufficient way of avoiding unfair dismissals. However, they may not always be an option.

Conclusion:

So, in short, unfair dismissal does not apply to:

  • truly casual employees (ie. where they are engaged infrequently);

  • employees who have worked for you for less than 6 months (if > 14 staff) and 12 months (if < 15 staff); or

  • staff members engaged on a fixed term or fixed period contract.

For further information, please contact:

Warwick Ryan, Partner  |  Phone: +61 2 9233 5544  |  Email: wpr@swaab.com.au

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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