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Wednesday, May 27, 2026

When Employment is More Than a Contract: Another Example - Maddocks

Legal Insights

It is now settled law that when the Fair Work Act (FW Act) speaks of termination of employment, it is referring to the relationship of employer and employee, rather than any particular contract which may operate within that relationship from time to time.

A well-known example was Khayam v Navitas English Pty Ltd [2017] FWCFB 5162, in which a Full Bench of the Fair Work Commission confirmed that in the context of a maximum term contract’s expiry, the employment relationship may well continue, despite that particular contract having come to an end. The question in such cases, when determining whether the employee has access to unfair dismissal and other remedies, is whether the employment relationship has been terminated and if so, was this pre-agreed or if not, is it at the employer's initiative.

Employers can find this confusing. True it is that every employment relationship is contractual, whether the terms are written, verbal or implied. But the contract is not the full story.

Importantly, as illustrated by a recent decision of the Fair Work Commission, the employment relationship might have commenced before a new employee has actually started work.

In this case, as is common, a contract is established before the employee commences to perform that contract. What if the employer has second thoughts? Is there an employment relationship already from which the employee must be terminated, thus giving them potential access to the general protections provisions...



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