Many organisations employ people on a fixed term contract to
cover a position for a certain period of time. The contract will
make it clear that the position will only be for a certain amount
of time, at the end of which the contract will expire.
You might think that any issues that arise with the employee
during the fixed term will go away once the contract expires, so
that you don't need to deal with them by ignoring them until
the contract expires.
A recent decision of the Federal Circuit Court has confirmed
that this is not the case. In the case of Crawford v Steadmark
Pty Ltd, Ms Crawford was employed as a Store Manager for
Steadmark, which operated lingerie stores under the brands Simone
Perele and Betty McDowell. Her contract was for a fixed period of
six months, but with provision for extension.
During Ms Crawford's employment, her performance as Store
Manager was strong and there appeared to be no reason for her
employer to have concerns about her performance. Ms Crawford
reported directly to Ms Vanessa Galina, the National Retail
Manager, and also reported to Mr Michael Rosenfeld, the Managing
About a month before Ms Crawford's contract was due to
expire, she attended a work function with Mr Rosenfeld and other
staff members. Ms Crawford stated that Mr Rosenfeld sat down next
to her, rubbed his leg against hers, and asked Ms Crawford to meet
with him to discuss her plans for the business. After he repeated
this request a few times, Ms Crawford said that she said to him
"Michael, I will never meet with you, except with Vanessa and
at the office to discuss my future" and then turned her back
The next day, Ms Crawford called Mr Rosenfeld, to provide the
store's figures for the day. Mr Rosenfeld allegedly said
"Thanks very much for that, now that you have ruined my
night,", and referred to her with an offensive epithet. Ms
Crawford was upset, and emailed Ms Galina to let her know that due
to Mr Rosenfeld's inappropriate behaviour, she would not be
attending a work function that night. Ms Galina responded about two
hours later, saying that she wasn't entirely sure what had
happened, and that they would discuss tomorrow. Ms Galina never
followed up the email with Ms Crawford, and never discussed the
email as promised, despite Ms Crawford following up the email over
the next three weeks.
A few days before the contract was to expire, Ms Galina emailed
Ms Crawford to set up a meeting for the day before the contract was
due to expire. Ms Crawford was absent from work on the day the
meeting was to be held. The following day, the contract expired.
The day after the contract expired, Ms Galina sent Ms Crawford a
letter stating that her employment would not be renewed because of
Ms Crawford's "unsuitability" for the position (no
Ms Crawford brought a claim for adverse action, alleging that
the reason her employment was terminated was not because of
performance reasons, but because she had complained about Mr
Rosenfeld. Mr Rosenfeld disputed Ms Crawford's claims. Ms
Galina denied that Ms Crawford told her about exactly what had
happened, and also said that the decision not to extend Ms
Crawford's employment had nothing to do with the complaint, and
everything to do with Ms Crawford's poor performance, which
they now attributed to low sales figures and poor interactions with
The Court found that the decision not to (re)employ Ms Crawford
was adverse action, and that Ms Crawford's complaint about Mr
Rosenfeld was one of the reasons why she wasn't (re)employed.
The Court therefore found that Ms Crawford had made out her adverse
action claim, and was entitled to up to six months' pay as
So what are the lessons to be learnt from Ms Crawford's
case? Firstly, if you have an employee on a fixed term contract
which is due to expire or lapse, you should speak to the employee
and either confirm that the contract will expire, or discuss
extending it. Whatever you choose to do, make sure you do it before
the contract expires. If you notify the employee even one day after
the contract expired, like Ms Galina did in this case, then you
open yourself up to arguments that a new contract was formed, or
that the old contract was extended.
Secondly, if an employee raises an issue during the course of
their employment, you should acknowledge and deal with it properly,
rather than thinking the issue will go away upon the expiration of
the contract. If you fail to do this, there could be arguments that
you decided not to extend the contract because of the complaint. If
there are good grounds for termination, dealing with those properly
and at the right time will be much better than them appearing to be
an afterthought to cover ulterior motives.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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