September 29, 2023

As an employer, have you ever ever questioned whether or not you may terminate a set time period worker’s fixed-term employment contract earlier than the top date? Earlier than you do that, you ought to be cautious, as doing so would possibly result in some authorized penalties.

On this article, we’ll clarify what a set time period contract is, whether or not a set time period contract will be ended earlier than the expiry date, whether or not fastened time period contracts have discover intervals and solutions to different incessantly requested questions.

Learn alongside!

What’s a set time period contract?

Fastened-term contracts are contracts of employment that restrict an worker’s employment to a selected time period. Fastened phrases are typically used when workers are required to work on a selected venture, and due to this fact they’re typically restricted to a selected timeframe to finish that venture. 

For employers they supply a cheap option to increase the variety of workers they’ve throughout busy intervals and through massive tasks. For instance, retailers will typically rent workers over Christmas on fixed-term contracts with a purpose to handle the vacation rush.

Can a set time period contract be terminated early?

Fastened time period contracts will be terminated early previous to the expiry date of the contract. For the termination of employment to be authorized, there have to be a legitimate purpose. Typically, fixed-term employment agreements come to an finish when there was a breach of contract by one of many events to the employment relationship.

Different legitimate causes that an worker’s fastened time period employment contract could possibly be ended previous to the expiry date embody misconduct, poor efficiency or if there have been operational adjustments.

What are the important thing issues for employers when utilizing fastened time period contracts?

Employers who use fixed-term contracts ought to keep away from utilizing fastened time period contracts for a similar worker repeatedly. It is because overusing fastened time period contracts via offering a collection of fixed-term contracts one-after-another to the identical worker as every finish could result in them being thought-about a full-time worker. The consequence of that is if the fixed-term worker turns into a full-time worker, they’ll require completely different therapy and entitlements below the legislation.

The Nationwide Employment Requirements employment entitlements full-time workers have embody the next:

Moreover, though the termination of fixed-term contracts is feasible, employers needs to be cautious. It is because whether or not the termination of the contract is feasible will depend upon the phrases of the contract. Due to this fact, if the termination of the contract violates the contract phrases, the employer could face authorized penalties or unfair dismissal claims from the worker.

Expectation of employment

Staff below a fixed-term contract will typically have a respectable expectation that the interval of employment will proceed during the contract. It’s, due to this fact, affordable to keep up the contract for its meant length. Due to this fact, employers will typically be required to pay out the worker for the remaining time on the contract. 

These ideas will comply with that of Australian contract legislation with regard to the termination of a contract. Specifically, if employment continues for a interval of 6 months prior, or 12 months within the case of a small enterprise, the worker may have a respectable declare for unfair dismissal for untimely termination.

Because of this expectation, the worker is entitled to an relevant discover of termination previous to termination.

Reputable termination

Nonetheless, it is very important word that employers can terminate fastened time period contracts when there are respectable causes for doing so. As an employer, it’s vital to stipulate within the fastened time period contracts the grounds on which the contract will be terminated. The commonest grounds which are included for a contract to be terminated embody the next:

  • Misconduct
  • Breach of the contract
  • Repudiation of the contract
  • Poor efficiency

Moreover employers can legally terminate fixed-term contracts for real redundancies. Section 389 of the Fair Work Act 2009 (Cth) outlines the which means of real redundancy. Real redundancy refers back to the following:

  1. The worker’s job not requires completion as a consequence of adjustments to the employer’s enterprise’s operational necessities
  2. The place the employer has made the worker redundant via complying with the related enterprise settlement or fashionable award in relation to informing the worker with regard to their redundancy

Contrastingly, an worker’s redundancy is not going to be thought-about real if the worker might have fairly been transferred to a unique place within the employer’s enterprise or to an related entity of the employer’s enterprise.

Does a set time period contract have a discover interval?

The Australian Government’s Fair Work Ombudsman states that there isn’t a requirement for discover intervals for workers who’ve been employed below a fixed-term contract. 

What to incorporate in a fixed-term contract?

As an employer, while you’re utilizing fastened time period contracts, you must be sure to embody clear contract phrases, whether or not the contract is getting used for a selected venture or for a specified time period. Due to this fact, you must keep away from utilizing phrases that require interpretation, similar to ‘vacation interval’. 

Moreover, you must clearly define the boundaries of acceptable behaviour and the actions that will result in the termination of an worker’s employment contract. That is essential to permit you to legitimately and legally terminate the contract because of the worker’s actions. Staff needs to be made conscious of the motion and conduct that will result in the termination of their employment contract. 

Lastly, you must guarantee that there’s a clear process for the conclusion of the contract. This must also embody phrases describing how you can prolong the contract, the way it could also be transitioned into a brand new venture and the way the present one will conclude.


In the end, fastened time period contracts will be ended early. Nonetheless, that is solely attainable below sure situations and the place there’s a legitimate purpose for the employment contract to be terminated. 

As an employer, if you happen to’re nonetheless feeling not sure about whether or not you’ll be able to finish your worker’s fastened time period employment contract, you must rent a lawyer for authorized recommendation. 

Alternatively, if you happen to’re an worker and your fastened time period contract has been ended early, and also you don’t suppose it has been ended for a legitimate purpose, you must rent a lawyer for authorized recommendation to find out whether or not you must take authorized motion towards your employer.