Redundancy and fixed-task employees

If an employee is hired / employed for a specific project, when it comes to the end of the project, is the employee redundant (ie entitled to severance pay)?

This is a question we receive from time to time and relates to the actual definition of a 'fixed task' employee.

Where an employee is hired for a specific project or task, they are usually employed under what is called a ‘fixed-task’ contract of employment. This sort of contract is similar to a fixed-term contract but rather than being for a specified period of time, it is for a specified task.

Under the Fair Work Act 2009, an employee who is employed under a fixed-task contract of employment will be excluded from the redundancy pay provisions where their contract of employment comes to its natural end (i.e. once the task that they were employed to carry out is complete).

However, if an employee is not under a ‘true’ fixed-task contract of employment then the employee may not be excluded from an entitlement to redundancy pay. In order to be a true fixed-task arrangement, a number of elements must be present. These include:

• That the task is clearly defined in the contract. NOTE: In defining the task, the contract would need to describe the specific work that the employee was engaged to carry, out rather than a vague statement about the project
• That the employee has not engaged in duties that fall outside the scope of their fixed-task contract
• That the employee has not worked beyond the completion of the task they were engaged to carry out

Further, if the task has not come to its natural end at the time the employee’s employment is terminated (for reasons of redundancy or otherwise), then the employee may be able to claim payment for the remaining period of the contract.

It would also be pertinent to consider the following questions when determining whether there could be an entitlement to redundancy pay:

• Is the employee under an enterprise agreement with redundancy pay provisions that apply to fixed-task employees? Or is there a policy in place with such provisions?
• Does the employee’s contract of employment have redundancy pay provisions that could apply in these circumstances?