Yes, the employer needs to confirm that it will not be extending the contract, preferably by email and registered mail.
The employer should be cautious and review to ensure that the change in employment terms was initiated by the employee and not under duress. As well, confirm there was no unwritten promises, guarantees, etc.
You would not want to be on the hook for a termination severance that could potentially date back to their initial contract start date.
HR Insider staff