Restrictions on Fixed Term Contracts Effective 6/12/2023

The restrictions on Fixed-Term contracts of Employment resulting from the amendments to the Fair Work Act in December 2023 commence on the 6/12/23. These changes place limitations on the duration & number of fixed-term employment contracts. The intent of this change is to eliminate fixed-term contracts as an avenue of job insecurity for employees when they have been used for the same role over an extended period or employees have been on rolling contracts.

Restrictions on Fixed-Term Contracts

1. A fixed-term contract of employment cannot be for a duration of more than two years; or

2. No more than two consecutive fixed-term contracts can be entered (duration must be less than two years)

Exceptions to this rule

a) the contract has been entered into for a clear and specific job that requires specific skills

b) or employee engaged in a situation where essential work is been undertaken

c) employee earns more than the high-income threshold under the FWA

Note: list of exceptions is not definitive

The key risk for an employer, in the scenario of a fixed-term contract exceeding a two-year period of more than two fixed-term contracts, the termination provision of the fixed-term contracts will be void. The contract morphs into a permanent contract of employment.

Actions to be undertaken

Review your fixed-term contracts of employment & the protocols around entering into fixed-term contracts of employment.

Update your workforce planning.

An employee entering into a Fixed Term contract will need to be provided with a Fixed Term Contract Information Statement (FTCIS)

Note: the FTCIS statement is not yet available as it has not been published in the Government Gazette.