New rules for Fixed Term contracts from 6 December 2023
16 November 2023
Author: Stephen Curtain - Our People
As part of the Closing the Loopholes legislation contracts will not be allowed to be for a fixed term of longer than 2 years. This includes contracts which can by agreement be extended beyond 2 years. Nor can fixed term contracts be extended more than once, even if the total period is for less than 2 years.
Furthermore, an employer cannot employ someone on a new fixed term contract if:
- the contract is for mainly the same work as a previous fixed term contract; and
- there is no substantial break in the employment relationship between the two contracts; and
any of the following applies:
- the total period of employment is more than 2 years; or
the new fixed term contract can be extended; or
the previous fixed term contract was extended; or
there was an initial fixed term contract before the previous contract that:
- was mainly for the same work; and
there was continuity in the employment relationship between the two contracts.
There are exceptions and these are:
- high income employees – currently those earning more than $167,500 p.a.
- where the relevant award allows it
- contracts for specialized skills – e.g. Sporting coaches
- training under Federal or State laws – e.g apprenticeships
- essential work – e.g. doing essential work such as fruit picking during harvesting
- emergency situations – e.g. replacing an essential services worker
- governance positions for limited times based on the body’s rules – e.g. board position
- government funded contracts for more than 2 years and funding not likely to be renewed
Employers will be required to provide employees employed on fixed term contracts with a Fixed Term Contract Information Statement which is yet to be finalized.
Please contact our employment law team if you’d like to consult a lawyer before employing anyone on a fixed term contract or renewing or replacing such a contract. Stephen Curtain, Special Counsel (firstname.lastname@example.org) has many years of experienced and would be pleased to assist.