The changes to the Fair Work Act 2009 (Cth) (“FW Act”) fixed-term contract rules begin from 6 December 2023. Is your organisation ready for these changes?
On 6 December 2022, the Fair Work Amendment (Secure Jobs, Better Pay) Bill 2022 passed both houses of parliament. Among the long list of amendments to the FW Act were changes to the rules around using fixed-term contracts. We previously issued a brief EMA Note of those changes which you can read here.
Brief Review of Changes
From 6 December 2023, the maximum cumulative term on a fixed-term contract will be two years—that is, whether it is a single fixed-term contract or consecutive fixed-term contracts, the maximum total duration must be two years. There are also strict anti-avoidance provisions, including preventing an employer from hiring a different employee in the same job at the end of a contract term to get around the two-year limit.
Penalties apply for breaches of these rules.
There are some exemptions to the two-year limit, including for employees earning above the high-income threshold.
What Should I Be Doing?
Organisations should review what fixed-term contracts they have in place, as well as their current practices around the use of fixed-term contracts. Anyone wanting to enter into fixed-term contracts from 6 December 2023 should ensure that their use of the contract will be compliant with the new rules. If you are unsure whether your proposed contract will comply with the new rules, you should seek specific advice.
If you engage anyone on a fixed-term contract from 6 December 2023, you will need to provide them with the Fixed-Term Contract Information Statement, which will be available on the Fair Work Ombudsman’s website from 6 December. Note: we will update this EMA Note on our website with a link to the information statement once it is published by the Fair Work Ombudsman.
Require further information/assistance?
This EMA Note is not comprehensive advice about your situation and does not cover all your obligations. If you require further information or advice, please contact your Consultant.
