New Rules for Fixed Term Contracts from 6 December

Amongst the festive celebrations and end of year holidays there are a couple of key dates to be aware of. From 6 December 2023, there are new rules for when an employee is engaged on a fixed-term contract and new rules if that fixed term is to be extended (or a consecutive contract offered). In addition, any Enterprise Agreement created prior to 2010 will automatically terminate on 7 December 2023 – more details here.

A fixed term contract sets out a specific period of employment (a maternity leave contract for example may have a set period of 12 months, or the employment of someone for the completion of a specific project may have a deadline after which the contract will end).

Employees engaged under a fixed term contract must be given a Fixed Term Contract Information Statement (FTCIS) and if they are new to your business they should also be given the Fair Work Information Statement (required for all new employees).

The three main rules regarding fixed term contracts:

1. Time Limitations – a fixed contract cannot be longer than 2 years
2. Renewal Limitations – cannot be extended or renewed more than once and the initial contract coupled with the extended period cannot be longer than 2 years
3. Consecutive Contract Limitations – you cannot employ someone on a new fixed term contract if, the contract is mainly the same work as a previous fixed term contract or permanent position they held, particularly if there isn’t a substantial break in the employment relationship between the previous and new contracts.

There are some exceptions the to above conditions including where the employee under a fixed-term contract has specialised skills, is an emergency or essential worker or is paid above the high-income threshold. Those employed under a government-funded contract and/or are in a governance position may have exemptions on the time and/or renewal limitations. Apprentices and trainees, for example, are able to receive a fixed term contract equal to the length of their apprenticeship or training agreement.

If you have a special or interesting scenario or need and you are not sure whether these rules will apply to you, please get in touch with Wendy Jeffery-Lonnie (GPHR Director) at wendy@gphr.com.au for practical advice and support.