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Fixed term contracts change

Nov 13, 2023


  • 2min

Fixed term contracts change

Industry News, Legislative Changes
Fixed term contract changes are coming into effect on 6 December 2023. The new rules focus on information transparency and time limitations on how fixed term contracts work. The changes aim to phase out fixed term contracts that should be part-time or full-time employment contracts.

The rules, or limitations, that are coming into effect focus on how long a fixed term contract can be, renewing a fixed term contract and how many times it can be renewed, and employing a person on consecutive contracts.

man in flannel shirt and cargo pants overlooks a field being ploughed by a red tractor
Fixed term contracts are commonly used in agriculture, transport, and seasonal work industries.
The changes also include the legal requirement for employers to provide team members with a Fixed Term Contract Information Statement (FTCIS) if they are engaged on a fixed term contract.
Time limitations:
  • A fixed term contract can’t be for longer than two years, including extensions and renewals.
  • Fixed term contracts can’t have an option to extend or renew the contract so that the employment period is longer than two years.
  • They cannot be extended or renewed more than once.

There are also rules surrounding consecutive contract limitations that reinforce the new rules. An employer cannot employ someone on a fixed term contract if the new contract is for the same work as a previous one. A substantial break in the employment relationship must exist before signing a new fixed term contract.

The new time limitation rules also apply to consecutive contracts; the employer cannot employ someone if the total period of employment for the previous and new fixed term contracts is more than two years or if the new fixed term contract can be extended or renewed.

The changes also include the legal requirement for employers to provide team members with a Fixed Term Contract Information Statement (FTCIS) if they are engaged on a fixed term contract.

The new limitations make keeping team members on ongoing fixed term contracts harder. Fixed term contracts are not a replacement for part-time or full-time employment contracts.

As with most employment updates, there are exceptions to all of these rules. Exceptions include specialised skills,  training arrangements, essential work, emergency circumstances or temporary absences, high income team members, government funded contracts, governance positions and if there are any award provisions for fixed term contracts.

You can visit the Fair Work Ombudsman for more information. They also have a breakdown of the changes with examples.

If you need help creating new employment contracts, please contact our HR experts on 1800 868 254 or email us at info@totalhrm.com.au.

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