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Nov 13, 2023
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.
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 firstname.lastname@example.org.
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