Do you have fixed term contracts in place?

Did you know that as part of the Australian Government’s Secure Jobs, Better Pay workplace law changes, rules about using fixed term contracts are changing on 6 December 2023?

It’s important that you are across these changes which include new rules about: how long fixed term contracts can be, extending fixed term contracts and offering new contracts that are substantially similar to previous contracts. There are some exceptions to these rules that apply.

What you need to know:

Time limitation:

A fixed term contract can’t be for longer than two years, including extensions and renewals. 

Renewal limitations:

A fixed term contract can’t have an option to:

• extend or renew the contract so that employment period (including the extension or renewal period) is longer than 2 years, or

• extend or renew the contract more than once.

Consecutive contract limitations:

An employer can’t employ someone on a new fixed term contract if:

• the contract is for mainly the same work as a previous fixed term contract

• there isn’t a substantial break in the employment relationship between the previous and new contracts, and

Any of the following apply: 

• the total period of employment for the previous contract and the new fixed term contract is more than 2 years, or

• the new fixed term contract can be renewed or extended, or

• the previous fixed term contract was extended, or

There was an initial fixed term contract in place (before the previous contract) that: 

• was for mainly the same work, and

• there was continuity of the employment relationship from the period of time (if any) between the initial contract and the previous contract.

There are of course exceptions to the new rules and the new limitations on fixed term contracts don’t apply in some situations including (but not limited to): specialised skills, training arrangements, government funded contracts and high income employees. If one of these situations apply, an employer can offer a fixed term contract and the rules outlined above won’t apply.

Fixed Term Contract Information Statement:

From 6 December 2023, employers must give employees they’re engaging on new fixed term contracts a Fixed Term Contract Information Statement (FTCIS).

The FTCIS will be available to download from the Fair Work Ombudsman on that date. We’ll also send you a reminder in our edition of the South Australian Business Chamber Today on 7 December 2023.

The FTCIS must be provided to employees before, or as soon as possible after, they enter into a new fixed term contract.

Reminder: Fair Work Information Statement:

In addition to the FTCIS, employers need to provide new fixed term contract employees with the Fair Work Information Statement. This is a separate document that provides information about minimum workplace rights and entitlements. For more information see Fair Work Information Statement

Now is a good time to have your contracts reviewed and/​or for you to seek advice about these important changes. The South Australian Business Chamber can talk to your about the best option for your business.

Need help?

For the South Australian Business Chamber Members, our Business Advice Hotline is only a phone call away and our advisors can talk assist you. Call (08) 8300 0000 (select option 1). Our workplace consultants who are experts in industrial relations can assist you with implementing a strategy to address your zombie agreement. 

Not a Member? Not a problem. If you are not a the South Australian Business Chamber Member now is the right time to join.