December 6 deadline for contract changes
New amendments to the Fair Work Act 2009, which significantly limit the use of fixed term employment contracts, take effect from this Wednesday 6 December 2023.
In brief, fixed term contracts (including maximum term and temporary contracts), entered into on or after 6 December 2023, are limited to a maximum period of two years and/or one renewal, including previous periods of employment, unless limited exceptions apply.
Therefore, unless an exception applies, a term in an employment contract that restricts the period of employment for more than two years (including previous employment), and/or provides for more than one renewal (including previous renewals), that is entered into on or after 6 December 2023, will have no effect, with the result that the contract will be ongoing and not fixed. The employer will also have breached the Fair Work Act and may face civil penalties under the Act.
Details of the amendments can be found in the Guidelines - Adapting to the changing landscape of temporary and fixed term contracts on the CER Portal. To request access please click here.
Regulations proclaimed on 23 November 2023 create additional exceptions to those referred in our Guidelines. However, these additional exceptions, which will need to be considered case by case, are restricted to organised and high-performance sport, philanthropic entities which are registered as a charity, live performance industry and higher education. These Regulations also provide the method of calculating pro rata high income threshold for the purpose of the existing exception.
If you have any concerns or questions in relation to your current temporary and fixed term contracts, please do not hesitate to contact us.