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On 6 December 2023, new restrictions on the use of limited (“fixed”) term contracts under the Fair Work Act 2009 (Cth) came into effect.
January 12, 2024
On 6 December 2023, new restrictions on the use of limited (“fixed”) term contracts under the Fair Work Act 2009 (Cth) came into effect. The laws prevent employers from using limited term contracts for longer than two years. This also applies to extensions or renewals, including extensions or renewals of contracts entered into prior to the changes coming into effect, if the total period would exceed two years. Renewals can be offered no more than once, regardless of the length of the term.
If a prohibited contract is entered into, employers may be liable for pecuniary penalties. A contravention does not invalidate the whole contract, but it can render the limited term as having no effect.
The provisions also contain anti-avoidance measures preventing employers from:
The provisions do not apply to casuals on limited term contracts. Employers can rely on exceptions for:
Employers are also required to issue employees engaged on a limited term contract with a Fixed Term Contract Information Statement.
If an employee under a limited term contract believes that their contract contravenes the new provisions they can apply to the Fair Work Commission, but first they must attempt to resolve the matter with the employer internally before doing so. Similar to the standard dispute resolution jurisdiction, the Fair Work Commission can only arbitrate with the consent of both parties.