As of December 6, 2023, certain fixed-term contracts are unlawful under the Fair Work Act 2009 (Cth) (FW Act).
Our employment lawyers explain the new rules and what businesses need to consider when using fixed-term contracts for their employees.
A fixed-term contract is a contract with an employee that has a set end date, which may be after a set period of time, a season or for a project. The FW Act now restricts the use of these contracts by prohibiting:
Employers must also give new employees who enter into a fixed-term contract the Fixed Term Contract Information Statement published by the Fair Work Ombudsman.
Failure to comply with these rules may expose employers and any accessories to civil penalties under sections 333E (restrictions on entering fixed-term contracts) and 333K (providing the Information Statement) of the FW Act.
Yes, there are several exceptions under section 334F, including:
If your business or employees may qualify for an exemption, we recommend you obtain legal advice before proceeding.
No, section 333H prohibits employers from making changes to the timing or terms of a fixed-term contract to avoid the operation of section 333E. The following are expressly prohibited under these anti-avoidance provisions:
Employers need to be careful when allowing fixed-term employees’ employment to “roll over” past the end date of their contract of employment.
Before the changes, the Fair Work Commission already warned that rolling over fixed-term contracts could result in the employment being viewed as permanent. Under the new rules, if a contract contains a prohibited term, it will be deemed ineffective, and penalties may apply. Allowing a contract to roll over may also breach section 333E.
Employers should review all fixed-term arrangements and consider transitioning employees to permanent contracts or exploring other workplace arrangements.
While fixed-term contracts may still be used in some situations, businesses must ensure they comply with the updated FW Act.
We recommend seeking legal advice and review existing and future contracts to avoid breaching the legislation.
Written By CCIWA Editor
CCIWA, Business Law WA and REEFWA has taken all reasonable care in preparing this document. The contents of this document do not constitute legal advice and should not be relied upon as such. Specific advice for your situation should be sought from CCIWA, Business Law WA or a professional adviser before any action is taken. Neither REEFWA, CCIWA nor Business Law WA accept responsibility for any claim that arises from any person acting or refraining from acting on the information contained in this document.
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