From 6 December 2023, there will be significant changes made to the regulations surrounding fixed term contracts, and as a business owner, it is crucial to be well-informed about these updates. These provisions are subject to an earlier date if set by the Australian Government, so staying ahead of the curve is essential.

What are the key changes?

Duration restrictions – Employers will no longer be able to employ individuals on fixed term contracts that last for two or more years, including any extensions. Additionally, the contract cannot be extended more than once.

Substantially similar roles – A new fixed term contract cannot be issued for a role that is the same or substantially similar to previous contracts, in circumstances where there has been significant continuity of the employment relationship between the end of the previous contract and the new one, and any of the following conditions are met:

  • The combined duration of the contracts is two or more years;
  • The new contract has the potential for renewal or extension; or
  • A previous contract was extended.

Avoidance of restrictions: Employers are prohibited from taking certain actions to bypass these new restrictions. For instance, an employer cannot delay re-engaging an employee for a specific period or hire someone else to perform the same or substantially similar role in order to avoid the fixed term contract limitations.

Are there any exceptions?

Exceptions to the new regulations will be in place for fixed term contracts used for training arrangements or if the employee is covered by an award that permits fixed term contracts under the circumstances mentioned above.

What do employers need to do?

From 6 December 2023, employers must provide employees being engaged on new fixed term contracts with a Fixed Term Contract Information Statement. This statement will contain important details and will be available on the relevant website before the implementation date.

In case of disputes related to these new requirements, the Commission will be able to hear and resolve issues. Additionally, employees will have access to the small claims court to pursue civil action if needed.

As a business owner, it’s important to adhere to these new regulations and ensure compliance with the updated fixed term contract rules. This may involve reviewing your current employment practices and making necessary adjustments to avoid any legal complications.

By staying informed and proactive, you can navigate these changes smoothly and continue to maintain a fair and productive working relationship with your employees. Remember, informed compliance is the key to a successful business.

Get in touch with our team if you need further guidance, we can help.

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