New Horizons in Employment: Navigating the Updated Fixed-Term Contract Regulations
On 6 December 2023, there are new rules for employers who employ people (under the jurisdiction of the Federal Fair Work Act or a Federal Award) in regards fixed term employment contracts.
Fixed term contracts, from that date:
+ must not be for a duration of more than two years (and that includes extensions)
+ must not be extended more than once
+ must not be a new contract replacing a previous one for fundamentally the same role
+ must not be offered if there is a possibility of extensions beyond two years
The Fair Work Commission will shortly prepare an Information Statement that must be given by the employer to all people considering signing up to a Fixed Term Contract.
Of course there will be exemptions such as being allowed to enter into fixed contracts for genuine “start and finish on outcome” project work or where funding may only be for a limited period and is a once off (unlikely to be recurring) or for State Award/State Act covered employees (see below note for WA Employers).
NOTE FOR WA EMPLOYERS
Most employees are employed under the Fair Work Act. In WA employees of an organisation deemed a trading corporation are employed under the Fair Work Act and/or a Federal Award.
However many not for profit organisations in WA could be considered not to be a trading corporation and therefore those organisations would employ people under the Western Australian Industrial Relations Act (“the WA IR Act”) and/or a WA State Award predominantly the Social and Community Services (Western Australian) Interim Award (SACS Award WA).
Some WA not for profit organisations would be considered trading corporations as they earn income other than fundraising.
NFP Success can provide a view as to whether you are trading corporation however it can be hard to determine and we can also assist in connecting you to a lawyer with expertise in such a determination.
If you are based in WA and are deemed a non-trading corporation the SACS Award WA does allow for fixed term contracts and at this stage the WA IR Act does not mirror the national Fair Work Act legislation. This might (and likely) change in the near future and employers are encouraged to register with WA Wageline for employment law updates including changes to the WA IR Act and the SACS Award WA. Go here to register: https://www.commerce.wa.gov.au/labour-relations/subscribe-wageline-news
Whilst the SACS Award WA and the WA IR Act currently allows for fixed term contracts employers are encouraged to think carefully re continual extensions of fixed term contracts as the contract could be deemed a permanent contract of employment and the employee could (on end of contract) be entitled to severance pay and/or be entitled to make an unfair dismissal claim.
Recruitment and retention of staff may also prove challenging for employers who offer fixed term contracts compared to others who have don’t (or under the national system who can no longer offer them).
