Are your fixed term contracts as rigid as you think they are?

South Australian Business News

Elisa Luck

Thursday, April 18th 2024

Are you aware of the changes to the rules that apply when engaging employees on fixed term contracts, which came into effect from 6 December 2023?

A fixed term contract terminates at the end of a set period (for example, the contract ends on a set date or after a set period of time or a season). The new rules include a requirement for employers to give any employees they’re engaging on a new fixed term contract a Fixed Term Contract Information Statement (FTCIS).

Limitations are now in place regarding the usage of fixed term employment contracts. Employers who contravene these new amendments to the Fair Work Act may face penalties of up to $165,000 for a serious contravention, or up to $16,500 for a contraventions.

Our Business Advice Hotline and Consultants are getting lots of questions from our Members on fixed term contracts. Rest assured we are here to help! We are going to do a deeper dive into fixed term contracts and other key changes to the Fair Work Act at our webinar on22 May 2024 — join our webinar here

The restrictions that have been put in place include the following:

The fixed term must be for no longer than 2 years
Successive fixed term contracts cannot be entered in to where the total duration of the successive contracts would extend beyond two years
An employee not being engaged on either;
- Three consecutive contracts for the same (or similar) type of work/duties; or
- A second fixed term which was in succession to a previous fixed term which had already been extended or renewed or where the second fixed term contains an option for renewal or extension

There are a number of exemptions to the new limitations including (but not limited to):

Employees engaged to perform work for a special task or project using specialist skills
Employees who are engaged through a training arrangement
Employees who are engaged as essential workers during peak demand
Employees who are engaged during emergency situations

Need some advice or support on how to manage this in the workplace or maybe it’s time for a review of your casual employment contracts?

South Australian Business Chamber members can call the Business Advice Hotline on (08) 8300 0000 (select option 1).