Fixed-Term Contracts: The New Rules and What You Need to Know
Fixed-Term Contracts: The New Rules and What You Need to Know
If you are an employer who uses fixed term contracts, you need to be aware of the new rules that will come into effect on 6 December 2023. These rules are part of the Secure Jobs, Better Pay legislation introduced by the Australian Government. In this blog post, we will explain what these changes mean for you and how to comply with them.
What are fixed-term contracts?
Fixed term contracts are employment contracts that last for a specific period of time. They can be used for various reasons, such as covering a temporary vacancy, completing a project, or meeting seasonal demand. Fixed term contracts can offer flexibility and certainty for both employers and employees, but they also have some limitations and risks.
What are the new rules for fixed-term contracts?
The new rules for fixed term contracts aim to prevent the misuse of these contracts and to protect the rights and entitlements of employees. The main changes are:
- Fixed term contracts can only be up to 24 months long. If an employer wants to use a longer fixed term contract, they must have a genuine operational reason and get written approval from the Fair Work Commission.
- Fixed term contracts can only be extended once, for up to 12 months. If an employer wants to extend a fixed term contract more than once, or for longer than 12 months, they must have a genuine operational reason and get written approval from the Fair Work Commission.
- Employers cannot offer new fixed term contracts that are substantially similar to previous contracts, unless there is a break of at least six months between the contracts. This is to prevent employers from using successive fixed term contracts to avoid permanent employment obligations.
- There are some exceptions to these rules, such as for casual employees, apprentices and trainees, and employees covered by certain enterprise agreements or modern awards.
Fixed Term Contract Information Statement
One of the new requirements for employers is to provide a Fixed Term Contract Information Statement (FTCIS) to employees who enter into new fixed term contracts on or after 6 December 2023. The FTCIS is a document that explains the key features and implications of fixed term contracts, such as:
- The duration and expiry date of the contract
- The rights and obligations of both parties
- The consequences of ending the contract early or renewing it
- The options available at the end of the contract
- The sources of information and assistance for fixed term contract employees
The FTCIS must be given to employees before, or as soon as possible after, they sign a new fixed term contract. It can be provided in person, by email, or by any other method that ensures the employee receives it. The FTCIS will be available to download from the Fair Work Ombudsman website on 6 December 2023.
Don’t forget the Fair Work Information Statement
In addition to the FTCIS, employers must also provide new fixed term contract employees with the Fair Work Information Statement (FWIS). This is a separate document that provides information about the minimum workplace rights and entitlements under the Fair Work Act 2009, such as:
- The National Employment Standards
- Modern awards
- Enterprise agreements
- Pay slips and record keeping
- Protections at work
- How to resolve workplace issues
- Where to get help and advice
The FWIS must be given to employees as soon as possible after they start work. It can be provided in person, by email, or by any other method that ensures the employee receives it. You can download the FWIS from the Fair Work Ombudsman website.
Conclusion
The new rules for fixed term contracts are designed to promote fair and secure employment practices in Australia. They will affect both employers and employees who use fixed term contracts, so it is important to understand them and comply with them.
If you need assistance with managing your fixed term contracts or any other HR matters, you can contact MMC HR at hello@mmchr.com.au or by using the Contact Us Form.