Restrictions in relation to fixed term contracts are set to come into effect today, 6 December 2023. The changes are found in Division 5 of Part 2-9 of the Fair Work Act 2009 (Cth) (FW Act). The restrictions on the use on fixed term contracts is one of several key changes that were implemented under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Secure Jobs, Better Pay Act).
We have previously written an article addressing the legislative amendments and implications of the proposed restriction on the use of fixed term contracts for employers, which is found here.
The focus of this article is on the most recent amendments to the Fair Work Regulations 2009 (FW Regulations) on 23 November 2023 by the Fair Work Amendment (Fixed Term Contracts) Regulations 2023 (Cth) that is relevant to the limited exceptions to the restriction on the use of fixed term contracts.
From today, FW Act requires a national employer who engages employees under a fixed term contract to do the following :
As outlined in our previous article, there are limited exceptions that apply to the legitimate uses of fixed term contracts. The most recent amendment to the FW Regulations explains the circumstances in which some of those exceptions will apply, which is discussed below.
The restriction on the use on fixed term contracts does not apply to a fixed term contract for which the employee’s earnings is above the high-income threshold. The amendment to the FW Regulations prescribes a method for calculating the high-income threshold for an employee engaged under a fixed term contract, who works part time or less than a year , as follows:
The restriction on use of fixed term contracts will also not apply to fixed term contract for the performance of work for which there is no reasonable prospects that funding is renewed at the end of the period.
The amendment to FW Regulation clarifies that positions for the performance of work funded, in whole or in part, by a philanthropic entity from a registered charitable entity, a testamentary gift, or by contribution to a philanthropic entity for a charitable purpose, is a legitimate use of a fixed term contract and would be exempt from restrictions. However, the contact must be entered into after 6 December 2033 but before 1 July 2024.
The restrictions on use of fixed term contracts will not apply to types of contracts of a kind prescribed by the FW Regulations. The amendment to the FW Regulations provides that the following types of contracts are legitimate uses of fixed term contracts and are exempt from the restrictions:
As the restriction on the use of fixed term contracts comes into effect today, it is important to be aware how new amendments impacts the arrangement between an employee and employer.
If you would like any further advice on the impact of the new legislation on fixed term contracts, our Employment, Workplace Relations, and Safety group at McCabes Lawyers can assist.
The Fair Work Commission (FWC) has dismissed an employee’s application for the Commission to deal with a dispute under s 65B of the Fair Work Act 2009 concerning a request for a flexible work arrangement with his employer in Gregory v Maxxia.