Effective December 6, 2023, significant changes have been implemented regarding fixed-term employment contracts in Australia. This article aims to provide employers and employees with a clear understanding of the new regulations and their associated implications.
Key changes:
Fixed-term employment contracts
From 6 December 2023, fixed-term employment contracts will be prohibited where the con-tract is for a term of more than two years. This includes renewable and consecutive contracts for the same or substantially similar work. There are some limited exceptions to this, including:
- where the employee is engaged for specific types of work;
- where the employee earns more than $167,500 per annum or is a casual worker;
- where the position is funded by the government or relates to a governance position of predetermined duration; or
- where the relevant contract is otherwise permitted by a modern award
Employees commencing a fixed-term employment contract will need to be presented with a Fixed Term Contract Information Statement, as prepared by the Fair Work Ombudsman, be-fore or as soon as practicable after the employment contract is entered into.
These amendments will apply only to new fixed-term employment contracts and extensions. Where a contract purports to exceed the new limits, the term will cease to have effect, which will effectively convert the employment to a permanent position. Employers cannot alter an employment contract to avoid contravening these provisions. Breaches will attract a civil pen-alty of up to $93,900 (or $939,000 for a serious contravention).
Companies seeking to employ non-Australian overseas staff in Australia on Employer Spon-sored Visas will need to ensure that they comply with the Fair Work Act and legislative re-quirements. Where the visa is for a duration of 4 years, we recommend that a full-time ongoing employment contract is issued instead of fixed term.
Additional Resources:
For detailed information on fixed-term contract employees, visit here.
Explore upcoming changes to the Fair Work Act, including authorized employee deductions and superannuation rights, here.
Conclusion:
Understanding these new regulations on fixed-term employment contracts is crucial for both employers and employees. By adhering to the revised guidelines and utilizing the provided resources, both parties can ensure compliance and maintain a positive working relationship.
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