Delaying the inevitable? Some sectors get a short reprieve from fixed term employment contract restrictions

Following the passing of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) in December 2022, new restrictions on the use of ‘fixed term’ employment contracts will start from 6 December 2023. You can read more about those changes in our recent article. 

Significant changes will impact many employers in the way they can engage employees for a limited duration. The changes will form part of the Fair Work Act 2009 (Cth).

With the changes set to take effect shortly, the Federal Government has granted some sectors a short reprieve, most notably the higher education sector.

Regulations to delay fixed term rules

As part of the changes, some types of employment contracts will not be caught by the new restrictions including where an employee earns over the high income threshold, the position is for a distinct and identifiable task involving specialised skills, or the fixed term is permitted by an applicable award. Those exceptions may be supplemented by regulations.

On 24 November 2023, new regulations were passed to delay the commencement of the fixed term restrictions for specific sectors.

The Fair Work Amendment (Fixed Term Contracts) Regulations 2023 (Cth), in effect, will delay the commencement of the new fixed term rules until 30 June 2024 for the following categories of employees:

1. Higher education – employees who are covered by either the Higher Education Industry Academic Staff Award 2020 or the Higher Education Industry General Staff Award 2020, even if an enterprise agreement applies to their employment;
2. Organised sport – athletes, coaches and other nominated positions employed by specific types of sporting organisations and bodies including national sporting organisations, federal or state governing bodies or competition bodies;
3. International events organisation for high performance sport – positions to directly support the administration or organisation of an international event for high performance sport hosted (or to be hosted) by the employer, in Australia, and where the event is not regularly held in Australia; and
4. Non‑government funded philanthropic entities – employees engaged to perform work funded by specific philanthropic entities, but only where there are no reasonable prospects of funding renewal and the employer is not an associated entity of the philanthropic entity.

What’s next?

The short delay provides further time for employers in the impacted sectors to get ready for the new fixed term rules.

Some employers are set to be significantly impacted by the new restrictions particularly where there is a sector practice to engage employees for limited durations or where funding arrangements have necessitated limited duration engagements. Whether or not there will be further augmentation of the rules for these sectors after mid 2024 is yet to be seen.

Further, neither the legislation or the new regulations deal specifically with the engagement of employees on temporary visas. Employers will need to carefully consider how these employees are engaged if existing exemptions do not apply.

The Gadens Workplace Advisory and Disputes team regularly assists clients with reviewing their employment frameworks, contract drafting, meeting compliance obligations and getting ready for significant legislative changes such as the new fixed term rules. Please get in touch with our team to discuss.

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Authored by:

Amanda Junkeer, Partner
Diana Diaz, Special Counsel