From 6 December 2023, employers cannot employ a worker on a fixed-term contract (FTC) for more than two years, nor extend or renew an FTC more than once. 

Join our expert Workplace Relations and Wellbeing team at 9am on Wednesday 31 January 2024 for a one-hour virtual briefing on the changes and implications for business. More information is available below.

Employers need to act now to ensure they are compliant and avoid accidentally or inadvertently entering a permanent employment relationship.

The Victorian Chamber urges business to seek advice as the legislation is complex and includes several recently announced exceptions.

Here are our top five tips for businesses:

1. Review how your business is using FTCs

From 6 December 2023, an FTC cannot exceed a term of more than two years or two consecutive contracts, whichever comes first.

You must understand the types and terms of FTCs your business has now, which ones are at risk of becoming permanent if renewed or extended after 6 December 2023, and which contracts may meet any exceptions so that you can limit your risk of non-compliance.

2. Find out if exceptions apply to your business

Several exceptions may allow FTCs to exceed more than two years or two consecutive contracts. However, these are complex and the onus of proving an exception falls on the employer. We strongly recommend that you get advice if you believe an exception applies to your business.

The Victorian Chamber can help you prepare for change by providing revised contract templates, implementing practices to ensure only compliant FTCs are offered in the future, and providing any fixed-term employees a Fixed Term Contract Information Statement (a new requirement as part of the changes).

3. Be aware of anti-avoidance provisions

Anti-avoidance provisions have been introduced to prohibit businesses from ‘getting around’ this new legislation. You may be breaking the rules by intentionally:

• Terminating an employee’s employment
• Delaying re-engaging an employee
• Failing to re-engage an employee and instead engaging another person to perform the same or substantially similar work to that of the original employee
• Changing the nature of the tasks required to be performed.

4. Create a roadmap to lead into 6 December 2023

Don’t leave your run to the home stretch too late! Act now to implement a roadmap to action the above tips. Ensure you have a timely plan to meet these new legislative changes and take any required actions.

5. Consider the consequences if you fail to act

Failing to be proactive will increase your risk of not meeting the new provisions or having less time to implement necessary changes in your business. This could lead to:

• Employees referring a dispute to the Fair Work Commission, which may impact your operations and lead to reputational damage
• Fixed-term employees automatically becoming permanent staff entitled to service-based entitlements
• Increased financial risk to the business in potential underpayments and civil penalties for serious contraventions of up to $165,000 for individuals and $825,000 for body corporates.

How the Victorian Chamber can help

The Victorian Chamber's Workplace Relations and Wellbeing team's virtual briefing on Wednesday 31 January 2024 is free for members and will:

• Summarise the limitations on using fixed term contracts
• Outline the exceptions contained in the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022
• Discuss the temporary relief afforded to some industries, as set out in the Fair Work Amendment (Fixed Term Contracts) Regulations 2023
• Provide examples and case studies explaining how the limitations and exception apply
• Share tips and practical strategies to ensure your business doesn’t breach these new provisions
• Offer an opportunity to ask our experts questions.

If you are a HR practitioner, or have the responsibility for recruiting or administering employment contracts, this is not to be missed. Similarly, if you are a business owner, or manager responsible for a team, join this valuable session to ensure you understand the do's and dont's of fixed-term contracting.

For further assistance on how to navigate and comply with the new FTC legislation, or to discuss any queries, please contact our Workplace Relations Advice Line on (03) 8662 5222.