Secure Jobs, Better Pay Bill – what’s in store for fixed term contracts!

In our series of articles on how the Secure Jobs, Better Pay Bill will impact your business, we look at the proposed changes to fixed term employment contracts.

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 will, if it becomes law, introduce limits on the number of consecutive fixed-term contracts an employer can offer for the same role. This change will mean that after 24 months on a fixed-term contract, an employer will be required to offer the employee permanent ongoing employment.

Employers who regularly engage workers through consecutive fixed-term contracts, such as those in project-based industries and where work is seasonal, such as in the horticulture, agriculture and tourism industries, will be impacted.

Why does the Government want to change this?

The Government considers fixed-term contracts create job insecurity for employees, especially where employees are subject to rolling contract renewals for jobs that would otherwise be ongoing.

What will these new rules involve?

The new rules will place a restriction on the use of fixed-term contracts that exceed a period of two years or that provide for an option or right to extend or renew the contract more than once. There will, however, be some exceptions, such as contracts for specialised tasks, government-funded positions or as permitted by a modern award. 

There will also be anti-avoidance provisions, including a prohibition on:

  • failing to re-engage an employee and employing another person to do the same work
  • making changes to the terms of a fixed term contract purely so an employee could not argue they had been performing the same work for the employer, and
  • a short break between contracts will not be an excuse to avoid the new provisions.

Noting a new Fixed Term Contract Information Statement will need to be issued.

What should I do to prepare?

Businesses that regularly issue consecutive fixed term contracts should start reconsidering their workforce planning models as soon as possible.

Need assistance to work this through?

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