29 June 2023
SUMMARY: Significant amendments are being made to Australia's Fair Work Act regarding the use of fixed-term contracts. These changes, stemming from the Secure Jobs, Better Pay Act 2022, aim to limit fixed-term employment to a maximum of two years, including renewals, and restrict repeated use of such contracts. These measures are part of broader efforts to promote equal pay, prohibit pay secrecy and sexual harassment, and address workplace discrimination.
The amendments call for universities and other employers to reassess their use of fixed-term contracts, ensuring compliance with the new laws. This involves evaluating current contract usage, anticipating future human resource needs, and being aware of the risks associated with non-compliance, such as penalties.
The changes necessitate a strategic shift in employment practices, particularly in sectors heavily reliant on fixed-term contracts, and require thorough preparation and adaptation to the new legal landscape.
On Friday 23 June 2023, Lachlan Carr, Director, Legal at AHEIA, provided an update to members on the upcoming changes to fixed term contract use in Australia.
The Fair Work Act 2009 (Cth) provides minimum conditions for, and general protection of, the majority of employees across Australia. In November 2022, the Secure Jobs, Better Pay Act 2022 (Cth)became law, amending the Fair Work Act. Some of these have already taken effect, some will come into play later in 2023.
Among others, changes have been made to:
Fixed term contracts do what they say on the tin: an employer engages an employee for a fixed term. When the term ends, the employment ends.As part of the November amendments the Fair Work Act prohibits the use of fixed term contracts in certain circumstances. If an employer enters into a fixed term contract that is prohibited by the Fair Work Act, they may be penalised.
From the effective date, employers will be prohibited from entering into a fixed term contract in certain circumstances. For example, a fixed term contract will not be permitted is it does one or more of the following:
In our seminar we discussed how these changes might impact the sector, and the circumstances in which exemptions may apply. We also considered what universities should be doing now to prepare for the changes.
At a high level, you need to understand how your university currently uses fixed term contracts. Ask yourself:
At a granular level, you need to understand your university’s future human resource needs. Ask yourself:
Employers cannot engage in behaviour that is intended to avoid the fixed term contract limitations.