Businespeople at panel discussion in board room

Navigating the Exceptions: A Detailed Look into the Upcoming Fixed-Term Contract Changes

As we work together to grow the agriculture and production sectors, it’s important to stay up-to-date on changes to employment law in Australia. Over 2023 there have been sweeping reforms to the Fair Work Act 2009 (Cth) (FW Act), the most recent of which have been changes to fixed-term contracts. Despite the introduction of broad changes, there are situational exceptions to the limitations of the new fixed-term contract rules. For instance, they won’t apply to government-funded positions, high-income employees or essential workers. They also don’t apply to casual employees.

The below exception scenarios have been sourced directly from the Fair Work Ombudsman.

Exception 1: Specialised Skills for a Specific Task

Where an employee brings specific expertise requisite for a singular task. Take Vivian, a technology professional, assigned to a project demanding her specialised skills. Her 6-month contract has provision for three 1-month extensions should the project be delayed.

Exception 2: Training Arrangements

Under those instances where employees are part of a formal training structure that couples work and study. Consider Javier, starting his plumbing apprenticeship, who receives a 4-year fixed-term contract, mirroring his apprenticeship duration.

Exception 3: Essential Work

This applies when an employee is hired during a high-demand phase to fulfil critical roles. Kevin, for example, a seasoned ski patroller with strong first aid skills, is employed for a 2-month contract during the ski season but may have his contract extended twice by a month each, subject to the ski conditions.

Exception 4: Emergency or Temporary Circumstances

This applies in unforeseen circumstances or to cover for someone temporarily away. Christina, away on 24 months of parental leave, is replaced by Gerry, whose fixed-term contract is extended for an additional 12 months when Christina extends her leave.

Exception 5: High-Income Employees

Should an employee’s guaranteed annual salary exceed the high-income threshold, the 2-year rule does not apply. Think of Esther, an IT project manager, who earns $240,000 annually on a 3-year fixed-term contract, surpassing the high income threshold for that contract year.

Exception 6: Positions Subject to Government Funding

When a role, wholly, or partially funded by government funding extending beyond two years, is unlikely to be renewed post the funding period. Lu, for example, is employed on a 3-year contract to develop a community garden, funded entirely by the Local Government for that period.

Exception 7: Governance Positions

Where a governance role with a fixed tenure (as per corporate or association rules) exists. Sunita’s 5-year fixed-term contract with the Land Management Council executive board is a perfect example.

Exception 8: Award Provisions

Under situations where the employment is covered by an award allowing conditions that are limited by the new rules. Like Ravi, whose award allows him to work on back-to-back contracts, and openly permits multiple contract renewals as agreed by both parties.

  • There are also exceptions and specific rules to the fixed-term contract limitations that need to be followed. These only apply to:
  • organised sport
  • High-performance sport
  • live performance
  • higher education
  • positions funded by philanthropic entities or testamentary gift or contribution

For more information, visit Fair Work Ombudsman – Additional fixed term contract exceptions.

Get the latest industry updates

Stay up to date on ag industry news, HR resources and available positions.