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Fixed term contract exceptions regulations released

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) limitations on fixed-term contracts have commenced as of today, 6 December 2023.

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) limitations on fixed-term contracts have commenced as of today, 6 December 2023.

The new provisions will amend the Fair Work Act 2009 (Cth) (FW Act) making it unlawful for employers engaging employees on term contracts in the same role beyond two years (including any extensions or renewals) or two consecutive contracts.

The amendments also include exceptions to the limitations.

The Fair Work Amendment (Fixed Term Contracts) Regulations 2023 (Fixed Term Contracts Regulations) have now been released. The Fixed Term Contracts Regulations extend funded to include those funded by charitable organisations and clarify the types of contracts which will be exempted by the limitations.

Significantly, the Fixed Term Contracts Regulations provide that the exceptions will only apply to contracts entered into on or after 6 December 2023 and before 1 July2024.

Non-government funding

The Fixed Term Contracts Regulations provide that the limitation on the use of term contracts will not apply for contracts which are wholly or partly funded:

  • by a philanthropic entity which is registered under the Australian Charities and Not-for-profits Commission Act 2012; or
  • as a testamentary gift or testamentary contribution to a philanthropic entity for a charitable purpose (within the meaning of the Charities Act 2013) of the philanthropic entity.

The Explanatory Statement to the Fixed Term Contracts Regulations makes it clear that the exception will not apply to positions for the performance of work where philanthropic funding is received by charities from non-charitable entities.

Further, the employer must not be an associated entity of the philanthropic entity.

Exempt contracts

The Fixed Term Contracts Regulations also helpfully provide exceptions for organised sport, international event organising bodies, the live performance industry and for higher education employees.

Organised sport

A contract between a person and an employee will be exempt if the employer andemployee fall under one the categories below:

A contract between a person and an employee will be exempt if:

  • the employee is engaged under the contract to primarily perform work as:
    • an athlete participating in an organised sport;
    • a coach for an athlete participating in an organised sport;
    • another kind of performance support professional for an athlete participating in an organised sport;
    • a match official for an organised sport; or
    • a performance support professional for a match official for an organised sport; and
  • the employer is:
    • a National Sporting Organisation or a National Sporting Organisation for People with Disability recognised by the Australian Sports Commission;
    • a State or Territory governing body for an organised sport;
    • a governing body for an organised sport for the non‑metropolitan areas (if a governing body is split between metropolitan and non-metropolitan areas);
    • a body conducting a State or Territory level competition for an organised sport; or
    • a member of, or a person otherwise affiliated with, an organisation or body referred to above.

A ‘performance support professional’ will be a person whose work primarily involves direct support and assessment of an athlete or match official – and will extend to support provided to a team of athletes. Examples provided by the Explanatory Statement of a performance support professional include physiotherapists providing services to a team, list managers, selectors and performance analysts. Membership officers will not be performance support professionals.

Helpfully, the Explanatory Statement clarifies that sporting teams who compete in a competition carried out by a National Sporting Organisation (or State equivalent) are members or affiliates of the organisation. This expanded definition to include members of organisations would also be welcomed in the coverage of the Sporting Organisations Award 2020.

International event organising bodies

A contract which is for the performance of work that involves providing direct support for the administration or organisation of a particular international event for a high performance sport will also be exempted.

To be captured by this exemption, the international event must be one that is not regularly held in Australia and the international organising body has granted hosting rights to the employer or the employer is seeking to be granted hosting rights.

Live performance industry

A contract which is entered between an employer and an employee that is covered by the Live Performance Award 2020 will be exempt providing that the term of the contract is not more than 12 months.

Higher education

The limitations will not apply to a contract entered into between an employer and employee who is covered by the Higher Education Industry—Academic Staff—Award 2020 or the Higher Education Industry—General Staff—Award 2020.

High Income Threshold and part-time employees

The Fixed Term Contracts Regulations also set out the calculation method to be used to calculate the high income threshold for employees working part-time or for less than a full year.

Fixed Term Contract Information Statement (FTCIS)

The FTCIS was released this morning and is now available for download here FTCIS.

Please note the FTCIS needs to be given when an employee enters, or as soon as possible after entering, the fixed term contract.

Final comments

While it is pleasing to receive clarity for contracts in certain sectors (in particular, for sporting organisations), they will only apply for contracts which are entered into on or before 6 December 2023 and before 1 July 2024.

Information provided in this news alert is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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