The regulations that govern fixed-term contracts for employees have changed as of early December.

Starting 6 December, a fixed-term contract you have with an employee must now terminate at the end of a set period. This can include the date set in the contract or a period of time like a season. This includes contracts where the employee is employed for a specific period.

If you are providing an employee with a new fixed-term contract, you must now also provide a Fixed Term Contract Information Statement (FTCIS). This is in addition to the Fair Work Information Statement that must be provided to all new employees.

The FTCIS is available for download here.

There are new limitations that apply to employee fixed-term contracts. These are valid for any contracts made on or after 6 December.

Time limits: A fixed-term contract can’t be for longer than two years. This includes any extensions or renewals.

Renewal limits: A fixed-term contract for an employee can’t have an option to extend or renew for more than the two year period, or extend or renew more than once.

Consecutive contract limits: An employee can’t be offered a new fixed-term contract if the first three points below all apply, and one or more of the scenarios in the fourth point applies:

  1. Their previous contract was also for a fixed-term.
  2. Their previous contract and the new contract are for mainly the same work.
  3. There is substantial continuity in the employment relationship between the previous and new contracts, and
  4. Either:
    • the previous contract contained an option to extend that has already been used
    • the total period of employment for both the previous and new fixed-term contract is more than two years
    • the new fixed-term contract contains an option to renew or extend, or
    • there was an initial contract in place (before the previous contract):
      • that was for a fixed-term,
      • that was for the same or similar work, and
      • where there was substantial continuity in the employment relationship.

Blaine Hattie is a business lawyer and principal at Sutton Laurence King Lawyers.

Starting a new construction project? To ensure it is legally-sound, contact Sutton Laurence King Lawyers in Victoria today on 03 9070 9810 or email .