By Kylie Lynam | Director
The Federal Government is proposing to set limitations on fixed-term contracts.
Concerns have been expressed about the misuse of fixed term contracts in particular where it is seen to extend the probationary period or where a contract continues to be extended.
While there are situations where fixed term contracts are being improperly used, there are also many organisations that rely on fixed term contracts due to nature of their business and funding which do not allow for longer term employment engagements to be considered or justified. Charitable organisations (where fixed term contracts are linked to funding grants) and contracts that are fixed to align with commercial contracts are two key examples.
It is anticipated that the Government may introduce legislation limiting the number of consecutive fixed term contracts that an employer can offer for the same role. For example, contracts may be limited to 24 months’ total duration, subject to some exceptions for specific scenarios that might be negotiated once the reforms are tabled.
It is not yet clear what consideration will be given to maximum term contracts. These contract arrangements vary from fixed term arrangements as they permit either party to terminate the contract early with notice where a true fixed term contract is not able to be terminated prematurely with notice.
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