Fixed-Term Contract Reform: What It Means for Your Business
Are fixed-term contracts hurting job security and wages? This question currently leads political discussions. We expect upcoming changes to impact employment legislation and many businesses across the country.
What is a Fixed-Term Contract?
A fixed-term contract is a formal agreement between an employee and an employer. This contract defines a working relationship with a specific end date. Currently, employers have the sole discretion to renew these employment contracts. Check Fair Work Ombudsman: Fixed term contract employees
The Misuse of Fixed-Term Agreements
The Treasury recently identified a growing problem: the misuse of these agreements. Some employers use fixed-term contracts as “extended probation periods” by locking staff into 12, 18, or 24-month terms.
This practice allows an employer to end a relationship without facing unfair dismissal claims. Treasury reports suggest this creates work instability, disempowers employees, and limits opportunities for wage growth or role progression.
The Need for Legitimate Fixed-Term Contracts
While some businesses misuse the process, many organizations rely on these contracts for legitimate reasons. Business funding and staffing needs often fluctuate due to external factors. When used correctly, fixed-term contracts increase security. They provide stable work for employees who might otherwise only receive casual positions.
Preparing for Fixed-Term Contract Reform
Legislative reform is likely on the horizon. These changes may place strict limits on how many consecutive fixed-term contracts an employer can offer for the same role. Additionally, the government may introduce a minimum contract term. Employers might soon need to apply for “special circumstances” if they wish to hire beyond these set limits.
Expert HR Guidance for Your Business
Assurance HR Management will keep you updated as the government initiates further action regarding fixed-term contract reform.
If you have questions or want to review your current employment contracts, our team can help. We have extensive expertise in managing the employee-employer relationship effectively.
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Contact Assurance HR today at 1800 577 515 for a free consultation with our specialists.
