Additional Exceptions on Fixed Term Contract Regulations

This article discusses the operation of additional temporary exceptions to fixed term contract limitations, as a consequence of the Fair Work Amendment (Fixed Term Contract – Exceptions Measures) Regulations 2024.  The exceptions have been in operation since 1 November 2024 and apply to certain employment contracts entered into between 1 November 2024 and 31 October 2025.  This alert serves as a reminder to those wishing to act on the temporary exceptions of the limited opportunity to do so, and explains in general terms, the scope of those temporary exceptions.

To summarise, among other significant changes introduced in the Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 (Cth), was the capping of the duration of fixed term contracts to a maximum period of two years, including by reference to the renewal or extension of contracts for a period of more than two years, and the engagement of employees performing the same or similar work on consecutive fixed term contracts[1].

The additional exceptions were introduced by the Government to an attempt to address issues that stem from the nature of funding arrangements in particular sectors, whilst maintaining the object of ensuring fixed term contracts are not misused where permanent employment can be provided.

What are the new exceptions?

In addition to existing exceptions (for example, fixed term contracts to perform only a distinct and identifiable task involving specialised skills or to cover temporary absences), additional temporary exceptions now operate for the following sectors:

• the charity and not-for-profit sector employees;
• medical or health research sector employees;
• public hospital employees[2].

These are summarised below:

Employees in the charity and not-for-profit sector

Employees engaged by employers in the philanthropic and not-for-profit sectors, who meet all of the following conditions will be exempt from the limitations to fixed term contracts where all of the following apply:

• the employee is engaged by a philanthropic entity registered under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (ACNC Act); and
• the employee’s funding is provided in whole or in part by:
  • Government funding, except for payments made to individuals under law or payments under the Commonwealth Home Support Program; or
  • a philanthropic entity other than the employer or an employer associated entity; or
  • as a testamentary gift or contribution under the Charities Act 2013 (Cth); and
• the work is for a specific program to which the funding relates; and
• the program is to run for no longer than 5 years, accounting for the period it has already run; and
• the contract is for the substantially same period as the program length; and
• if the employee is already, or has previously been, employed by the philanthropic entity, the contract would not result in the employee being employed by that entity on a substantially continuous basis for more than 7 years; and
• neither the Higher Education Academic Staff or Higher Education General Staff Awards apply; and
• any funding started on or after 1 November 2024.

Employees in medical or health research  

Fixed term contracts for employees primarily carrying out medical or health research will be exempt from the restrictions where:

• The employee is engaged by:
  • a philanthropic entity, including an entity controlled by a philanthropic entity (registered under the ACNC Act); or
  • a public Commonwealth, state or territory body, including an entity controlled by such a body; and
• the position funding is provided in whole or part by
  • the Government;
  • a different philanthropic entity than the employer;
  • if the employer is a philanthropic entity, for a charitable purpose under the Charities Act 2013 (Cth); and
• the work is for:
  • basic research;
  • pre-clinical research;
  • clinical research; or
  • translational research; and
• the work is for a specific program to which the funding relates; and
• the program is to run for no longer than 5 years, accounting for the period it has already run; and
• the contract is for the same period as the program length; and
• if the employee is already, or has previously been, employed by the philanthropic entity, the contract would not result in the employee being employed by that entity on a continuous or substantially continuous basis for more than 7 years in total; and
• neither the Higher Education Academic Staff or Higher Education General Staff Awards apply; and
• any funding started on or after 1 November 2024.

Employees in public hospitals

Fixed term employment contracts that relate to positions in public hospitals are (in broad terms) exempt where funding is provided by a philanthropic entity or for a charitable purpose, and where the work is for a specific program or project of not more than 5 years:

• the hospital must be a public hospital under the National Health Act 1953 (Cth); and
• the position funding is provided by:
  • a philanthropic entity; or
  • for a charitable purpose under the Charities Act 2013 (Cth); and
• the work is for a specific program to which the funding relates; and
• the program is to run for no longer than 5 years, accounting for the period it has already run; and
• the contract is for the same period as the program length; and
• if the employee is already, or has previously been, employed by the philanthropic entity, the contract would not result in the employee being employed by that entity on a continuous or substantially continuous basis for more than 7 years in total; and
• any funding started on or after 1 November 2024.

What should employers do if impacted by these changes?

Employers should note these exceptions are temporary and carefully consider, in respect of any new contracts, whether the exceptions apply to ensure compliance with the Fair Work Act 2009 (Cth) and limitations that otherwise apply[3].  EMA Legal is able to assist employers with any questions they may have surrounding these issues.

[1] See Fair Work Act 2009 (Cth) s 333E

[2] See Fair Work Regulations 2009 (Cth) reg 2.15 (7)

[3] Fair Work Act 2009 (Cth) s 333F