New laws on fixed term contracts and enforcement powers for the positive duty
New Rules for Fixed Term Contracts
From 6 December 2023 employers should ensure their contract templates and staffing arrangements are appropriate for the new limitations on fixed term contracting introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth). The amendments aim to decrease the use of fixed term contracts and increase movement into permanent employment.
The amendments mean employers must now:
- Provide a Fixed Term Contract Information Statement to employees engaged on a new fixed term contract at the commencement of their employment (this will be made available here: New rules for fixed term contracts – Fair Work Ombudsman).
- Limit Fixed Term Contracts to a two year limit, including renewals and extensions, subject to limited exemptions, for example where the contract is linked to a Government grant, or the employee earns above the high-income threshold (currently $167,500).
The maximum term of two years includes consecutive contracts, for example, where the work outlined is for similar work and there is no substantial break in the employment relationship between contracts.
If an employer provides a fixed term contract that breaches the two year fixed term limit, they will be subject to a civil penalty of 60 penalty units ($13,320) for an ordinary contravention, and a maximum of 600 penalty units ($133,200) for a serious contravention.
Even where a fixed term contract breaches the two year term limit, the terms of the contract will remain valid except for the end date of the contract, resulting in employees being treated as permanent employees.
Contracts entered before 6 December 2023 will not be subject to the limitations, however any extension will be. The new legislation also includes an anti-avoidance provision which is broadly drafted to state that an employer must not “alter an employment relationship” to avoid any right or prohibition. With legislation already known, there is a risk to employers of extending contracts beyond 6 December 2023 and for longer than two years.
If you would like assistance updating your employment documentation, please get in touch with our employment law experts.
Positive duty can now be enforced
From 12 December 2023, the positive duty amendments made to the Sex Discrimination Act 1984 (Cth) in December 2022 can be investigated and enforced by the Human Rights Commission.
The positive duty requires organisations and businesses to take ‘reasonable and proportionate measures’ to eliminate, as far as possible:
(a) discrimination on the ground of sex in a work context;
(b) sexual harassment in connection with work;
(c) sex-based harassment in connection with work;
(d) conduct creating a workplace environment that is hostile on the ground of sex; and
(e) related acts of victimisation.
The Commission can commence an inquiry when it ‘reasonably suspects’ an organisation or business is not complying with the positive duty outlined in section 47(c) of the Act. The Commission will have the power to:
(a) issue a compliance notice specifying action that must be taken, or refrain from taking in addressing any non-compliance;
(b) apply to the Federal Courts for an order to direct compliance with notice; and
(c) enter into enforceable undertakings which the organisation or business agrees or refrains from doing certain things.
Organisations should familiarise themselves with guidance material and consider whether their existing frameworks satisfy their legal obligations to prevent and respond to unlawful conduct. A prevention and response plan, among other things, is recommended in order to satisfy the positive duty in the Sex Discrimination Act.
Further information can be found on the Australian Human Rights Commission website.
Resources on Positive Duty (humanrights.gov.au)
Griffin Legal can provide advice on meeting the new positive duty, including working with your organisation to update policies and procedures and preparing a tailored prevention and response plan.