Assistant Secretary Sam Casey
What is a fixed term contract?
There are different types of fixed term contracts:
Genuine Fixed-Term contracts have a set end date with no early termination rights.
Maximum-Term contracts allow for termination prior to the set end date, with notice. Therefore, this type of contract may be terminated early, subject to the notice period specified – for example, if a project is finished early. As the duration of the contract may be subject to change, it is important to be aware of the notice period. In the public sector, the standard notice period is four weeks, however a fixed-term contract may alter these terms.
It is important to read your contract in full before signing, to ensure you understand the terms you are agreeing to.
When is a fixed-term contract used?
Fixed-term employment is appropriate in specific circumstances. A fixed-term contract may be offered when a role is subject to funding, to work on a specified task/project or replace a temporarily absent employee. Fixed-term employment should not be used by employers to avoid providing benefits arising from permanency.
The reason behind your contract being fixed term should be clearly identified in your contract of employment. If it is not identified, we encourage members to request this for transparency.
Common examples of legitimate fixed-term contracts are:
- Graduate programs*
- RUSON/M positions
- Backfill for parental leave and long service leave
- Positions subject to external funding/grants from the government
*In both public sector agreements, graduates who have successfully completed their program are to be offered ongoing employment at the end of their fixed term contract when an appropriately classified vacancy exists.
Limits to the use of fixed term contract
In December 2023, rules were introduced limiting employers from using consecutive fixed-term contracts. This limit was introduced by Fair Work to prevent the exploitation of employees and limit the financial instability that consecutive renewals of short-term arrangements can bring.
A fixed-term contract cannot be for longer than two years. This includes any extensions or renewals. These protections are also reflected for public sector members in clause 21 of the Nurses and Midwives Public Sector Enterprise Agreement 2024-2028.
Exceptions to the two-year limit
There are exceptions to these rules, and the two-year limit does not apply in certain circumstances, such as where the role is subject to funding, to replace someone temporarily away, to work on a specific project, to work during emergency circumstances or is subject to the high-income threshold.
There are exceptions to these rules, and the two-year limit does not apply in certain circumstances, including but not limited to:
- to replace someone who is temporarily away e.g. on parental leave
- positions depending on funding from the government
- performing essential work during a peak demand period
- specialised skills for a specific task e.g. a special project.
If you are unsure whether limits apply to your fixed-term contract or work situation, please contact ANMF via our Member Assistance Team.
Your entitlements while on a fixed-term contract
It is important to remember that when you reach your contract end date, your employment relationship no longer exists, unless you have agreed to revert to a substantive contract. This can have implications for entitlements such as parental leave. If you are receiving parental leave payments when your contract ends, these will also end, as your employer is no longer obligated to provide you with access to such entitlements.
Is a fixed term contract the same as a secondment?
No. Although both have defined end dates, a fixed-term contract stands alone as an employment contract. A secondment is a temporary assignment, where the employee works in a different role or organisation for a set period. A secondment will usually involve the employee returning to their substantive position at its cessation.
