- medical research organisations (where fixed term contracts are linked to funding grants);
- engagements for medical research or patient studies (which are of limited duration);
- charitable organisations (where fixed term contracts are linked to funding grants);
- horticultural businesses (where fixed term contracts are linked to specific seasons – possibly over a number of consecutive years);
- contracts that are fixed to align with commercial contracts a business may have. By having an ability to employ people on fixed terms that align with commercial contract arrangements, businesses can employ with confidence, increasing the likelihood of greater employment in a particular business; and
- businesses in areas with highly seasonal demand (where fixed term contracts are linked to specific seasons – possibly over a number of consecutive years).
The use of fixed term contracts in these scenarios can often further genuine and productive outcomes and is likely preferable to the alternative – casual employment.
Likely reforms
Notwithstanding the competing views in this space, reform of some nature seems inevitable based upon the ALP’s own election campaign which promised reform in this area.
It is most likely 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.
What is not clear is how the Government will address the prevalence of maximum term contracts (that is, fixed term contracts that permit either party to terminate early with notice). These contracts do not necessarily attract the same special status as ‘true’ fixed term contracts under the Fair Work Act, (‘true’ fixed term contracts being those which are not able to be terminated prematurely with notice).
In fact, following the Fair Work Commission decision of Khayam v Navitas English Pty Ltd [2017] FWCFB 5162, the question of whether employers can be exposed to unfair dismissal or redundancy liability when they allow maximum term contracts to expire is a matter that will depend largely on the circumstances of each case – as we explained in our alert on the case when it was handed down.