Changes to Fixed Term Contract Rules – Update from Explore Potential

Facebook
Twitter
LinkedIn
Since 6 December 2023, new limits have applied to how fixed term contracts can be used, including restrictions on:
  • the length of contracts
  • how many times they can be renewed
  • the use of consecutive fixed term contracts for the same role
Some sectors have had temporary exceptions to these limits. From 1 November 2025, a number of these exceptions are changing.
What’s Changing from 1 November 2025
From 1 November 2025:
  • The higher education and public hospital sectors will no longer have additional exceptions.
    • Regular fixed term limitations will apply to any fixed term contracts entered into on or after this date (unless another exception applies).
  • The charities/not-for-profit and medical or health research sectors will keep their temporary exceptions for one more year, as long as the new revenue thresholds apply to the employer.
  • The organised sport and high-performance sport sectors now have permanent exceptions for certain fixed term contracts.
From 1 November 2025, the higher education, public hospital and live performance sectors lose their additional fixed term contract exceptions.
Key Limitations Under the Fair Work Act
From 6 December 2023, new limitations apply. Employers cannot engage a worker on a fixed term contract that:
  1. Exceeds two years in total (including any extensions or renewals).
  2. Includes more than one extension or renewal option.
  3. Creates a consecutive series of contracts for the same or similar work where substantial continuity exists.
If these rules are breached, the contract will not automatically end at the nominated expiry date — meaning the employee may be considered ongoing.
Summary of Fixed Term Contract Exceptions
Sector
Start of Exception
End of Exception
Organised Sport
On or after 6 December 2023
No end date
High Performance Sport
On or after 6 December 2023
No end date
Charities & Not-for-Profit
On or after 1 November 2024
Before 1 November 2026
Medical or Health Research
On or after 1 November 2024
Before 1 November 2026
More detail is available via the Fair Work Ombudsman under additional fixed term contract exceptions.
New Fixed Term Contract Information Statement (FTCIS)
The Fair Work Ombudsman has released a new version of the Fixed Term Contract Information Statement (FTCIS), effective 1 November 2025, to reflect the updated exceptions.
The FTCIS includes information on:
  • what a fixed term contract is
  • the limitations on using fixed term contracts
  • the exceptions to those limitations
  • how to resolve disputes about fixed term contract limitations and exceptions
Employers must provide fixed term employees with the version of the FTCIS that applies at the time the new fixed term contract is entered into.
You do not need to reissue the updated FTCIS to existing employees who have already received a statement. However, we recommend sharing this update internally with anyone involved in recruitment, contracting or managing fixed term staff.
How Explore Potential Can Support You
If you’re unsure how these changes affect your organisation, or you’d like to review your fixed term contract templates and processes, Explore Potential can help you to:
  • audit your current use of fixed term contracts
  • update contract templates and letters of offer
  • ensure your practices align with the new FTCIS and Fair Work requirements
  • brief leaders and hiring managers on compliant use of fixed term arrangements
Phone: 7095 1830