Fair Work’s Fixed-Term Contract Changes: What You Need to Know in 2025

Australia’s workplace laws have undergone major reform over the past two years, and one of the most significant updates is the new rules around fixed-term employment contracts.

These rules, introduced under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, came into effect on 6 December 2023 and they continue to shape how employers and employees approach short-term work in 2025.

🔒 Why the change?

The aim of these reforms is to provide more job security for workers who were repeatedly being rolled over on short-term contracts, sometimes for years at a time.

Under the new rules, fixed-term contracts are now tightly limited in duration and renewals, ensuring that ongoing work is recognised with ongoing employment.

📜 The new rules in a nutshell

Here’s what the new fixed-term contract laws mean:

• 2-year cap:

A fixed-term contract can’t last more than two years in total, including any extensions or renewals.

• One renewal only:

You can’t include an option to renew a contract if doing so would push the total employment beyond two years or involve more than one renewal.

• Consecutive contracts restricted:

Employers can’t offer a new fixed-term contract for the same or similar role if there’s been continuous employment and no valid exception.

• New information requirement:

Employers must give every fixed-term employee a Fixed Term Contract Information Statement (FTCIS) at the start of their employment.

If a contract breaks these rules and no exception applies, the end date may be considered invalid, meaning the worker could be deemed a permanent employee under the law.

⚖️ Exceptions: when fixed-term contracts are still allowed

Not all short-term arrangements are banned. Fair Work has outlined a series of exceptions, including where:

• The role involves a specific and identifiable task or project requiring specialised skills.

• The employee is engaged under a training arrangement.

• The work relates to peak demand or emergency situations.

• The employee earns above the high-income threshold (currently $175,000 per year).

• The role is funded by a finite government or research grant that is unlikely to be renewed.

There are also sector-specific exceptions, particularly for higher education, public hospitals, charities, medical research, and organised sport.

These additional exceptions were originally set to run until 1 November 2025, but some have been extended to 2026 or made ongoing, depending on the sector.

🧭 What this means for employers

For employers, the changes require more careful workforce planning:

• Review any existing or planned fixed-term contracts to ensure they meet the new two-year limit.

• Make sure the FTCIS is provided to every new fixed-term employee.

• Avoid “rolling” contracts for the same person or role — even if you change the job title, it may still count as consecutive.

• Check whether your organisation falls within an exception category and track when those exemptions expire.

Trying to “work around” the rules can trigger anti-avoidance provisions, exposing the business to potential Fair Work claims.

💡 What this means for employees

If you’re on a fixed-term contract, these laws give you stronger rights and greater certainty.

You should:

• Receive a Fixed Term Contract Information Statement when you start.

• Be aware that if your contract exceeds two years (or is renewed more than once) without an exception, you may be considered permanent.

• Check whether your role falls under an exception — particularly if you’re in education, health, research or sport.

If you believe your contract breaches the new rules, you can seek advice from Fair Work or an employment lawyer.

📅 Key dates to remember

• 6 December 2023: New fixed-term contract laws took effect.

• 1 November 2025: Sector-specific exceptions updated (some expired, others extended).

Fixed-term contracts are still a legitimate tool for short-term or project-based work, but they’re no longer a long-term solution to avoid ongoing employment.

For employers, compliance is critical. For employees, these changes mean more security, clarity, and leverage when it comes to how your work is structured.

As Australia’s workplace landscape continues to evolve, both sides will need to adapt to ensure fair, transparent, and lawful employment practices.