Fair Work Amendment (Fixed Term Contracts) Regulations 2025

REPLACEMENT EXPLANATORY STATEMENT

Issued by the authority of the Minister for Employment and Workplace Relations

Fair Work Act 2009

Fair Work Amendment (Fixed Term Contracts) Regulations 2025

Authority

The Fair Work Act 2009 (the Act) provides a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. The Fair Work Regulations 2009 (Principal Regulations) support matters of detail within the legislative framework contained in the Act.

Subsection 796(1) of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Section 333F of the Act provides, in part, that the Governor-General may make regulations prescribing exceptions that may apply to the limitations on fixed term contracts established by the Act.

In accordance with subsection 33(3) of the Acts Interpretation Act 1901, these powers extend to authorising the Governor-General to make instruments for the purpose of amending other instruments. The Fair Work Amendment (Fixed Term Contracts) Regulations 2025 (Instrument) amend the Principal Regulations.

Purpose and Operation

Sections 333E to 333L of the Act limit the use of fixed term contracts. The Act prohibits the use of fixed term contracts for the same role beyond 2 years or 2 consecutive contracts (whichever is shorter), including renewals. Section 333F of the Act provides principles-based exceptions for certain fixed term contracts to which the limitation will not apply. Section 333F also contains regulation making powers that allow for regulations to be made prescribing types of fixed term contracts to which the limitations do not apply.

The provisions are intended to promote job security for employees engaged under successive fixed term contracts, while allowing employers to continue to use fixed term contracts for legitimate purposes. The provisions commenced operation on 6 December 2023.

The purpose of Instrument is to amend the Principal Regulations to:

• make ongoing the existing exceptions for organised sports and high-performance sport - international event organising bodies, which applies to contracts entered into on or after 6 December 2023
• extend the operation of current exception in the charities and not-for profit, and medical or health research sectors by 12 months (to 1 November 2026), subject to the relevant entity having a total annual revenue of less than $10 million and $100 million respectively
• provide that relevant entities belonging to a reporting group that has a total annual revenue in excess of the threshold amount is taken to have the total annual revenue of the reporting group, unless the entity can demonstrate otherwise, and
• repeal the current exceptions from the fixed term provisions of the Act that apply to the higher education and public hospital sectors following their expiry on 31 October 2025.

These changes reflect the finding of the Secure Jobs, Better Pay Review Report (SJBP Review Report) that providing for exceptions in the Principal Regulations should be an option of last resort or for those circumstances where modern awards are not a solution. The Report recommended stakeholders should seek variations to modern awards to tailor the limitation on the use of fixed term contracts to their industry or occupation (Recommendation 17).

Commencement

The whole of the Instrument commenced on 1 November 2025.

Consultation

The Department of Employment and Workplace Relations undertook consultation with key stakeholders in sectors who will be affected by the Instrument, the members of the Committee on Industrial Legislation (a subcommittee of the National Workplace Relations Consultative Council, established under the National Workplace Relations Consultative Act 2002), relevant Commonwealth agencies, and states and territories under the Intergovernmental Agreement for a National Workplace Relations System for the Private Sector (the formal consultation process).

Formal consultation was conducted on a confidential basis ‘on the papers’ and feedback on the proposed Instrument was requested within 2 business days. Stakeholder feedback was collated and considered by the department, and informed advice provided to the Minister and the final Instrument.

The formal consultation process was preceded by early consultation across government, employer and employee organisations and relevant industry stakeholders during development of the Instrument, starting in August 2025. The department drew on data collected from relevant agencies including the Australian Bureau of Statistics and the Australian Charities and Not-for-profits Commission to understand the proposed Instrument’s potential impact on likely affected persons. Informal consultation played an important role in developing and refining the policy underpinning the Instrument. These discussions provided an avenue for the department to test policy settings and clarify stakeholder concerns.

The department also obtained the Governor-General’s approval to announce the proposed Instrument to ensure likely affected stakeholders received adequate notice of any impacts.

The department continues to engage with key stakeholders on the issues addressed by the Instrument, noting that the exceptions provided are temporary and expire in October 2026.

In keeping with recommendation 18 of the Secure Jobs, Better Pay Review, the department provided a discussion paper to relevant stakeholders in December 2025, seeking views on fixed term contracts arrangements in sectors dependant on government and/or philanthropic funding – including representatives in the charities and medical research sectors, and Commonwealth government agencies.

Sunsetting

The Instrument is exempt from sunsetting in accordance with Item 27(e) of Rule 12 of the Legislation (Exemptions and Other Measures) Regulations 2015, as the Instrument is a regulation made under the Fair Work Act 2009. The Explanatory Statement to the Legislation (Exemption and Other Matters) Amendment (2019 Measures No. 1) Regulations 2019 provides that instruments made under the Fair Work Act are exempt as they are developed in consultation with referring states and territories under the Intergovernmental Agreement for a National Workplace Relations System for the Private Sector.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Fair Work Amendment (Fixed Term Contracts) Regulations 2025

The Fair Work Amendment (Fixed Term Contracts) Regulations 2025 (Instrument) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Instrument

The Instrument amends the Fair Work Regulations 2009 (Principal Regulations) to:

• make ongoing the existing exceptions from the fixed term provisions of the Fair Work Act 2009 (the Act) that apply to organised and high-performance sport - international event organising bodies, which apply to contracts entered into on or after 6 December 2023
• extend the operation of the current exceptions in the charities and not-for profit, and medical or health research sectors by 12 months (to 1 November 2026), subject to the relevant entity having a total annual revenue of less than $10 million and $100 million respectively
• provide that relevant entities belonging to a reporting group that has a total annual revenue in excess of the threshold amount is taken to have the total annual revenue of the reporting group, unless the entity can demonstrate otherwise, and
• repeal the exceptions from the fixed term provisions of the Act that apply to the higher education and public hospital sectors following their expiry on 31 October 2025.

Human rights implications

The Instrument engages the following rights:

• the right to the enjoyment of just and favourable conditions of work under Articles 6 and 7 of the International Covenant on Economic Social and Cultural Rights (ICESCR).

Right to work and rights in work

Article 6 of the ICESCR requires the State Parties to the Covenant to recognise the right to work and to take appropriate steps to safeguard this right. The United Nations Committee on Economic, Social and Cultural Rights has stated that the right to work in Article 6(1) encompasses the need to provide the worker with just and favourable conditions of work.

Article 7 of the ICESCR requires the State Parties to the Covenant to recognise the right of everyone to the enjoyment of just and favourable working conditions.

The Principal Regulations provide certain exceptions to the limitation on the use of fixed term contracts under the Act.

The Instrument amends the Principal Regulations to make ongoing the existing exception that applies to organised sport and high-performance sport - international event organising bodies. This is necessary because, there is no clear modern award pathway for appropriate and necessary industry specific arrangements to be provided for fixed term contracts for employers and employees. Making the exception ongoing promotes the right to just and favourable conditions of work by ensuring employers may use fixed term contracts for legitimate purposes while providing certainty to employees.

The Instrument repeals the exception for the higher education sector, which terminated on 31 October 2025. Extending the operation of this exception is not necessary or appropriate on the basis that applications to vary the Higher Education Industry-Academic Staff-Award 2020 and Higher Education Industry-General Staff-Award 2020 have concluded, and the Fair Work Commission’s orders varying those awards took effect on 31 March 2025. The Instrument promotes just terms and conditions of employment by ensuring that exceptions to the Act are appropriate and fixed term contracts are only used where there is a genuine need.

The Instrument narrows the application of the exception available to employers in the charities and not-for profit, and medical or health research sectors to entities with a total annual revenue of less than $10 million and $100 million respectively. The Instrument also extends the current exceptions by 12 months (to 1 November 2026). These changes promote the right to just and favourable conditions of work by ensuring the availability of an exception to the protections in the Act to those employers with lower annual revenue and permitting additional time for parties in those sectors to reach agreement on appropriate and necessary amendments to relevant modern awards in relation to fixed term contracts consistent with the recommendations in the Secure Jobs, Better Pay Review Report (SJBP Review Report).

The Instrument repeals the exception that applies to the public hospitals sector. These changes promote the right to just and favourable conditions of work by ensuring more employees have access to secure work.

The Instrument balances the aim of providing secure and, where applicable, permanent work for employees with the uncertain nature of funding in these sectors. The employer bears the evidentiary burden to establish it is entitled to rely on an exception when entering into a fixed term contract that would otherwise not be permitted under the Act.

Where an employer enters into a fixed term contract in contravention of the limitations in the Act, and where no exception set out in the Act or Instrument applies, the employee is not deprived of their employment. Rather, the employment contract continues on foot as if the termination date in the contract is of no effect, and the employee would be entitled to notice of termination and redundancy pay under the Act (which are generally not available to employees employed under a fixed term contract).

As such, the Instrument facilitates just terms and conditions of employment, including by protecting the right of employees not the be unfairly deprived of work by ensuring that fixed term contracts are used only where subject to an exception and employees are otherwise entitled to the same rights and entitlements under the Act.

Conclusion

The Instrument is compatible with human rights because it promotes the right to the enjoyment of just and favourable working conditions.

The Hon. Amanda Rishworth MP, Minister for Employment and Workplace Relations

Fair Work Amendment (Fixed Term Contracts) Regulations 2025

EXPLANATION OF PROVISIONS

Section 1: Name

1.      This section states that the title of the Instrument is the Fair Work Amendment (Fixed Term Contracts) Regulations 2025 (Instrument).

Section 2: Commencement

2.      This section provides for the provisions of the Instrument to commence on 1 November 2025.

Section 3: Authority

3.      This section provides that the Instrument is made under the Fair Work Act 2009 (the Act).

Section 4: Schedules

4.      This section provides that each item that is specified in a Schedule to the Instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the Instrument has effect according to its terms.

Schedule 1 – Amendments

Fair Work Regulations 2009

Item [1] – Paragraph 2.15(1)(c)

5.      This item repeals and substitutes paragraph 2.15(1)(c) of the Fair Work Regulations 2009 (Principal Regulations) to remove the expiry date for the exception for organised sport in subregulation 2.15(1). The effect of this is to make the operation of the exception ongoing.

6.      This item would not otherwise change the operation of the exception. It would still apply to contracts between an employer and an employee, where the employee is employed to primarily perform in an organised sport as either an athlete, coach for an athlete, match official, or a performance support professional who directly works to support or assess an athlete or match official participating in an organised sport. 

Item [2] – Paragraph 2.15(3)(e)

7.      This item repeals and substitutes paragraph 2.15(3)(e) of the Principal Regulations to remove the expiry date for the exception for high-performance sport - international event organising bodies in subregulation 2.15(3) and make the operation of the exception ongoing.

8.      This item does not otherwise change the operation of the exception in paragraph 2.15(3)(e). It continues to apply to contracts between an employer and an employee, where the employee is employed to directly support the administration or organisation of an international event for a high-performance sport.

Item [3] – Subregulation 2.15(6)

9.      This item repeals the temporary exception to the limits on the use of fixed term contracts in the higher education sector in subregulation 2.15(6) of the Principal Regulations after its expiry on 31 October 2025.

10.  This exception was inserted into the Principal Regulations by the Fair Work Amendment (Fixed Term Contracts) Regulations 2023 to enable parties to reach agreement on and pursue variations to relevant modern awards clarifying where employers and employees may enter into fixed term contracts in reliance on the modern award exception set out at paragraph 333F(1)(h) of the Act.

11.  Proceedings before the Fair Work Commission in those matters have now concluded. Variations to the Higher Education Industry-Academic Staff-Award 2020 and Higher Education Industry-General Staff-Award 2020 took effect on 31 March 2025. As such, it is not appropriate or necessary to extend the operation of subregulation 2.15(6).

Item [4] – After paragraph 2.15(7)(a)

Item [9] – After paragraph 2.15(9)(a)

12.  Subregulations 2.15(7) and 2.15(9) of the Principal Regulations set out exceptions available to certain entities in the charities and not-for-profit and medical and health research sectors respectively. Items [4] to [13] make amendments to these exceptions, including by:

• narrowing the application of the exceptions (items [4], and [9])
• extending the duration of the exception (items [7] and [12])
• providing for how a relevant entity’s total annual revenue is to be determined, if it reports revenue to the Australian Charities and Not-for-profits Commission (ACNC) within a reporting group (items [8] and [13]), and
• making minor and consequential amendments (items [5], [6], [10] and [11]).

13.  As these amendments are mirrored in both subregulation 2.15(7) and (9), the items are dealt with together below.

14.  Items [4] and [9] insert new paragraphs 2.15(7)(aa) and 2.15(9)(aa) to introduce an annual revenue threshold that limits the application of the exception to entities that:

• in the charities and not-for-profit sector – have annual revenue of less than $10 million, and
• in the medical and health research sector – have an annual revenue of less than $100 million.

15.  The term ‘total annual revenue’ is not defined in the Instrument. It is intended to be interpreted according to its ordinary meaning, having regard to relevant financial reports and statements.

16.  Depending on regulatory requirements applying to an organisation, these could include financial statements published in annual reports, prepared in accordance with the Australian Accounting Standards, or for charities, revenue reported to the Australian Charities and Not-for-profit Commission on an annual basis.

17.  These documents are generally readily available, and it is anticipated that employers seeking to rely on the exception will be able to ascertain the entity’s annual revenue at the time the contract is to be entered into in order to satisfy themselves of the entity’s eligibility to do so.

18.  Should a dispute arise, the employer relying on the exception bears the evidential burden of demonstrating it is permitted to rely on an exception to the limitation in section 333E of the Act (subsection 333F(4)).

Item [5] – Paragraph 2.15(7)(g)

Item [10] – Paragraph 2.15(9)(h)

19.  These items repeal and substitute paragraphs 2.15(7)(g) and 2.15(9)(h) of the Principal Regulations to provide that, for the exceptions in subregulations 2.15(7) and 2.15(9) to apply to an entity, the employee with whom the entity is entering into a contract of employment must not be covered by the Higher Education Industry-Academic Staff-Award 2020 or the Higher Education Industry-General Staff-Award 2020.

20.  These items do not change the operation of the exceptions in subregulation 2.15(7) or 2.15(9), rather are consequential to the repeal of subregulation 2.15(6).

Item [6] – Paragraph 2.15(7)(h)

Item [11] – Paragraph 2.15(9)(i)

21.  These items amend paragraphs 2.15(7)(h) and 2.15(9) of the Principal Regulations to make clear that the funding arrangement to which the contract relates must have come into effect after 1 November 2024, the date on which the exceptions provided by subregulations 2.15(7) and 2.15(9) were initially inserted into the Principal Regulations.

22.  As the exceptions are being extended, this will assist the reader to determine from the face of the Principal Regulations whether the exception applies.

Item [7] – Paragraph 2.15(7)(i)

Item [12] – Paragraph 2.15(9)(j)

23.  These items repeal and substitute paragraphs 2.15(7)(i) and 2.15(9)(j) of the Principal Regulations to extend the operation of the exception for the charities and not-for-profit sector and medical and health research sector for 12 months, to include contracts that are entered into on or after 1 November 2024 and before 1 November 2026.

24.  Including an express reference to the date from which the exception applies (rather than referring to ‘the day this subregulation commences’) as well as an end date is intended to assist the reader to determine from the face of the Principal Regulations whether the exception applies.

25.  These amendments provide additional time to employer and employee representatives to consider a longer-term approach to fixed term contracts in the respective sectors, including by applying to the Fair Work Commission to vary modern awards.

Item [8] – After subregulation 2.15(7)

Item [13] - After subregulation 2.15(9)

26.  These items insert new subregulations 2.15(7A) and 2.15(9A) to provide that, for the purposes of the total annual revenue specified in paragraphs 2.15(7)(aa) and 2.15(9)(aa), if:

• a relevant entity is part of a reporting group within the meaning of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act), and
• the total annual revenue reported in the most recently available financial statements of the group meets or exceeds the relevant threshold,

the relevant entity is taken to exceed the threshold. The most recently available financial statement for the group is generally publicly available on the ACNC website, and that statement may relate to a previous financial year.

27.  The relevant entity may rely on the exception if, at the time it seeks to enter into a fixed term contract with an employee, it can provide evidence that would satisfy a reasonable person that its total annual revenue is below the threshold.

28.  The effect of this is to ensure that relevant entities that are part of a larger corporate structure that, as a whole, have a total annual revenue in excess of the relevant threshold in paragraphs 2.15(7)(aa) and 2.15(9)(aa) are deemed to share the total annual revenue of the reporting group.

Item [14] – Subregulation 2.15(10)

30.  This item repeals the exception to the limits on fixed term contracts in public hospitals provided by subregulation 2.15(10) of the Principal Regulations. Employees of public hospitals can be engaged on fixed term contracts subject to the limitations in Division 5 of Part 2-9 of the Act and the Principal Regulations.

31.  The note that appears at the bottom of regulation 2.15 is not repealed. This note makes clear that entitlements to redundancy pay and payment in lieu of notice still arise if an employee is engaged on a fixed term contract with the intention of avoiding those obligations (see subsection 123(2) of the Act).

Item [15] – In the appropriate position in Chapter 7

32.  This item makes clear that the new annual revenue thresholds inserted by items [4] and [9] apply prospectively in relation to contracts entered into on or after 1 November 2025.