Fixed Term Contract Information Statement Checklist

Hiring someone for a set period can make a lot of sense. Maybe you need cover while a team member is on parental leave, extra hands for a busy season, or a specialist for a six-month project.

But fixed term hiring now comes with some very specific Fair Work rules. One of the easiest things to miss is the fixed term contract information statement, which you need to give to employees who enter into a fixed term contract.

The good news is that this doesn't have to be complicated. If you get the statement, contract wording and renewal plan right from the start, you can stay flexible without accidentally creating a compliance issue in your fixed term employment contract for your business.

What Is The Fixed Term Contract Information Statement?

The fixed term contract information statement is an official Fair Work Ombudsman document that explains the rules and rights that apply to fixed term employment contracts in Australia.

You need to give it to an employee when they enter into a fixed term contract. This obligation sits under the Fair Work Act 2009, after changes that started applying from 6 December 2023.

A fixed term contract is generally an employment contract that ends at a particular time, after a set period, or when a specific event occurs. For example:

• A 12-month contract from 1 February 2026 to 31 January 2027
• A six-month contract to cover an employee on parental leave
• A contract that ends when a particular funded project finishes

The statement doesn't replace your employment contract. It sits alongside your contract and gives the employee information about the legal limits on fixed term arrangements, including limits on length, renewals and consecutive contracts.

You should keep a record that you've provided it. In practice, that could mean sending it by email with the contract, storing the email in your HR system, and noting the date it was sent.

You may also need to give other Fair Work documents. For example, all new employees should receive the Fair Work Information Statement, and casual employees should receive the Casual Employment Information Statement as well.

When Do You Need To Give The Statement?

You need to give the fixed term contract information statement before, or as soon as practicable after, the employee enters into the fixed term contract.

For most businesses, the simplest approach is to provide it at the same time as the written employment contract for full-time or part-time employees. That way, there's no confusion about timing and you have one neat paper trail.

For example, say you run a cafe in Brisbane and hire Ella for a nine-month fixed term role to manage weekend shifts while another supervisor is on parental leave. You email Ella the contract on Monday and ask her to sign by Friday. Attach the fixed term contract information statement to that same email. If Ella signs electronically, save the signed contract and the email together.

If you've already signed the contract but forgot the statement, don't ignore it. Send the current statement as soon as you realise and keep a note of what happened. You may also want to check whether the contract itself complies with the fixed term rules, because the missed statement is often a sign the contract hasn't had a proper compliance check.

Employer Record Checklist

• Save the version of the statement you provided
• Record the date it was sent or handed over
• Keep a copy of the signed employment contract
• Store any emails about renewals, extensions or end dates
• Note the business reason for using a fixed term contract

These records can be very useful if a question comes up later about whether the employee was correctly treated as fixed term.

What Are The Main Fixed Term Contract Rules In Australia?

The main rule is that many fixed term employment contracts can't run for more than two years, can't include more than one renewal or extension option, and can't be used repeatedly to avoid ongoing employment.

These rules are part of the Fair Work Act and are regulated by the Fair Work Ombudsman. They apply to many fixed term contracts entered into on or after 6 December 2023.

As a starting point, you should check three things before offering a fixed term contract:

• Length: Will the contract run for more than two years, including any extension or renewal period?
• Renewal options: Does the contract allow the business or employee to extend or renew it more than once?
• Consecutive contracts: Are you giving the same employee another fixed term contract for the same or substantially similar work, with substantial continuity between contracts?

If the answer is yes to any of these, you need to pause and check whether an exception applies. If no exception applies, the end date or renewal term may not work the way you expect.

That can create practical problems. For example, you may think the employment relationship ends automatically on a date in the contract, but the fixed term limitation rules may mean that particular end-date term has no effect. You could then be dealing with an ongoing employee rather than a clean contract end.

The rules can also interact with awards, enterprise agreements and the National Employment Standards. So, if your employee is award-covered, check both the Fair Work Act rules and the applicable award before you issue the contract.

Can You Renew Or Extend A Fixed Term Employment Contract?

Yes, you can renew or extend a fixed term employment contract in some situations, but you need to stay within the Fair Work limits and avoid creating a pattern that looks like ongoing work dressed up as fixed term employment.

A key limit is that a fixed term contract generally can't include an option to renew or extend the contract more than once. You also need to count the total time under the arrangement. If the original term plus the extension goes beyond two years, you may breach the rules unless an exception applies.

Consecutive contracts need extra care. If the employee is doing the same or substantially similar work, there's substantial continuity between the contracts, and the new arrangement pushes beyond the legal limits, the end-date term may be invalid.

Worked Example: Renewing A Project Role

Mike runs a cleaning business and wins a 12-month customer contract under his terms of trade to service a commercial site. He hires Priya on a fixed term employment contract for 12 months and gives her the fixed term contract information statement with the contract.

After 10 months, the client extends the cleaning arrangement for another 12 months. Mike wants Priya to continue. A single 12-month extension may be workable because the total period is 24 months and there's only one extension.

But if Mike adds another six-month extension after that, the total arrangement becomes 30 months. Unless an exception applies, the end-date term in that later contract may not be valid. Mike should consider whether Priya should move to ongoing employment, or whether a genuine exception applies to the role.

This is why renewals are best planned before the first contract is signed, and set out clearly in the employment contract. If you think the role might keep going, don't rely on repeat fixed term contracts as your default.

What Exceptions Can Let You Use A Longer Fixed Term Contract?

Some exceptions can let you use a fixed term contract that would otherwise fall outside the usual limits, but you should document the reason carefully before relying on one.

Common exceptions include situations where:

• The employee has specialised skills needed for a specific task
• The employee is engaged under a formal training arrangement
• The work is essential during a peak demand period
• The role is needed for emergency circumstances or to replace an absent employee
• The employee earns above the high income threshold for the year the contract starts
• The role is funded by government funding that's payable for more than two years and there's no reasonable prospect of renewal after that funding ends
• The role is a governance position with a time limit under the organisation's rules
• An applicable modern award permits the arrangement

The high income threshold changes on 1 July each year, so you should check the current Fair Work figure before you rely on that exception. Superannuation is usually treated separately, so don't assume a total package figure automatically qualifies.

The safest approach is to write down the exception you're relying on and the facts that support it. For example, if you're hiring a specialist software engineer for a nine-month system migration, record the project, why the skills are specialised, and why the role is tied to that task.

If you're not sure whether an exception applies, get advice before you issue the contract. A fixed term contract template often won't ask enough questions to test the exception properly.

What Should A Fixed Term Contract Template Include?

A fixed term contract template should cover the usual employment terms plus fixed term-specific wording about the start date, end date, reason for the fixed term and any permitted renewal process.

A template can be a helpful starting point, but fixed term contracts are one area where small wording differences matter. Before you use one, it should be tailored to your role, award coverage, business reason and renewal plan.

Fixed Term Contract Outline

1. Parties: Identify your business and the employee clearly, including the employing entity's correct name and ACN or ABN if relevant.
2. Role And Duties: Describe the position, reporting line, work location and main duties.
3. Fixed Term Reason: Explain why the role is fixed term, such as parental leave cover, a project or seasonal demand.
4. Start Date And End Date: Set out the exact dates or the event that will bring the contract to an end.
5. Hours And Work Pattern: State whether the role is full-time or part-time and set out ordinary hours.
6. Pay And Entitlements: Cover wages, superannuation, leave, loadings, penalties and any award or enterprise agreement that applies.
7. Renewal Or Extension: State whether renewal is possible and avoid more than one renewal or extension option unless a valid exception applies.
8. Early Termination: Explain whether either party can end the contract early and what notice applies.
9. Policies: Refer to workplace policies, making clear which ones are directions rather than contractual promises where appropriate.
10. Confidentiality And IP: Protect your business information, systems, customer details and work product.
11. Fair Work Statements: Note that the employee will receive the fixed term contract information statement and any other required Fair Work statements.

Don't use this outline as a finished fixed term employment contract or legal document. It needs to be adapted to your business and checked against the Fair Work Act, any applicable award, and the practical way the role will operate.

What Happens If Your Fixed Term Contract Doesn't Comply?

If your fixed term contract doesn't comply, the end-date term may be invalid, and you may face Fair Work compliance issues.

This doesn't always mean the whole contract disappears. Often, the problem is that the clause ending employment on a set date won't work as intended. Other parts of the contract, such as duties, pay, confidentiality and IP clauses, may still operate.

The practical consequence is that you may no longer have a clean automatic end date. If the employee is treated as ongoing, ending the employment relationship may require you to follow the usual rules for notice, dismissal, redundancy or performance management, depending on the situation.

If something has already gone wrong, take these steps in order:

1. Pause any renewal or end-date decision: Don't rush into issuing another contract or telling the employee the role has ended.
2. Collect the documents: Find the signed contracts, renewal emails, position descriptions, rosters, pay records and Fair Work statements.
3. Map the timeline: Write down each contract start date, end date, extension and gap between contracts.
4. Check award coverage: Confirm whether a modern award or enterprise agreement applies to the role.
5. Review exceptions: Identify whether any exception genuinely fits the facts.
6. Get tailored advice: If the contract may be invalid or you're ending employment, get help before taking the next step.

It's much easier to fix the contract before it's signed than to manage a dispute after the relationship has soured. A short review upfront can save you from a messy exit later.

Key Takeaways

• You need to give the fixed term contract information statement before, or as soon as practicable after, an employee enters into a fixed term contract.
• Most fixed term contracts are limited to two years, including extensions, and can't include more than one renewal or extension option unless an exception applies.
• Repeated fixed term contracts for the same or substantially similar work can create risk, especially where there's no real break between contracts.
• Exceptions can apply, but you should record the exact reason you're relying on and check the current Fair Work rules before issuing the contract.
• A fixed term contract template should be tailored to your business, the role, award coverage and your renewal plan.
• If the contract doesn't comply, the end-date term may not work as expected, which can affect how you manage the employee's exit.

If you'd like help with your fixed term employment contracts, Fair Work statement process, renewal wording or contract compliance checks, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.