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Major change for 400,000 Aussie workers

Changes to fixed-term contracts will kick in from today.

Thousands of Aussie workers could now have access to more secure employment, following a major overhaul of the country's fixed-term contract rules.

Under the new rules, which come into effect today, employers are now banned from employing workers on fixed-term contracts for more than two years.

Employers are also prohibited from extending or renewing a fixed-term contract more than once, according to Fair Work, even if the total period is less than two years.

Australian workers walking in the city. Work and annual leave concept.
Major reforms are kicking in for Aussie workers on fixed-rate contracts next month. (Source: AAP)

Fixed-term contracts specify an end date for employment. This is different from permanent employees whose employment is on an ongoing basis.

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The changes are one aspect of the government’s major employment law reform under the Fair Work Legislation Amendment Act, known as Secure Jobs, Better Pay.

The Australian government said while fixed-term contracts had a legitimate purpose for businesses, they could “exacerbate job insecurity” for employees hired in the same role over an extended period, or where employees were hired on “rolling contract renewals” for jobs that would be permanent otherwise.

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If a fixed-term contract is made in breach of the new rules, the employee will be considered a permanent employee.

The government said that meant the worker would be entitled to safety nets, including redundancy payments and access to unfair-dismissal proceedings.

Fair Work can also help with disputes about fixed-term contracts between employees and employers, where the issue can't be resolved in the workplace.

Fixed-term contracts in Australia

Around 390,000 employees - or 3.4 per cent of Australian employees - are employed on fixed-term contracts, according to the latest Australian Bureau of Statistics data.

Around three-quarters were working on a contract with a total term length of one year or less. Around 77 per cent of workers received paid leave entitlements, while the remainder did not.

The industries with the highest proportion of employees on a fixed-term contract were education and training (11 per cent), information media and telecommunications (8 per cent), and public administration and safety (7 per cent).

Employees on fixed-term contracts had higher salaries, earning $1,479 per week on average, compared to $1,248 per week for non-fixed-term contract employees.

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