Fixed-term contracts can be useful where a business needs an employee for a defined period or particular circumstance. However, there are rules about when these contracts can be used. 

Since 6 December 2023, the Fair Work Act 2009 has limited the use of fixed-term contracts, including how long they can run, how often they can be renewed and when consecutive contracts can be used.  

Further changes took effect from 1 November 2026, affecting additional exceptions for the charity and not-for-profit and medical or health research sectors. The Fair Work Ombudsman has also released an updated Fixed Term Contract Information Statement.  

A quick refresher on the rules 

A fixed-term contract is an employment contract that ends after a set period, such as on a specified date, after a period of time or at the end of a season.  

For contracts entered into from 6 December 2023, employers generally cannot use a fixed-term contract that: 

• runs for more than two years, including extensions or renewals; 
• allows the contract to be renewed or extended more than once; or 
• is one of a series of consecutive contracts prohibited by the legislation.  

The consecutive contract rules are important. Simply issuing an employee a new contract does not necessarily start the clock again. Previous contracts can be relevant where the employee continues performing the same or substantially similar work and there is continuity in the employment relationship. Contracts entered into before 6 December 2023 can also be relevant when applying the consecutive contract rules to a new contract.  

Are there exceptions? 

Yes. The limitations do not apply to every fixed-term contract. 

There are exceptions under the Fair Work Act 2009, as well as additional exceptions for certain sectors. An applicable modern award may also allow fixed-term arrangements in particular circumstances.  

Employers should check that an exception genuinely applies before relying on it. This means considering the employee’s role, why the fixed term is required, any applicable award and the employee’s previous contracts. 

Employers should also be aware that exceptions can change. For example, additional exceptions that previously applied to certain higher education and public hospital employees ended from 1 November 2025.   

What changed from 1 November 2026? 

The latest changes are targeted at particular sectors. 

From 1 November 2026, additional fixed-term contract exceptions for eligible charity and not-for-profit organisations and medical or health research organisations became ongoing. These exceptions had previously been due to end on 31 October 2026.  

There has also been a change to the funding requirements for these exceptions. For the relevant exception to apply, more than 50% of the funding for the position must come from certain specified sources.  

Employers in these sectors should therefore check the updated requirements before assuming an existing or previous fixed-term arrangement continues to qualify for an exception. 

Updated Fixed Term Contract Information Statement 

The Fair Work Ombudsman has also published an updated Fixed Term Contract Information Statement (FTCIS) reflecting the November 2026 changes. 

Employers must give every employee entering into a new fixed-term contract the version of the FTCIS that is current when the contract is entered into. The FTCIS is separate from the Fair Work Information Statement provided to new employees.   

Businesses should check their onboarding processes and HR systems to make sure they are using the current version. 

What if a contract does not comply? 

If a fixed-term contract does not meet the legislative requirements, the term providing for the contract to end after the specified period may have no effect. The remainder of the employment contract can continue to operate.  

This creates a risk for employers who assume employment will automatically end on the date written into the contract without first checking that the fixed-term arrangement is permitted. 

What should employers do now? 

Employers using fixed-term contracts should: 

• Review existing arrangements, particularly where employees have had multiple contracts. 
• Check an employee’s contract history before offering another fixed-term contract. 
• Confirm whether an exception applies rather than assuming a role qualifies. 
• Check the applicable modern award for any relevant fixed-term provisions. 
• Review the new funding requirements if operating in the relevant charity, not-for-profit or medical or health research sectors. 
• Update onboarding documents to ensure the current FTCIS is being provided. 
• Seek advice before issuing a further contract if there is uncertainty about whether the arrangement complies. 

How can Business Chamber Queensland help? 

Fixed-term contracts can provide businesses with valuable flexibility, but the rules can be complex, particularly when a contract is approaching its end date or a further fixed-term arrangement is being considered. 

Reviewing the arrangement before offering an extension or new contract can help identify compliance risks early. 

Business Chamber Queensland’s Workplace Relations team can help employers understand their obligations, review employment contracts and arrangements, and provide practical guidance tailored to their circumstances.