April 2, 2024

With changes to fixed-term contracts in place, still uncertainty for the film and TV industry

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In an effort to increase gender equality and job security, the Australian Government introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (“Amendment”) to the Fair Work Act 2009 (Cth) (“Act”) late last year.

One of the major changes was a prohibition on employers issuing employees successive fixed-term contracts which could continue for an indefinite period of time. The idea was to stop employers from using such contracts as a disguise for what essentially could be insecure work.

However, with the start of the new legislation back on 6 December 2023, film and television industry-specific guidance is still lacking.

What are the changes?

From 6 December 2023, employers cannot employ an employee on a fixed-term contract that:

  • Is longer than 2 years
    • This 2-year period includes any extensions;
  • Can be extended more than once; or
  • Is a new contract:
    • that is for the same or substantially similar role as in previous contracts;
    • that has substantial continuity of the employment relationship between the end of the old contract and the new contract, AND either:
      • the total period of the new and old contracts is 2+ years,
      • the new contract can be renewed or extended, or
      • an old contract was extended.

Employers cannot try to avoid these new rules. Avoidant action would include:

  • Delaying the re-engagement of your employee so there is no ‘substantial continuity’; and
  • Re-engage the employee in a different role but reengage someone else to do the employee’s old same or substantially similar role.

If employers are engaging anyone on a new fixed-term contract, they must give the new employee a Fair Work Fixed Term Contract Information Statement. The Statement can be downloaded from the Fair Work website here.

Are there any exceptions?

Yes! The new rules won’t apply if the proposed fixed-term contract is:

  • For a distinct, identifiable task;
  • For essential work to be performed by the employee during a peak period;
  • For work funded by a governmental body and which does not last longer than 2 years;
  • For a training arrangement; or
  • The employee is covered by an award that allows fixed-term contracts that would otherwise be in contravention of these new rules. If unsure, please use Fair Work’s ‘Find my award’ tool here.

So what happens if an employer is in breach?

If an employer makes a fixed-term contract in breach of these new rules, the employee will be considered a permanent employee. This means that all provisions of that employee’s contract, EXCEPT for the expiry date, will be valid.

Permanent employee status also means the employee will have access to other employment law protections such as:

  • Entitlement to notice of termination and redundancy payments;
  • Unfair dismissal proceedings.

The Fair Work Ombudsman also has the power to start court proceedings for any alleged breaches of the rules, which may result in civil penalties against an employer.

What don’t we know yet?

The Amendment does not provide guidance on some key issues, including but not limited to:

  • At what point can an employer re-engage someone without it being considered avoidant? For example, continuity of employment breaks after 3 months for the purposes of calculating long service leave. Is there a possibility that it will be the same for fixed-term contracts?
  • What is considered to be a distinct, identifiable task?
  • What is considered to be essential work?

In terms of industry-specific concerns, the film and television industry has long employed workers on fixed-term contracts, usually to different special purpose vehicle production companies (“SPV”), to work on different shows. Is employment by different, successive SPVs (owned by the same parent company) considered avoidant or will the law interpret SPVs as distinct companies in the same way that tax offset legislation does?

For now, there are no answers to these questions. We understand that industry bodies, such as Screen Producers Australia, are undertaking consultation with members to understand their views of the impact of the legislation on their current and proposed working practices.

What should I do next?

If you are an employee, we suggest:

  • Checking your fixed-term contract and any other fixed-term contract entered into before 6 December 2023: your contract should only last for a maximum of 2 years from its start date, and only have one rollover/extension period.
  • Checking any current and future fixedterm contract: when entered into from 6 December 2023 onwards. 
  • Asking for the Statement from your employer: only applicable if you started work on or after 6 December 2023.

If you are an employer, we suggest:

  • Reviewing current employment contracts: conduct an audit of all current employment contracts and see if there are any fixed-term contracts you need to update or convert to permanent employment.
  • Reviewing employment practices: review and consider the impacts to your business moving forward if you will need to reduce or stop reliance on fixed-term contracts.
  • Staying up to date: keep an eye out on the Fair Work Ombudsman website for release of  any further guidance. The Ombudsman issues regular email updates that can be subscribed to here.

At Digby Law, we’re here to help you with your employment law matters. If you have any queries or concerns about these upcoming changes, please don’t hesitate to get in touch.

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