Fixed-term contracts are a common practice in Australia, particularly in industries such as retail, manufacturing, and hospitality. However, there are regulations surrounding how long an employee can be kept on a fixed-term contract, and it`s essential for both employers and employees to be aware of these regulations to avoid any legal issues.
According to the Fair Work Act 2009, employees can only be hired on a fixed-term contract if the employer has a genuine reason, such as replacing an absent employee, completing a specific project, or filling a temporary vacancy. The duration of the fixed-term contract should also be reasonable and necessary, depending on the nature of the work.
In general, fixed-term contracts can be for a maximum of five years. However, there are exceptions, such as academic staff in universities, who can be employed on fixed-term contracts for up to seven years. Additionally, in some industries such as construction, employees can be kept on fixed-term contracts for the duration of a project with no maximum length.
If an employee is kept on a fixed-term contract for longer than the maximum duration, they may be entitled to permanent employment. This is known as a „deemed“ contract, and it occurs when an employee has been employed on a series of fixed-term contracts for a total of four years or more. In this case, the employee is considered a permanent employee, and their employment cannot be terminated unless there is a valid reason, such as misconduct or redundancy.
It`s important for employers to ensure that they have a genuine reason for hiring an employee on a fixed-term contract and that the duration of the contract is reasonable and necessary. Employers should also keep accurate records of the employee`s start and end dates and ensure that they comply with the Fair Work Act`s regulations.
In conclusion, fixed-term contracts are a legitimate employment practice in Australia. However, employers must ensure that they comply with the regulations regarding the duration of contracts to avoid any legal issues. Employees should also be aware of their rights and entitlements under the Fair Work Act to ensure they receive fair treatment during their employment.
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