On 6 December 2023, new rules[1] came into effect when engaging employees on fixed term contracts. The general intent of the legislation is to limit the use of fixed-term contracts in order to move more employees into permanent employment.
One of the new rules is that a fixed term contract can’t be for longer than 2 years, including extensions and renewals.
A number of exceptions apply to these rules.
These exceptions include fixed term contracts relating to:
- organised sport (including athletes, coaches, performance support professionals, match officials, governing bodies and their members);
- organising bodies for international sporting events which are not regularly held in Australia; and
- live performance.
The exception to organised sport applies to contracts between an employer and an employee, where the employee is employed to primarily perform in an organised sport as one of the following;
- an athlete,
- coach for an athlete,
- match official, or
- a performance support professional who directly works to support or assess either an athlete or match official participating in an organised sport.
The exception generally does not apply to administrative or management roles or non-player facing roles.
However, significantly for the sporting industry, the regulations specifically state that the above exceptions will only apply until 30 June 2024.
There is currently no indication that the temporary exception will extend beyond that date.
Given that many athletes and coaches playing for professional sporting franchises are regularly contracted for terms exceeding 2 years, this is clearly not workable, and hence we expect further review to take place.
In the meantime, sporting organisations should carefully consider their contractual and employment arrangements leading up to 30 June 2024.
[1] Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) and Fair Work Amendment (Fixed Term Contracts) Regulations 2023 (the Regulations).
