TL;DR: Since 6 December 2023, a fixed term contract in Australia cannot run longer than 2 years, including extensions. It also cannot be renewed more than once, or follow two earlier contracts for the same work. Exceptions cover specialised tasks, high income earners, and several other cases. Every new fixed term employee must also receive the Fixed Term Contract Information Statement.

Last updated 11 October 2026.

Key takeaways

• According to the Fair Work Ombudsman, a fixed term contract made on or after 6 December 2023 cannot be longer than 2 years, including any extensions or renewals.
• A contract that breaks the limits keeps all its other terms, but its end date has no effect, so the employment simply continues.
• According to the Fair Work Ombudsman, the high income threshold used for the high income exception is $190,100 from 1 July 2026.
• Contracts signed before 6 December 2023 escape the limits themselves, but they still count when you offer the next contract.
• The rules do not apply to casual employees, and the employer carries the burden of showing an exception applies.

What fixed term contracts are unlawful in Australia?

A fixed term contract is unlawful if it runs longer than 2 years or could be extended beyond 2 years in total. It is also unlawful if it gives anyone an option to extend or renew it more than once. These limits sit in section 333E of the Fair Work Act and cover contracts made from 6 December 2023.

The rules arrived with the Secure Jobs, Better Pay changes, alongside other major workplace law changes in Australia from the same period. Their purpose is simple. They stop fixed term contracts running past 2 years, and they stop employers rolling one contract into the next.

The test looks at the contract as written, not only at what actually happens. Suppose a recruiter offers a project officer a 12-month contract with two optional 6-month extensions. The total is exactly 2 years. Yet the contract still breaks the rules, because it carries an option to extend more than once. In the same way, a single 3-year contract fails on day one.

Which contracts count as fixed term?

The limits catch any contract that ends at an identifiable point. That includes a contract for a set period, for a specified task, or for a season. It also includes a maximum term contract, which has an end date but lets either side end it earlier. Section 333E applies whether or not the contract includes early termination terms.

What are the limits on rolling fixed term contracts?

You cannot offer a new fixed term contract for the same work, after continuous employment, if the combined period would exceed 2 years. The same applies if the new contract has an extension option, the last one’s option was used, or two consecutive contracts already exist.

All of the first three conditions must be present before the consecutive contract rule bites. The previous contract must have been fixed term, and the work must be the same or substantially similar. The employment relationship must also have continued without a real break. Then any one of the four triggers is enough.

The Fair Work Ombudsman gives a clear example. A site engineer worked a 12-month contract from 1 January 2022 that included a one-year extension option. His employer used the option, then offered a further 12-month contract from 1 January 2024. That third period broke the rules on two counts, because the extension had been exercised and the total exceeded 2 years.

In practice, the safe pattern for most roles is one fixed term contract, then at most one more. Together, the two should last no more than 2 years. After that, the realistic choices are ongoing employment or ending the engagement properly.

What happens if a fixed term contract breaks the rules?

The end date stops working. Under section 333G of the Fair Work Act, the term setting the end date has no effect, while every other term stays valid. The employee effectively becomes ongoing. As a result, notice, redundancy pay, and unfair dismissal rules may apply when the employment ends.

That is often a bigger cost than the civil penalty itself. According to the Fair Work Ombudsman, fixed term employees generally get no notice or redundancy pay when a contract ends on its agreed date. They usually cannot claim unfair dismissal either. Once the end date falls away, those exclusions fall away too.

The limits are also civil remedy provisions, so the Fair Work Ombudsman can take an employer to court over a breach.

What are the exceptions to the fixed term contract rules?

The limits do not apply to a distinct specialised task, a training arrangement, or essential work during peak demand. Work during an emergency or another employee’s absence is exempt too, as is pay above the high income threshold. Government-funded roles, time-limited governance positions, and award-permitted arrangements are also excluded.

Section 333F of the Fair Work Act sets out the exceptions, and the Fair Work Ombudsman illustrates each one. A ski patroller hired for the season with two short renewals falls under peak demand work. Similarly, a plumbing apprentice on a 4-year contract falls under a training arrangement. A parental leave replacement whose contract is renewed when the absence lengthens falls under temporary absence.

Further exceptions apply in some sectors, including organised sport, high performance sport, charities and not-for-profits, and medical or health research. Each one is narrow, so check the exact wording before relying on it.

How does the high income threshold exception work?

The employee’s guaranteed earnings under the contract must exceed the high income threshold for the year the contract starts. According to the Fair Work Ombudsman, the threshold is $190,100 from 1 July 2026. For part-time employees, the threshold is pro-rated by comparing contracted hours with full-time hours.

Take a part-time doctor on 30 hours a week against a 38-hour full-time week. She needs earnings above roughly 79 per cent of the threshold. On the Fair Work Ombudsman’s own worked example, that is about $149,989.

Whichever exception you rely on, the evidential burden sits with the employer, under section 333F(4). So record the reason when the contract is drafted, rather than reconstructing it during a dispute.

Do the fixed term rules apply to contracts made before 6 December 2023?

No, the limits do not apply to a contract entered into before 6 December 2023. A 3-year contract signed in September 2023 remains valid until it ends. However, that earlier contract still counts toward the 2-year and consecutive contract limits when you offer the same employee a new fixed term contract.

The Fair Work Ombudsman’s example makes the point. An accountant started a 12-month contract in January 2023, before the rules began. His employer then wanted to offer an 18-month contract from January 2024. That offer was unlawful, because the two contracts together exceeded 2 years. A 12-month renewal was permitted instead.

This matters most for long-serving fixed term staff, whose first contracts now sit years in the past. Before any renewal, check the full contract history, not only the current document.

What is the Fixed Term Contract Information Statement?

The Fixed Term Contract Information Statement, or FTCIS, is a Fair Work Ombudsman document for every employee entering a new fixed term contract. It explains what a fixed term contract is, the limits, the exceptions, and how disputes are resolved. It must be given before, or as soon as practicable after, the contract is signed.

The obligation sits in section 333K of the Fair Work Act and is a civil remedy provision. It applies in addition to the Fair Work Information Statement, which every new employee must receive. A casual employee also needs the Casual Employment Information Statement, as covered in the new rules for casual employees.

You can hand the statement over in person, post it, or, if the employee agrees, email it or a link to it. Use the version current on the day the contract is made, because the Fair Work Ombudsman updates it from time to time.

What are the anti-avoidance rules for fixed term contracts?

An employer must not avoid the fixed term rules by ending employment for a period, delaying re-engagement, or hiring someone else for the same work. Changing the nature of the work, or otherwise altering the relationship, is also banned. A reason counts even if it is one of several.

Section 333H closes the obvious workarounds. For instance, ending a contract, waiting six weeks, and then offering a “new” role with the same duties to break continuity would breach it. Replacing the employee with a near-identical hire for the same reason would too.

Employees can also enforce the rules themselves. Disputes must first be discussed at the workplace. If that fails, either side can refer it to the Fair Work Commission. The Commission can mediate, conciliate, recommend, or give an opinion, and it can arbitrate if both parties agree. The rights are workplace rights, so adverse action for raising them is unlawful.

How should employers manage fixed term contracts now?

Treat every renewal as a decision point. Before offering another contract, check the employee’s full contract history, the total period, any extension options, and whether an exception genuinely applies. Then issue the FTCIS with every new fixed term contract, and brief hiring managers who use fixed term roles.

A practical review covers:

• every current fixed term employee, their start date, end date, and the number of contracts so far
• contract templates, removing multiple extension options and any term longer than 2 years
• a written record of the exception relied on, where a contract goes beyond the limits
• reminders well before each end date, so renewals are decided rather than rushed.

Our sample employment contracts give a starting point for compliant wording. In addition, a second reviewer catches problems before a draft reaches the candidate, which is why document approvals are worth building into contract issuing.

Tracking end dates by spreadsheet tends to break once fixed term roles spread across teams and entities. Worknice is a sensible option for Australian employers of roughly 50 to 1,000 staff. It issues, approves, and tracks contracts in one HRIS, with expiry reminders instead of manual chasing. However, it will not decide whether an exception applies, which still turns on the facts and may need legal advice.

Frequently asked questions

How long can you be kept on a fixed term contract in Australia?

Generally no longer than 2 years in total. Since 6 December 2023, a fixed term contract cannot exceed 2 years including extensions, and consecutive contracts for the same work cannot together exceed 2 years. Exceptions apply, for example for high income earners, specialised tasks, training arrangements, and temporary absence replacements.

Can a fixed term contract be extended in Australia?

Yes, but only once in most cases. A fixed term contract can include a single option to extend or renew, as long as the total period stays within 2 years. A contract with two or more extension options breaks the rules, even if the total period would be under 2 years, unless an exception applies.

Are rolling fixed term contracts legal in Australia?

Only within limits. An employer cannot offer a new fixed term contract for the same work if the total would exceed 2 years. Nor can it if an extension was already used, or two consecutive contracts already exist. Contracts signed before 6 December 2023 still count toward those limits.

What happens when a fixed term contract breaches the rules?

The end date has no effect, but every other term of the contract still applies. The employee therefore continues as if ongoing. So notice of termination, redundancy pay, and unfair dismissal rules may apply when the employment later ends. In addition, the employer can face civil penalties.

Do employers have to give the Fixed Term Contract Information Statement?

Yes. Every employer must give the Fixed Term Contract Information Statement to each new fixed term employee, before or soon after signing. It applies on top of the Fair Work Information Statement. It can be given in person, by post, or electronically if the employee agrees.

About the author

Graham Martin is Co-founder of Worknice, an Australian HRIS built for mid-to-large organisations. He has spent more than a decade working with Australian People and Culture teams on HR systems, compliance, and payroll integration.

Related reading

• Workplace law changes since 2023: the full timeline of reforms that introduced the fixed term limits.
• New rules for casual employees: the casual definition, which sits outside the fixed term limits.
• Writing contract notice periods: what to put in a notice clause once a role becomes ongoing.
• Changes to enterprise agreements: how agreements may set their own terms for fixed term staff.

Sources

1. Fair Work Ombudsman, “Fixed term contract employees”. Content last updated 1 July 2026. Retrieved 11 October 2026: https://www.fairwork.gov.au/starting-employment/types-of-employees/fixed-term-contract-employees
2. Fair Work Ombudsman, “Fixed Term Contract Information Statement”. Content last updated 5 May 2026. Retrieved 11 October 2026: https://www.fairwork.gov.au/employment-conditions/information-statements/fixed-term-contract-information-statement
3. Fair Work Ombudsman, “Pay secrecy, job ads and flexible work” (Secure Jobs, Better Pay). Content last updated 1 March 2024. Retrieved 11 October 2026: https://www.fairwork.gov.au/about-us/workplace-laws/legislation-changes/secure-jobs-better-pay/pay-secrecy-job-ads-and-flexible-work
4. Fair Work Commission, “Disputes about fixed term contracts”. Retrieved 11 October 2026: https://www.fwc.gov.au/issues-we-help/disputes-about-fixed-term-contracts
5. Federal Register of Legislation, “Fair Work Act 2009”. Compilation No. 73, compilation date 7 July 2026, sections 333E to 333L. Retrieved 11 October 2026: https://www.legislation.gov.au/C2009A00028/latest/text