Fair Work Commission to review fixed term clauses in university modern awards

Universities recently won a reprieve, with the commencement of the fixed term limitations arising from the Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 (Cth) being delayed to 1 January 2025. This extension occurred through regulations issued by the Minister, with the stated purpose to allow industry and employee representative bodies to reach agreement on appropriate and necessary amendment to the relevant modern awards.

The fixed term limitations

When they begin applying to Universities, the fixed term limitations in the Fair Work Act 2009 (Cth) (FW Act) impose a number of limits on fixed term contracts, prohibiting:

• contracts greater than two years;
• contracts where the sum of the period of the contract and any other period for which the contract may be extended or renewed is greater than two years;
• contracts where there is an option to extend or renew more than once (even if the combined period is less than two years);
• consecutive contracts performing the same or substantially the same work, where the combined length is greater than two years.

There are a number of exceptions to these limitations. One exception is set out in section 333F(1)(h) of the FW Act, which provides that the limitations do not apply to a contract of employment if a modern award that covers the employee includes terms that permit any of the prohibited circumstances set out above (eg. permits contracts of more than two years, or allows successive contracts) (the modern award exception).

The Fair Work Commission’s review

The Higher Education Industry – Academic Staff – Award 2020 and the Higher Education Industry – General Staff – Award 2020 set out circumstances in which fixed term contracts can be offered, including allowing contracts to be offered for longer than 2 years. The fixed term provisions in the Awards have a long history, dating back to Higher Education Contract of Employment Award 1998.

Of its own motion (but following earlier submissions from the union), the Fair Work Commission has initiated a review of the fixed term provisions in the Awards. In its report, the Commission stated that the fixed term provisions in the Awards were developed against a different legislative scheme that did not regulate the use, extension and renewal of fixed-term contracts. The Commission stated that the fixed term provisions of the Awards require a review considering the modified legislative scheme.

How the FWC review will affect you

The Commission’s review will commence in September 2024. The details and timeline of the review will be decided when the review commences.

Given the likely commencement of the fixed term limitations on 1 January 2025, universities should consider actively participating in the Commission’s review, because any change to the fixed term provisions in the Award may impact the way in which universities can rely on the modern award exception and future enterprise bargaining.