A useful table explaining the different types of Limited (Fixed) Term contracts, their potential application, and their limitations/ restrictions is detailed below, or you can find a PDF version to download on the SBS Intranet, under People Leader Resources, found here.
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Ongoing Employment |
A contract where it is reasonably anticipated and intended that the role be ongoing in nature, subject to reasonable circumstances. i.e. if you have an intention for the role to continue to the extent possible and there is no clear or obvious point the position will no longer be required.
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Limited Term contract types:
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Specified Period | Specified Task |
Maximum Term
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| What is it? |
A contract that is subject to a clearly defined start and a finish date. Commitment from both parties to the full term.
Must be a legitimate business reason for a specified or fixed period of time, and that the role is not an ongoing one.
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A contract that is subject to a clearly defined start date and with an identifiable, specific task to be completed but that end date remains uncertain. There should be no doubt when the task is completed. Commitment from both parties to the full term and to the task to complete.
Must be a legitimate business reason for a specified task arrangement.
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A contract for a specific project/role/ task or season that ends by a certain date, rather than on a certain date, and provides flexibility for termination of the contract with notice by both parties.
Must be a legitimate business reason for a maximum term arrangement.
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| Suited to |
Appropriate to provide cover for periods to meet a short- medium term need for a specific project/role/skill or season, where you may have a specific employee required and a commitment from both parties to see out the full term.
Eg.
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Appropriate to provide cover for periods to meet a short- medium term need for a specific project/task or season, where you may have a specific employee required for a specific task and a commitment from both parties to see out the full term and task to complete
Eg.
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Where you want to engage an employee for a project, task or role for a certain term, where it is known the employee will not be required on an ongoing basis but you may want the flexibility to end employment if the term ends early. You may also wish to first assess the skills, experience or fit of an employee during probation for the project, task or role to be performed.
Eg:
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| Maximum length limitation |
Up to 2 years. Contract can only be renewed or extended once for performing similar or the same work within the term, as long as the total length remains within 2 years.
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| Renewal/ extension limitation |
Only permitted once for the same or similar work, as long as the total length remains within two years.
On any occasion that a single renewal or extension is offered, clear reasons must be communicated to the employee that employment will cease at the expiration date/task specified in the contract.
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| Breach of limitation rules |
If a limited term contract (EA or common law) breaches any of the limitation rules (maximum length, renewal/extension, consecutive contract) the contract will continue to apply except the term relating to the end date will not be valid – i.e. the employee will be a permanent and ongoing employee.
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Exceptions to the limitation rules:
Note: Max term 5 years only (for EA covered employees)
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| Fixed Term Contract Information Sheet | Employees engaged under a Limited Term contract (EA or common law) must be given a copy of the ‘Fixed Term Contract Information Sheet’ at the time of entering the contact, or as soon as possible after. | ||
| Communication | Clear reasons communicated to the employee that employment will cease at the expiration date specified in the contract and no expectation of further employment. There is no earlier termination permitted. | Clear reasons communicated to the employee that employment will cease at the completion of the of task detailed in the contract as advised by SBS and no expectation of further employment. There is no earlier termination permitted (ie, earlier than the task’s completion) | Clear reasons communicated to the employee that employment will cease at the nominated expiry date specified in the contract, subject to earlier termination by either party. No expectation of further employment. |
| Dates |
Contract for a specified period – start and end time clear and unambiguous. Automatically ends when the term expires.
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Contract for a specified task – start time and task to be completed clear and unambiguous, and anticipated end date. Automatically ends when the task concludes. |
Includes a nominated expiry date but also provides the parties with the right to terminate with notice for any reason during the term.
NOTE: If SBS terminates the contract early, there must be a valid reason and procedural fairness afforded – i.e. the termination must be treated in the same manner as ongoing employees due to the risk of unfair dismissal and adverse action claims.
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| Notice periods |
No notice period Contract doesn’t allow for an exit. If employee ends the contract early SBS can choose to enforce the contract. If SBS chooses to terminate the contract, SBS may be liable to pay the balance to the other.
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Notice period applies. Employee or SBS can terminate the contract before the expiry date with notice per the contract. If SBS terminates the contract early, termination is then at the initiative of SBS so unfair dismissal and adverse action factors need to be considered. | |
| Probation | Not applicable | Ordinary probation and/or qualifying period apply | |
| Performance |
Reasonable to manage performance and conduct during the contract, but SBS cannot terminate on this basis (excepting gross misconduct)
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Ordinary performance management processes apply, termination on the grounds of performance permissible following usual performance management processes | |
| Ending the contract |
No representations that employment will continue subject to conduct and performance, contract ends simply by effluxion of time and the end of the project/task/season. . |
No representations that employment will continue, contract ends simply by agreement at the nominal expiry date, or earlier with required notice | |