Secure Employment

Application

This Policy applies to all departments and public sector bodies of the State of Victoria and their non-executive level employees, as defined under the Public Administration Act 2004 (Vic) (PA Act) and other Victorian legislation.

Overview

The Government recognises the importance of secure employment for strengthening Victoria’s economy as well as enabling public sector employees and their families to fully participate in the community. Public Sector employers will give preference to ongoing forms of employment over casual and fixed term arrangements wherever possible.

In support of these commitments, enterprise agreements should include limitations on the use of casual and fixed term forms of employment (consistent with the terms of this policy and the Fair Work Act 2009 (Cth)(FW Act)) as well as a clause that outlines an overarching commitment to secure employment. Attachment A provides an example of an overarching model secure employment clause for public sector employers.

Public sector employers must ensure compliance with the FW Act, which places limitations on the use of fixed-term contracts of employment and provides avenues for conversion of fixed term and casual conversion to ongoing employment. The below policy position provides guidance to public sector employers on complying with these obligations.

Use of Fixed Term Employment

Where there is a genuine need for the use of fixed term or casual employment arrangements the following principles apply to all public sector employers. The use of fixed term employment across the public sector (including maximum term contracts) is limited to:

• replacement of employees during a temporary absence of another employee (for example, because an employee is on approved leave, or the employee is filling a vacancy, resulting from another employee undertaking a temporary assignment or secondment), or
• undertaking essential work during a peak demand period, or
• undertaking work during emergency circumstances, or
• undertaking a distinct and identifiable task involving specialised skills, which is funded for a specific purpose, or
• a contract in relation to a training arrangement, or
• temporarily filling a vacancy where:
  • following an appropriate selection process, a suitable ongoing employee is not available, or
    • the employee is filling a vacant role whilst a review of the area is undertaken (provided that such an appointment does not exceed a period of twelve months).

In other than exceptional or unforeseen circumstances, fixed term appointments to a specific position will be for a maximum of three years. Where there is a possibility of a position being terminated earlier than the date initially specified, a maximum term contract with a provision for termination should be used rather than a fixed-term contract with no option to terminate other than through the effluxion of time.

In advertising positions, the employer will identify the reason for the fixed term position. Where public sector employers have existing limitations on the use of fixed term contracts in their enterprise agreements they are expected to integrate those with the above requirements through enterprise bargaining for a replacement agreement.

Application of fixed term employment limitations in the FW Act

Section 333E of the FW Act provides limitations on the use of fixed term contracts for the same or substantially similar work beyond two years (including extensions or renewals) or consecutive contracts, subject to various exceptions outlined in the FW Act. Consistent with the Victorian Government’s commitments, these legislative provisions aim to reduce the prevalence of fixed term employment and promote secure employment.

The Victorian Government takes a policy position that, regardless of any constitutional limitations, all public sector employers will be subjected to the secure employment regime under the FW Act and requires all public sector employers to apply the FW Act limitations on fixed term employment as if they legally apply.

Interaction between the FW Act and this Policy

To ensure that all public sector employers comply with the requirements of the FW Act, public sector employers must include in their enterprise agreements, fixed term arrangements that:

• provide a list of permissible reasons for entering into fixed term employment (which align with the limited exceptions at section 333F of the FW Act and the circumstances listed above at ‘Use of Fixed Term Employment’), and
• allows for the parties to enter into a fixed term contract for one of those permissible reasons for a duration of up to three years (with some limited exceptions).

Exceptions permitting maximum terms beyond the three-year maximum term until the permissible reasonable no longer applies may include where:

• there are exceptional or unforeseen circumstances
• the fixed term engagement is backfilling another employee who is on parental leave
• the employee is engaged on a training arrangement of longer than three years duration

Exceptions that permit fixed term contracts beyond the three-year maximum allowed under this policy are expected to be rare and should be limited to the specific operational requirements of the public sector employer.

Any exceptions that allow for the parties to enter into fixed term contracts beyond the three-year maximum duration allowed under this policy must only be applied in circumstances where a permissible exception to fixed term contract limitations already applies, and which aligns to the exceptions outlined at section 333F of the FW Act. In this circumstance any extension beyond the three-year maximum must be limited to the duration of the reason under the exemptions that apply to the fixed-term contract.

Fixed term conversion

An employee must only be engaged in a fixed term role for a permissible reason outlined above, and which is aligned to the fixed-term contract exceptions to limitations under the FW Act. Where a permissible reason applies, an employee may only be engaged on a fixed term contract on the basis of that reason for a maximum duration of three years per this Policy (subject to any limited exceptions in an employer’s enterprise agreement).

Other than in exceptional and unforeseen circumstances, the employer must make an offer of ongoing employment to a currently employed fixed term employee if the employee has been employed on a fixed term contract(s) to the same or a substantially similar position for the maximum permitted duration (subject to the circumstances described in the applicable enterprise agreement).

The offer must be:

• made in writing
• an offer to convert to ongoing employment at the same classification or equivalent as the employee’s fixed term role
• consistent with the employee’s existing number of ordinary hours
• given to the employee within the period of 21 days before their fixed term employment has reached its maximum duration.

The employer is not required to make an offer to an employee if there:

• are reasonable business grounds not to do so
• the role in question relates to a parental leave back-fill role or the back-fill of an employee who is posted overseas
• where exceptional or unforeseen circumstances apply.

In this event, the employer must give written notice to the employee. The notice must:

• advise the employee that the employer is not making an offer of ongoing employment; and
• provide details of the reasons for not making the offer, including the reasonable business grounds and details of any exceptional or unforeseen circumstances; and
• be given to the employee within the period of 21 days before their fixed term employment has reached its maximum duration under this clause.

Reasonable business grounds include where:

• there is no ongoing vacancy available in which to place the Employee
• the employee’s position will cease to exist in the coming 12 months
• the employee is engaged under the contract in relation to a training arrangement of longer than three years duration.

If an employer fails to make an offer of ongoing employment to an eligible fixed term Employee, the employee may request in writing conversion to ongoing employment. Approval to convert to ongoing employment will not be withheld unless one of the reasonable business ground exceptions apply.

Use of casual employment

Where there is a genuine need for the use of casual employment arrangements the following principles apply to all public sector employers. Public Sector Employers must not use casual employees for the purpose of undermining the job security of ongoing employees or for the purpose of turning over a series of casual employees to fill an ongoing vacancy or as a means of avoiding obligations under an enterprise agreement or this Poli cy. Public sector employers must consider the appropriateness of the engagement of employees as casuals in the context of their overarching secure employment obligations under this Policy.

In accordance with this overarching policy position, enterprise agreements should limit the use of casual employment to:

• meeting short term work demands; or
• filling specialist skill roles that are not expected to continue and could not have been anticipated or met by existing employee levels.

In particular, employers must keep these principles in mind when considering:

• the engagement of a casual employee to ensure that the engagement is for one of the permitted reasons outlined above, and/or
• whether reasonable business grounds apply when determining whether there is an entitlement to casual conversion.

Casual Conversion

The FW Act provides that casual employees that are employed on or after 26 August 2024, and who have been employed for six months, may provide their Employer with written notification that they intend to change to permanent employment. Casual employees that were employed before 26 August 2024 may make a written notification that they intend to change to permanent employment from 26 February 2025.

Casual employees may provide their employer with a notification if they have been employed for at least 6 months and believe their employment relationship no longer meets the definition of casual employment under the FW Act. Under the FW Act, an employee is a casual employee only if:

• the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and,
• the employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument, such as a modern award, enterprise agreement or workplace determination, if the employee were a casual employee, or if the employee is entitled to such a loading or rate of pay under the contract of employment.

Employers may only refuse a written notification on the grounds that:

• the employee’s current employment relationship with the employer still meets the FW Act’s definition of Casual Employee;
• there are fair and reasonable operational grounds for not accepting the notification, such as:
  • substantial changes would be required to the way work in the employer’s business is organised.
    • there would be significant impacts on the operation of the employer’s business, or
    • substantial changes to the employee’s employment conditions would be reasonably necessary to ensure the employer does not contravene either an award or agreement that would apply to the employee as a full-time or part-time employee.

or;

• where accepting the notification would result in the employer not complying with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

The provisions under the FW Act may not apply as a matter of law to all Public Sector employers. However, the Victorian Government has taken a policy position that all public sector employers be subjected to the secure employment regime under the FW Act and requires all public sector employers to apply the FW Act provisions as if they do legally apply. Given this, employers must have regard to both the provisions of the FW Act and any existing casual conversion arrangements outlined in enterprise agreements when giving effect to the Government’s secure employment provisions.

Labour hire and professional services

The Government is committed to becoming more efficient in how it uses public resources to drive growth and development reducing the use of labour hire and professional services to make public service jobs more secure and build the internal capability of the VPS.

The decision to seek external support to deliver government policies, projects and programs is often driven by the need for specialist or technical skills or additional capacity to ensure new initiatives are delivered in a timely and effective manner.

To ensure the valid use of labour hire and professional services, the Government has implemented the following guidelines for VPS employers:

• Administrative Guidelines on Engaging Labour Hire in the Victorian Public Service; and
• Administrative Guidelines on Engaging Professional Services in the Victorian Public Service.

These guidelines apply to public service bodies mandated to comply with the Victorian Government Purchasing Board policies.

Where public sector agencies are not mandated to comply with these guidelines, they must align their labour hire and professional services use with the following principles:

Table 1: Principles to apply to the use of labour hire in the broader Victorian Public Sector

Table 2: Principles for engaging professional services in the broader Victorian Public Sector

Labour Hire Licensing Act

The Labour Hire Licensing Act 2018 (Vic) (LHL Act) introduced a licensing scheme for providers of labour hire, to protect workers from being underpaid and exploited. The Labour Hire Licensing Authority is responsible for implementing the LHL Act. Further information can be found here: Labour Hire Licensing Act 2018.

Public sector employers must only engage labour hire workers from licensed providers.

Further Information

For further information and advice employees and public sector union representatives should contact the local Human Resources or People and Culture Unit (or equivalent) of the relevant entity for further assistance in the first instance.

People and Culture Representatives of Public Sector Entities should contact their Portfolio Department for further assistance in the first instance.

People and Culture Representatives of Portfolio Departments should contact their usual IRV portfolio contact for further assistance in the first instance.

Related Policies or Documents

• Public Sector IR Principles
• Employment Categories and Secure Employment Common Policy
• Application of the Fair Work Act 2009 (Cth) to public sector employers

Attachment A