• Non-executive public sector employees

  What is changing? 

  The fixed term limitations and casual conversion provisions in the FW Act will apply to all non-executive public sector employees (unless a current enterprise agreement contains different terms, in which case the terms of the enterprise agreement continue to apply). 

  What should you do? 

  • Review current enterprise agreements to understand differences between those terms and the FW Act provisions. 
  • Audit current arrangements for fixed term employees to understand how they align with the FW Act limitations and create a forward-looking compliance plan. 
  • Review template fixed term and casual employment contracts to ensure compliance with the FW Act. 
  • Review internal policies regarding fixed term employment and casual conversion, for updating whenever the amendments impact your organisation.
  • Prepare to align enterprise agreement terms with the FW Act in the next bargaining round.
  • Ensure any changes to government policy (including the 2025 Public Sector Industrial Relations Policies) are implemented.
• Public sector executives and office holders

  What is changing? 

  Executives and office holders will be able to request flexible working arrangements under the FW Act. The pay secrecy provisions of the FW Act will also apply, meaning executives and office holders are free to disclose and discuss remuneration and any contractual pay secrecy provisions will be unenforceable.

  What should you do? 

  • Ensure the FW Act is complied with in relation to flexible working arrangements and pay secrecy, regardless of existing contractual terms. 
  • Update template contracts and terms of appointment to reflect the right to request flexibility and remove any prohibited pay secrecy terms. 
  • Issue updated contracts at the appropriate time (there is no need to issue a new contract simply because of these changes).
  • Update internal policies regarding flexible working arrangements to apply to executives. 

Background 

Victoria has historically excluded certain matters from its referral of industrial relations powers to the Commonwealth Parliament. This is confirmed in section 5 of the Fair Work (Commonwealth Powers) Act 2009 (Cth) (Referral Act). 

The Amendment Act narrows several of those exclusions, which has the practical effect of extending several recently enacted FW Act rights and protections to Victorian public sector employees across two key areas. 

These constitutional issues are notoriously complex. We have explained the background to these changes below without getting too far into the constitutional weeds. 

The Amendment Act also makes a number of changes relevant only to law enforcement officers, reflecting the factual situation which has existed for many years under which successive enterprise agreements covering Victorian police officers arguably include matters which have been excluded from referral. The Amendment Act legitimises this practice. We do not address these changes further in this update. 

The relevant exclusions from Victoria’s referral of powers in section 5 of the Fair Work (Commonwealth Powers) Act 2009 (Vic) apply only to public sector employees as defined in the Public Administration Act 2004 (Vic). On this basis, our understanding is that the Amendment Act does not impact the application of the FW Act to local council employees. 

Fixed term contracts and casual conversion 

Section 5(1)(a) of the Referral Act excludes matters pertaining to the number, identity and appointment (other than terms and conditions of appointment) of employees in the public sector from Federal regulation. 

The phrase ‘number, identity and appointment’ is a codification of the principles in the High Court decision commonly known as Re: AEU (1995) 184 CLR 188. It includes the ‘term of appointment’ of public sector employees. 

The limitations on fixed term employment and the casual conversion provisions in the FW Act deal with the number, identity and appointment of employees. On this basis, the understanding across the public sector has been that these provisions do not apply to public sector employees unless the entity within which they are employed is a constitutional corporation. The FW Act applies to them without need of a referral of power from Victoria, unless a common law exclusion applies, which is a complex constitutional question in any given case.

New section 5(1A) narrows the exclusion in s 5(1)(a) of the Referral Act such that matters pertaining to fixed term employment and casual conversion for non-executive public sector employees can now be regulated by the FW Act. It broadens the scope of the referral of powers to cover those matters. In simple terms, this means all non-executive public sector employees will have the benefit of the FW Act’s limitations and protections regarding use of fixed term contracts and conversion from casual to permanent employment. 

To summarise the substance of these provisions in brief terms:

• Fixed term contracts, including successive fixed term contracts, must not exceed a total 2-year term, unless a specific exemption applies (ss 333F and 333G of the FW Act). 
   
• An invalid fixed term contract will create an ongoing employment relationship (s 333G of the FW Act).
   
• Casual employees can request conversion to permanent employment if they believe they no longer meet the definition of a casual employee in s 15A of the FW Act (s 66AAB of the FW Act). 
   
• Employers can only refuse a request for conversion on specific operational and related grounds (s 66AAC of the FW Act).

Accordingly, from the earlier of proclamation or 1 November 2026, all non-executive public sector employees will be entitled to these rights and protections under the FW Act. 

However, the Amendment Act includes transitional provisions, protecting the terms and conditions of current enterprise agreements, where those terms differ from the FW Act in relation to fixed term employment and casual conversion. 

Most (if not all) non-executive public sector employees are covered by an operative enterprise agreement. 

The 2025 Public Sector Industrial Relations Policies cover use of fixed term employment and casual conversion and include model clauses which depart in some ways from the FW Act (for example, contemplating fixed term employment of up to 3 years and reflecting a previous model of casual conversion). Public sector enterprise agreements generally reflect these model clauses. 

The terms of current enterprise agreements will continue to apply, even where they are less beneficial than, or different to, the FW Act provisions regarding fixed term employment and casual conversion, until those agreements are replaced. 

Action required by employers in the public sector

	If an enterprise agreement that deals with fixed term employment and/or casual conversion is in force now (or upon commencement of the Amendment Act), continue to adhere to the terms of that instrument.
	If an enterprise agreement is not in force, or when bargaining for a new replacement enterprise agreement, the fixed term limitations and casual conversion provisions in the FW Act will need to be complied with from the commencement of the Amendment Act.
	The first round of bargaining after the Amendment Act commences will be critical for public sector organisations – existing terms which depart from the FW Act will need to be replaced with compliant provisions.
	Update internal policies and template contracts, as well as audit current fixed term arrangements, in anticipation of the FW Act provisions applying.

We expect that the 2025 Industrial Relations Policies will also be revised to reflect the changes brought about by the Amendment Act and to align government policy regarding content for public sector enterprise agreements with the FW Act provisions.

Flexible working arrangements and pay secrecy

Section 5(1)(d) of the Referral Act excludes from FW Act regulation matters pertaining to persons holding office in the public sector to which the right to appoint is vested in the Governor in Council or a Minister (including the Premier). 

Section 5(1)(e) of the Referral Act excludes from referral matters pertaining to persons employed as executives within the meaning of the Public Administration Act 2004 (Vic) or persons employed at higher managerial levels in the public sector. 

The FW Act currently has no application to office holders, public service executives and persons employed at higher managerial levels in the public sector, unless they are engaged or employed in a public sector body that is a constitutional corporation. In that situation, the common law as enunciated by the High Court in Re: AEU applies, which may well have a similar exclusionary effect on high level executives as the Referral Act.

The term ‘higher managerial levels in the public sector’ is yet to be tested before the courts. Our view is that it captures at least executives in the public sector (being comparable to executives in the public service who are expressly referred to) but it may also capture other senior leaders. 

New section 5(1B) narrows the exclusions in ss 5(1)(d) and (e) of the Referral Act for these higher level employees, such that matters pertaining to entitlements to flexible working arrangements and the right to disclose and discuss remuneration can now be regulated by the FW Act. This broadens the scope of the referral of powers to cover those matters, as they apply to office holders and executives (and potentially, other senior leaders).

In simple terms, this means that upon the earlier of proclamation or 1 November 2026, public sector office holders and executiveswill:

• be able to request flexible working arrangements under s 65 of the FW Act; and 
• have the right to disclose and discuss (or not disclose) their remuneration and any contractual provisions prohibiting this will be void (see ss 333B – 333D of the FW Act). 

The employment of executives in the public service and public sector is governed predominantly by contract. However, there is a rigorous and transparent approach to remuneration already in place. 

Office holders are appointed according to terms set out in their instrument of appointment, reflecting any relevant statutory or policy requirements. 

Action required by employers in the public sector

	Regardless of contractual terms or terms of appointment, office holders and executives should be permitted to request flexible working arrangements under the FW Act from the commencement of the Amendment Act.
	Next time contracts are issued to executives on or after 1 November 2026, to the extent permissible (and if required): ensure the right to request flexible working arrangements is referenced, for completeness; and amend the confidentiality clause so that it is subject to the pay secrecy provisions in the FW Act. The standard contracts may well be updated to address these issues in the meantime.
	Terms of appointment for relevant office holders should be revised to ensure consistency with the right to request flexible working arrangements and the pay secrecy provisions of the FW Act.

Although the legislative and constitutional underpinnings of these matters are dense, the changes brought about by the Amendment Act are quite simple. 

• Non-executive public sector employees

  The fixed term limitations and casual conversion provisions in the FW Act will apply (unless a current enterprise agreement contains different terms, in which case those continue to apply until replaced). The next round of enterprise bargaining for public sector employers will need to address and update terms to align with the FW Act provisions. 

• Public sector executives and office holders

  Will have the right to request flexible working arrangements under the FW Act, regardless of current contractual terms. Any contractual clauses which could be prohibited pay secrecy provisions cannot be enforced. New contracts should reflect the right to request flexible working arrangements and remove or qualify any prohibited pay secrecy provisions.