Fixed term contracts

Fixed Term Contracts

What are Fixed Term Contracts?

A fixed term contract is when an employer takes on an employee for a set period of time only. However, if an employee has been employed under a fixed term contract by the same employer for a period of four years or more the employee is then entitled to permanent employment status within that company.

Why use Fixed Term contracts?

There are many reasons why an employer may feel it is necessary to hire an employee under a fixed term contract, including :-

  • Seasonal Work: Some businesses or companies may require extra staff during busier times of the year such as Easter, the summer holidays or Christmas so may set the contract at a fixed term of anywhere between just a few weeks right up to six months.
  • Skills: An employer may wish to take on an employee with specific skills knowledge or qualifications to carry out a particular job so will only require that employee for the duration of the work required.
  • Cover: A fixed term employee may be employed for a set amount of time to cover for another member of staff perhaps due to illness or maternity leave.
  • Job Duration: An employer may only require a fixed term employee for a short length of time because the job itself only has a short lifespan

A fixed term contract offers many benefits and may tie in a particularly useful or senior employee and offer certainty for the employee also, but it is not necessarily a flexible or short term solution and many employers believe that by having a fixed term agreement, the employee does not acquire employment law rights in the same way as other employees. This is incorrect.

Fixed Term Employee’s Rights

A fixed term employee is entitled to the same treatment and rights as a permanent employee and these rights include:

  • The same level of pay as that of a permanent employee
  • The same working conditions as that of a permanent employee
  • The same or similar workload as that of a permanent employee
  • The same benefit entitlements as those of a permanent employee
  • The same pension entitlements as that of a permanent employee
  • A fixed term employee also has the right to be informed of and apply for any permanent positions as they arise within the company.
  • Should a fixed term employee apply for a permanent position within the company they should be giving the same consideration as a permanent employee.
  • Although an employer has the right to re-issue a further fixed term contract to the employee after the initial contract has come to an end it is not seen as good practice to utilise a succession of fixed term contracts.
  • If an employer intends to terminate a fixed term employee’s contract then he must give at least one week’s notice for between one month and two years of employment and two weeks notice for the continuous employment of two years.
  •  A fixed term employee is entitled to statutory redundancy pay if they have been dismissed after two years of service with the same company.

Unfair Treatment

An employer cannot dismiss a fixed term employee before the duration of the fixed term stated in the contract has come to an end without just cause and should always treat the fixed term employee in an equal manner to how he treats his permanent staff.

  • If a fixed term employee is treated unfairly or differently from the permanent staff by the employer then they do have the right to take their complaint to an Employment Tribunal but that complaint must be filed within three months of the incident taking place.
  • Should an employer unfairly or wrongly dismiss a fixed term employee then, again, the employee can take their case to an Employment Tribunal and the employer will be expected to provide a detailed statement outlining why the dismissal occurred within 21 days of the employee requesting the document.
  • There are some circumstances under which the violation of the fixed term employee’s rights will not be considered but the employer must be able to justify why the fixed term employee has not been entitled to the same rights and treatment as the permanent employees.

Click the following link for further advice on employment contracts from Darlingtons

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