Fixed Term Contracts

12 January 2016

This continues to be a topic which generates a number of calls and queries to our service. The vast majority of establishments use fixed-term contracts as an effective way to manage peaks in demand or to cover periods of absence e.g. maternity leave. It is however important to be aware that anyone employed on a fixed term contract has a number of employment rights from day one of their employment such as the right not to be unlawfully discriminated against, the right to make a claim for breach of contract, the right to be considered for suitable alternative employment if their fixed term contract comes to an end and the right not to be unfairly dismissed for any other reason.

It is also important to carefully consider the reason for offering a position on a fixed term contract basis rather than a permanent basis. A fixed term contract should not be offered as an alternative to a probation period or to “try the person out in the role” and the reason for a contract being offered on this basis should be clearly stated within the employment contract.

Fixed term contracts will normally end automatically on the agreed end date and the employer does not need to give any notice however this is still considered a dismissal in law; as such the employer must follow a fair process to end the contract. In the majority of cases the following three step process will normally be appropriate, i.e. when the contract is ending on the due date for the reason stated within the contract:-

1 – Invite the employee to a meeting allowing them the opportunity to be accompanied

2 – Discuss the ending of the fixed term contract and any alternatives, listen to any representations and confirm your decision in writing. Remember the person may be entitled to receive a redundancy payment.

3 – Provide the right of appeal against your decision