If you have a need for some extra help or cover for a project or an employee’s leave, but this has an end date, one option you can look at is employing someone on a fixed term contract.
Fixed Term employees are not workers who:
- have a contract with an agency and are provided by the agency
- are on a work-experience placement
- are an apprentice.
Employers must not treat workers on fixed-term contracts less favourably than permanent employees. Fixed term employees should get:
- the same pay and conditions as permanent staff
- the same or equivalent benefits package
- information about permanent vacancies in the company
- protection against redundancy or dismissal.
A lot of employers believe that they can just end fixed term contracts without being at risk of an unfair dismissal claim. However, this is incorrect. Any employee that has worked continuously for the same employer for two years or more has the same redundancy rights as a permanent employee.
If the fixed-term contract was to cover family leave of another employee or project, these will normally end automatically when they reach the agreed end date. The employer doesn’t have to give any notice. However, if the work is continuing but the employer ends the contract or does not renew it, this is considered to be a dismissal, and if the employee has 2 years’ service the employer needs to show that there’s a ‘fair’ reason for not renewing the contract (e.g. if they were planning to stop doing the work the contract was for).
The employee may also be entitled to redundancy if they have over 2 years’ service.
It is also important that any contract has a notice period set out so that if the employer wants to end the contract earlier they can do so without being in breach of contract. Employers should note that fixed term employees have the right to a minimum notice period of:
- 1 week if they’ve worked continuously for at least 1 month
- 1 week for each year they’ve worked, if they’ve worked continuously for 2 years or more.
Employers can put longer notice periods in the contract, but the minimum must be adhered to.
Employees must hand in their notice 1 week in advance if they’ve worked for an employer for a month or more. The contract may state that they need to give more notice.
Any employee on fixed-term contracts for 4 or more years will automatically become a permanent employee, unless the employer can show there is a good business reason not to do so.
If you have any questions or need a template please get in touch.
