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Fixed Term Employment Contracts UK

A fixed term employment contract is a contractual working relationship. The purpose of fixed-term employment contracts is to last for a specific period of time.

Entitlements in Fixed Term Employment

Someone with employee status would have a fixed-term contract if both of these apply:

  • They have a contract of employment issued by the organisation they work for.
  • Their employment contract ends after the completion of a task (e.g. a particular project) or on a specified date.

UK fixed-term employees receive the same rights as permanent employees with comparable jobs. It also applies to jobs requiring similar skills experience for the same employer.

As a rule, fixed-term contracts do not have a predetermined duration limit. Even so, a contract of four (4) years or longer would get treated afterwards as permanent position.

Note: There must be ‘objective justification’ to treat fixed term employees less ‘favourably’ than any permanent staff.

Fixed-term Employee Examples

  • Someone covering for Maternity Leave
  • A specialist person employed for a particular project
  • A seasonal (casual employee) taken on during a peak period (maximum six months)

Employers must ensure that any fixed-term employees receive:

  • The same pay and working conditions as the permanent staff get.
  • At least the same benefits package (or equivalent).
  • Protection against workplace redundancies or dismissals from work.
  • Information relating to any permanent vacancies available in the organisation.

Note: Entitlement to the same rights would only apply to permanent staff who work for the same employer. It would not apply to an associated organisation of the employer. Fixed term employees have the same rights on redundancy after continuous employment with the same employer for two (2) years.

Workplace Disputes with Fixed-term Employees

Most workers on fixed-term contracts should try to solve a workplace dispute ‘informally’ with their manager. They can also request a written statement explaining the treatment they received.

Even so, you may need to use the employer grievance procedures or make a claim to an employment tribunal.

When a Fixed Term Employment Contracts Ends

  • After a specified task or event gets completed (or it does or does not happen)
  • When the contract terminates at a specific period of time

Workers Not Considered as Fixed-term Employees

  • A member of the armed forces
  • A student or a trainee on a work-experience placement
  • If you become an apprentice you will be working under a ‘contract of apprenticeship’
  • Someone with a contract issued by an independent agency (not issued by the company they are working for)

Renewing or Ending Fixed Term Employment Contracts

Ending a Fixed-term Contract

As a rule, a fixed term contract will end by automatic process when it reaches the agreed end date. In this case, an employer would not need to issue any notice period.

If a Contract is Not Renewed

UK employment legislation considers non renewal of a fixed term contract as a dismissal. An employer would need to show a ‘fair’ reason for not renewing a contract and if the employee has two (2) years of service. An example would be a case where the plan was to end the work that the contract got issued for.

Workers on fixed term employment contracts have the right:

  • Not to get ‘dismissed unfairly‘ after a minimum of two years of service. This applies for employees in employment before the 6th of April 2012.
  • To get a written statement of reasons for a case of not renewing the contract (after one (1) year of service).

Different rules apply if the reason for non-renewal is redundancy. Entitlement to statutory redundancy payments would occur after 2 years of service.

Employer wants to End a Contract Early

As a rule, the terms of the contract would determine what happens if the employer wants to end it early. Thus, if the fixed-term contract:

  • Contains nothing about getting ended early then the employer may be in breach of a contract.
  • Can end early, and the employer gives proper notice, then the contract can be ended in the usual way.

Fixed Term Employee Contracts Minimum Notice Periods

As a fixed-term employee, you would have the right to receive a minimum notice period of:

  • 1 Week: If you worked ‘continuously’ for at least one (1) month.
  • 1 Week: For every year you worked (providing you worked ‘continuously’ for two (2) years or longer).

Note: A fixed term contract may specify a longer notice period than the statutory minimums. But, ending a fixed-term contract without giving the proper notice means the employee may claim for breach of contract.

Working Longer than a Contract End Date

There would be an ‘implied agreement’ if the work continues after the end date of a contract. This may occur even if it does not get ‘formally’ renewed by the employer. But, they would still need to give proper notice to dismiss a worker.

Limit on Fixed-term Contract Renewal

Any employee becomes a permanent employee after four (4) years on a fixed-term contract. An exception may apply if the employer can show a valid business reason for not doing so.

Note: Employer and unions (or staff association) can make a collective agreement. It could remove the automatic right to become a permanent employee in such circumstances.

Renewing a Fixed-term Contract Less ‘Favourably’

Renewing on less favourable terms generally needs negotiations and an agreement between the employer and the employee. But, if the contract ends without reaching an agreement, an employee might have a case to claim for unfair dismissal.

Employee Ending a Contract Early

There are minimum periods for handing in your notice at work – even for fixed-term workers. You must hand in your notice one (1) week in advance if you worked for an employer for at least one month. A longer notice period may get stated in the terms of the contract.

Fixed Term Employment Contracts and Employee Rights in the United Kingdom