Fixed term contracts

Overview

Fixed term contracts last for a specified period of time, or will end when a specific task/project or event has been completed. Therefore, fixed term contracts are often used to cover seasonal work, busy periods or to cover maternity leave.

Staff on fixed term contracts benefit from legal protection against 'less favourable treatment'. Employers must also ensure that fixed-term employees get:

• the same pay and conditions as permanent staff
• the same or equivalent benefits package
• information about permanent vacancies in the organisation, and
• protection against redundancy or dismissal.

Clear guidance for employers and employees on fixed term work can be found on Gov.uk. Guidance on the regulations for Northern Ireland have been published by the Department of Employment and Learning.

Fixed term employees have the right not to be treated less favourably than similar permanent employees doing the same or similar work, unless there is a good business reason for the different treatment. This is known as 'objective justification'.

If your employer accepts there is less favourable treatment but is claiming there is a justifiable reason for this, you have the right to request details of this in writing. Your employer should have considered your needs and rights and tried to balance those against business objectives. 

If your employer fails to provide the statement outlining the reasons for the less favourable treatment, you could request a meeting to discuss the matter and confirm in writing what has been discussed. This may help resolve the matter informally. 

If this is unsuccessful, contact us to discuss any formal options. If the matter is to progress to an employment tribunal, any claim should be made within three months of the date the less favourable treatment occurred.

Fixed term employees have the right to be informed about permanent employment opportunities in the organisation they work for and you should be treated fairly if you wish to apply for those posts.

Find out more at recruitment, interviews and job offers.

Your employer is obliged to offer you access to pension schemes on the same basis as comparable permanent employees unless different treatment is objectively justified.

Speak to your employer about your pension arrangements and contact us if you are in dispute with your employer about your access to a workplace pension.

The law limits the use of successive fixed term contracts for longer than four years. Your contract may become permanent as soon as the four-year anniversary of the first contract comes around.

Contracts must be successive so the employee is continuously employed with a break of no more than one week.

However, it is important to note that the relevant regulations allow for a collective/workforce agreement to be reached which can vary these rules. They can agree on a system that states:

• a limit on the number of successive fixed-term contracts
• a limit on the length of successive fixed-term contracts
• objective reasons justifying the renewal of fixed-term contracts.

Check your employer's fixed term contract policy for more information. If you believe that your employer is failing to follow the above provisions, please contact us for further support.

Fixed term employees who have been employed continuously for two or more years have a right to redundancy pay. For more information please see our guidance on redundancy and check your employer’s own policy.

Employers must act fairly when considering a redundancy situation and a fixed-term employee cannot be selected for redundancy purely because of their employment status. If your employer is considering making you redundant whilst employed on a fixed term contract, contact us for further support. If the redundancy was not fair then it may count as an unfair dismissal.

This type of contract usually ends automatically when an agreed end date is reached. The employer does not have to give any specific notice about the ending of the contract, however it is a good idea to seek confirmation of this as the end date approaches. 

The Gov.uk website provides helpful information on renewing and ending of fixed term contracts.

If a contract isn't renewed this is classed as a dismissal

In most cases, a dismissal due to the ending of a fixed term contract will be a fair dismissal, and therefore your employer will not be acting unlawfully.

You have the right to a written statement of reasons for not renewing the contract after 1 year’s service. 

If you have 2 years’ service, your employer needs to show that there’s a ‘fair’ reason for not renewing the contract (for example, if they were planning to stop doing the work the contract was for). There may be circumstances where a fixed-term employee can nevertheless claim they have been dismissed unfairly. Find out more about unfair dismissal in our dismissal advice guide.

Automatic unfair dismissal

The regulations covering fixed term contracts make it automatically unfair to dismiss an employee if the grounds for dismissal are that the employee:

• brought proceedings against the employer under the relevant regulations
• requested from their employer a written statement of reasons for less favourable treatment
• requested from their employer a written statement confirming that their contract is no longer fixed-term or that they are now a permanent employee
• gave evidence or information in connection with such proceedings brought by any employee
• otherwise did anything under the regulations in relation to the employer or any other person
• alleged that the employer had infringed the relevant regulations
• refused (or proposed to refuse) to forgo a right conferred on them by the regulations
• declined to sign a workforce agreement for the purposes of the regulations
• is a representative of members of the workforce 
• is a candidate in an election to be a representative of the workforce
• performed (or proposed to perform) any functions or activities as such a representative or candidate.

If you feel you have been unfairly dismissed, contact us.

Ending a fixed term contract early

The terms of that contract should outline what the employer needs to do to end the contract earlier than planned. The employer may need to simply give proper notice (see below) to bring the contract to an early end. If the contract does not allow for the contract to be ended early, the employer may be in breach of contract.

Notice

Minimum notice periods apply in this scenario, therefore you’re entitled to: 

• 1 week if you’ve worked continuously for at least 1 month, or
• 1 week for each year you’ve worked, if you’ve worked continuously for 2 years or more

However, the contract itself might outline how much notice the employer needs to give to end the contract early. The contract might require a longer notice period, so check it carefully.
If you (as the employee) wish to end the contract early, you must give 1 week notice if you’ve worked for the employer for one month or more, However, your contract may specify a longer notice period, so check it carefully. You can also read more in our notice advice guide.