Overview
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- The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (FTR) give fixed-term employees the right to be treated no less favourably than permanent employees who are employed by the same employer and who are doing the same or similar work.
- Fixed term contracts are common in the public and voluntary sectors (where there is funding for specific projects or for a limited period of time); in television (for the duration of a particular series); and in academia (for specific research projects).
- Fixed term contracts are also frequently used in all sectors to cover for maternity leave. They are also used for short-term seasonal contracts designed to proved for an increased workload, such as fruit picking in the summer or working in a shop in the lead up to Christmas.
What is a fixed-term contract?
- A fixed-term contract is a contract of employment which will terminate on the expiry of a fixed term, the completion of a particular task, or on the occurrence (or non-occurrence) of a specific event.
- A contract is still for a fixed term even if it contains a clause allowing either party to end it earlier.
Who is covered?
- The FTR apply to employees only and not to the wider definition of workers.
- Specifically excluded from the definition are apprentices, agency workers (contracted to perform work for an end-user company through a temping agency), employees on government or EC institution-funded training, work experience or temporary work schemes, students on work experience for up to a year as part of a higher education course and the armed forces.
Protection from discimination
- Fixed-term employees are entitled not to be treated less favourably than comparable permanent employees unless there is an objective justification.
- They have parity of rights therefore as regards the terms of their contract and are entitled not to be subjected to any to any detriment by any act, or deliberate failure to act, on the part of their employer.
- Fixed-term employees also have the same protection as permanent staff against discrimination on the grounds of pregnancy and maternity.
- In particular they are entitled to the same opportunities to receive training and to secure any permanent position.
- A fixed-term employee can compare their conditions to those of a 'comparable' permanent employee who is not on a fixed-term contract and who is working for the same employer in the same establishment doing the same or broadly similar work.
- When comparing terms and conditions, there is no absolute requirement for every item to be identical provided the overall package is no less favourable.
- Less favourable treatment may, for example, occur where a fixed-term employee:
- is given different contractual terms from a permanent employee
- is not given access to promotion opportunities
- is selected for redundancy on the basis of being part time, or
- where an employer imposes additional conditions on a fixed-term employee, e.g. to start work earlier than permanent employees
- Less favourable treatment must be justifiable on objective grounds, for example, the employer's need to achieve a particular business objective, or where the cost of providing a benefit to someone on a fixed-term contract would be disproportionately high compared with the benefit the employee would receive.
Pro rata principle
- If a particular benefit is offered over, for example, a year employers should try to pro rata the benefit. For example, an employer might offer 50% of an annual bonus to an employee on a six-month fixed-term contract.
- Where the benefit cannot be pro-rated, employers may be able objectively to justify not giving it to fixed-term employees.
- They may wish to consider compensating fixed-term staff by offering them an alternative benefit so that their overall package is no less favourable.
Redundancy
- Selecting employees for redundancy simply on the basis of their fixed-term status will be unlawful unless it can be objectively justified.
- It might be justified where, for example, staff had been employed for 6 months to complete a particular task and that task had been completed.
- It might also be lawful to select fixed-term employees for redundancy on the basis of length of service provided that permanent employees’ with the same length of service are also included in the selection pool.
Protection from dismissal
- Dismissal of a fixed-term employee is automatically unfair if the reason or principal reason for the dismissal is that the employee has brought proceedings against the employer under the FTR (or done any other act under the FTR or the employer suspects or believes the employee has done such an act).
- This includes requesting a written statement of the reasons for less favourable treatment, alleging that the employer has infringed the FTR, given evidence in connection with any proceedings brought under the FTR or refused to forgo a right conferred on him by the FTR.
- There is no qualifying period of employment where the dismissal is automatically unfair in these circumstances.
Written statement of reasons
- An employee has the right to request a written statement of the reasons for any less favourable treatment from their employer.
- The request must be in writing and the employer must respond within 21 days.
Successive fixed-term contracts
- Employees who have been continuously employed for 4 years or more on a series of fixed-term contracts are automatically deemed to be permanent employees, unless the continued use of a fixed-term contract can be objectively justified.
Expiry of a fixed-term contract
- The expiry of a fixed-term contract without renewal counts as a dismissal for unfair dismissal and redundancy purposes.
- An employee whose fixed-term contract expires without renewal therefore has the same rights to unfair dismissal protection and redundancy payments as a permanent employee, subject to the usual qualifying criteria.
- If redundancy is the reason for dismissal, employers must look for suitable alternative employment and will have to make a redundancy payment if the individual has been employed for 2 years or more.
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