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Fixed Term Workers

Who is a fixed term worker?

A worker employed under an employment contract that comes to an end after a specific period, or the occurrence of a particular event. This may include seasonal or casual workers employed for up to 6 months at peak periods, cover for maternity leave or a person taken on for a specific project. It does not include agency workers, students or work experience placements or apprentices.

What protection is given to a fixed term worker?

Employers may not treat fixed term workers less favourably than permanent employees in relation to contract terms, access to pension schemes, access to training, access to permanent employment opportunities and the qualifying periods for benefits such as holidays or sickness leave. The fixed term worker must receive comparable benefits to those of a permanent employee when applied pro rata.

There are also limits on an employers’ right to employ an employee on successive fixed term contracts.
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Employers are also under an obligation to notify all fixed term workers of permanent vacancies within their organisation.

Who is a comparator for these purposes?

A comparable, permanent employee that is employed by the employer in similar work at the same establishment (or another of the employer’s establishments) as the fixed term worker. If relevant, the fixed term worker must have a similar level of skills, qualifications and expertise.

Are there any restrictions on these rights?

Differences in pay and benefits can be objectively justified on the grounds that there is good reason for the difference, or by showing that the fixed term worker’s terms are at least as favourable as those for a permanent employee.

What action can fixed term workers take?

The first step is for fixed term workers to identify a comparator and request a written statement of reasons for their treatment from their employer. This should be made in writing and the employer must respond within 21 days explaining the reasons. Thereafter if the worker remains dissatisfied then a claim may be made to an Employment Tribunal.

Can workers be employed on a series of fixed term contracts?

The use of successive fixed term contracts is limited to a maximum of 4 years, unless their use for a longer period is objectively justified.

If a fixed term contract is renewed beyond a 4 year period then the words that limit the contract to a fixed term will effectively be invalid. The contract will be regarded as permanent and subject only to any notice provisions in the contract. In the absence of notice provisions, the statutory minimum notice provisions will apply to employees, both in terms of notice received and given.

Employees on a succession of fixed term contracts may also accrue continuity of service for unfair dismissal purposes or the right to a redundancy payment (2 years’ continuous service). Continuity can be preserved in some circumstances even if there is a break between fixed term contracts. The employee will also be entitled to written reasons for dismissal and employers must take care to apply appropriate termination procedures in accordance with ACAS guidelines (see Dismissal).

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