Your employment status will depend upon the nature of the contract under which you are working. Different contract types can include full time and part-time contracts; fixed-term contracts; agency staff; freelancers, consultants and contractors; as well as zero-hours contracts.
The following guide provides the answers to some frequently asked questions for employees under fixed-term contracts.
What is a fixed term contract?
A fixed term contract is different to a permanent contract that will run, as the name suggests, until otherwise brought to an end by either the employer or employee. In contrast, a fixed term contract lasts only for a certain length of time, based on a time scale that is specifically set in advance.
You will be on a fixed term contract where you have a contract of employment with the organisation or company that you work for, and your contract ends on a particular date. Typically, the fixed term contract will come to an end on completion of a specific task or when a specific event takes place.
By way of example, you may be a fixed term employee where you have been taken on as a specialist on a particular project, or where you are covering for someone else on maternity leave, or even as a seasonal or casual employee taken on for a period of up to six months during peak times.
If you are working under a contract of apprenticeship, or as a trainee on a work-experience placement, even though these will be for set periods of time, you will be classed as a worker rather than as a fixed term employee. As a worker you will have lesser employment rights than those of employees (see below).
You will also be classed as a worker where you work under a contract with an agency rather than the organisation or company that you are working for, or where you are in the armed forces.
What are my employment rights under a fixed term contract?
Your employment status will help to determine your rights, as well as your employers’ responsibilities. Under a fixed term contract you will be classed as an employee rather than simply as a worker. In other words, you will be someone who is working under a contract of employment.
All employees are workers, although as an employee under a fixed term contract you will have additional employment rights and responsibilities that do not apply to workers who aren’t employees. This includes all the rights that a worker is entitled to, for example, the right to be paid the national minimum wage or to receive the statutory minimum level of paid holiday.
As such, subject to meeting any minimum length of continuous employment requirement where relevant, in addition to your rights as a worker, you will also be entitled to the following:
- Statutory sick pay (please note, in some cases a worker may also be entitled to pay here)
- Statutory maternity, paternity, adoption and shared parental leave
- Statutory maternity, paternity, adoption and shared parental leave pay (again, in some cases a worker may also be entitled to pay here)
- A minimum notice period if your employment is being terminated, for example, if you are being dismissed
- Protection against unfair dismissal
- The right to request flexible working
- Time off for emergencies
- Statutory redundancy pay
How do my fixed term contract rights differ to permanent employees?
As an employee under a fixed term contract you are entitled to receive the same treatment as full time permanent staff. In other words, your employer must not treat any worker on a fixed term contract less favourably than permanent employees doing the same or similar role.
In particular, your employer must ensure that you receive the same pay and conditions as permanent staff, as well as the same or equivalent benefits package. You should also receive information about permanent vacancies in the organisation, as well as protection against redundancy or dismissal.
That said, there are certain circumstances in which an employer can objectively justify different treatment, ie; where there is a good business reason for so doing. By way of example, where a permanent employee is in receipt of certain benefits, such as a company car, an employer may be able to argue that the cost for a fixed term employee over a short period would be too high.
Can a fixed term contract be brought to an end early?
If your employer is looking to end your contract prior to the expiry of the fixed term or specific event for which the contract is based upon, their right to do so will very much depend upon the terms of your contract of employment.
Where your contract is silent on whether or not it can be ended early, your employer may be in breach of contract if they attempt to terminate your employment prior to expiry of the fixed term.
In circumstances where your employment contract contains an early termination provision, and therefore allows for your employment to be ended early, as a fixed term employee you will still have the right to a minimum notice period. This is set at one week where you have worked continuously for at least one month, or one week for each year that you have worked if you have worked continuously for two or more years.
That said, your fixed term contract may in fact make provision for a longer notice period, these are simply the statutory minimum periods depending on your length of service for your employer.
What happens upon the expiry of my fixed term contract?
Typically, a fixed term contract will come to an end automatically upon either expiry of the fixed term, the completion of a particular task or occurrence of any other specific event.
As such, where the contract is due to come to an end, your employer is not legally required to give you any notice. However, the law governing fixed term contracts becomes a little complex here. As such, in the event that your contract is not renewed, and you have two years’ or more continuous service, this could in fact be construed as a dismissal.
In these circumstances, your employer will be required to show that there is a fair reason for not renewing your contract, for example, where the work for which the contract was required has come to an end. However, where the reason for non-renewal is redundancy and you have accrued over two years’ service, you may be entitled to a statutory redundancy payment.
Please note, after one years’ service, you are also entitled to a written statement from your employer of the reasons for not renewing the contract.
How long can you remain on a fixed term contract?
In circumstances where you continue to work beyond the end of a fixed term without any formal agreement being reached with your employer, in other words, you continue on the same terms and same pay undertaking the same or similar role and responsibilities, an implied agreement will come into existence.
This is an agreement that the end date has now effectively changed. This does not necessarily mean that you have become a permanent employee, rather you will remain on a fixed term contract until the work in question comes to an end and/or you receive the appropriate notice from your employer to terminate your employment.
That said, if you work under a fixed term contract for four or more years, you may automatically become a permanent employee, unless your employer can show there is a good business reason not to do so. Please note, however, there may be a collective agreement in place that removes the automatic right to become a permanent employee in these circumstances.
Author
Anne Morris is the founder and Managing Director of DavidsonMorris. A highly experienced lawyer, she is recognised by Chambers & Partners and the Legal 500 UK as a trusted adviser to multinationals, large corporates and SMEs, delivering strategic immigration and global mobility advice. Anne is also an active commentator on UK immigration and HR matters.
