Employers need to review their use of fixed-term contracts and whether those
employed under them should become permanent workers, advisers have warned.
The final nail for such contracts will be hammered home in June 2001, when
the Fixed Term Contracts Directive is due to be implemented in the UK, said
head of employment at Osborne Clarke OWA, Nicholas Moore.
The directive prohibits an employer from unjustifiably treating a fixed-term
contractor less favourably than a permanent employee. It will compel employers
to consult workers’ representatives over the use of fixed-term contracts, and
will allow the UK Government to cap the number of times a fixed-term contract
may be renewed.
"Combine these aspects with the obvious disadvantages of a fixed-term contract
– that without good reason or an appropriate break clause, early termination
will result in a claim for damages – and you wonder whether there is any
point," Moore said.
There might be a future for fixed-term contracts among apprentices, he
added, since less favourable treatment will still be allowed in their case.
Those on fixed-term contracts of more than two years can still agree to
waive their right to redundancy payments, but such advantages will be marginal.
Employers should take these into account and adopt a clear policy on fixed-term
contracts, such as bringing benefits packages into line with those for
Death of a contract
1983: House of Lords held practice
of breaking continuity of service for fixed-term workers by inserting breaks
between terms would fail, unless break was substantial.
October 1999: Government
outlawed practice of getting fixed-term workers to sign away unfair dismissal
June 2001: Fixed-Term
Contracts directive to be incorporated into UK law, prohibiting employers from
unjustifiably treating fixed-term workers less favourably than permanent ones.