Employers must convert the contracts of workers who have been on a fixed-term agreement for more than four years to contracts of indefinite length, or run the risk of tribunal claims, lawyers have warned.
When the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations came into force in 2002, part of the new regime was that fixed-term contracts should be converted after four years. The four years could not start before 10 July 2002, meaning 10 July was the first “effective” date for this regulation to bite.
“It may be that some employers still see fixed-term employees as second-tier staff, believing they are locked into leaving at a set date,” said James Warren, solicitor at law firm Field Fisher Waterhouse.
“However, the regulations have made it unlawful to treat fixed-term employees less favourably than permanent staff, and the non-renewal of a fixed-term contract may, in some cases, be an unfair dismissal.”
An employer can objectively justify a fixed-term contract. Objective justification requires an employer to show particular business reasons why a fixed-term contract is more appropriate than a permanent position. For instance, appropriate justification might exist if the role in question is for a short-term project that depends on its funding from an external client.
“But in most cases, it will be very difficult to prove justification, particularly where the individual has been employed on a succession of contracts, as this implies that there is in fact an ongoing role,” said Warren.
Ruling gives permanent rights to fixed-term staff