Fixed Term Employees Regulations 2002

On
1 October 2002, the Fixed Term Employees Regulations 2002 came into force.
Fixed-term workers now have in general a right to be treated no less favourably
than comparable permanent employees, unless that less favourable treatment can
be objectively justified. Many employers are only now beginning systematically
to look at this issue, and a number of our clients have asked us to set out
clearly what their responsibilities are, and how to tackle this issue. The
following stage-by-stage checklist may help:

Is
the complainant an employee?
The regulations only cover the narrow
definition of ’employee’. Those individuals who are agency workers,
apprentices, freelancers or genuinely self-employed, among others, will not be
able to seek protection.

Is
the complainant working for a fixed term?
The concept of a fixed term is
defined in the regulations and includes contracts which expire on a particular
date, on the completion of a particular task, or on the happening or
non-happening of a specific event. This excludes, of course, the normal
retirement age. If the fixed term does not fit into any of the above
categories, it is not covered by the regulations.

Is
there an actual comparable permanent employee?
The complainant must point
to an actual comparable permanent employee. That employee must be doing the
same or broadly similar work as the fixed-term complainant. The skills and
qualification levels must be similar. The comparator must also be based at the
same establishment as the complainant, unless there are no comparable permanent
employees there, in which case another establishment can be used. The
comparator cannot be a predecessor or successor, and cannot be hypothetical.

Is
there less favourable treatment?
The complainant must point to and evidence
less favourable treatment in respect of a specific term of the contract of
employment, or in the way they have been treated. It must be treatment ‘on the
ground’ that the complainant is a fixed-term employee. Any other reason for the
treatment will enable the employer to defend a claim.

Is
there objective justification for the less favourable treatment?
The
employer will not be acting unlawfully if it can objectively justify
differences in treatment in all the circumstances. The test is likely to be
strict – the less favourable treatment must be shown to correspond to a real
business need, be necessary to achieve the objective in question, and be
proportionate to it. Very usefully, however, the regulations expressly state
that if the terms of the fixed-term employee’s contract, taken as a whole, are
at least as favourable as the terms of the comparable permanent employee’s
contract of employment, then objective justification is made out. That
clarification is extremely helpful to employers, and allows employers to look
at the overall ‘value’ of a contract, rather than having to replicate every
last benefit in kind for fixed-term employees.

Remedial
action, where necessary, should be taken swiftly in order to ensure that the
employer is fully compliant with the law now in place.

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