Law Updates

New rights for Employees on Fixed-Term Contracts

Originally scheduled for 10 July 2001, the Government has postponed the introduction of new European regulations giving employees engaged on fixed-term contracts the right to many of the same benefits as permanent employees, unless the contrary can be objectively justified.

Although the legislation is yet to be finalised, it will broadly seek to ensure that fixed-term employees are not treated less favourably than those on permanent contracts.  It looks likely to outlaw the use of successive fixed-term contracts as a means of avoiding permanent employment, except possibly where there is a collective or workplace agreement to the contrary; the only other exceptions might be apprentices, certain people employed on government-supported training or retraining schemes, staff employed by an employment business to work for third parties, the armed forces and the self-employed.

Employers are likely to be required to take steps to inform fixed-term employees of vacancies in their organisations on the same basis as permanent employees.

The legislation is based on the 1999 European Directive, which does not cover pay and pension benefits.  The Government may decide to introduce separate legislation to cover these aspects of the contract.

Certain fixed-term employees may currently waive their right to statutory redundancy pay.  The government is considering removing this provision.

Many employers assume that if there is a break between two or more successive fixed-term contracts, there is no continuity of employment.  This is not necessarily the case; even a break of 6 months does not automatically prevent there being continuity. Subscribers should consult us if in doubt.