Understanding fixed-term contracts

Rights of fixed-term employees


Fixed-term employees have the right not to be treated less favourably than comparable permanent employees because they are on a fixed-term contract.

This means you must treat fixed-term employees the same as comparable permanent employees unless there are 'objectively justifiable' circumstances for not doing so (ie there is a genuine, necessary and appropriate business reason).

Therefore they must receive the same or equivalent (pro-rata) pay and conditions, benefits, pension rights and opportunity to apply for permanent positions within the business.

Under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (Northern Ireland), which came into operation on 1 October 2002, employees who have been on a fixed-term contract for four years or longer will usually be legally classed as permanent if their contract is renewed or if they are re-engaged on a new fixed-term contract. The Fixed-term Employees Regulations apply only to 'employees', not to the wider category of 'workers'.

The only exemptions are when employment on a further fixed-term contract is objectively justified to achieve a legitimate business aim or when the period of four years has been lengthened under a collective or workplace agreement.

You also need to make the same tax arrangements for fixed-term employees as for permanent staff.