Guide

Understanding fixed-term contracts

Introduction

A ‘fixed-term contract’ is an employment contract that ‘in the normal course’ will terminate on:

  • the expiry of a specific term
  • the completion of a particular task, or;
  • the occurrence or non-occurrence of any other specific event, except the attainment of retirement age

The key advantage is that employers can benefit from specific skills without the cost of a longer-term commitment.

Fixed-term employees have the right not to be treated less favourably than comparable permanent employees. If you do not treat fixed-term employees in accordance with their legal rights, it can lead to grievances and possibly legal action through an industrial tribunal. This guide explains the rights of fixed-term employees, fixed-term employment benefits and fixed-term contracts and statutory employment rights.

Agency workers, apprentices, serving members of the armed forces, and students on work placements of one year or less that they are required to attend as part of a higher education course, are exempt from fixed-term employment regulations. Also exempt, are people employed on training, work experience or temporary schemes specifically designed to provide them with training or work experience to help them find work, where the schemes are wholly or partly funded by the government or an institute of the European communities.

This guide explains fixed-term contracts and the equal treatment principle and fixed-term contracts and less favourable treatment. In addition this guide outlines the redundancy rights of fixed-term employees, limiting the use of successive fixed-term contracts and informing fixed-term employees about permanent vacancies. Seeking professional advice is also always a good idea in matters of employment law.