Here at BIS, we are interested in your views on employment matters. In this post, we thought we’d explain some of the myths and misconceptions around fixed-term contracts and ask for your thoughts on some of the changes the government has made in this area in the last 18 months.
Fixed-term contracts offer flexibility to businesses and workers to undertake shorter-term work that might not be suitable for a permanent role. However, there is sometimes a perception that employers only offer fixed term contracts so they can avoid paying for any employment rights. This perception is unfounded as, along with other employment contracts, workers on fixed term contracts are entitled to key rights such as the same pay and conditions as permanent staff, and protection against unfavourable treatment.
For example, from 30 June this year, new rules mean that any employee (someone on a fixed term contract can be an employee) with 26 weeks continuous service can request a flexible working pattern that suits their circumstances.
Also, an employer cannot simply keep renewing a fixed-term contract every year. If the job still exists after 4 consecutive years of contracts then there’s a high chance that the role needs to be made permanent.
It’s worth checking then if the contract includes:
- Clear information about the circumstances in which the employer will/will not renew the contract
- A clear statement about when the contract will end, so for example a date in the contract or a statement that the contract ends when work related to a specified activity completes.
Last year, the Government made changes to make it clear that the expected end of a fixed term contract was not a redundancy for purposes of collective redundancy consultation. This was to end the practice of ‘fake’ consultation around saving jobs at the end of the contract and encourage employers to be clear about when each contract is expected to end or be renewed.
This was a particular problem in the higher education sector where jobs are only guaranteed for one academic year as the budget and roles are funded annually. We found that annual consultation to save jobs was generating false expectations that roles would be renewed when in fact neither party actually knew at that time if the role would or could be made available again next year.
We are interested to know what you think of these changes. Have they resulted in tangible cost savings for your business or improved staff morale where you work? Have there been changes to the way contracts are written? Let us know what you think in the comments box below.
Got a question about your contract? Don’t forget advice on employment issues is free from ACAS.
3 comments
Comment by Grant Cockburn posted on
You have put "not a redundancy or purposes of collective consultation" but perhaps you could put in here that after 2 years someone on a fixed term contract could still be eligible for a redundacy "payment".
It is technically covered by saying FT employees have same rights, but by putting this in I feel there may be some confusion and employers may think redundancy as a whole is exempt not just the consultation process
Thanks
Comment by Nicola Stevens posted on
Hi Grant,
Thanks for your helpful comment.
Employees on fixed term contracts can accrue statutory rights to redundancy pay after 2 years.
More information about redundancy pay and who is entitled can be found at:
https://www.gov.uk/redundant-your-rights/redundancy-pay.
Comment by Christina posted on
Hi. Whist fixed term contract employees are entitled to redundancy payments can I ask about the redundancy process? I have been employed for over 2 years on two successive fixed term contacts. I have signed a third contact for a further 8 months. I do the same job as permanent colleagues in my team. There is a lot of discussion about business continuity and what happens when I leave. It seems I am ear marked for redundancy purely based on my fixed term status. There is even talk of training people in low priority work areas to better understand the work my team does as the work load is not expected to drop at the same time I leave. Is this fair and legal?