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Fixed Term Employment Contracts

Modern legislation gives a worker the right not to be dismissed unfairly if he or she has sufficient continuous employment. Unfortunately, in the same world many employers run projects and employ people to work on those projects where the funding is from year to year. Anyone who is not sufficiently careful, runs the risk of finding that an employee taken on for a fixed term contact, has acquired the right not to be unfairly dismissed. This is a complicated area and it is also an area which is heavily litigated and where the rules are continuously developing.

The essential requirement for an employer and an employee to create a fixed term contract, is that the contract itself must be for a term of at least a year. It is not necessarily clear whether a renewal of that contract must again be for a year, but it is perhaps wise to assume so.

The real difficulty comes when the relationship between the employer and the employee extends over the two year mark. How is this to be handled without the employee acquiring the rights?

In essence the employer must do whatever is necessary to make it quite clear to anybody who looks at the arrangement, that the first employment has come to an end. The employer should, therefore, formally dismiss the employee, and should obtain, from the employee, a letter acknowledging that the employment has been terminated as a result of the expiry of the fixed term contract.

Is it safe to re-engage the employee? The answer is yes, for the moment, provided proper steps are taken.

There must first and above all be a clear break in the employment. It is suggested that a week is a sensible minimum. The employee should not be told, for example, to think of this as an unpaid holiday, and the employer should take whatever steps are appropriate to make it quite clear that the employment has been terminated. The employee might for example be asked to clear out their desk for the appropriate period. In any event, the documentation must be clear showing the expiry of the notice to quit, and a new date for the commencement of employment, with a clear gap between them.

Experience of employment law suggests that any promises of effectiveness are unwise, but that does not mean that a minimum attention to detail will not go a long way to assist. Please also note that these provisions are liable to change in the promised 'Fairness at Work' legislation.

Important: Please note that our law-bytes are retained for archival purposes only. The law changes, and these notes are often, now, out of date. You must take direct advice on your own personal situation and the law as it currently stands.
All information on this site is in general and summary form only. The content of any page on this site may be out of date and or incomplete, and you should not not rely directly upon it. Take direct professional legal advice which reflects your own particular situation.
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18 October 2013 87 18 October 2013