A fixed-term contract is a contract that is issued for a specific and specified length of time only, e.g., to cover maternity leave. It can also be a contract that is created for a specific task and will come to an end when the task has been completed, e.g., a 1-1 teaching assistant for an EHCP child that will come to an end when the child leaves the school.
Employers must not treat fixed-term workers less favourably than permanent employees doing the same or a similar job. When issuing a fixed-term contract, an employer should clearly specify the reason for the fixed-term contract. If the reasons are not specified, a redundancy process including the same roles may apply when ending the contract, including all other employers employed in the same role.
The only reasons for an employee to be on a fixed-term contract should be one of the following:
- To cover an absence caused by maternity (linked to someone named)
- To cover an absence caused by sickness (linked to someone named)
- To cover a leave of absence (linked to someone named)
- To cover a secondment (linked to someone named)
- To undertake a specific project (giving details of the specific project, the more detailed the better)
- Linked to external funding (external funding named)
- To cover a post pending recruitment
Employees on a fixed-term contract who work continually for the same employer (including a Local Authority) for two years or more may have the same redundancy rights as a permanent employee. In addition, contracts will normally end automatically when they reach the agreed end date. However, it may be necessary to extend a fixed-term contract but employees who are on a fixed- term contract for four or more years, may automatically become a permanent employee.
When ending a fixed-term contract, a formal process should be followed to ensure the employee’s fixed-term contract can be ended without risk. An employer should arrange a meeting with the employee and serve them the appropriate notice in line with the notice clause in their contract.
How are Zero-hour contracts different to fixed-term contracts?
Zero-hour contracts are different to fixed-term contracts. With fixed- term contracts, the employee and employer has agreed a start and end date, as well as regular hours and duties. A zero-hour contract, also known as a casual contract, is an agreement in which the employer does not have to guarantee any working hours and the employee does not have to accept work, when asked by the employer. Zero-hour contracts provide work for an employee on short notice or where there is a sudden demand/ need for additional workers. Employees on a zero-hours contract must be paid at least the National Minimum Wage and will be entitled to the basic statutory rights of employment. You must apply the same formal process and notice to all employees when ending a zero-hour contract.
If you would like to learn more about fixed-term contracts and ask questions of our HR Advisors, here at FusionHR, watch our free webinar recording here.
