The purpose of this article is to advise employers of the requirements of the Fixed-term Employees Regulations 2002 and provide practical guidance on steps to take to ensure compliance.

The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 came into force on 1st October 2002. The basic idea of the new fixed-term regulations is to ensure that it is not possible for an employer to "escape" from the regulations by employing fixed-term workers on a part-time basis.

The key features of the Regulations are:

• employees on fixed-term contracts will have the right not to be treated less favourably than comparable permanent employees, unless the less favourable treatment can be justified on objective grounds;
• the use of successive fixed-term contracts will be limited to a maximum period of 4 years, unless their use for a longer period can be objectively justified;
• employers will be required to inform fixed-term employees of permanent vacancies, with the aim of improving their access to permanent employment.

The Regulations apply only to employees ie individuals who have entered into or work under, or, if the employment has ceased, worked under a contract of employment. Agency workers are specifically excluded from the protection of the Regulations, as are apprentices, people on government training schemes and students on university placements.

The definition of a fixed-term contract covers:

• a contract for a specific term which is fixed in advance; and
• a contract which terminates automatically on the completion of a particular task or upon the occurrence or non-occurrence of a particular event, other than the employee reaching normal retiring age or committing a breach of the contract which would entitle the employer to dismiss him or her summarily.

Employers are advised to take the following steps in the light of these new Regulations:

• Assess whether and in what ways, employees on fixed-term contracts are treated less favourably than permanent staff.
• Determine whether the fixed-term employees have permanent employees who are "comparators" for the purpose of the Regulations.
• If there are occurances when fixed-term employees are treated less favourably than an appropriate comparator, consider whether that different treatment is objectively justifiable.
• If the differential treatment involves a temporary employee receiving fewer non-cash benefits, then consider whether you should augment the basic pay to make up for the absence of other benefits.
• When renewing fixed-term contracts, consider whether the period of employment after 9 July 2002, plus the length of the proposed renewal, would amount to a total of more than 4 years. If it would, then consider whether there is any objective justification for renewing the contract on a fixed-term, rather than permanent basis.
• If an employee who has been employed on fixed-term contracts for a period in excess of 4 years since 10 July 2002 asks for confirmation that they are permanent, then consider whether there are any justifiable reason for asserting that they have not assumed permanent status.
• If an employee has been engaged on fixed-term contracts for more than 4 years after July 2002, and the fixed term contract upon which they are employed is coming to an end, it may be wise for an employer expressly to give notice to the employee of the fact that the employment will shortly terminate and the termination date. The employer can still assert that it considers that the employment is of a fixed-term nature, and will in any event expire by the passage of time, but that it is nevertheless giving notice to terminate.

  For further information about this news release please contact Close Thornton Solicitors Marketing and Media Department. Tel: 01325 466461 or e-mail.

  BACK