Fixed Term Contracts

All you Need to know about Fixed Term Contracts!

Do you ever wonder why fixed-term contracts are so popular among companies? or How do they use it to fill the gap of temporary employees that were hired for a short period of time? Here, in this guide, we will help you to understand what is a fixed-term contract and how it needs to be protected because this can be abused.

Before we delve into further discussion, let’s see what are the points of discussion in this article:

employment law

  • What is a fixed-term contract?
  • Fixed Terms Employees Regulations
  • What Happens when Fixed Term Contract comes to an end?
  • The Bottom Line


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What is a Fixed-term Contract?

To develop a better understanding of fixed-term contracts. Let’s take the example of a certain project that has specific terms and the contract with employees will expire after the project is completed. The examples of temporary employees who work in replacement of employees with maternity leave or long leave can also be added. Such employees who are hired temporarily are on fixed-term contracts. It is also known as FTC.

Such employees are PAYE employees. This is required from the employer to give specific terms and conditions to fixed-term contract employees. The provided document should explain the time period of the contract and the reason why the employee is hired for the temporary time period.


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Fixed Terms Employees Regulations:

The employees who are working on fixed-term contracts have a piece of good news to know here. The fixed-term employees are under the protection of the law in order to avoid any kind of work abuse. According to 2002 regulations, it is to ensure prevention of being less favourable.

Moreover, the purpose behind this regulation is to ensure the protection of fixed-term contract employees so that they do not face work abuse. Often it has been observed that such employees face less favourable environments when they work with permanent employees. There are certain requirements that are suggested to be provided for fixed-term employees. Some of them are listed below for you:

  • Holiday benefits
  • Bonus schemes
  • Work training and promotions
  • Pension schemes and other perks of being part of the company

If we view with an employers sight, there are some very solid reasons to not offer all the benefits that are offered to the permanent employees. If the reasons are genuine enough, they can be considered. This is important to know that they are not applicable for agency workers, freelancers, and contractors. Moreover, if an FTC employee continues to work for four or more years in the same company. The job will automatically be turned into a permanent offer.

In scenarios like FTC employee has served for four or more years, he can request his employer to provide the document that confirms workforce agreement as a permanent employee.


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What Happens when Fixed Term Contract comes to an end?

It is taken as a dismissal when a certain contract is expired. The FTC employees must get a respectable dismissal after the expiry of the contract. Redundancy is the most common reason of what the contract is expired. This happens for one of the following reasons:

  • Because of the reduced workload, the employee is no more required.
  • The project is over and the contract is expired.

While doing the process of redundancy, the following should be ensured:

  • The self rest and fairness towards the FTC employee must not be compromised.
  • It is obligatory for the employer to inform the FTC employee about the redundancy and suggest they look for an alternate.
  • A fair reason for redundancy must be stated to document.
  • The reasons should not be based only on the FTC and that the employee is working on a contract.

In case of unfair dismissal, the employee can make a claim to get the rights.


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The Bottom Line:

Now that you know that what is a fixed-term contract, we can sum up the discussion by saying that FTCs are quite beneficial to protect the rights of temporary employees and offer ensured rights in a workplace. The fair treatment and respect by the employer is equally rightful for the FTC employees just as that is for the permanent employees. We hope this article helped to develop a better understanding.


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Disclaimer: This article is written with the intention of providing general information based on what is a fixed-term contract.

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