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About the P&I Team Briefings Home | Responses | PFI Index | Policy Guide
Briefing 46: Fixed Term Employees
Communications

 

 

 

Fixed Term Employees Briefing

Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002

Introduction

This legislation, enacted on 1st October 2002, was introduced to comply with the EU directive on Fixed Term Work. Its aim is to prevent employers from treating employees on fixed term contracts less favourably than similar permanent employees. It also imposes limits on the use of successive fixed term contracts.

Who is covered?

The regulations provide quite a narrow definition of who counts as an employee. In the terms of the regulations, this is an individual who is clearly working under the control and direction of the employer. It excludes agency workers, freelancers, employees on apprenticeships or government training schemes and students on work placements of up to one year.

The employee must also be employed on a contract which is for a specific term or which terminates automatically on the completion of a specific task or upon the occurrence or non-occurrence of a specific event

Less Favourable Treatment

A fixed term employee should not be less favourably treated than a comparable permanent employee unless the treatment can be justified objectively.

Less favourable treatment may take a number of forms including inferior employment terms, such as a lower rate of pay, or less generous benefits than a comparable permanent employee. This includes longer periods to accrue benefits as well as restricted access to training or permanent employment opportunities than a comparable employee.

The regulations also repeal the provisions enabling fixed-term employees to waive their right to a redundancy payment. The effect is that any such waivers inserted into contracts agreed, renewed or extended after 1 October 2002 will be void and fixed-term employees will have a right to statutory redundancy payments if they have been continuously employed for two years or more.

Comparable Employee

When deciding the question of whether a fixed-term employee has been treated less favourably, it is necessary to compare their treatment with that afforded to a comparable, permanent employee. This is defined as an individual employed on a permanent contract by the same employer who works or is based at the same establishment and who is engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience. If there is no such permanent employee at the same establishment, the fixed-term employee is entitled to compare themselves with someone based at one of the employer's other establishments.

Objective justification

The regulations however do allow less favourable treatment of fixed term employees to continue under certain specific conditions. For such treatment to continue it must be 'objectively justified'. Therefore it must be shown to correspond to a real business need, be necessary to achieve the objective in question, and be proportionate to it.

However, the regulations expressly state that if the terms of the fixed-term employee's contract, taken as a whole, is at least as favourable as the terms of the comparable permanent employee's contract of employment, then objective justification is made out.

Therefore, it will be permissible to deny a fixed-term employee certain benefits provided that the overall package is just as good.

Limiting the use of successive fixed-term contracts

If fixed-term employees have their contracts renewed, or are re-engaged on a new fixed-term contract, when they already have a period of four or more years of continuous employment, the renewal or new contract takes place as a permanent contract. In calculating this four year period all employment prior to 10th July 2002 is disregarded.

However, exceptions to this include if the employment on a fixed-term contract was objectively justified or the period of four years has been lengthened under a workforce agreement. There is also no limit on the duration of a first fixed-term contract, but if the first contract lasts for four years or more and is renewed, the second contract will be regarded as permanent unless a further fixed-term contract can be justified objectively.

What to do next

If a fixed term worker suspects that they are being less favourably treated by their employer they are entitled to receive a written statement giving the reason for such treatment. The employer must produce this statement within 21 days of the request. This statement may be used in evidence at an employment tribunal hearing concerning a complaint under the regulations. It should set out the reasons for the different treatment or, if less favourable treatment is not occurring, that this is the case. If a package approach is used to justify the treatment, the statement should say that is why different treatment is occurring in respect of one or more benefits.

If fixed-term employees believe they are being less favourably treated than a comparable employee because they are fixed-term, or that the employer has otherwise infringed their rights under the regulations, then they may present their complaint to an employment tribunal. Fixed-term employees are also protected from victimisation arising from their having made such complaints. No qualifying period of continuous employment is necessary for a complaint under the regulations.

Action for Branches

Most employers are using these negotiations as an opportunity to review their policies on the use of fixed term contracts. We expect a significant reduction in the use of fixed term contracts. Branches should:

  • Request a list of fixed term staff from the employer and why they are employed on fixed term contracts
  • Advise members on fixed term contracts of their new rights
  • Negotiate a reduction in the use of fixed term staff.

There are many other reasons for ending the widespread use of fixed term contracts including; staff turnover, training costs, quality of customer service. A stable staffing policy provides the best prospect for quality services.

Department of Trade and Industry: Employee Relations: Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002

http://www.dti.gov.uk/er/fixed/index.htm

ACAS: Fixed Term Employees: Questions and Answers

http://www.acas.org.uk/q_a/q_a11.html

Labour Research Department

Temporary Workers a guide to the new law (October 2002)

Contacts list:

Dave Watson - d.watson@unison.co.uk

@ The P&I Team
14 West Campbell St
Glasgow G26RX
Tel 0845 355 0845
Fax 0141-307 2572

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Further Information

Department of Trade and Industry: Employee Relations: Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002

http://www.dti.gov.uk/er/fixed/index.htm

ACAS: Fixed Term Employees: Questions and Answers

http://www.acas.org.uk/q
_a/q_a11.html

Labour Research Department

Temporary Workers a guide to the new law (October 2002)

Contacts list:

Dave Watson -
d.watson@unison.co.uk

@ The P&I Team
14 West Campbell St
Glasgow G26RX
Tel 0845 355 0845
Fax 0141-307 2572