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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