Your job and the law

The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 impose a duty to treat employees on fixed-term contracts no less favourably than a comparable permanent employee other than in exceptional cases. Fixed-term staff cannot be paid less, get less favourable benefits or be subject to any other detriment.

One issue that has, until recently, remained unclear is whether or not failure to renew or extend a fixed-term contract is in itself less favourable treatment. In the recent case of the Department for Work and Pensions v Webley the court ruled in favour of the DWP, finding that non-renewal alone was not a breach.

But employers are not totally off the hook. A fixed-term contract that is not renewed is a dismissal at law and as such an employee has the same rights in relation to unfair dismissal as any permanent employee. Therefore where an employee has a requisite one-year qualifying period, they could claim unfair dismissal where the fixed term of their employment expires without being renewed. In such circumstances the onus will be on the employer to demonstrate that the reason for dismissal was a potentially fair one. The employer will have to show the procedures it has followed were fair.

Before the implementation of the Statutory Dismissal, Disciplinary and Grievance procedures in October 2004, employers that failed to consult with a fixed-term employee before the termination of their contract might not necessarily have been found to have unfairly dismissed them. Now employers must follow a three-stage procedure before the fixed-term contract expires. Failure to do so will lead to a finding of unfair dismissal and higher awards of compensation.