Employers accustomed to having staff employed under a series of fixed-term contracts may find a surprise in store. Under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, a fixed-term contract is normally automatically converted into a contract of indefinite duration once an employee has completed four years’ continuous employment under two or more fixed-term contracts.
Service before 10 July 2002 does not count towards the period of four years’ continuous employment so the first date on which fixed-term contracts could be converted to indefinite contracts was 10 July 2006.
The exceptions to this rule are where there is an ‘objective justification’ for the use of a fixed-term contract or where details of the arrangements, including the four-year period, have been varied by a collective agreement with a trade union or by a workforce agreement.
Employers who use fixed-term contracts should review their arrangements and where a fixed-term contract automatically becomes a permanent one should notify the employee concerned, in writing, of the change in the terms of their employment. If an employee is dismissed for trying to enforce their rights under the legislation it will automatically be unfair dismissal.
