Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 came into force on 1 October 2002. A fixed term contract consists of a fixed commencement and termination date even if it is likely to be renewed. Examples of situations where these type of contracts are most relevant are for example, employees covering for maternity leave and peaks in demand.
An employee on a fixed-term contract has the right not to be treated less favourably than permanent employees doing similar work for the same employer at the same organisation. They are entitled to terms and conditions of employment equivalent to those available to permanent staff (on a pro rata basis), and are no longer able to waive their right to a redundancy payment if employed under a fixed-term contract lasting two years or more. Employees on fixed-term contracts now also have a right to receive statutory sick pay, guarantee and medical payments irrespective of the length of service. However, certain types of worker are excluded from the regulations. These are:
Fixed-term contracts include those where the duration of employment is for a specified period or 'task' based (i.e. that last until a particular task has been completed of until a particular event has (or doesn't) happen).
There are two ways in which to make a fair comparison between fixed term employees and permanent employees. These are either on a term-by-term basis or on a package basis.
This means that every term in a fixed term employees employment package should be the same as that of a permanent employee, or the same on a pro-rata basis.
With the package approach, employers will be able to balance a less favourable condition against a more favourable one. Hence employers will be allowed to pay higher up-front rewards in return for reduced benefits in other areas.
In addition to the above, the equal treatment of fixed-term workers covers the following areas:
Employees will be also be able to insist on the same level of access to occupational pension schemes and to share options as permanent employees, unless there is an objectively justifiable reason for their exclusion.
Any fixed term contractor in continuous service on 10 July 2002 who has been continuously employed on successive fixed-term contracts for four years or more will become permanent on 10 July 2006. The only proviso is unless the use of further fixed -term contracts is objectively justified or has been provided for in a collective or workforce agreement.
Employers and employees will have the option to increase or decrease the four year limit or agree an alternative to prevent the abuse of successive fixed-term contracts via collective or workforce agreements. Such agreements need to be governed by one or more of the following:
Temporary employees have the same statutory employment rights as permanent employees and hence should be issued with a written statement outlining the main terms and conditions of their employment. The period for which employment is expected to continue or, if it is for a fixed term, the date it is to end needs to be clearly stipulated. A person employed for a fixed term of two years or more loses the right to statutory redundancy payment if the contract contains a clause waiving the right to such payment on the termination and non-renewal of that contract.
Statutory minimum notice periods are not applicable where the contract is for the performance of a specific task whose duration is no more than three months, provided the contract is not extended beyond that minimum period.
Temporary employees also have the right not to be dismissed, made redundant, or be subjected to any other detriment as a result of their affiliation to trade union or for taking part in efforts to secure trade union recognition or for encouraging other workers to do the same.