EU Directive on fixed term work

The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 come into force on 1st October 2002 (via enabling provisions in the Employment Act 2002). They prohibit employers from discriminating against fixed term employees and also aim to prevent abuse arising from the use of successive fixed term contracts. The Regulations will also improve access to permanent jobs for fixed term employees. The Regulations implement the European Union Directive on fixed term work and apply to all fixed term contracts in existence as at 1st October 2002.

The Regulations only protect employees not workers. There is also a wide definition of fixed term contracts, catching contracts of employment which terminate automatically on the completion of a particular task.

The Regulations provide for the “pro-rata principle” to apply – this means that a fixed term employee is entitled to the proportion of a payment or benefit which a comparable permanent employee receives relative to the length of his contract of employment and the basis on which the pay or other benefit is offered.

The Regulations guarantee that fixed term employees must not be treated less favourably than permanent employees in relation to the terms of their contract or pay or by being subjected to any other detriment. There is a defence if the employer can prove that the failure to grant equal treatment is objectively justified.

The Regulations also confer a right on fixed term employees to be informed of available permanent vacancies at their workplace. Unfortunately, the Regulations as drafted do not state that these should be vacancies suitable for the employee in question. So it may be necessary to give them access to news about all vacancies.

If a fixed term employee thinks his employer has failed to comply with the Regulations, he has the right to demand a written statement of reasons for the less favourable treatment. There is also the right to bring a claim to tribunal if dismissed for or suffering any detriment e.g unequal treatment. Any dismissal on these grounds will be automatically unfair, and the usual remedies are available.

In addition, there is a new control on the length of time an employee can be employed on a fixed term contract.

The new law will be that any employee who has been continuously employed under a series of fixed term contracts over a period of 4 years or more will be treated as if employed under an indefinite contract subject to the statutory minimum periods of notice.

The Regulations also remove the right to waive the statutory right to receive redundancy payments on the redundancy of a fixed term employee at the end of his contract. This will apply to contracts signed, extended or renewed after the Regulations have come into force.

For further information, please contact Simon Jeffreys at [email protected] or on +44 (0)20 7367 3421.