What 'fixed-term' means

There are special regulations protecting fixed-term employees, which define a fixed-term employee as "a person with a contract of employment which is due to end when a specified date is reached, a specified event does or does not happen or a specified task has been completed". Examples of fixed-term employees are:

• Additional staff taken on for six months during a peak period
• Specialist employees taken on for the duration of a project
• Someone employed to cover during another employee's maternity leave

If someone is taken on as 'temporary' but without a contract that will end on a particular date, event or completion of a task, then they are not covered by the regulations.

The Fixed-term Employee Regulations only apply to employees; people who have a fixed-term employment contract with the business where they work. They don't cover agency workers ('temps') who have a contract with an outside company, apprentices, or students and other trainees on work-experience placements or temporary work schemes.

Why employers take on fixed-term employees

Taking on fixed-term employees lets employers bring in people with special skills or employ extra labour when needed. A fixed-term contract allows both employee and employer to be flexible in their commitment.

Both employer and employee can benefit, as the employer has access to specialised skills to meet a particular need, while the employee can gain broader experience. In some companies, fixed-term employees are paid more than permanent staff, either because of their special skills, or to compensate for the temporary nature of the job.

Comparing the treatment of fixed-term employees with that of permanent staff

The general rule is that, except where there's good reason, employers mustn't treat fixed-term employees less favourably than permanent employees doing the same, or largely the same, job. This means that fixed-term employees have the right (except where there's good reason) to:

• The same pay and conditions
• The same or equivalent benefits package
• Access to a workplace pension scheme (except perhaps where the fixed-term contract is for less than 2 years)
• The right to be informed about permanent employment opportunities in the organisation

However, fixed-term employees don't have the right to the same pay, conditions and benefits if their overall terms and conditions, although different from those for permanent employees, are just as good or better. For example, an employer can choose to give fixed-term employees better pay instead of pension rights.

Not renewing a fixed-term contract is treated as a dismissal, so if the contract is not renewed, depending on the reasons why they were employed, fixed-term employees will also have:

• Redundancy rights, if continuously employed for 2 years or more (1 year in Northern Ireland), unless they signed a clause waiving their right to a redundancy payment before 1 October 2002
• Statutory protection against unfair dismissal, after 2 years' continuous service (1 year in Northern Ireland)

Ending a fixed-term contract

Normally a fixed-term contract comes to an end automatically once it has reached its agreed end point – there is no need for an employer to give notice. Your employer is still required to act fairly when dismissing you, otherwise you will be able to make an unfair dismissal claim.

If your contract is to cover someone on maternity leave, then if your contract is finished when they return, your dismissal will normally be fair.

Can an employer end a fixed-term contract early?

Check the terms of your contract – if it says your employment can be ended early and your employer has given proper notice, there's little you can do. However, if it doesn't say anything, your employer may be in breach of contract.

If you worked past the end of your contract (e.g. you were kept on for a year when your original contract was for three months), there's an implied agreement by your employer to change the end date. You would then have the right to be given proper notice if your employer wanted to dismiss you.

How long can an employer renew fixed-term contracts?

An employee can be kept on successive fixed-term contracts for a maximum of four years. If your contract is renewed after that, you become a permanent employee, unless:

• In England, Wales and Scotland - the employer can show a good reason why you should stay on a fixed-term contract
• In Northern Ireland - the period of four years has been lengthened by a collective or workplace agreement

When an employer renews on less favourable terms

If you're offered a renewed contract on less favourable terms, you can refuse to accept it and try to negotiate with your employer. If they won't change the terms, you'll need to choose between accepting the amended contract and treating the contract as being at an end. If the contract does end, you may be able to claim unfair dismissal.

If you are being treated less favourably than permanent staff

First, raise it with your manager and/or HR contact. If the matter still isn't sorted out, ask your employer for a written statement explaining why they're treating you less favourably.

Your next step should be to make a written complaint under your employer's standard grievance procedure.

If you can't sort the matter out with your employer, the last resort is to complain to an Employment Tribunal (Industrial Tribunal in Northern Ireland).

You must make the claim within three months of the occurrence (if a single event), or last incident (if the treatment has been ongoing), of less favourable treatment, unless you're still involved in the grievance procedure.