EMPLOYMENT CASE LAW / HUMAN RESOURCE MANAGEMENT - Fixed term contracts ending
As we approach the year end Employers should be mindful of any fixed term contracts coming to an end. A fixed term contract is a contract which is put in place for a temporary period and has a definite duration or purpose.
The end of the contract is determined by an objective condition such as:
What is the difference between a fixed term and a fixed purpose contract?
A fixed term contract is for a (fixed) duration / term of work required e.g. an Employee being hired during a busy seasonable time (i.e. Christmas). A fixed purpose contract expires when the specified (fixed) purpose of the role is fulfilled e.g. completion of a project or an Employee returning from long-term sick leave.
Legislation
The Protection of Employees (Fixed-Term Work) Act, 2003 is in place to ensure that there is no discrimination in relation to conditions of employment as between a fixed term / purpose worker and a comparable permanent employee. It is also in place to prevent abuse by Employers of the use of successive fixed term contracts.
A fixed term / purpose contract must specify the objective condition which brings the contract to a natural end. As outlined above, this may be a specified date, the completion of a specific task / project, or the occurrence of a specific event. Once this objective condition is satisfied, the natural expiry of the contract occurs. Objective provisions may include:
Fixed term / purpose contracts must also include a clause precluding the provisions of the Unfair Dismissals Acts applying to a termination resulting solely from the expiry of the fixed term / purpose contract. It is important to note that the Unfair Dismissals Acts will still apply to termination for any other reason other than the natural expiry of the contract, e.g. performance, conduct, attendance, redundancy etc.
Renewals & Extensions
If an Organisation wishes to renew a fixed term / purpose contract, they must have objective grounds justifying the renewal and failure to offer a contract of indefinite duration (i.e. a permanent contract) at that time.
The Act provides that where an Employer proposes to renew or extend a fixed term / purpose contract the Employee shall be informed in writing, not later than the date of renewal, of the objective grounds justifying the renewal of the fixed term / purpose contract and the failure to offer a contract of indefinite duration at that time.
When renewing or extending a fixed term / purpose contract it is a legal requirement that the Employer advises the Employee, in writing prior to the expiry of the current contract, of the fact that the contract is to be renewed. The legislation requires that the Employer outline the objective reasons for renewing the fixed term / purpose contract and not offering permanent employment at the time. A failure to provide this will not leave an Employer liable to a fine, however, where an Employee pursues a claim for permanency, the Employer’s case will be severely weakened by their absence.
The end of the contract is determined by an objective condition such as:
- The arrival of a specific date
- The completion of a task / project
- The occurrence of a specific event.
What is the difference between a fixed term and a fixed purpose contract?
A fixed term contract is for a (fixed) duration / term of work required e.g. an Employee being hired during a busy seasonable time (i.e. Christmas). A fixed purpose contract expires when the specified (fixed) purpose of the role is fulfilled e.g. completion of a project or an Employee returning from long-term sick leave.
Legislation
The Protection of Employees (Fixed-Term Work) Act, 2003 is in place to ensure that there is no discrimination in relation to conditions of employment as between a fixed term / purpose worker and a comparable permanent employee. It is also in place to prevent abuse by Employers of the use of successive fixed term contracts.
A fixed term / purpose contract must specify the objective condition which brings the contract to a natural end. As outlined above, this may be a specified date, the completion of a specific task / project, or the occurrence of a specific event. Once this objective condition is satisfied, the natural expiry of the contract occurs. Objective provisions may include:
- A fixed term – the contract expires on a particular date;
- A specified purpose – the contract expires when the specified purpose of the role is fulfilled, e.g. completion of a project;
- The occurrence of a specific event, e.g. Employee X returning from maternity leave.
Fixed term / purpose contracts must also include a clause precluding the provisions of the Unfair Dismissals Acts applying to a termination resulting solely from the expiry of the fixed term / purpose contract. It is important to note that the Unfair Dismissals Acts will still apply to termination for any other reason other than the natural expiry of the contract, e.g. performance, conduct, attendance, redundancy etc.
Renewals & Extensions
If an Organisation wishes to renew a fixed term / purpose contract, they must have objective grounds justifying the renewal and failure to offer a contract of indefinite duration (i.e. a permanent contract) at that time.
The Act provides that where an Employer proposes to renew or extend a fixed term / purpose contract the Employee shall be informed in writing, not later than the date of renewal, of the objective grounds justifying the renewal of the fixed term / purpose contract and the failure to offer a contract of indefinite duration at that time.
When renewing or extending a fixed term / purpose contract it is a legal requirement that the Employer advises the Employee, in writing prior to the expiry of the current contract, of the fact that the contract is to be renewed. The legislation requires that the Employer outline the objective reasons for renewing the fixed term / purpose contract and not offering permanent employment at the time. A failure to provide this will not leave an Employer liable to a fine, however, where an Employee pursues a claim for permanency, the Employer’s case will be severely weakened by their absence.
