What is a Fixed Term Worker?

Fixed-term workers are employees with a contract of employment which comes to an end: (i) on a specific date, (ii) upon completing a specific task, or (iii) on the occurrence of a specific event. Workers hired on a temporary basis to provide maternity leave cover, assist during a business’ peak season or to assist in a specific project are often engaged on a fixed-term basis.

This is in contrast to permanent workers employed under open-ended contracts, also known as contracts of indefinite duration. For these workers, the contract continues until the employee or employer chooses to terminate it.

Are there specific protections afforded to fixed-term workers?

A fixed-term worker should not, in respect of their conditions of employment, be treated less favourably than a comparable permanent employee and any such difference in treatment must be objectively justified by the employer. This protection, among others, is afforded to all fixed-term employees by the Protection of Employees (Fixed-Term Work) Act, 2003 (the 2003 Act).

Conditions of employment are defined under the 2003 Act as including remuneration and related matters. However, any difference in treatment in respect of a pension scheme or arrangement is not less favourable where a fixed-term employee whose normal hours of work constitutes less than 20%of the normal hours of work of a comparable permanent employee.

The legislation provides that there may be different treatment where it is justifiable on objective grounds i.e., the treatment is appropriate and necessary for a purpose of achieving a legitimate objective of the employer. In addition, the protection excludes where the contract, taken as a whole, is at least as favourable as the terms of the comparable permanent employee's contract of employment.

In addition, the law includes a prohibition on penalising fixed-term employees: (i) for invoking their right to be treated as favourable as a comparable employee, (ii) for opposing an unlawful act by the employer under the 2003 Act in good faith, (iii) for giving evidence in any proceedings brought under the 2003 Act, or (iv) by dismissing the employee from their employment if the dismissal is wholly or partly for or connected with avoiding a fixed-term contract being deemed to be a contract of indefinite duration.

What do I need to include in the fixed-term employment contract?

In addition to the terms required to be included in all contracts of employment as set out in the Terms of Employment (Information) Act 1994 (as amended), (including, for example, full name of the employer and employee, address of the employer, place of work of the employee, job title / nature of the work, date of commencement of employment, rate of remuneration etc.), fixed-term contracts require additional considerations.

Under the Terms of Employment (Information) Act 1994 (as amended) a fixed-term contract must include the date on which the contract expires.

A clause should also be included stating that the automatic termination of a fixed-term contract does not give rise to a claim under the Unfair Dismissals Act, 1977.

Where a probation clause is being included in a contract of employment for a fixed-term employee, the length of the probationary period must be proportionate to the expected duration of the fixed-term contract and the nature of the work. However, where a fixed-term contract is being renewed for the same functions and tasks, the fixed-term contract cannot be subject to a new probationary period.

Is it possible to extend / renew the duration of the fixed-term?

Yes.

When renewing a fixed-term contract, there is a requirement under section 8 of the 2003 Act to provide a statementsetting out the objective grounds justifying the renewal. This statement must be in writing and provided prior to the expiry of the fixed-term. Where this is explained to the fixed-term employee in a meeting or on a call, employers should be mindful that a written statement must follow. A failure to provide this explanation in writing is a breach of the legislation, even in circumstances where it is communicated to the employee verbally.

Employers extending fixed-term contracts should also be mindful of how long the fixed-term worker has been employed. The aggregate duration of two or more continuous fixed-term contracts must not exceed four years.  Where this is contravened, the contract will be deemed to be a contract of indefinite duration, unless there is an objective ground justifying such continuous renewal.

Examples of objective justification that have been accepted by the courts include where a short-term project for which a fixed-term worker was hired has not yet completed and where there is uncertainty around the number of permanent staff to be required when trialling a new business model.

When is a fixed-term worker covered by the Unfair Dismissals Acts?

As with permanent employees, fixed-term employees may bring an unfair dismissals claim provided they have 12 months’ service.

The mere expiry of a fixed-term contract upon its cessation date or event does not give rise to a claim of unfair dismissal, provided the fixed-term contract is in writing, is signed by both the employer and the employee, states the purpose or duration of the contract and states that its expiry does not make the employer liable to a claim of unfair dismissal.

Fixed-term workers with 12 months’ service may be able to make a claim under the Unfair Dismissals Acts where their employer has not complied with these requirements.

There are circumstances where a worker on a fixed-term contract of less than 12 months’ duration could qualify for protection under the Unfair Dismissals Acts which targets the practice of using successive temporary contracts of less than 12 months to avoid employees gaining the protection the unfair dismissal legislation affords. To combat this, the law recognises as continuous service the re-employment by the same employer of a worker previously engaged on a fixed-term contract, provided the dismissal was in an attempt to avoid liability under the Unfair Dismissals Acts.

Are fixed-term workers entitled to redundancy payments?

Fixed-term employees with two years’ service may be entitled to a redundancy payment when their fixed-term contract expires and is not renewed in circumstances where the contract expiry contract is due to a redundancy i.e., the employee’s position ceases to exist, and the employee is not replaced.

What are the consequences of non-compliance with the legislation?

Contravention of the 2003 Act exposes an employer to a complaint from an employee to the Workplace Relations Commission, where an adjudication officer may require the employer to comply with the provision in question, to reinstate or reengage the employee (including possibly reengaging them on a contract of indefinite duration) or to pay the aggrieved employee up to two years’ remuneration.

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