Fixed-term or specified-purpose contracts
Employees on fixed-term contracts have broadly similar rights to those on open-ended contracts. The majority of employees work under open-ended contracts of employment. In other words, the contract continues until such time as the employer or employee ends it. Many other employees however, work under fixed-term contracts.
The term, fixed-term employee, covers employees whose contract ends on a specified date, or when a specific task is completed, or when a specific event occurs. Generally, a fixed-term contract ends on an agreed date. The period of such a contract may range from a matter of months up to a period of a year or more. However, a fixed-term contract can also involve a specified-purpose and so may not end on a specific date. Rather, it is agreed that the contract will finish when a particular stated task is completed, such as replacing an employee while she is on maternity leave.
The expression, fixed-term contract, is used for convenience here. It also includes specified-purpose contracts.
Rights of employees on fixed-term contracts
Generally speaking, people employed under such contracts have the same rights as other employees. For example, employees with fixed-term contracts have the normal entitlement to annual leave (holidays), maternity leave, and wage slips. The Terms of Employment (Information) Acts 1994–2014 require that employees with a fixed-term contract get written notice of the expiry date.
The Protection of Employees (Fixed-Term Work) Act 2003 applies to most employees on fixed-term contracts. However, it does not apply to agency workers placed by a temporary work agency at the disposition of a user enterprise or to apprentices, trainees and people in publicly-funded employment schemes such as Community Employment. The Act does apply to agency workers employed directly by an employment agency.
The Act provides that fixed-term employees may not be treated less favourably than comparable permanent employees unless the employer can objectively justify the different treatment. Any justification offered cannot be connected with the fact that the employee is on a fixed-term contract. The definition of comparable employees, the conditions attached and the enforcement mechanisms are similar to those for part-time employees.
Only those fixed-term employees whose normal hours of work are less than 20% of the normal hours of the comparable permanent employees can be excluded from entitlement to join a pension scheme.
As far as is practicable, an employer is required to help a fixed-term employee to access training to enhance skills, career development and job mobility.
Maternity leave: an employee on a fixed-term contract is entitled to full maternity leave. However, if her fixed-term contract ends before the last day of maternity leave, this counts as the last day of maternity leave. This means that if the fixed-term contract ends during maternity leave, then the employee’s contract of employment terminates on that date. This does not affect entitlement to the full 26 weeks of Maternity Benefit.
An employer must provide a fixed-term employee with a written statement as soon as possible, outlining what will trigger an end to the contract. That is, whether the contract will end on a specific date, following completion of a specific task or a specific event. In addition, where an employer intends to renew a fixed-term contract, a written statement must be supplied to the fixed-term employee not later than the date of renewal, setting out the objective grounds justifying the renewal and the failure to offer an open-ended contract.
Employers are obliged to inform fixed-term employees of vacancies for permanent positions. This may be done by means of a general announcement.
When an employee is dismissed at the end of the contract the unfair dismissals legislation applies as normal unless the employer has availed of the provision to exclude the operation of the legislation. To avail of that provision, the employer must put the contract in writing. The employer must include a clause stating that the Unfair Dismissals Acts 1977–2007 will not apply where the only reason for ending the contract is the expiry of the fixed term, or the completion of the specified purpose. Both the employer and the employee must sign the contract.
An employee who has worked continuously for at least 104 weeks under a fixed-term or specified purpose contract may qualify for a redundancy payment when the contract ends.
Renewal of fixed-term contracts
Employees may not be employed on a series of fixed-term contracts indefinitely. There are 2 possible situations where this arises as follows:
- If an employee whose employment started before 14 July 2003 has completed 3 years’ continuous service as a fixed-term employee, the employer may renew their fixed-term contract only once for a period of no more than 1 year.
- If an employee whose employment started after 14 July 2003 has been employed on 2 or more continuous fixed-term contracts, the total duration of those contracts may not exceed 4 years.
After this, if the employer wishes to renew the employee’s contract, it must be an open-ended contract unless there are objective grounds justifying the renewal of the contract for a fixed term only.
The Unfair Dismissal Acts 1977–2015 contain a provision aimed at ensuring that successive temporary contracts are not used in order to avoid that legislation. Where a fixed-term or specified-purpose contract expires and the individual is re-employed within 3 months, the individual is deemed to have continuous service.
Therefore, even where an employer excludes the unfair dismissals legislation in the manner described above, an adjudicator of the Workplace Relations Commission will consider whether the use of such contracts was wholly or partly to avoid the employee having the protection of the unfair dismissals legislation. If it is considered that this was the case and the contracts were not separated by more than 3 months and the job was at least similar, then the case can be dealt with as if there was continuous employment and the employer will be required to justify the dismissal in the normal manner.
How to apply
An employer is prohibited from victimising a fixed-term employee who seeks to avail of rights under the Protection of Employees (Fixed-Term Work) Act 2003. Victimisation includes dismissal in order to avoid a fixed-term contract being considered an open-ended contract.
For further information you can read the explanatory leaflet on Protection of Employees (Fixed-Term Work) Act 2003 (pdf) or you can contact the Workplace Relations Commission's Information and Customer Service - see 'Where to apply' below.
Where to apply
Workplace Relations Commission - Information and Customer Service
Information and Customer Service
Opening Hours: Mon. to Fri. 9.30am to 5pm
Tel: (059) 917 8990
Locall: 1890 80 80 90