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 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. A fixed-term contract can range from a number of months up to 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 people employed on fixed-term contracts have the same rights as other employees. For example, employees with fixed-term contracts have the normal entitlement to annual leave, 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 of their contract.
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 cannot 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 must 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, the last day of her contract 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 end the contract.
Reasons for ending a fixed-term contract include the:
- Arrival of a specific date
- Completion of a specific task
- Occurrence of a specific event
If an employer intends to renew a fixed-term contract, a written statement must be given to the fixed-term employee by the date of renewal. The written statement should set out the objective grounds justifying the renewal and the failure to offer an open-ended contract.
Employers must inform fixed-term employees of vacancies for permanent positions. This can be done by 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 1977–2015 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 can qualify for a redundancy payment when the contract ends.
Renewal of fixed-term contracts
Employees cannot be employed on a series of fixed-term contracts indefinitely.
If an employee whose employment started on or 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 wants the employee to continue in the job, they must be employed under a contract of indefinite duration.
The only exception to this statutory provision is where there are objective grounds justifying the renewal of a fixed term contract. The employer must be able to demonstrate that a further renewal is appropriate and necessary to achieve a legitimate objective.
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 if 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