Fixed Term Contracts

Fixed Term Contracts 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. A fixed-term contract can also involve a specified-purpose and so may not end on a specific date.

The Act provides that fixed-term employees may not be treated less favorably 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.

Section 8 (1) specifically requires the employer to inform the employee in writing as soon as practicable of the objective condition determining the contract.

Section 8 (2) provides that where the employer proposes to renew a fixed term contract, the fixed term employee shall be informed in writing by the employer of the objective grounds justifying the renewal of the fixed term contract and the failure to offer a contract of indefinite duration, at the latest by the date of the renewal.

Section 9 (1) of the Act provides that where a fixed term employee completes or has completed his or her third year of continuous employment then the fixed term contract may be renewed by the employer on only one occasion and any such renewal shall be for a fixed term of no longer than one year.  Section 9 of the Act prevents the renewal of a fixed term contract which effect is to bring the aggregate period of such periods to more than four years, except where there are objective grounds for renewal.

Section 9 (3) provides that once the four-year threshold has expired then the fixed term contract is transmuted into a contract of indefinite duration by operation of law, unless there is an objective justification for not ordering the status of the contract in this way.

Continuous service means that the service of an employee is continuous unless it is terminated either by the dismissal of the employee or by the employee voluntarily leaving the employment. The dismissal of an employee followed by immediate re-employment of the employee does not break an employee’s service.

The burden of proof is on the employer with regard to objective grounds justifying the renewal of the fixed term contract. Case law has shown that vague generalisations, unsubstantiated claims and financial reasons alone will not suffice.

Fixed term workers are excluded from the protection of the Unfair Dismissals Acts by virtue of the fact that the contract has come to an end (either by expiry of the term or the arrival of the specific purpose event) provided three conditions are met:

  1. The contract was in writing
  2. The contract states that the Unfair Dismissals act will not apply to a dismissal which occurs only as a result of the end of the contract arriving
  3. The contract was signed by both employee and employer.