Recruiting staff on fixed-term employment contracts
Advantages and disadvantages of using fixed-term employment contracts when recruiting new staff.
There may be times when it's best for your business to take on somebody on a fixed-term employment contract.
What is a fixed-term employment contract?
A fixed-term employment contract is one which either:
- lasts for a specified time, set in advance
- ends with the completion of a specified task
- ends when a specified event does or does not take place
For example, if you're a shopkeeper you may want to take on someone for just three months to cover the busy run-up to Christmas. Or you may wish to employ someone specifically to cover for another person who is on maternity, adoption or parental leave.
Employer considerations when using fixed-term employment contracts
Fixed-term employment contracts give you the advantage of bringing in specific skills and labour as and when they are needed.
It's important to remember that unless there are special circumstances that can be justified, you have a legal responsibility to treat fixed-term employees the same as comparable permanent employees. This means you must give them:
- the same pay and conditions
- the same or equivalent benefits package
- the same or equivalent pension scheme
- the same opportunity to apply for vacancies for permanent posts in the business
Fixed-term employees also have access to the same employment rights as their permanent equivalents.
Under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2002, any employee who has been on a fixed-term contract for four or more years (excluding any period before 1 October 2002) will usually be classed in law as a permanent employee if their contract is renewed, or if they are re-engaged on a new fixed-term contract.
The only exemptions to this are when employment on a further fixed-term contract is objectively justified to achieve a legitimate aim, eg a genuine business aim that can be objectively justified, and is also a necessary and appropriate way to achieve that aim, or the period of four years has been lengthened under a collective or workplace agreement.
These regulations do not apply to apprentices, students on work experience of a year or less, or people on certain training courses and temporary work schemes.
You will need to make the same tax arrangements for fixed-term employees that you would for permanent employees.
See fixed-term employment contracts and 'equal treatment' principle.