Employment Rights Act 1996 s.197
Employment Relations Act 1999 s.18
Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 SI 2002/2034 .

The expiry of a fixed term employment contract without renewal is deemed to be dismissal rather than simply the coming to the end of the contract "by performance" (ERA 1996 s.95 and ERA 1996 s.136 and see Fixed term contracts/rights on expiry of/general rule ). The effect is that employers cannot escape from liability to pay unfair dismissal compensation or statutory redundancy pay by employing staff on fixed term contracts which are simply not renewed when the employee is no longer wanted.

An employee is not legally bound by any agreement which purports to waive his unfair dismissal or statutory redundancy pay rights on expiry of a fixed term contract without its being renewed.

Until recently agreements to opt out of the special protection noted above were legally valid if in writing and the fixed term was for a minimum of one year (for unfair dismissal opt outs) or two years (for statutory redundancy pay opt outs). However the unfair dismissal opt out option came to an end on 25th October 1999, subject to transitional phasing in arrangements. The redundancy pay opt out option came to an end on 1st October 2002, again subject to transitional arrangements, when the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, SI 2002/2034 repealed ERA 1996 s.197 (see FTER 2002 sch 2 para 3(15) and for notes on the 2002 changes generally see Fixed term contracts/2002 regulations and see also general notes at Contracting out of the legislation ).