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Fixed Term Workers

Key Points

  • Under common law, expiry of a fixed term contract simply brings the contract to an end "by performance".
  • In such a case, there is no dismissal and therefore (without special rules) there would be no compensation for unfair dismissal or dismissal by reason of redundancy.
  • ERA 1996 provides special rules. These ensure that if an employee is employed under a fixed term contract and the term expires without the contract being renewed, then for the purposes of unfair dismissal and redundancy law he or she is treated as dismissed (see ERA 1996 s.95(1)(b) for unfair dismissal and ERA 1996 s.136(1)(b) for redundancy).
  • The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, SI 2002/2034 introduced statutory protections for fixed term workers, including the automatic conversion to indefinite contracts for fixed term contracts which have lasted four years or more.
  • The FTER 2002 provide for comparable treatment between an indefinite term employee and a fixed term employee. 

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