The Future Of Fixed Term Work

01 December 2003

Andrew Masters previews the impact that new laws on fixed term employment contracts will have for your business.
The Government will implement on 1 October 2002 ground breaking legislation that gives new rights to employees engaged on fixed term contracts. The draft Fixed Term (Prevention of Less Favourable Treatment) Regulations 2002 have been published and the final version will implement the European Union’s Directive on Fixed Term Work.
In recent years, fixed term contracts have become popular with both employers and employees and may become common practice in future recruitment and human resource planning. Although more common in the public sector, they are also widely used in the private sector. Fixed term contracts are frequently used in manufacturing, construction, finance, insurance and in the leisure industry. Examples include an employment contract for a research project of a specific duration, a contract for an employee to complete a specific task (for example, setting up a new IT system) or a contract ending when the permanent job holder returns from maternity leave or some other absence.
The new Regulations will broadly follow the rights given to part timers following the implementation of the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. They will cover two main areas:
* Prevention of discrimination against fixed term employees when compared to similar permanent employees in respect of their terms and conditions of employment.
* Prevention of abuse arising from the use of successive fixed term contracts.
Discrimination against fixed term employees
A recent TUC survey of unionised workplaces found that 47% paid fixed term workers lower rates than permanent workers and 70% did not offer the same access to occupational pension schemes.
When implemented, the Regulations will prevent a fixed term employee from being treated less favourably by their employer than a permanent employee engaged in the ‘same or broadly similar work’ (known as a comparator), having regard, where relevant, to whether they have a similar level of qualification, skill and experience. The comparator must also work or be based at the same establishment as the fixed term employee. Where there is no comparable employee working or based at the same establishment who satisfies these requirements, the fixed term employee may compare their work with an employee who works or is based at a different establishment and satisfies those requirements.
The Regulations will cover terms and conditions of employment, for example, pay, pensions, annual leave and the provision of employee benefits, such as private health insurance. They will also provide a right not to be subjected to a detriment, for example, when selecting employees for redundancy or when providing access to training.

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