University of Salford
GUIDANCE NOTES ON THE OPERATION OF FIXED-TERM CONTRACTS
1. What is a fixed-term contract?
The expression "fixed-term" refers to an employment contract that terminates on the expiry of a specific term, or on completion of a specific task (e.g., the installation and testing of a new computer system), or on the occurrence or non-occurrence of a specific event (e.g., a permanent employee's return to work after maternity leave or the cancellation of an expected order). Under the Fixed Term Employees Regulations (see 3 below) the automatic termination and non-renewal of a fixed-term or "task-related contract" is treated in law as a dismissal, giving the employee in question the right (subject to specific age and service qualifications) to challenge the fairness of that dismissal and to be provided (on request) with a written statement explaining the reasons for that dismissal.
2. Use of Fixed-Term Contracts
a) The University has made extensive use of fixed term contracts in the past. However, recent changes in employment legislation have had a major impact on the use of fixed term contracts. As a consequence the University is committed to scrutinise the rationale for utilising fixed term contracts to ensure that in each case there is a bona fide reason for an appointment being made on a fixed term basis or an objective justification for continuing on a fixed term basis.
b) In the majority of cases the rationale for making an appointment fixed term is due to the finite nature of the job and/or the funding linked to the job. However, in cases where it may be relatively easy to redeploy someone to another post elsewhere in the University e.g. a clerical, secretarial or junior administrative post, particularly those of a generalist nature, managers are urged to consider the appropriateness of making the appointment permanent at the outset. In the event that the job is discontinued, the post holder can be considered for redeployment to another post in accordance with the University’s Code of Practice for the Redeployment of Staff. In addition, managers should be aware that making an appointment fixed-term where it is not necessary may result in a limited field of suitable applicants.
c) Because of the legal complexities of using fixed term contracts managers are advised to liaise with their link Personnel Manager in respect of creating a new fixed term contract, extending an existing fixed term contract or in respect of an intention not to renew a fixed term contract.
3. The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations (2002)
These regulations came into force on 1 October 2002. They implement the European Framework Directive on fixed term work.
There are two main areas covered by the Regulations. The first relates to less favourable treatment. The second relates to the use of successive fixed term contracts.
4. Prevention of Less Favourable Treatment
The rules on less favourable treatment introduced a new type of discrimination liability for the University. The Regulations provide that a fixed-term employee has the right not to be treated less favourably than a comparable permanent employee on the grounds that he/she is a fixed term employee in relation to any term of his/her contract or by being subjected to any other detriment by the University unless this treatment can be objectively justified.
5. The successive use of fixed term contracts
a) The Fixed Term Employees Regulations stipulate that employees employed before 1 October 2002 can only be employed on fixed term contracts for a maximum period of four years. (Service before 10 July 2002 does not count towards the four-year limit.)
b) There is no time limit on the first fixed term contract for a new employee appointed on or after 1 October 2002. (E.g. an employee appointed on or after 1 October 2002 can be offered a fixed term contract of five or six years duration.) However, if an employee is offered a fixed term contract on or after 1 October 2002, any extension of employment beyond a four-year period should be on a permanent basis unless there is an objective justification for continuing the fixed term contract.
c) If an employee is appointed to a fixed term contract on or after 1 October 2002 of less than four years duration, extension(s) can be offered as long as the extensions do not take the total duration of employment on a fixed term contract to more than four years. (E.g. an employee appointed at 1 January 2003 on a one year fixed term contract to 31 December 2003 could have three x one-year extensions to 31 December 2006. If it is decided to extend employment beyond that date then he/she must be offered permanency from 1 January 2007 unless there is an objective justification for not doing so.)
d) Accordingly it is imperative that managers give careful consideration at the outset to whether a post should be fixed term and consider the appropriateness of transfer to permanency on each and every occasion that the Personnel Division sends a reminder about a forthcoming contract end date.
d) The University is committed to ensuring that employees who have three+ years’ continuous service at the University are considered for permanency before they acquire four years service. To this end the University has an agreed procedure for considering Contract Research Staff for permanency. This procedure includes a Workplace Agreement that allows contract research staff to continue on fixed term contracts beyond four years where it is demonstrated there is an objective justification for this. This agreement is subject to an annual review and an overall maximum period of eight years on a fixed term contract.
Although there is no formal procedure in respect of other groups of employees, the University wishes to comply with the spirit of the regulations and ensure that employees do not remain on fixed-term contracts indefinitely.
6. The legal implications of ending a fixed term contract
It is important to note that the expiry of a fixed-term contract without renewal is a dismissal but not a reason for dismissal. In order for a dismissal to be fair the University must be able to show that the reason for the dismissal was one of the five potentially fair reasons listed below.
a) a reason relating to the capability or qualification of the employee for performing work of a kind for which he/she was employed by the employer to do;
b) a reason relating to the conduct of the employee;
c) that the employee was redundant;
d) that the employee could not continue to work in the position which he/she held without contravention (either on his/her part or that of his/her employer) of a duty or restriction imposed by or under an enactment;
e) some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
It is likely that there will be an increasing amount of judicial guidance on this point when fixed-term unfair dismissal claims reach employment tribunals and the higher courts.
7. Ending of a Fixed-Term Contract – Procedural Steps Required
It is essential that managers adhere to the following structured approach when considering the non renewal of fixed-term contracts. If an employee is dismissed without the University following this procedure the dismissal will automatically be ruled unfair. Therefore it is essential that managers liaise with their link Personnel Manager about a proposed non renewal of a fixed term contract, after which the following procedural steps (outlined in 8. 9 and 10 below) must be followed.
8. Ending a fixed term contract of an employee with 12 months’ or more continuous service
The Personnel Division sends out reminders about the forthcoming end of fixed term contracts approximately 4 months prior to the expiry dates of fixed term contracts. Schools/Divisions should aim to take a decision on the renewal or non-renewal of a fixed-term contract (and notify the Personnel Division accordingly) four months before the contract end date or, where this is not possible, at the earliest possible juncture thereafter.
a) The line manager of the fixed-term contract employee should write to the employee and explain the reason(s) for the proposed non-renewal of the contract and invite him/her to a meeting to discuss the matter. (see attached template letter)
Possible reasons for non-renewal of the contract may include:
· the requirement for specialist knowledge/expertise ceases to exist
· end of a need for staff absence cover
· end of a secondment/career development opportunity
· changing business requirements
· where there is no foreseeable prospect of securing further funding.
b) The line manager of the fixed-term contract employee should hold a meeting (with the Link Personnel Manager in attendance if required), at which the employee has the right to be accompanied by a trade union representative or a work colleague. At the meeting the line manager will explain his/her intentions and reasons for the proposed non-renewal of the contract and establish whether the employee is interested in exploring the scope for redeployment. (see 9 below) Following the meeting the manager should confirm the decision taken in writing to the employee, and send a copy to the Link Personnel Manager. Where the decision is not to renew the fixed term contract the employee must be advised of his/her right to appeal against the decision within 10 working days of receipt of the letter. (see attached template letter)
c) An employee who wishes to appeal against a decision not to renew his/her fixed-term contract must do so in writing to the manager who made that decision. The letter must specify the grounds of the appeal and a copy must be sent to the Link Personnel Manager. The employee is then entitled to present his/her case, accompanied by his/her representative (see paragraph 8b), to a more senior manager not previously involved in the case.A representative of the Personnel Division will also be present to advise the person appointed to hear the appeal.
The appeal hearing will normally be convened within 20 working days from receipt of the letter of appeal. Wherever possible, the appeal will be heard prior to the expiry date of the fixed term contract. Having heard the evidence, the manager appointed to hear the appeal shall have delegated authority to accept, amend or reject the original decision. The employee and his/her representative shall be notified of the decision in writing by the manager who heard the appeal, with a copy of the letter sent to the link Personnel Manager. (See attached template letter)
9. Redeployment
If an employee has expressed an interest in redeployment, (see 8b and the University’s Code of Practice for the Redeployment of Staff) the line manager must inform the link Personnel Manager.
The Personnel Division will write to the employee confirming that his/her employment with the University will end on the expiry date of his/her fixed-term contract unless he/she has expressed an interest in being considered for redeployment and an offer of redeployment has been obtained prior to the expiry date of the fixed term contract. Attempts to secure redeployment will not continue beyond the expiry date of the fixed-term contract.
10. Ending a fixed term contract of an employee with less than 12 months’ continuous service
a) Schools/Divisions should aim to take a decision on the renewal or proposed non-renewal of a fixed term contract (and notify the Personnel Division accordingly) at the point when the
Personnel Division sends the reminder. (See 8 above) The line manager of the fixed-term contract employee should arrange an interview with him/her and his/her representative to explain the manager’s intentions and reasons for the proposed non-renewal of the fixed term contract. The same procedure as detailed in 8 above should be followed. However, employees with less than 12 months’ continuous service do not have an entitlement to be considered for redeployment or a right of appeal against a decision not to renew a fixed term contract. Possible reasons for the non-renewal of the fixed term contract may include:
· the requirement for specialist knowledge/expertise ceases to exist
· end of a need for staff absence cover
· end of a secondment/career development opportunity
· changing business requirements
· where there is no foreseeable prospect of securing further funding.
b) The line manager confirms the outcome of the interview between him/her and the fixed-term
contract employee in writing, including the reasons for non-renewal as stated in the interview, with a copy sent to the link Personnel Manager (see attached template letter).
The employee will be sent a letter by the Personnel Division confirming that his/her employment with the University will end on expiry date of his/her fixed term contract.
It is important to note that any issues which arise in relation to conduct or capability need to be properly considered during the fixed-term contract itself and dealt with under the appropriate procedures. It is not acceptable to deal with these issues simply by waiting for the end of the fixed-term contract.
Updated September 06
------Ref: Fixed Term Contracts – Guidance/ 13.09.06/ Personnel
1. Template letter - invitation to attend a meeting to discuss proposed non-renewal