Temporary (fixed-term) employees 




Employees on fixed-term contracts (temporary employees) are legally entitled to equivalent rights and treatment as permanent employees under the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (FTER). The regulations are based on the EU Framework agreement on fixed-term work. Fixed-term employees are employees working for a specified period of time, or those employed to undertake and complete a specified task. The UK regulations apply only to employees. Agency workers are specifically excluded (regulation 19, FTER). 




A contract is for a fixed term even if it contains a clause giving either party the option to end it earlier by giving notice (Allen v National Australia Group Europe [2004] IRLR 847).




Fixed-term employees have the right to paid holidays pro rata to the length of their contract. Where employees work on successive fixed-term contracts, their service is added together to assess holiday pay rights. 


The FTER cover all contractual terms including pay and pensions. However, each particular term does not have to be the same as for a permanent employee, as long as the overall employment package is no less favourable. 




Fixed-term employees have the same right to a written statement of their main contractual terms (see Chapter 3), and to guarantee pay and medical suspension pay (see Chapter 4) as permanent staff. The right to no less favourable treatment extends to qualifying periods for employment benefits and to opportunities for training and permanent employment. Fixed-term employees also have the right not to be subjected to any other detriment because of their temporary employment status.



Fixed-term employees can compare their treatment to that of permanent staff employed by the same employer, as long as they are doing the same or similar work and are working at the same establishment. If there is no comparable employee at that establishment, a comparison can be made with the pay and benefits package of a comparable employee at another location.




Employers can legally justify less favourable treatment if they have a good reason. 




Fixed-term employees who believe they have been less favourably treated have the right to ask for a written statement explaining the difference in treatment. This can be used as evidence in a tribunal.


If a temporary employee has been working continuously for four or more years under a single contract that has been renewed at least once, or under a series of contracts, they will become a permanent employee unless the employer can justify continuing to employ them on a temporary basis. Time spent on government or EU-funded work placements or training schemes does not count towards the four years (Hudson v Department for Work and Pensions [2012] EWCA Civ 1416).




Continued renewal of fixed-term contracts to cover “temporary staffing needs” is likely to be a breach of EU law if those needs are in fact permanent (Lopez v Servicio Madrileno de Salud [2016] Case C-16/15).



When a fixed-term employment contract is converted into a permanent contract, the employer is not required to reproduce the exact clauses of the fixed-term contract, but the new permanent contract, viewed overall, must not be any less favourable to an employee whose tasks and functions are unchanged (Huet v Universite de Bretagne Occidentale [2012] WLR 71).




Temporary employees who work for short periods can lose out on employment rights that depend on qualifying service, such as unfair dismissal rights, especially since the increase in the service requirement from one to two years. However, a series of temporary contracts with gaps in between may qualify as statutory continuous service, depending on the reason for the gaps (see Chapter 10, page 351).




The dismissal of fixed-term employees wholly or mainly for asserting statutory rights under the regulations is automatically unfair and requires no service. However, the ending of a fixed-term contract is not, of itself, less favourable treatment. In Webley v Department for Work and Pensions [2005] IRLR 288, the Court of Appeal ruled that a decision not to renew a 51-week fixed-term contract (that is, a contract designed to prevent an employee gaining sufficient service to claim unfair dismissal, at a time when one year’s service was required) was not unlawful under the FTER.



Less favourable treatment of fixed-term employees can amount to indirect sex discrimination or unequal pay (see Chapter 7) if it adversely affects more of one sex than the other (Whiffen v Milham Ford Girls’ School [2001] IRLR 468).




Temporary employees have the same protection as permanent employees from discrimination on the grounds of pregnancy and maternity. A temporary employee cannot be dismissed, refused renewal of her contract or refused employment for these reasons (Tele-Danmark v Handels [2001] IRLR 853 and Jimenez Melgar v Ayuntamiento de Los Barrios [2001] IRLR 848).




Employers can no longer require employees to sign a waiver of dismissal or redundancy rights when beginning or renewing a temporary contract. 


It would be a breach of the FTER to select someone for redundancy because they are a fixed-term employee. A temporary employee who is made redundant and who has worked for the employer for two or more years is entitled to equal treatment in relation to redundancy pay and other redundancy rights, including redundancy selection, redundancy process, access to redeployment or retraining opportunities (see Chapter 11: Redundancy).




The dismissal of a fixed-term employee brought in to cover another employee’s temporary absence (due, for example, to long-term sickness, secondment or sabbatical) because that colleague has returned to work, can be fair — see Chapter 10, page 341. This is not a redundancy and there will be no right to a redundancy payment, because the reason for dismissal is the return of the original post-holder, not a reduction in the need for employees (Greater Glasgow Health Board v Lamont [2012] UKEATS/0019/12/B1). See also Chapter 11: Redundancy.


Changes to the law governing collective consultation, made in April 2013, have limited the legal obligation to consult unions over collective redundancies that result from the expiry and non-renewal of fixed-term contracts (see Chapter 11, page 380). However, unions can still try to negotiate suitable consultation arrangements with the employer. Individual consultation requirements are unaffected.