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Fixed Term Contracts: Employers Take Note
On 10 July, an employee workign on a fixed-term contract might have become (by operation of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 20020 a permanent employee .
The Regulations seek to prevent the use of successive fixed-term contracts when in reality an employee is a permanent member of the workforce. To discourage this practice, a fixed-term contract is normally automatically converted into a contract of indefinite duration once an employee has completed four years’ continuous employment under two or more fixed-term contracts.
Service before 10 July 2002 does not count towards the period of four years’ continuous employment so the first date on which fixed-term contracts could be converted to indefinite contracts was 10 July 2006.
The exceptions to this rule are where there is an ‘objective justification’ for the use of a fixed-term contract or where details of the arrangements, including the four-year period, have been varied by a collective agreement with a trade union or by a workforce agreement.