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Blog  »  May 2015  »  Fixed Term Contracts - Blog
May 15

Posted by
Michelle Arkins

Fixed Term Contracts

When can I use them? What you need to watch out for?

One of the most difficult areas of employment law for employers to fully grasp, is the whole area of fixed term contracts and how they can turn into the dreaded CID (contract of indefinite duration).

What is a fixed term contract? This is a contract that will end on a specified date, or when a specific task is completed, or when a specific event occurs. Generally, a fixed-term contract ends on an agreed date. Such a contract period may range from a matter of months up to a period of a year or more. However, a fixed-term contract can also involve a specified-purpose and so may not end on a specific date. Rather, it is agreed that the contract will finish when a particular stated task is completed, such as replacing an employee while she is on maternity leave.

Employees on fixed-term contracts have broadly similar rights to those on open-ended contracts. The majority of employees work under open-ended/permanent contracts of employment. In other words, the contract continues until such time as the employer or employee ends it. Many other employees however, work under fixed-term contracts.

The expression, fixed-term contract, is used for convenience here. It also includes specified-purpose contracts.

By law an employer must provide a fixed-term employee with a written statement as soon as possible, outlining an event which will trigger an end to the contract .That is, whether the contract will end on a specific date, following completion of a specific task or a specific event. (None in place? Get started today).

In addition, where an employer intends to renew a fixed-term contract, a written statement must be supplied to the fixed-term employee no later than the date of renewal, setting out the objective grounds justifying the renewal and the failure to offer a permanent position.

Employers are obliged to inform fixed-term employees of vacancies for permanent positions. This may be done by means of a general announcement.

The Protection of Employees (Fixed Term Work) Act, 2003 provides under section 9(3) that a contract of indefinite duration will arise by operation of law if a contract is awarded in breach of sections 9(1) or 9(2) of the act

In simple terms, if an employee is employed on 2 or more successive fixed term contracts in continuous employment for a period of 4 years, then any attempt to give that employee a further fixed term contract is unlawful and void at which stage the employee is entitled to a contract of indefinite duration.

If your employee is entitled to a CID, he/she will have practically all the same entitlements as a permanent employee.

If this is an area that interests you then, click here to read the key aspects of the legislation which employers should be aware of, when issuing fixed term contracts.

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