Fixed-Term Contracts – A Brief Overview

Fixed term contracts of employment are useful for employers where the nature of the work is for a fixed period, where the employer is uncertain about the role in the longer-term and to address staffing needs in situations such as maternity cover, etc.
Fixed term contracts are governed by Protection of Employees (Fixed Term Work) Act 2003 and this provides measures of protection for both parties.


Under the 2003 Act:


• The aggregate duration of contracts cannot exceed fours years

• An exemption to this rule can apply if there is an objective reason for doing so

• Fixed term employees cannot be treated less favourably in relation to terms and conditions than a comparable permanent employee

• Again less favourable treatment must be justified on objective grounds


Employers are free to exit the contractual relationship with an employee retained on a fixed term contract when that fixed period ceases and they have objective grounds for not renewing the contract or for not offering the employee a contract of indefinite duration.
Nonetheless, great care should be taken in the issuing and reissuing of fixed-term contracts, and especially in their non-renewal or in not making the employee permanent.

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