Renewal of Fixed Term Contracts
Employees whose contracts end on a specified date, or when a specific task is completed, or when a specific event occurs are typically called fixed term employees. Fixed term employees have broadly similar rights to permanent employees. Such employees are protected by The Protection of Employees (Fixed Term) Work Act 2003 (the “Act”). The purpose of this Act is to prevent such employees from being treated less favourably than comparable permanent employees.
The Act contains specific provisions with regard to the renewal of fixed term contracts. It provides that where an employee commenced employment after 14th July 2003 and has been employed on two or more continuous fixed term contracts, the aggregate duration of such contracts shall not exceed four years. The Act contains different provisions for employees whose employment started before 14th July 2003.
Continuous service means that the service of an employee is continuous unless it is terminated either by the dismissal of the employee or by the employee voluntarily leaving the employment. The dismissal of an employee followed by immediate re-employment of the employee does not break an employee’s service.
After the four-year period, if an employer wishes to renew such an employee’s contract, it must offer a permanent contract, unless there are objective grounds justifying the renewal of the fixed term contract.
The burden of proof is on the employer with regard to objective grounds justifying the renewal of the fixed term contract. Case law has shown that the employer must have genuine objective grounds that are provable and capable of being independently audited and backed up by solid evidence. Case law has shown that vague generalisations, unsubstantiated claims and financial reasons alone will not suffice. Objective justifications that have been accepted include, but are not limited to, those with regard to legitimate employment policy, labour market and vocational training objectives, incentivising promotion, public pay policies, payment that is due to a grading structure and the requirement of flexibility of workers. These factors are only to be used by way of general guide as each case is decided on its own facts.
If, after the four-year period, an employer wishes to issue a further fixed term contract, it must claim an objective ground for issuing such a contract, as discussed above, and it must also inform the employee, in writing, at the latest by the date of contract renewal, of the objective condition determining the contract, whether it is arriving at a specific date, completing a specific task or the occurrence of a specific event. Employers are also obliged to notify such employees of any permanent positions that are available and they are prohibited from penalising and/or victimising an employee who invokes any rights under the Act.
Claims under the Act may be made by employees to the Workplace Relations Commission, either within 6 months of the contravention to which the complaint relates or the date of termination of the relevant contract. The time limits can be extended in limited circumstances.
Employers must tread very carefully when issuing fixed term contracts as there are numerous pitfalls, one example is that employers must give sufficient notice of the termination date of the contract to employees before the objective condition which determines the contract occurs.
For further information about fixed term contracts or other employment matters contact Dervla Beirne, Solicitor at Keating Connolly Sellors, at [email protected] or +353 (0)61 414 355.
The material contained in this article is for general information purposes only and does not constitute legal or other professional advice. We advise people to always seek specific expert advice for their individual circumstances.