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Fixed-term workers gain more protection


New rules make it harder for employers to justify treating fixed-term workers less favourably, says Janet Gaymer

The coming months will provide HR practitioners with much food for thought the DTI has issued a raft of consultation documents seeking views to help it form its future policy.

These include the proposal for a directive on temporary and agency work (consultation closes on 18 October 2002); a discussion paper on employment status to help decide which employment rights should be extended to those who are not classed as employees (11 December 2002); a document on the implementation of the directive on informing and consulting employees, plus a discussion paper on the role of employee involvement and a series of questions aimed at identifying current UK experience and highlighting examples of best practice (11 December 2002); and a final paper on regulations governing employment agencies and employment businesses the regulations for this one will come into effect in the first half of 2003 and the consultation period closes on 1 November 2002.

On top of all this, HR directors should also bear in mind that on 1 October the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations came into force. Under these regulations employers cannot treat fixed-term employees less favourably unless the treatment is objectively justified. They can objectively justify individual terms which are less favourable if the overall contract offered to the fixed-term employee is as favourable as that offered to a permanent employee.

Employees continuously employed for four years are deemed to be employed on a contract of indefinite duration unless the employer can show an objective justification for keeping a fixed-term contract. These provisions can, however, be modified by a collective or workforce agreement.

Employers must also inform employees on a fixed-term contract of available vacancies in the business. And finally, fixed-term employees will no longer be able to waive their right to a redundancy payment upon expiry of a fixed-term of two years or more.

The regulations follow the EU framework directive on fixed-term work. The use of successive fixed-term contracts was thought to be a source of abuse, leaving employees insecure and without legal remedy.

The number of people employed under such contracts in the UK has risen the Labour Force Surveys estimation for spring 2001 was 1.4 million, with over half of them in the public sector and the majority being women. But the regulations do not offer protection to everybody. They only apply to employees, not to contracts of apprenticeship, agency workers and those attending a period of work experience not exceeding one year as part of a higher education course.

In addition, the concept of objective justification may cause confusion. The Government declined to create an exhaustive list of possible objective justifications, as these, it felt, would depend upon the circumstances of a particular case.

Although the original directive did not appear to cover pay and pensions, the Government has decided to include pay and pensions in the non-discrimination principle to help reduce gaps in pay inequalities.

The regulations limit the use of successive fixed-term contracts to four years, unless the use of fixed-term contracts beyond this point may be objectively justified. But there is no limit on the length of the first fixed-term contract which could even extend for more than four years. The Government was anxious to allow sectors or workplaces to agree arrangements for fixed-term contracts which were suitable to their particular needs through collective and workplace agreements. The regulations are not retrospective. The four-year period mentioned starts from 1 October 2002.

If you thought all of the above was enough to be getting on with, then think again. Around the corner is the review of employment status and the possibility that the ambit of the regulations may be extended to the broader category of workers the phrase used in the directive. Some argue that the regulations fall foul of European law by this omission. And the outcome of the current round of consultation on employment status may yet trigger further changes in the law on fixed-term work.


Janet Gaymer is senior partner at Simmons & Simmons