Protection of Employees (Fixed Term Work)

Protection of Employees (Fixed Term Work) Act 2003

The protection of Employees (Fixed-Term) Work Act, 2003, implements an EU Directive, and became operational on 14 July 2003. It aims to improve the quality of fixed term work and to prevent abuse in the utilisation of successive fixed term employment contracts. This Act applies to any Fixed-Term Employee under a contract of Employment or Apprenticeship.

The term fixed-term employee means a person who has entered into a contract of employment with an employer where the end of the contract is determined by an objective condition such as:

• Arriving at a specific date, or,
• Completing a specific task, or,
• The occurrence of a specific event.

The Act provides that a fixed-term employee cannot be treated in a less favourable manner than a comparable permanent employee in relation to conditions of employment. A "Comparable" permanent worker is defined in the Act, as an employee who works for the same employer or associated employer and fulfils one of the following conditions:

• Both of the employees perform the same work under the same or similar conditions or are interchangeable in terms of work.
• The work performed by the two employees is of similar nature with minimal differences.

Where the employees do not work for the same employer, but the employee is covered by a collective agreement which assigns a comparable worker.

All Employee protection legislation, other than unfair dismissal in certain circumstances, applies to a fixed term employee in the same manner as it already applies to a permanent employee.

A fixed term employee can be treated in a less favourable manner where such treatment can be justified on objective grounds. A ground would be considered as an objective ground if the less favourable treatment is for the purpose of achieving a legitimate objective of the employer and such treatment is necessary for that purpose.

The Act also provides that where an employer proposes to renew a fixed term contract, the employee shall be informed in writing, not later than the date of renewal, of the objective grounds justifying the renewal of the fixed term contract and the failure to offer a contract of indefinite duration. Where an employee is employed by his/her employer on 2 or more continuous contracts, the aggregate duration of those contracts may not exceed 4 years.

The right not to be treated in a less favourable manner than a comparable permanent employee shall not apply, in relation to any pension scheme or arrangement, to a fixed term employee who normally works less than 20% of the normal hours of the comparable permanent employee.

The 2003 Act, together with the Unfair Dismissals Acts offer employees on Fixed Term contracts much greater protection than has heretofore been available. Employers should also take note under the amendment to the Unfair Dismissals Acts of 1993; Rights Commissioners, Employment Appeals Tribunals and The Circuit Court are empowered to decide whether fixed term contracts are being used for the purpose of avoidance of liability under Unfair Dismissals Legislation. If any of these bodies decide that in their opinion there has been an attempt to avoid the Acts, a claim for unfair dismissal may be allowed to proceed.

An employer must inform a fixed term employee of permanent vacancies and training opportunities.

A dispute in relation to an entitlement under the act may be referred to a Rights Commissioner for adjudication. A decision of the rights commissioner can be appealed to the Labour Court for a legally binding determination.

Fixed-Term contracts and specified contracts still have their uses, in allowing employers dispense with the services of the employees involved, once a fixed term or specified purpose has been completed.