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UCU commentary on the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002

22 October 2008

The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations (hereafter referred to as the Regulations) came into force on 1 October 2002.

They transpose EC Directive 1999/70/EC on Fixed Term Work into UK law. The regulations can be accessed below:

The regulations came into force via the Employment Act 2002. Clause 45 of the Act states that the purpose of the regulations is to:

  1. secure that fixed-term employees are treated no less favourably than comparable permanent employees
  2. prevent the abuse arising from successive periods of fixed-term employment.


Who is covered?

Part 1, regulation 1

The regulations apply to employees on a fixed-term contract which is defined as a contract of employment that, under its provisions determining how it will terminate in the normal course, will terminate -

  • on the expiry of a specific term,
  • on the completion of a particular task, or
  • on the occurrence or non-occurrence of any other specific event other than the attainment by the employee of any normal and bona fide retiring age in the establishment for an employee holding the position held by him.

The regulations apply only to employees - those working under a contract of employment but do not apply to the wider definition of workers. This is a complicated area of law. If a member is unsure whether he/she falls into the definition of employee, please seek advice from your regional official.

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Comparable employees

Part 1, regulation 2

A fixed-term employee can compare their treatment to a comparable permanent employee. A comparable permanent employee is one employed by the same employer (that is, the College, University or Institution) who is engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification and skills. The comparable permanent employee may be on a full or part-time contract.

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Equal treatment of fixed-term employees

Part 2, regulation 3

Under the regulations fixed-term employees have the right to be treated no less favourably to comparable employees on permanent contracts. This relates to all terms and conditions including pay and pensions as well as training opportunities and the opportunity to apply for permanent posts. The less favourable treatment does not only apply to contractual terms, but any benefit that is offered to employees.

The right not to be treated less favourable only applies if

  • the less favourable treatment is on the ground that the employee is a fixed-term employee, and
  • the treatment is not justified on objective grounds.

There are two forms of comparison permitted under the regulations - either on a term by term basis or on a package basis. Under a term by term basis each condition of employment of the fixed-term employee should be equivalent to the comparator (on a pro- rata basis if appropriate). Under the package approach employers will be able to justify a less favourable term for the fixed-term employee provided that the overall employment package is not less favourable than that of the comparator. This might involve a higher salary payment for example to compensate for another condition.

The UCU would strongly support the use of the term by term approach.

Part 2, regulation 5

If a fixed-term employee believes s/he is being discriminated against compared to a permanent employee, s/he has the right to request in writing a written statement giving reasons for the difference in treatment. Employers must provide this within 21 days of the request. In the event of a case being taken to Employment Tribunal, this written statement would be used in evidence. A model letter to request this information from the employer has been prepared and can be downloaded here.

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Part 2, regulation 7

The regulations provide that an employee may present a complaint to an Employment Tribunal if s/he thinks that the employer has treated her/him less favourably than a comparable permanent employee on the grounds that s/he is a fixed-term employee and that the less favourable treatment is not justified on objective grounds. Any claim must be made within 3 months of the alleged infringement. If the tribunal finds in favour of the employee it can make a declaration as to the rights of the employee and the employer and / or order the employer to pay compensation and/or recommend the employer take action to remedy the less favourable treatment.

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Right not to be subjected to detriment

Part 2, regulation 6

The regulations provide protection for employees against dismissal or any other detriment as a result of bringing proceedings or requesting a written statement under the regulations.

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The use of successive fixed-term contracts

Part 2, regulation 8

The regulations limit the use of successive fixed-term contracts to a period of four years. Once a fixed-term employee has four years' continuous service on two or more contracts (or has had their contract renewed), the contract automatically becomes indefinite unless the continued use is objectively justified. Service prior to 10 July 2002 did not count towards this period of four years.

There is no limit on the duration of a first fixed-term contract. But if a first fixed-term contract lasts for four years or more and is renewed, the second contract will be regarded as permanent (unless the continuing use of a fixed-term contract is objectively justified).

The regulations provide for a collective or workplace agreement that will define both objective justification and / or the maximum total period an employee can remain on a fixed-term contract. This will allow local associations/branches to negotiate agreements for fixed- term staff that improve on the statutory minimum.

Part 2, regulation 9

Whether or not the contract can be regarded a permanent under regulation 8 is a matter of fact in law and the regulations require neither the employee nor the employer to take any action.

However, if an employee considers that by virtue of the regulations s/he is a permanent employee s/he has the right to ask for a written statement confirming that s/he is now a permanent employee. A model letter to request this information from the employer has been prepared and can be downloaded here.

This statement must be produced within 21 days of the request and the employer must either confirm that the employee is now a permanent employee or give a statement why the contract remains fixed-term including a statement of the objective justification for maintaining the fixed-term contract.

If the employer asserts that the contract remains fixed-term or does not reply within the specified 21 days the employee may apply to the employment tribunal (ET) for a declaration as to whether or not s/he is a permanent employee.

The ET can consider any employer statement provided in response to the employee's regulation 9 letter and can draw inference from the fact if the employer has omitted to provide a written statement or the written statement is evasive or equivocal.

The employee must still be employed by the relevant employer at the time the application is made to the ET.

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Part 2, regulation 9

The declaration from the tribunal will determine whether or not the employee is a permanent employee. However, the effect of such a declaration is to remove the clause in the contract that restricts the duration of the contract e.g. the end date. It will not alter any clauses in the contract and is not a legal protection against redundancy.

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The abolition of the redundancy waiver

Schedule 2, Part 2, paragraph 5 (2)

The regulations abolish the use of the redundancy waiver so that fixed-term employees can no longer be required to waive their statutory rights to a redundancy payment. This will only apply to contracts signed, extended or renewed on or after 1 October 2002. After a minimum of two years continuous service fixed-term employees now have the right to statutory redundancy payments, or better local contractual schemes where they exist, if they are made redundant at the end of their contract. Fixed-term employees should not be selected for redundancy purely on the basis of their contractual status.

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What is objective justification?

A major weakness of the regulations is that they fail to define objective justification, leaving this open to interpretation by employers. This applies both to equal treatment and the use of successive fixed-term contracts.

UCU does not believe that there could be any such grounds for less favourable treatment of our fixed-term members compared with permanent employees.

UCU also believes that there should be fair, transparent and objective reasons for placing a post initially and subsequently on a fixed-term contract. These should relate to exceptional circumstances.

The DTI compliance guidance for employers advises that a renewal of a fixed-term contract after four years will be justified on objective grounds if it can be shown that the use:

  • is to achieve a legitimate objective (for example a genuine business objective)
  • is necessary to achieve that objective
  • is an appropriate way to achieve that objective.

While each case would need to be considered on its own merits it is worth noting that in the case of Ball v Aberdeen, the tribunal rejected the university's case that short term funding could automatically provide a justification for employment on a fixed-term.

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Last updated: 29 October 2008