The main advantage of a fixed term or specified purpose contract is that they allow for the termination of the contract once the fixed term or the specified purpose has been completed. Generally, a fixed term contract ends on an agreed date and this is stated in the contract. By contrast, a specified purpose contract is used in situations where the termination date is not definable in advance. It is suitable where a person is employed as a replacement for someone who is absent due to illness/maternity leave or if someone is employed to work on a particular project.

Rights of employees

Employers should ensure that they fully understand the rights of employees on fixed term or specified purpose contracts as set out in Protection of Employees (Fixed Term Work) Act, 2003. It is important to note that if an employer wishes to renew an employee’s fixed-term/ specified purpose contract that they must provide the employee with a written statement, not later than the date of renewal, setting out the objective grounds justifying the renewal and the reasons why the company was unable to offer a contract of indefinite duration.

Obligations of employers

There are some limitations on the use of fixed-term/specified purpose contracts and if an employee has been employed on two or more continuous fixed-term contracts, then the total duration of those contracts may not exceed four years. After this, the employee becomes entitled to a contract of indefinite duration unless the employer can justify a further fixed term contract being issued on objective grounds. The Unfair Dismissals Act 1977-2015 also contains a provision to prevent the abuse of fixed-term contracts by employers.  The Act provides that where a fixed-term or specified purpose contract expires and the individual is re-employed within three months, the individual is deemed to have continuous service. However, the Workplace Relations Commission may even look beyond this three month threshold if they feel that the employer’s aim in breaking the employee’s service was to avoid the legislation.

The SFA have published a guideline on employing fixed term workers .For further information, contact Ciara McGuone on 01 605 1668, or ciara.mcguone@sfa.ie.