The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 came into force on 1 October 2002.

The Regulations cover four areas:

• The right not to be treated less favourably than a comparable permanent* employee in respect of contractual terms and conditions or being subjected to any other detriment
• Limiting the use of successive fixed-term contracts (FTCs) unless the continued use of an FTC can be justified on objective grounds. Statutory period of 4 years may be varied by collective or workplace agreement
• The right to a statutory redundancy payment where the expiry of an FTC gives rise to a redundancy situation
• The right to be informed of open vacancies within the organisation

The Regulations apply to:

• employees on contracts that last for a specified period of time
• employees employed on contracts that will end when a specified task has been completed
• employees employed on contracts that will end when a specified event does or does not happen.

Examples could include employees covering for maternity leave and peaks in demand and employees on task contracts such as setting up a database.

At the University the majority of FTCs will have a specified end date and will fall into the first category. It should be noted that agency staff are not covered by the regulations but staff recruited in line with the guidelines on temporary and casual contracts may be covered.

Less favourable treatment

Fixed-term employees will have the right not to be treated less favourably than comparable employees on open contracts because they are fixed-term, unless the different treatment can be objectively justified. This includes the following:-

• Terms and conditions
• Other benefits
• Subjected to disadvantage not imposed on employees on open contracts
• Compare treatment to comparable employee on open contract i.e. doing the same or broadly similar work, and the comparator’s skills and qualifications may be taken into account where they are relevant to the job.

*The term ‘Permanent’ has been replaced by ‘Open’

If challenged the University would need to provide a written statement justifying the less favourable treatment.

Staff on FTCs are employed under the same contractual arrangements as employees on open contracts. The University needs to guard against differences in treatment in terms of access to benefits e.g. training, opportunities for promotion or failing to do something for a fixed-term employee that would be done for an employee on an open contract.

Successive fixed-term contracts

The legislation provides that an employee will be regarded as on an open contract if they have their contract renewed, or they are re-engaged on a new FTC, when they already have a period of 4 or more years of continuous employment and employment on an FTC cannot be objectively justified.

There is, however, no limit on the duration of a first FTC. The issue of permanency arises at the point of renewal or re-engagement. Service prior to 10 July 2002 does not count towards this period of four years.

The University is committed to appointing staff to open contracts wherever possible but recognises the need to operate within the constraints of funding arrangements and financial restrictions. It is with this in mind that the following arrangements have been agreed:

Appointment to a fixed-term contract

HoDs will review all posts prior to advertising to determine whether the appointment should be made on an open basis. Fixed-term appointments may be justified on a limited number of grounds as follows:

• Where there is a demonstrable case that the University/department requires specialist skills or experience for a specific period and/or where the University/department can demonstrate a specific task-oriented project that will only last for a limited term and/or is limited by funding;
• To cover staff absence as appropriate (e.g. to cover for parental or adoptive leave, long-term sickness, sabbatical leave or secondment);
• To provide a secondment or career development opportunity for employees of the University;
• To meet fluctuating demand for short courses, particular modules or schemes of study e.g. Associate Tutors in the Centre for Lifelong Learning and Languages for All or to meet seasonal fluctuations in demand;
• To fill specific posts that the University/department can demonstrate as developmental (e.g. Lektors);
• For an interim period pending the restructuring of a department and/or recruitment to a specific post.

This list is not exhaustive and, subject to agreement with the relevant Trade Union, there may be other circumstances in which appointment to an FTC is appropriate and can be justified on objective grounds.

It should be noted that appointing managers are required to indicate the reason for the use of an FTC on the vacancy request form. This will be used to advise the individual appointed of the reason for the FTC.

Review of fixed-term contracts

Heads of Department will:

• Monitor the use of FTCs on an ongoing basis
• Make recommendations to HR that individuals transfer to indefinite contracts where the objective reasons for an FTC no longer apply

Heads of Department will review contracts 6 months prior to the expiry date and consider:

• Whether there is an ongoing requirement for work of the same type to be undertaken
• The period of time during which there will be an ongoing requirement
• Whether a source of funding is available to support this ongoing requirement
• Whether the objective justification still applies or whether it would be appropriate to recommend to HR that the individual transfers to an indefinite contract

In order to do this HoDs will be provided with reports of staff whose FTCs are due to expire in the next 6 months on a monthly basis.

The difficulty associated with predicting availability of funding so far in advance is recognised but the UCU in particular stressed the need for individuals to know where they stand. The extended timescale also provides the opportunity to operate the University’s redundancy and re-deployment procedures as necessary.

It should be noted that reliance on the objective justification is only applicable up to the 4 year cut off point (or 6 years/after 3 rd contract in the case of research staff). Staff Committee felt that after this period of time, we should be in a position to determine whether there is likely to be an ongoing requirement for the work to be undertaken and whether a pattern of funding has been established that would support that continuing requirement.

Successive fixed-term contracts

Whilst the use of FTCs should be kept under review, this is particularly important where the renewal of a contract will take an individual beyond the 4-year cut off point or for research staff a total period of 6 years employment/after their third contract.

Research staff

The University has attempted to recognise the position of research staff and particularly the funding arrangements, by entering into a Collective Agreement with the UCU. This essentially extends the statutory 4 year period to a period of 6 years for this staff group in recognition of the fact that it may well be in the best interests of both the individual and the University to allow them to undertake two periods of postdoctoral study. There is, however, a limit to the total number of fixed-term contracts that will be permissible.

• Where the contract is renewed or extended following a period of six years’ continuous service from 10 July 2002, the individual will be transferred to an indefinite contract and notified accordingly

or

• At the beginning of the fourth contract, the individual will be transferred to an open contract and notified accordingly

HoDs and PIs will therefore need to think carefully about continuing to use individuals on a series of short-term contracts. In particular, the use of short-term ‘bridging’ contracts may no longer be appropriate.

For all other staff groups, where the contract is renewed or extended following a period of four years’ continuous service from 10 July 2002, the individual will be transferred to an indefinite contract and notified accordingly.

The expectation is that staff will transfer to an indefinite contract on completion of 4 years employment or 6 years/after their 3 rd contract for research staff, but there may be a very limited number of exceptional cases where the continued use of an FTC can be justified as follows:

• where further time is required to finish a specific task-oriented project which has gone beyond its original deadline:
• to provide a secondment or career development opportunity;
• where an employee is taking up a demonstrably different post i.e. where the individual has applied and been appointed to the post in response to a published advertisement seeking applications from candidates not confined to existing employees.

This recognises that one of the main concerns of HoDs was that, in seeking to accommodate staff on expiry of an FTC they would be compelled to offer an indefinite contract.

Application for open status

The University feels that it is appropriate to remove as far as possible some of the uncertainty surrounding fixed-term contracts. We also need to be mindful that following 4 years/6 years or after 3rd contract for research staff individuals can apply to an employment tribunal for open status in the following way:

• Individual applies to the University in writing for confirmation that employment to be considered for open status
• Written response provided by the University within 21 days
• Right to request a review by University Contract Review Panel which is essentially an appeal stage carried out by an internal review body
• Right to apply to employment tribunal if dissatisfied with outcome

To pre-empt this, HoDs/PIs will be required to indicate the reason for the FTC on the Variation of Contract form which will be used to advise the individual of the reason for the continued use of an FTC.

Expiry of fixed-term contract

The expiry of an FTC without renewal is classed as a dismissal in law so we need to be aware of the provisions relating to unfair dismissal. This means that the University must be able to establish a fair reason for terminating employment and demonstrate that it has acted reasonably. We also need to comply with the statutory dismissal procedure.

A process map has been prepared identifying the roles and responsibilities of relevant parties from start to finish if a post is to be made redundant on the expiry of the FTC. This is summarised as follows:-

• Where employment is to terminate on expiry of the fixed-term, informal discussion will initially take place with the individual. The individual will be provided with an information sheet advising them of their rights in relation to consultation on redundancy.
• A letter will be sent to the individual from the HoD inviting him/her to a 1st consultation ‘at risk’ (of redundancy) meeting
• At this meeting at which the individual has the right to be accompanied by a work colleague or Trade Union representative, the position will be discussed and the individual may make suggestions as to how their employment could be maintained
• A letter will be sent to the individual from the HoD confirming what has been discussed at the first meeting
• The individual will be invited to a second consultation meeting
• At this second meeting a review of the action taken to date will be carried out and the individual and their representative may make further representations which will be considered. At this meeting, if the consultation process has not identified a way to maintain employment, the post will be declared redundant
• Where appropriate, a letter declaring the post redundant will be sent to the individual by the HoD
• HR will confirm the outcome of the meeting and explain what, if any, redundancy payment applies and will explain the individual’s right of appeal.

There may be occasions when individuals indicate that they do not wish to participate in the consultation process. In such cases the individual may opt-out by using the information sheet to indicate their wishes. The individual will be asked to sign the ‘opt-out’ form contained in the information sheet to confirm his/her position. This should then be countersigned by the HoD and forwarded to HR who will confirm the contract expiry date and right of appeal.

Redundancy

Fixed term employees are entitled to receive a redundancy payment where the expiry of an FTC gives rise to a redundancy situation, in the same way as staff on open contracts are eligible. There is a 2 year qualifying period for a redundancy payment. Legislation on redundancy and the University’s redundancy policy also applies to FTCs.

A redundancy situation arises when:

• The University has ceased or intends to cease, to carry out the work for which the employee was employed in the place where the employee was so employed
• The requirements of the University for employees to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish

In many cases the expiry of an FTC will give rise to a redundancy situation i.e. there is no longer a requirement for work of that kind because, for example, the research project has been completed. There will, however, be circumstances where this is not the case. Where, for example, someone has been brought in to provide temporary cover in the case of absence due to illness or leave, or where, perhaps, the work requirement is ongoing but there are benefits to be gained by advertising the post more widely. This may arise where an individual has been brought in on a very short contract and the requirement for the work to be done has been extended.

We need to ensure that any dismissal is fair. Where there have been concerns about an individual’s performance, for example, these should be well documented and dealt with in accordance with the University’s guidelines on managing poor performance. Further details on managing performance are contained in the Capability Procedure and HoDs are strongly advised to discuss any potential cases with HR.

Selection pool for redundancy

In most cases the pool for redundancy will be defined by the specialist nature of the work carried out. It should, however, be noted that selection for redundancy purely on the basis of an FTC might be deemed to be less favourable treatment unless it can be objectively justified. However, where fixed-term employees have been brought in specifically to complete particular tasks or to cover for a peak in demand, it is likely that an employer could objectively justify selecting them for redundancy at the end of their contracts. This will depend on the circumstances but HoDs should bear in mind that the pool for redundancy could include both fixed-term and employees on open contracts, in which case they should consult with the relevant HR Manager regarding the procedure to follow.

Consultation

In cases of redundancy there are certain legal requirements to consult about ways of avoiding the redundancy situation, reducing the number of dismissals or mitigating the effects of the redundancies proposed. There are two aspects to this as follows:-

• Collective consultation
• Individual consultation

There is a requirement to review all FTCs 6 months prior to expiry. At this stage HR will also be providing the relevant Union with details of those employees whose contracts are due to expire and who are therefore potentially in a redundancy situation. In most cases collective consultation will be carried out centrally.

It is also important that HoDs consult with the individual staff member concerned at the earliest opportunity to advise them of the situation and offer any assistance that might be available to support them in their future career aims. HoDs might also wish to consult with colleagues within the department to determine whether there any further opportunities available for the individual concerned.

Redundancy payments

• Individuals with 2 or more years’ continuous service receive payment equivalent to 1 week’s pay for each completed year of service
• Redundancy payments are paid from a central budget

Redeployment

One way of avoiding a redundancy situation is by seeking redeployment opportunities. The need to balance the rights of existing employees with the need for the University to remain competitive in the market place is recognised. It has therefore been agreed that where a redundancy situation arises, the following approach will be adopted.

• HoDs are encouraged to identify suitable opportunities within their department. Individuals may be assimilated to a new role where the essential skills, knowledge and qualifications required to do the post and the nature of the post are substantially similar and there is no difference in the grading of the post.

This essentially reflects current practice, whereby staff are often transferred to another project to prevent a redundancy situation from arising. This would not, however, apply where the individual was initially recruited outside the normal recruitment procedures.

To guard against claims of discrimination, we need to ensure all employees at risk of redundancy are given equal access to re-deployment opportunities. This may require a competitive selection process in some cases.

• Department to consider individual at risk of redundancy for re-deployment within the department
• Details of vacancies within the University to be provided to the individual
• Individual will be placed on the University’s central ‘at risk’ register

Where an individual is subject to redeployment s/he should be considered for alternative posts within the University in advance of other candidates. If s/he is capable of doing the job s/he should be appointed and a trial period may be agreed.

The expiry of an FTC is a dismissal in law. Employment tribunals will consider the reasonableness of any decision to dismiss. If for example we decided to terminate an individual with 10 years’ service who can point to an ongoing requirement for similar work and a track record of funding, we may have difficulty in demonstrating we have acted reasonably.

In cases where individuals are to be transferred to indefinite status, HoD’s are advised to review and re-issue their job description so that both parties are clear about the expectations and requirements of the role e.g. a requirement to generate funding.

Transfer to open status

• Review and re-issue job description to ensure clarity of role
• Open status to be confirmed to individual

Staff who are employed on open contracts may still be affected by redundancy and would be subject to the same policies and procedures in relation to Redundancy, Re-deployment etc. A notice period – whatever is on the contract of employment – would need to be added on to ensure that when staff on open contracts are formally notified that their post has been declared redundant, they then have their contractual notice to work, although in some cases it may be desirable to make a payment in lieu of notice.

Expiry of fixed-term contract

• Determine whether redundancy situation arises
• Liaise with relevant HR Manager
• Consult with individual
• Ensure compliance with procedures

Summary

The University is committed to reducing reliance on FTCs. The approach outlined provides for greater transparency in the use of FTCs so that individuals understand the reasons for their use and have more realistic expectations of their employment with the University. For contract researchers, in particular, a training programme is being developed by the Graduate Training Office to support them during their employment with the University and ensure that they are better equipped to move on into other areas as appropriate.

Useful links

• Code of Practice on the Management of Staff on FTCs
• Collective Agreement on the Management of Staff on FTCs
• Redeployment Policy
• Redundancy Policy

1. On a monthly basis you will be provided with a list of staff whose fixed-term contract is due to expire within the next six months.
2. Heads of Department/Principal Investigators are required to review the list to determine whether:
   1. The individual should be transferred to an open contract (complete a contract variation form and return to HR)
   2. The fixed-term contract should be extended (complete a contract variation form including objective justification for FTC and return to HR).
   3. The employment will cease on expiry of the current fixed-term contract (commence consultation procedure).
3. Where it is anticipated that employment will cease on expiry of the current contract consultation should commence with the individual as outlined below.

In cases of redundancy (i.e. where the requirement for work of that kind ceases or diminishes), consideration should be given to the pool for redundancy. The pool for redundancy may include staff on open and fixed-term contracts doing similar work. Further guidance on defining the pool for redundancy and the procedure to be followed is available from your HR Manager.

4. Commence redundancy consultation process in line with guidance:
   1. Initial informal discussion to explain process and issue information sheet to individual.
   2. Department issue letter inviting individual to attend first consultation ‘at risk’ (of redundancy) meeting, copied to HR (template letters [docx]). This meeting should take place at least 30 days prior to the decision meeting to allow for minimum 30 day consultation period.
   3. At meeting outline position to individual and invite him/her to make suggestions as to how his/her employment could be maintained. Explain the redeployment process if appropriate.
   4. Complete consultation meeting pro-forma.
   5. Send letter to individual confirming outcome of consultation meeting and giving details of how to register for redeployment where appropriate (copied to HR).*
   6. Follow-up suggestions from first consultation meeting. Further interim discussions/meetings may be required.
   7. Send letter inviting individual to second formal consultation/decision meeting.
   8. At meeting review actions to date and consider representations made by individual. Confirm position regarding employment i.e. employment will terminate.
   9. Send letter to individual confirming outcome of meeting i.e. employment to terminate and confirm expiry date (copied to HR).
   10. Complete a leaver form and forward it to HR Services at least four weeks prior to the last day of employment, stating the leaving reason as Fixed Term Contract Expiry.

Note: It may be possible to omit steps b – i above if the individual indicates that s/he does not wish to participate in the consultation process and completes the relevant form.

5. HR will write to individual to confirm termination date, redundancy payment (where applicable) and advise of right of appeal.

*If HR have not received copy correspondence 3 months prior to contract expiry date, we will contact the department to confirm that appropriate consultation is taking place.

These documents are designed to assist departments with the management of fixed term contracts.

• Vacancy Request Form [MS Word]
• Offer of Appointment Form [MS Word]
• Extension/Variation of Contract form [MS Word]
• Process Map for the Management of Fixed-Term Contracts [PDF]
• Information for Staff on the Expiry of a Fixed-Term Contract [MS Word]
• Template letters [MS Word]
• FTC Expiry – consultation meeting pro forma [MS Word]