The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, SI 2002/2034 came into force on 1st October 2002. The Regulations were prompted by the need to ensure that British Law complies with the EC Fixed Term Work Directive 1999/70/EC. This Directive was originally meant to be implemented by 10th July 2001 but the British government took advantage of a let-out giving Member States a maximum of one more year “following consultation with management and labour, to take account of special difficulties or implementation by a collective agreement” (Art 2). Even that one year delay was extended as the Regulations in fact apply from 1st October 2002, albeit with some backdating to 10th July 2002.
The basic idea is that it becomes unlawful to treat a fixed term employee less favourably than a comparable permanent employee engaged in similar work, but subject to a defence of objective justification. An employer can objectively justify individual terms which are less favourable, if a fixed-term employee’s contract taken, as a whole, is as favourable to him/her as contracts of permanent employees are to them.
Several other related issues are also covered, notably:
- Fixed term contracts are automatically converted to contracts of indefinite length after four years (the four years cannot start before 10th July 2002)
- Removal of the ability of a fixed term employee to waive his/her right to statutory redundancy pay on expiry of the fixed term, subject to transitional provisions
- Making the completion of a task count as a dismissal for unfair dismissal purposes
- A fixed term employee who considers he/she is being treated unfairly can require his/her employer to provide a written statement setting out the reasons for the treatment complained of
Only a fixed term employee can benefit from the Regulations – a ‘worker’, as generally widely defined, is not covered.
An important change from the original March 2001 draft Regulations (para 2(3)(b)) is that after pressure from various bodies (see, for example, a TUC Press Release of 14th August 2001) the 2002 Regulations cover pay and pensions. One result is that it will become unlawful for occupational pension schemes to exclude from membership temporary employees who are on fixed term contracts if comparable permanent employees are eligible for membership.
The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 apply to fixed term employees only. Thus an employer can effectively circumvent some parts (ie the non-discrimination parts) of the new Regulations by the simple expedient of employing those whom he might previously have employed on fixed term contracts under normal permanent contracts instead. Subject to ensuring that there is no infringement of sex, race and disability discrimination, there is no statutory requirement that terms of contracts offered to one group of employees must be the same as those offered to others; so an employer can still legitimately offer different employment terms to different groups of employees who are not fixed term employees covered by the Regulations). However this is all uncharted territory and professional advice should be sought in any particular case.