Fixed term contracts - 2 year timeframe

(6 Posts)
MarmiteMerriment Tue 05-Jul-16 21:56:50

Can I ask for some advice from anyone in HR or employment law? I'm a department manager and have an employee who has been on a fixed term contract for an initial 12 month period, extended for an extra 6 months. This person is doing very well, and we have invested a lot of time in training and development to the point where they are a real asset the team.

I would like to keep this employee on, but am getting inconsistent and confusing advice from company HR. I understand that a employee who works continuously on fixed term contract for more than two years attains the same employment rights as a permanent employee, so it is no longer common practice to keep extending contracts beyond the two year point.

My questions are:

1. I'm being told that we could extend for another 4 months (i.e. to 22 months), but can't go any closer to 2 years than that (although I've heard that someone in a related department, with the same HR advisor, has recently been extended to only a couple of days under 2 years). Is there any valid reason for avoiding going as close to 2 years as possible?

2. Is it legal/common practice, to allow a fixed term contract to come to an end, while simultaneously advertising a new fixed term contract for exactly that same role (i.e. to replace the previous contractor)? If the previous contractor were to apply for it, and we were unable to appoint because of the two year situation, would it be valid/legal to give that reason for rejecting their application? (We are being advised not to make people aware of the two year limit, which is proving to be difficult, and I really want to avoid having to replace and train all over again when I have an effective person in place).

3. If I am successful in getting approval for a permanent post, can I simply 'award' this to the contractor of my choice, or is it necessary to advertise internally and interview all suitable applicants? My HR advisor has overseen both approaches in recent months.

I'd be really grateful for any advice that you can give.

MarmiteMerriment Wed 06-Jul-16 08:17:40

Anyone around this morning?

flowery Wed 06-Jul-16 08:48:10

1. Over-cautiousness. As long as proper notice is given and the contract doesn't go to two years you are fine. Why would you not extend it for the period actually you need the role for?

2. If the role needs to be a fixed term contract for some reason, like funding restrictions or whatever, then yes you can advertise another fixed term contract, and if you terminate the original employee's contract before two years is up, you don't have to appoint them if you don't want to. However I am confused because you say if you are 'unable' to appoint because of the 'two year situation'. 'Unable' is the wrong word here. You are perfectly able to appoint them. What you mean is 'unwilling' to appoint that person because you want to avoid your employment law obligations to them. Which is very short-sighted commercially and not good employment practice either.

3. No idea what your internal recruitment procedure says. If you are happy with the person personally my preference would be to convert their employment into permanent rather than fixed term, instead of dragging them and perhaps others through a recruitment process with a predetermined outcome. But internally you may have a policy of advertising when fixed term contracts are made permanent.

The only extra rights someone gets after two years are the right not to be unfairly dismissed and the right to redundancy pay. Redundancy pay for someone with two years' employment would be less than £1,000. And a fixed term contract coming to an end is a perfectly fair reason for dismissal. If a fixed term contract genuinely needs to be longer than two years, there is no reason you can't extend it for a further year, and then if the role is no longer needed at that point, their employment will end and you'll have to pay them a bit of redundancy pay. No big deal, what's the problem?

When employees have been on fixed term contracts for four years, their employment is then considered permanent, but even then, if the role ends because of funding, or whatever the reason is you are using fixed term contracts here, you'd just go through a redundancy process, assuming there were no other vacancies for them. Again, no big deal.

Why not extend the fixed term contract for the length of time you need the role for, and if you are happy with the current incumbent, as the manager you get to decide who to appoint to the role in your department, surely??

breakingpointisnigh Wed 06-Jul-16 15:33:55

I think it's awful that your company is going through all those hoops just to avoid giving its employees rights.

flowery Wed 06-Jul-16 19:06:47

OP? This morning your need for advice was so urgent that you were bumping it despite only having posted late last night.

MarmiteMerriment Wed 06-Jul-16 22:24:37

Thank you so much for taking the time to write such a detailed response flowery and I'm sorry to have been unable to come back until now. I read your post just before a meeting with HR this morning, and it made a real difference to be able to challenge this spurious 'two year rule' which they had seemed determined to stick to. I was able to get agreement for a one year contract extension, with the possibility of a permanent post in a couple of months.

Thanks again.

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