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Finding your way around fixed-term contracts

A recent case in Scotland has raised important questions around the employment of people on fixed-term contracts. Are employers at risk of claims of unfair dismissal or redundancy if they decide not to renew a fixed-term contract?

The case of University of Stirling v University and College Union involved tribunal action being brought by a number of workers who had not had their fixed-term contracts renewed. The workers claimed that they had effectively been made redundant, and that their employer had failed in their duty to consult them, and an initial ruling found in their favour. While this was later overturned on appeal, the case nevertheless raises interesting questions around treatment of workers on fixed-term contracts.

Fixed-term contracts normally end automatically when they reach their agreed end point, so there is no need for employers to give notice. However, the expiry of a fixed-term contract without renewal amounts to a dismissal in law, and employers must still act fairly and follow any dismissal procedure if necessary.

Any decision on whether or not to renew a fixed-term contract will usually have to take into account a range of business reasons. However, it can sometimes be difficult to distinguish a 'business' reason from an 'employee-related' reason, and this can sometimes leave the door open to tribunal claims later on. Drawing up clear contract terms and including fixed-term contract workers in any consultation process can help avoid any claims against employers for failure to consult on redundancy, or for unfair dismissal.

Acas offers training in drawing up contracts for staff, including what to include in a written statement, how to approach potential changes to terms and conditions, managing lay-offs and terminating contracts.

Visit the Acas training and business solutions area for more information.

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