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Fixed-term contracts and notice: what you need to know

You have an employee whose fixed-term contract has almost run its course, but do you need to give any notice?

On the face of it, it would appear not - both sides know the expiry date and no notice is needed.

However, there are cases where it would be right to give notice, and it's always worth checking the wording of the contract.

Always check notice provisions in fixed-term contracts

For example, the contract may have a provision requiring a certain amount of notice to be given. Failing to do so could be a breach of contract. There could also be collective agreements that have a bearing on what notice is needed before a contract expires.

In any case, it's good practice then to check the contract, give notice and specify the date of termination so that everyone's clear.

Ending fixed-term contracts early

What about notice periods if you're terminating a fixed-term contract early?

Again, a good look through the contract is advisable. If it specifically prohibits early termination - except because of gross misconduct, say - pulling the plug on a contract before time may not alter the fact that the employee is still entitled to his or her remaining wages.

In other instances, a fair process for dismissal is needed, and the correct amount of statutory notice should be given:

  • one week's notice if the employee has been employed by the employer continuously for one month or more, but for less than two years
  • two weeks' notice if the employee has been employed by the employer continuously for two years, and one additional week's notice for each further complete year of continuous employment, up to a maximum of 12 weeks.

Failure to give statutory notice can leave employers open to a claim of breach of contract at an employment tribunal.

Acas publications and services

Acas has detailed information about Terminating employment - notice periods and pay, including help with Statutory or contractual notice period.

Acas can help you with Contracts of employment, including with its step-by-step guide on how to establish a New employee's contract, and Useful templates for letters, forms and checklists.

Acas experts can also visit your organisation and develop terms and conditions of employment and help you minimise the potential for disputes. See Contracts and hours: how Acas can help for more information.

Related practical training is also available on Contracts and terms and conditions, Managing change, Handling difficult conversations, and for new employers, Employing People - A Practical Introduction.

For free, impartial advice and guidance visit Acas Helpline Online.

Visit the Acas Training Courses, Workshops and Projects area for more information.

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