Brief Guide to Fixed-term and Specific
  Purpose Contracts of Employment
(This   is a brief guide only and should not be c...
Prepared by
                               CollierBroderick Management Consultants
                                       ...
A Guide to Fixed-term and Specific Purpose Contracts of
                             Employment

Definitions

Some of the ...
(b)   the work performed by one of the employees concerned is of the same or a similar
              nature to that perfor...
“This contract will terminate once the specified work has been completed and the
        provisions of the Unfair Dismissa...
of a contract. If it could be shown that the termination of the contract / dismissal of the
employee was to avoid the empl...
For

                            Contracts of Employment

              Policies and Procedures and Employee Handbooks

  ...
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Temporary Contract Of Employment

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This "Brief Guide" gives information on temporary contracts of employment including fixed-term contracts, specific purpose contracts, zero hours contracts and casual contract. This document can be downloaded at http://www.collierbroderick.ie/Services/HR%20Compliance/Employment%20Contract.asp

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Temporary Contract Of Employment

  1. 1. Brief Guide to Fixed-term and Specific Purpose Contracts of Employment (This is a brief guide only and should not be considered as a comprehensive guide to fixed-term and specific purpose Contracts of Employment) Page 1 of 7
  2. 2. Prepared by CollierBroderick Management Consultants Tel: +353 1 8666426 Fax: +353 1 8666457 E-mail: enquiries@collierbroderick.ie Web: www.collierbroderick.ie Disclaimer Whilst every care has been taken by CollierBroderick Management Consultants to ensure that the information contained in this guide is accurate and up-to-date, as the guide is for information purposes, the contents of these pages should not be relied upon as a substitute for your own independent HR or legal advice. We recommend that you always consult a suitably qualified HR or legal professional on any specific matter before relying on any information in this guide. No responsibility or liability is accepted by or on behalf of CollierBroderick Management Consultants or anyone associated with its production for any errors or omissions in the guide, nor for any use the information may be put to. Page 2 of 7
  3. 3. A Guide to Fixed-term and Specific Purpose Contracts of Employment Definitions Some of the key definitions under Section 2 of the Protection of Employees (Fixed-term Workers) Act, 2003 are: 1. “Permanent employee” means an employee who is not a fixed-term employee; 2. “Fixed-term employee” means a person having a contract of employment entered into directly with an employer where the end of the contract of employment concerned is determined by an objective condition such as arriving at a specific date, completing a specific task or the occurrence of a specific event but does not include— (a) employees in initial vocational training relationships or apprenticeship schemes, or (b) employees with a contract of employment which has been concluded within the framework of a specific public or publicly-supported training, integration or vocational retraining programme; 3. “Remuneration”, in relation to an employee, means— (a) any consideration, whether in cash or in kind, which the employee receives, directly or indirectly, from the employer in respect of the employment, and (b) any amounts the employee will be entitled to receive on foot of any pension scheme or arrangement; 4. “Renewal” includes extension and cognate words shall be read accordingly In addition, Section 5 of the Protection of Employees (Fixed-term Workers) Act, 2003 clearly defines a “Comparable Employee” or employee with which the fixed-term worker can compare the value of his / her contract of employment: (1)For the purposes of this Part, an employee is a comparable permanent employee in relation to a fixed-term employee if— (a) the permanent employee and the relevant fixed-term employee are employed by the same employer or associated employers and one of the conditions referred to in subsection (2) is satisfied in respect of those employees, (b) in case paragraph (a) does not apply (including a case where the relevant fixed-term employee is the sole employee of the employer), the permanent employee is specified in a collective agreement, being an agreement that for the time being has effect in relation to the relevant fixed-term employee, to be a type of employee who is to be regarded for the purposes of this Part as a comparable permanent employee in relation to the relevant fixed-term employee, or (c) in case neither paragraph (a) nor (b) applies, the employee is employed in the same industry or sector of employment as the relevant fixed-term employee and one of the conditions referred to in subsection (2) is satisfied in respect of those employees, and references in this Part to a comparable permanent employee in relation to a fixed-term employee shall be read accordingly. (2) The following are the conditions mentioned in subsection (1)— (a) both of the employees concerned perform the same work under the same or similar conditions or each is interchangeable with the other in relation to the work, Page 3 of 7
  4. 4. (b) the work performed by one of the employees concerned is of the same or a similar nature to that performed by the other and any differences between the work performed or the conditions under which it is performed by each, either are of small importance in relation to the work as a whole or occur with such irregularity as not to be significant, and (c) the work performed by the relevant fixed-term employee is equal or greater in value to the work performed by the other employee concerned, having regard to such matters as skill, physical or mental requirements, responsibility and working conditions Summary of the Protection of Employees (Fixed-term Worker) Act, 2003 Section 6(1) of the Act states that “A fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee” – this includes equal access to training. This does not mean that the contract of employment for a permanent employee and a fixed-term employees must be the same, instead, contracts of employment must be of equal value. It is important to note that there is no restriction on the duration of any single fixed-term contract of employment (e.g. it is possible to give a once-off 10 year contract or to engage an employee on a once-off specified purpose contract –although, in these cases, an employer would be wise to have an objective reason as to why the employee is not being given a contract of indefinite durations (permanent Contract).. However, the Act places two main restrictions on the use successive (or back-to-back) fixed-term contracts of employment: 1. A Company can offer as many contracts as it likes, however, when totaled these contracts cannot exceed a duration of 4 years; 2. When a duration of 3 years is reached, the Company can only offer 1 more contract and this contract can only be for a maximum duration of 12 months. Note: There is no restriction on the number of fixed-term contracts of employment which can be given. Instead, the restriction is on the duration of successive or back-to-back contracts of employment when added together. That said, is it possible to break the employment or length or service of a fixed-term worker thereby restarting the clock? Effectively, no. The Unfair Dismissals (Amendment) Act 1993 introduced a provision to prevent employers abusing employees by renewing fixed term contracts on an indefinite basis whereby an employee, employed under a fixed term contact, is dismissed on the expiry of the term and is then re-employed within three months under a new contract - the nature of the work being the same or similar. If the Rights Commissioner, the Employment Appeals Tribunal or the Circuit Court consider that the employer was deliberately trying to avoid restrictions under employment legislation relating to fixed-term contracts of employment, the employee will retain continuity of employment (including any break in service) and the Unfair Dismissals Acts 1977-2001 will apply to the dismissal. Exclusion of the Unfair Dismissals Acts, 1977-2001 When giving a fixed-term contract of employment, the Company would be wise to exclude the provisions of the unfair dismissals legislation from the natural termination of the contract by inserting a clause such as: “This is a fixed term contract of employment and therefore the provisions of the Unfair Dismissals Acts, 1977-2001, will not apply to the termination of this contract where such termination is by reason only of the expiry of this fixed term” (Fixed-term Contract of Employment) Page 4 of 7
  5. 5. “This contract will terminate once the specified work has been completed and the provisions of the Unfair Dismissals Acts, 1977-2001 will not apply to such termination” (Specific Purpose Contract of Employment Note: While the provisions of the unfair dismissals legislation may be excluded from the natural termination of the contract – be it fixed-term of specific purpose – the employee can still take a claim under the unfair dismissals legislation should the contact be terminated during the term of the agreement and should the employee hold the required elements which will allow him / her to take a case (e.g. 12 months continuous service, etc). Objective Justification for Giving a Fixed-term or Specific Purpose Contract of Employment (Instead of a Contract of Indefinite Duration) Section 8(1) of the Protection of Employees (Fixed-term Workers) Act, 2003 states that the Company must inform, in writing, as soon as reasonably practical, the objective condition determining the contract (i.e. what will result in the end of the contract of employment – a specific date, event, etc). In addition, Section 8(2) of the Act states that “where an employer proposes to renew a fixed-term contract, the fixed-term employee shall be informed in writing by the employer of the objective grounds justifying the renewal of the fixed-term contract and the failure to offer a contract of indefinite duration, at the latest by the date of the renewal”. One of the most commonly asked questions which we receive in relation to fixed-term and specific purpose contracts of employment is “Does there have to be objective justification for an employer to enter into a fixed term arrangement in the first place”? Simply put – No. An employer does not have to specify their objective justification for entering into a fixed-term contract of employment in the first place. However, an objective justification will have to be offered for all renewals of the fixed-term contract and the failure to offer a contract of indefinite duration. Objective justification will turn on the individual facts and circumstances of each case. However, in general, the following issues are likely to be considered to be objective justification: Where the post is funding dependent and the employer is genuinely not aware from one year to the next as to whether funding will be available for the position; Temporarily replacing an individual who is acting /seconded in another post; Temporarily replacing an individual who is availing of statutory leave (e.g. Maternity Leave, Parental Leave, Carer’s Leave, etc); Temporarily filling a vacant post that is pending establishment; A specific project that is time limited and funding dependent; The purpose of the post being the employment of specialist expertise not already available within the organisation; Business demand can be clearly demonstrated as particularly uncertain; There is a pending restructuring of staff within the organisation. Penalisation of a Fixed-Term Worker Another of the most commonly asked questions we get asked is “If a fixed term employee is terminated at the end of the contract, are there any repercussions for the employer if he / she subsequently fills the job of another fixed-term worker or makes the position a permanent one for the new incumbent”? Section 13 of the Fixed Term Workers legislation deals with penalisation of employees and prohibits penalisation of the employee by way of termination Page 5 of 7
  6. 6. of a contract. If it could be shown that the termination of the contract / dismissal of the employee was to avoid the employer’s obligations under the Protection of Employees (Fixed- term Workers) Act, 2003 then the employee would have a cause of action against the employer. Furthermore, the employee may have a cause of action under the Unfair Dismissals Acts, 1977-2001 if the Employment Appeals Tribunal was satisfied that the termination of the fixed term contract was purely to avoid obligations under the Unfair Dismissals legislation. Page 6 of 7
  7. 7. For Contracts of Employment Policies and Procedures and Employee Handbooks Employment Law Advice HR Support Contact Helena Broderick Managing Consultant Tel: +353 1 8666426 Mob: + 353 87 9074843 E-mail: hbroderick@collierbroderick.ie Services are available nationwide through our team of experienced HR and employment law specialists Web: www.collierbroderick.ie Page 7 of 7

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