Do you use temporary contracts? If so, do you know their dangers?

How many temporary staff do you have in your School? Do you know when to use a temporary contract? Do you renew or extend temporary contracts?

A fixed-term contract (often referred to as temporary contracts) is a contract of employment that states how and when it will end. This is generally on the expiry of a specific date, completing a specific task, or the occurrence of a specific event.

Fixed-term contracts are often used by Schools to provide flexibility. The most common reasons for these are:

To provide maternity cover, or to cover long-term sickness absence or people on secondment;
Where funding is external and may not be renewed after a fixed period or occurrence of a specific event (for example when you recruit someone to support a child with specific funding for their special educational needs);
Where someone is needed for a specific task or project;
Where demand for a particular post is not clear and you wish to carry out a trial period before offering a permanent position.

Fixed term contracts can be very helpful but you do need to be careful not to get stung by their drawbacks.

What are the drawbacks of using fixed-term contracts?

Below I list the dangers of fixed term contracts that most people are unaware of!

1.             Regulations designed to protect fixed-term employees provide that fixed-term employees cannot be excluded from the contractual benefits and facilities offered to permanent staff or treated less favourably. Therefore, staff employed on fixed term contracts should be treated in the same way as permanent employees.

2.         The non-renewal of a fixed term contract could result in a claim for unfair dismissal.  If you have an employee who has been employed by the School, Multi Academy Trust, or if you are a maintained School, by the same local authority, or Governing Body of a School maintained by the same local authority, for more than two years in total (with no break in service), then they will have the same right as permanent members of staff not to be unfairly dismissed. Therefore, if you do not have one of the five potentially fair reasons for dismissal (conduct, capability, redundancy, illegality or some other substantial reason) and follow a fair procedure, any dismissal at the end of a fixed term contract is likely to be unfair.

3.         Do you keep renewing or extending temporary contracts over and over? If so, and have done so for 4 years or more, the employee is automatically considered to be a permanent employee (unless the continued use of a fixed-term contract can be objectively justified).

4.         Don’t be fooled into thinking that the School holidays break continuity of employment! If you have a Teacher on a fixed term contract which expires on the last day of the summer term, but before the end of that contract you negotiate a further fixed term contract to start at the beginning of the next academic year, would continuity of employment be preserved? Yes! Despite the break between the two contracts being performed as it would be both the Schools and the Teachers intention that they will be returning after the summer holidays continuity will be preserved.

5.         Can you terminate a fixed term contract early? Yes, provided the contract of employment provides for this. You must ensure that you comply with the terms of the contract when terminating the contract before the end of the fixed term. If you don’t then the employee may have a claim for wrongful dismissal (breach of contract).

When using fixed term contracts always consider:

o Is a fixed term contract necessary in the circumstances?

o  Does the employee haven any qualifying previous service?

o  Does the contract provide for early termination?

o  When renewing:

o   has it been renewed or extended before?

o   Does it still need to be fixed term?

If you are unsure about any of this or just want to sense check your thoughts, give us a call.