FusionHR Blog

HR news, updates and tips to help manage your people.

Temporary contracts – can I just finish them at any time?

There is no such thing as a temporary contract. What most businesses are referring to are fixed-term contracts, whereby you have agreed to take on an employee for a fixed period of time (usually from 1 September to 31 August). The most common reasons for a fixed-term contract is usually linked funding or maternity cover, although there are many reasons for having a fixed-term contract in place. You shouldn’t use them to “suss out” an individual as this can create more issues than simply employing the individual on a permanent contract with a probationary period incorporated into their terms and conditions. Please see the below links for further blogs on fixed-term contracts and how to use them.

Before ending a fixed-term contract you need to remember to check / carry out the following actions:

  • Check how long the employee has been with you by referring to a copy of their contract;
  • If you are ending the contract and the employee does have more than 2 years’ service they will be entitled to redundancy pay;
  • In addition, if the employee has come from another organisation that is covered by the Modification Order such as within the NHS/Education/Local Government and has continuous service in place, it could be argued that employees are entitled to a redundancy payment in line with the Redundancy Modification Order, if they have more than 2 years’ continuous service;
  • Remember that ending a fixed-term contract (regardless of its duration or the employee’s length of service) is still a dismissal. Therefore, you need clear (non-discriminatory) reasons for ending the contract and you should follow a dismissal process;
  • A dismissal meeting should always take place to explain that the contract will not be renewed and the reasons why with the opportunity to appeal outlined in the outcome letter;
  • If you are going out to recruit for a permanent post, you should advise the employee they can apply for the permanent post;
  • If there are any concerns regarding the employee’s performance (during the fixed term contract) you should discuss and address these with the employee, before discussing the non-renewal of the contract;

We appreciate that fixed-term contracts may be an attractive option. However, you must ensure that you track your contracts and make a diary reminder to undertake a dismissal meeting, before the contract expires.

If you have any queries on your fixed-term contracts, please speak to your HR consultant or give one of the FusionHR team a call on 01924 827869.

Other blogs you may want to look at:

Terminating fixed-term contracts

What should a contract of employment include

Unfair dismissal of a fixed-term employee

Zero-Hour Contracts

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