Fixed Term Employees Regulations   

New Rights for Part-Time Workers   from 1st October 2002

Update on National Minimum Wage   Values from 1st October 2002

Fixed Term Employees Regulations

Prevention of Less Favourable Treatment Regulations 2002

These regulations come into force on 1 October 2002. They make certain changes to the way fixed-term employees are treated by the law and should be treated by their employers. This brief summary will give employers and fixed term employees information about how they may be affected by the regulations.

In a nutshell the regulation says that Fixed-term employees should not be treated less favourably than comparable permanent employees on the grounds they are fixed-term employees, unless this is objectively justified.

Who they will apply to

Employees on contracts that is for a fixed term which will end when a specified task has been completed or a specified event does or does not happen. Examples include employees covering for maternity leave and seasonal temporary employees.

The comparator

Fixed-term employees can compare their conditions to employees who are on a permanent contract and are employed by the same employer to do the same or broadly similar work. Where relevant the comparator should have similar skills and qualifications to the fixed-term employee. If no comparator in the company, a comparison can be made with a similar permanent employee in a different organisation.

Less favourable treatment

Each of the fixed-term employee’s terms and conditions of employment should not be less favourable than the their comparator or the fixed-term employee’s overall package of conditions should not be less favourable. In both instances any less favourable treatment would need to be justified on objective grounds.

Written statement

The employer must provide a statement within 21 days stating reasons for unfavourable treatment should a fixed term employee complain.

Use of successive fixed-term contracts

• Limited to four years, unless the use of further fixed-term contracts is justified on objective grounds. However, this period may be negotiated via collective or workforce agreements.
• For the purposes of this part of the Regulations, service accumulated from 10 July 2002 will count towards the four-year limit.
• There is no limit on the duration of the first fixed-term contract, although if a contract of four years or more is renewed, it will be treated from then as permanent unless the use of a fixed-term contract is objectively justified.
• If a fixed-term contract is renewed after the four-year period, it will be treated as a contract for permanent employment (unless the use of a fixed-term contract is objectively justified). A fixed-term employee has a right to ask their employer for a written statement confirming that their contract is permanent or setting out objective reasons for the use of a fixed-term contract beyond the four-year period. The employer must provide this statement within 21 days.

Redundancy waiver

A redundancy waiver included in a fixed-term contract which is agreed, extended or renewed after 1 October 2002 will be invalid. Fixed-term employees will have a right to statutory redundancy payments if they have been continuously employed for two years or more.

Vacancies

Fixed-term employees should receive information on permanent vacancies in their organisation.

Task Contracts

The end of a task contract that expires when a specific task has been completed or a specific event does or does not happen will be a dismissal in law. The non-renewal of a fixed-term contract concluded for a specified period of time is already a dismissal in law. Employees on these task contracts of one year or more will have a right to a written statement of reasons for this dismissal and the right not to be unfairly dismissed. If the contract lasts two years or more and the contract is not renewed by reason of redundancy, the employee will have a right to a statutory redundancy payment.

Contracts of 3 months or less

Such employees will have a right to statutory sick pay and to payments on medical suspension or maternity grounds under Health and Safety regualtions, guarantee payments and the right to receive and duty to give a week’s notice after one month’s continuous service. This applies if the contract is ended before it is due to expire.

Right to Occupational Pension Scheme?

Yes, unless unfavourable treatment can be justified. Having said that the employer has a choice

• If not offered, the Justification may be that the fixed term is so short that offering membership to the scheme would not benefit either party on terms of costs or that the eligibility for joining will not be met in that period of employment.
• The employer might give the fixed-term employee a salary increase equivalent to employer pension contributions paid.

New Rights for Part-Time Workers

Amendments to Part-time workers (Prevention of Less Favourable Treatment) Regulations 2000

Currently the Regulations make it unlawful for employers to treat part-timers less favourably than comparable full-timers in their terms and conditions of employment, unless different treatment can be objectively justified.

Comparators

As the regulation stands at the moment part-timers must compare themselves to full-timers employed under the same type of contract. This means, for example, that a part-timer on a fixed-term contract can only compare their terms and conditions with a full-timer on a fixed-term contract.

From 1st October Part-Time Workers Regulations will allow individual part-timers to compare themselves to a full-time colleague irrespective of whether either party’s contract is permanent or fixed-term. Since the Part-Time Workers Regulations (unlike the Fixed-Term Regulations) apply both to employees and to non-employee workers, the new possibilities of comparison under the Part-Time Regulations will be available to both categories of individual.

The right for an employer to treat a part-time worker differently remains provided the employer can justify the difference in treatment on objective grounds.

Access to Occupational Pension Scheme

A ruling was passed on 6 February 2001 that the two-year time limit on backdating contravened European law on the equal treatment of men and women, and could no longer be maintained. As a result, the Part-Time Workers Regulations are being amended to remove the two-year time limit

Update on National Minimum Wage

The development rate can also apply to workers aged 22 and above during their first 6 months in a new job with a new employer and who are receiving accredited training.

The information in this newsletter is of a general nature and is not a substitute for professional advice. You are recommended to obtain specific professional advice before you take any action.

For further information, advice or assistance on any of the matters raised in this newsletter please contact Picasso HR on 01473 890037.

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