Ending a fixed term contract
Where a fixed term contract will end at the stated expiry date without renewal, managers must act in good time to follow the correct procedure to bring the employment to an end. Depending on the length of the fixed term contract and the reason for the fixed term contract, managers will follow either the Non-Renewal of a Fixed Term Contract Procedure or the Redundancy Procedure.
The purpose of this guidance is to support managers with following the correct process to end a fixed term contract to ensure any dismissal is fair and within the law. Support is available for managers from HR with following ending processes.
Five months prior to the expected end date of an employees fixed term contract, the manager will receive an email to remind them that the contract is coming to an end and the steps they must follow. Note: this is the recommended point in which action should be taken to ensure timescales are met. Consideration should be given to where additional time may be needed and this should be factored into the process, for example any University closure periods. Delays in managers initiating this process may result in extensions in order to meet contractual notice and additional costs to the Faculty/Service.
For reasons of fairness, HR will aim to provide 3 months' notice for all employees on fixed term contracts that are ending. As a minimum, this will be the notice period to which the employee is contractually entitled.
There is a common perception that a fixed term contract will end on its stated expiry date without any further action being required on the part of the manager. This is incorrect and could potentially risk a claim of unfair dismissal being brought to the Employment Tribunal. The ending of a fixed term contract is treated as a dismissal in law, and a fair process must be followed.
To ensure a potentially fair process, managers are required to explain to the employee why their role is ending, arrange a meeting at which they may be accompanied by a colleague or trade union representative and offer a right of appeal. It is the responsibility of the manager to ensure the correct process is followed to end a fixed term contract.
Under the Employment Rights Act (1996) redundancy is defined as applying to situations where dismissals are wholly or mainly due to the following reasons:
- The employer has ceased, or intends to cease, continuing the business; or
- The requirements for employees to perform work of a specific type, or to conduct it at the location in which they are employed, has ceased or diminished, or are expected to do so.
There are two types of fixed term contracts:
- Fixed term contracts that are required for a non-redundancy reason (where the ending of the fixed term is not due to redundancy). This could be due to cover arrangements or if the role is a clearly defined training programme.
- Fixed term contracts that are required for a redundancy reason (where the ending of the fixed term is due to redundancy as the requirement for work is ceasing or diminishing). This could be due to the requirement for additional resource or for specialist skills or experience for a limited period.
All fixed term contracts will state the business rule which justifies the use of a fixed term contract. This will determine which type of fixed term the contract is and is outlined below:
|
Non-redundancy reason |
Redundancy reason |
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The role was for cover arrangements (for example, parental leave, sickness absence, study leave, secondment backfill) |
Where the post required specialist skills to accomplish a particular task or project for a limited period. |
|
The post was a clearly defined training or career development position (for example, graduate trainees, apprentices, KTPs). |
Time limited projects (including research projects) where the prospect of continued funding was unlikely. |
|
A discrete project or specific task was being carried out for a limited period, outside business as usual. |
The appointment was to cope with unexpected or unpredictable period of demand over a time limited period. |
The correct dismissal process will depend on the reason for the fixed term contract and the overall length of the fixed term contract at the expected contract end date.
Non-Renewal of a Fixed Term Contract
Managers will need to follow the Procedure for Non-Renewal of a Fixed Term Contract where:
- the ending of the fixed term contract is not due to redundancy, or;
- the ending of the fixed term contract is due to a redundancy reason, and the employee will have 21 months or less continuous service at the contract end date.
Follow our Manager’s Guidance: Non-renewal of a fixed term contract
Redundancy Procedure
Managers will need to follow the Redundancy Procedure where:
- the ending of the fixed term contract is due to a redundancy reason, and;
- the employee will have more than 21 months continuous service at the contract end date, or where the fixed term contract may end earlier than the expected end date.
Follow our Manager’s Guidance: Redundancy procedure