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How to employ an individual on a fixed-term contract

A practical guide to employing individuals on fixed‑term contracts, covering when to use fixed‑term arrangements, employee protections and how contracts can lawfully end or be extended.

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By Rob Davies

Contracts of employment are typically for an indefinite term, ie a contract will remain in force until one of the parties terminates it. By contrast, a fixed-term contract, as defined by the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034), is a contract of employment that provides that it will terminate on the expiry of a fixed term (ie it has an agreed termination date); completion of a particular task or project; or occurrence or non-occurrence of any other specific event.

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  • When to use a fixed-term contract
  • Termination prior to the end of a fixed term
  • Protection from less favourable treatment
  • Pro rata principle
  • Justifying less favourable treatment
    • Term-by-term approach
    • Package approach
  • Written statement of reasons for less favourable treatment
  • Calculating annual leave entitlement
  • Job adverts and job specifications
  • Written statement of terms – duration of fixed term
  • Ending the fixed-term contract
    • Collective redundancies
    • Misconduct/performance dismissals
  • Successive fixed-term contracts
  • Written statement of variation to reflect permanent employment status
  • Extending a fixed-term contract
  • Failing to take action at the end of the fixed term

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Latest updates

Updated to reflect that the code of practice on dismissal and re-engagement may apply when a fixed-term contract ends or is extended.

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About the author

Rob Davies

Rob Davies was a professional support lawyer (PSL) in the Labour & Employment team at Squire Patton Boggs. He qualified as a solicitor in 2001 and, prior to becoming a PSL in 2006, covered all areas of contentious and non-contentious employment law. Rob’s PSL role included preparing client training materials and publications, and writing for external publications.

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