Back

Please note our offices and reception will be closed from 4.15pm on Wednesday 25 June for our staff AGM. We will re-open as usual at 9am on Thursday 26 June.

Get in Touch Menu

Fixed-term contracts

27 July 2012

If employers decide not to renew fixed-term contracts, are they at risk of claims of unfair dismissal or redundancy?

The issue arose in a recent case where tribunal action was taken by a number of workers whose fixed-term contracts had not been renewed. They claimed that they had effectively been made redundant and that the employer had failed in his duty to consult them. An initial ruling found in their favour but this was overturned on appeal.

The case raises a number of questions around treatment of workers on fixed-term contracts. Generally, such contracts automatically come to an end at their agreed point so employers are not required to give notice. However expiry of the contract without renewal amounts to a dismissal in law. Employers must therefore act fairly and follow any dismissal procedure if necessary.

A range of business reasons should be taken into account in deciding whether or not to renew a fixed-term contract. But the difference between a ‘business’ reason and an ‘employee-related’ reason is not always clear-cut and can potentially leave the door open to a tribunal claim.

Ensuring that contract terms are clearly drafted, and including fixed-term contract workers in any consultation process, can help employers avoid claims for unfair dismissal or failure to consult on redundancy. Employers should bear in mind the two vital ingredients for a viable fixed-term contract: there must be clear agreement in writing as to the duration and a properly evidenced underlying business reason for the fixed duration of the contract (eg availability of funding for the limited period or the duration of a particular order).

As always, if you need commercial and pragmatic legal advice, we’re here to help so please get in touch.

Contact us

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Group 24 Created with Sketch.
Resources to help

Related articles

The issues and risks of fire & rehire

Employment & business immigration

Our employment experts look into the issues and risks of ‘fire and rehire’. When an employer wants to make changes to an employee’s terms and conditions of employment, the starting…

Simon Pathé FCILEx
Partner, chartered legal executive

Does AI work in the workplace? (An article not generated by AI!)

Employment & business immigration

The use of such technology is becoming increasingly popular, but does AI work in the workplace? Our employment experts look into why being cautious with AI may be the best…

Hifsa O'Kelly LLB (Hons)
Senior associate, solicitor

Case law update (June 2025): Terms of agreement, gross misconduct & jurisdiction

Employment & business immigration

Our employment law & business immigration experts delve into some recent case law that could prove relevant to you and your business. In our June edition of Dispatches, we look…

Simon Pathé FCILEx
Partner, chartered legal executive
Contact us