Renewing or ending a fixed-term contract THEMIS
- Steve Fantauzzi
- Jun 18
- 2 min read
Ending a fixed-term contract
Fixed-term contracts typically conclude automatically upon reaching the agreed end date, without the need for the employer to provide any notice.
If a contract isn’t renewed?
This termination is considered a dismissal, and if the employee has completed 2 years of service, the employer must demonstrate a valid reason for not renewing the contract, such as discontinuation of the work for which the contract was initially established.
Employees have certain rights, including protection from unfair dismissal after completing 2 years of service (or 1 year for those employed before April 6, 2012).
Additionally, employees are entitled to receive a written statement outlining the reasons for not renewing the contract after completing 1 year of service.
In the event of redundancy, employees may be eligible for statutory redundancy payments after completing 2 years of service.
If the employer wants to end the contract earlier?
The outcome of the situation is contingent upon the specific terms outlined in the contract.
If the contract does not address the possibility of early termination, the employer may be in violation of the agreement.
However, if the contract allows for early termination and the employer provides adequate notice, then the contract can be legally terminated.
Minimum notice period
Fixed-term employees are entitled to a minimum notice period as follows:
- One week if they have worked continuously for at least one month.
- One week for each year they have worked, if they have worked continuously for two years or more.
In the event that an employer terminates a contract without providing the requisite notice, the employee may have grounds to pursue a claim for breach of contract.
Working longer than the contract’s end date
When an employee continues working beyond the expiration of a contract without formal renewal, it implies that the employer has agreed to extend the end date.
However, it is important for the employer to provide proper notice if they intend to terminate the worker's employment.
The limit on renewing a fixed-term contract
Employees who have been on fixed-term contracts for four or more years will be granted permanent employee status, unless the employer can provide a valid business justification for not doing so.
Nevertheless, employers and Unions (or a staff association) have the option to negotiate a collective agreement that waives the automatic transition to permanent employee status in such cases.
Renewing a fixed-term contract on less favourable terms
In the event that an employer wishes to make changes, the employee has the option to negotiate with them in order to come to a mutual agreement.
If negotiations are unsuccessful and the contract expires, the employee may have grounds to file a claim for unfair dismissal.
Ending the contract early
Employees are required to provide one week's notice if they have been employed by the company for a month or longer. However, the terms of the contract may stipulate a longer notice period.
Contact Themis Crown Advocates for your legal service needs.
Telephone +44 2038548361
