Fixed term contracts, also known as temporary contracts, are a common employment arrangement in many businesses and industries. These contracts are usually entered into for a specific period of time, usually for a project or to cover for a staff member’s absence. While fixed term contracts can be an effective way for employers to fill short-term staffing needs, they are also subject to certain legal requirements that must be met.
The main concern with fixed term contracts is ensuring that they are legally binding and enforceable. Under the law, a fixed term contract must clearly specify the date of commencement and expiry of the contract, as well as the terms and conditions of employment. This includes details relating to remuneration, benefits, duties and responsibilities, hours of work and any other relevant provisions.
The Employment Relations Act 2000 sets out specific rules for fixed term contracts. It requires employers to provide fixed term employees with the same minimum employment rights as permanent employees, including access to leave entitlements, superannuation and other benefits. Additionally, employers must ensure that fixed term employees are not treated less favourably than permanent employees, unless there is a genuine reason for doing so.
It is also important to note that fixed term contracts cannot be used to avoid providing an employee with the protections afforded by the law. For instance, if an employee is entitled to redundancy pay, they must still receive this payment at the end of their fixed term contract. Similarly, employers cannot use fixed term employees to replace permanent employees who are on parental leave or other types of leave.
To ensure that your fixed term contract is legally compliant, it is highly recommended that you seek legal advice. An experienced employment lawyer can help ensure that your contract meets all the necessary legal requirements, while also protecting your business interests.
In summary, fixed term contracts can be a useful employment arrangement for businesses and employers. However, it is important to ensure that they meet all legal requirements and provide employees with the necessary protections. Seeking legal advice is the best way to ensure that your fixed term contract is legally binding and enforceable, while also protecting your business interests.