When is a fixed-term contractor considered permanent?

I am on a fixed term contract with my local council. This has already been extended twice – the current contract ends March 2014, I go on maternity leave Nov 2013. I am entitled to SMP, and then the Occupational Health Maternity pay – which is 12 weeks (weeks 7-18 of maternity leave) of 1/2 pay on top of SMP; but they are saying that until the contract is extended (which we’ve been told it will be, just waiting for the written confirmation) they will withhold the 12 weeks of 1/2 pay entitlement. Can they do this? I understand that the provision of the 1/2 pay is dependent on me returning for 3 months after maternity leave, which I am intending on doing anyway, but can they decide to not pay me the Occupational Pay because they are not extending the contract – surely that’s unfair? I have now worked for them on 3 fixed-term contracts for a total of 4 years (2 years, then 2 x 1 year contracts) – does this mean I am classed as a permanent employee, or will this only come into effect once the contract is renewed this time?

I understand that you have been employed by your local council on a series of fixed-term contracts and that your current fixed-term contract is due to end in March 2014. You are due to go on maternity leave in November 2013. The Council have agreed to pay your SMP but you have been informed that they will be withholding the occupational maternity pay until your contract is extended. You understand that your contract will be extended but you are just waiting for written confirmation on this. You have not mentioned in your query how long you intend to take off work on maternity leave so I have assumed that you intend to take your entire entitlement of 52 weeks’ maternity leave.

I understand that in order to benefit from your employer’s enhanced maternity pay, you would need to return to work for three months following your maternity leave. Your employer can legally impose limits on the contractual maternity pay it provides over and above SMP. It is fairly common for employers to provide in their enhanced schemes that staff who do not return to work for a minimum period following maternity leave must repay all or part of their enhanced maternity pay. The exact conditions for entitlement, payment and repayment of enhanced maternity pay should be set out in your contract and/or staff handbook.

Given that your current contract would end  in March 2014 and therefore you would not be able to comply with the condition to return to work for three months following your maternity leave before the end of your fixed-term contract, your employer may legally withhold your enhanced maternity pay in the knowledge that you cannot comply with the requirement to return to work for three months following your maternity leave.

However, you asked  whether you would be classed as a permanent employee as you have been employed on three fixed-term contracts for a total of four years by the end of your current fixed-term contract. Under the Fixed-term Employees Regulations, employees who have been continuously employed for four years or more on a series of successive fixed-term contracts are automatically deemed to be permanent employees unless the continued use of a fixed-term contract can be objectively justified. When you reach the end of your current fixed-term contract, assuming that you will have then been employed on successive fixed-term contracts for four years of more, your employer should send you a written confirmation of the variation of your contract to a permanent contract unless the use of another fixed-term contract can be objectively justified.

I understand that your employer plans to issue you with another fixed-term contract but you have not explained the reasoning for this. You could speak to your employer and ask it to confirm that your contract will be converted to that of a permanent employee at the end of your current fixed-term contract. On this basis, you should state that you should have the same terms and conditions as a permanent employee. However, tactically, my advice is that you only raise this point after you have started your next fixed term contract.  In the meantime, assuming you are offered a further fixed term contract, you should confirm that you fully intend to return to work for the required three months after your maternity leave and therefore request payment of your enhanced maternity pay.

If your employer decides to provide you with another fixed-term contract, rather than confirming your status as a permanent employee, its decision needs to be objectively justified. You should call us to discuss this matter further if your status as a permanent employee is not confirmed and/or if your employer still refuses to pay your enhanced maternity pay because you may have a claim under the Fixed-Term Employees Regulations.


Comments [1]

  • Anonymous says:

    I have worked for a company for almost 3 years. 12 month a go they put me on a 3 month fixed term contract, then every 3 month they renewed it. 3 weeks ago I was told they would not be renewing my contract as the role I was carrying out was no longer needed. I have been doing the Same role for almost 3 years now am I entitled to redundancy ?]

    Editor: Fixed-term employees have a right to statutory redundancy pay if they have been continuously employed for two years or more. Fixed-term employees cannot be excluded from the statutory redundancy payments scheme. However, they can be excluded from contractual schemes if this is objectively justified.

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