A fixed-term contract means a contract of employment that will terminate:-
– on expiry of the fixed-term; or
– on the completion of a particular task.
Therefore, a contract covering a permanent employee’s maternity leave which will terminate on the permanent employee returning to work will be a valid fixed-term contract although there is no specific end date.
The Handbook provides that your employer will pay 26 weeks full pay if you continue to be employed for the duration of your maternity leave. I assume that the duration of your maternity leave means until you return to work after having your child. If, however, your contract ends prior to your returning to work because your maternity cover has returned, then you will not be entitled to full pay but you will be entitled to SMP.
In summary, it is appropriate to have an open ended fixed-term contract provided it is for a specific project which, in this case, covers maternity cover and it is unlikely that you will be entitled to full pay during maternity leave unless your maternity cover does not return to work.”