Employment Policies, Procedures & Guidance

Transcription

1 GUIDANCE REGARDING THE USE AND REMUNERATION OF NON-STANDARD WORKERS 1. Introduction This Guidance was first introduced in 2000 and it has now been updated to reflect changes in employment legislation and case law. The two main areas of development are around Fixed term contracts, following the introduction of the Fixed term Employees (Prevention of Less Favourable Treatment) Regulations 2002, and case law developments around the Working Time Regulations requirement for paid holidays. The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 implemented a EC Directive on fixed term work effective from July 2002 and introduced some fundamental changes to the ways in which fixed term contracts could be used eroding many of the advantages of using fixed term contracts. Principles The Council believes that the culture which is most conducive to an efficient and effective workforce is one which values creativity, innovation and team contribution and in which individuals feel valued and are motivated towards achievement. Workers who feel marginalised and treated as second class are unlikely to be motivated and committed to the Council. The Council is committed to the principles of the Green Book Single Status agreement, which support and encourage high quality services, equal opportunities, a flexible approach to providing services and stable industrial relations. The framework provided herein should assist Departments in working within these principles. The principles contained within this policy, however, are not confined to those covered by the Single Status Agreement, but apply across the whole of the Council. The process of ensuring Best Value in the provision of services requires the Council to make the best use of all resources, including the human resource. Recognising which form of worker is the most appropriate in the circumstances is an important element in the best value process. 2. Categories of Non-Standard Work The categories of non-standard work are shown below. The definitions of each category, as well as the contractual matters, advantages, and disadvantages Non-Standard Workers Guidance March 2005 Page 1

2 associated with each one are summarised in table format in Appendix 1, and detailed separately in Appendices 2 8. The non-standard categories of workers are: Permanent Variable Hours Employment See Appendix 2 Temporary Employment See Appendix 3 Fixed Term Employment See Appendix 4 Specific Purpose Contracts of Employment See Appendix 5 Casual Work See Appendix 7 Sessional Work See Appendix 8 Agency Work See Appendix 9 In addition a new Appendix 6 has been included giving further guidance about the management of short term employment, specifically covered by the Fixed Term Employees Regulations. 3. Employment Legislation (i) There is no distinction in the terms of the employment protection legislation between permanent and temporary employees. In practice qualifying periods of service make the distinction irrelevant from the employer s point of view. (ii) The National Minimum Wage applies to all categories, as do the Part-Time Workers Regulations 2000, in that part-time workers may not be treated less favourably than comparable full-time workers unless the differential treatment can be justified objectively and in accordance with the DTI s guidance. The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 apply to employees with fixed term contracts that end on a specific date, or on completion of a specific task or the occurrence or nonoccurrence of a specific event. Fixed Term Employees have the right not to be treated less favourably than comparable permanent employees unless objectively justified, in accordance with the DTI s guidance. The Regulations do not apply to apprentices or students on work experience placements of one year or less, that they must do as part of a higher education course, or to some fixed term employees on temporary work schemes funded by the EC Non-Standard Workers Guidance March 2005 Page 2

3 The Regulations cover employees on fixed term contracts with a specific end date and those which end on the completion of a specific task or future event. This is a wide definition which may not just cover obvious fixed term contracts but other types of temporary contract which may be in use, e.g. Contracts to cover seasonal peaks in demand Contracts to cover maternity/ sick leave Contracts to cover a specific task/purpose. (iii) Even though casual and sessional workers may not be employees within the meaning of the Employment Rights Act, they are still covered by the laws on sex, sexual orientation, religion or belief, race and disability discrimination. Additionally they are entitled to be treated fairly and with the same respect and dignity as all others who come into contact with the Council. (iv) All workers are entitled to a minimum of 4 weeks paid annual leave per annum in accordance with the Working Time Regulations (v) The Council owes a duty of care to all employees and workers under Health and Safety legislation. Other than clarifying entitlement to annual leave in accordance with the Working Time Regulations (which is H&S legislation), this guidance document does not deal with any aspects of the health and safety implications of employing non-standard workers. Directorates should see separate guidance to be included in the Council s Health and Safety policy. (vi) Permanent variable hours, fixed term, temporary, specific performance and agency workers contracts are subject to the minimum statutory dismissal procedures under the Employment Act 2002 (Dispute Resolution) Regulations These Regulations provide that when a contract comes to an end it should be treated as a dismissal and must therefore be subject to the minimum dismissal procedure. The minimum statutory procedure specifies that the employer must: put in writing why they are considering dismissing the employee; invite the employee to a meeting at which the issue is discussed. The employee must take all reasonable steps to attend this meeting, and has a right to be accompanied by a trade union representative or work colleague of their choice. The decision the employer makes must then be given in writing to the employee and; offer an appeal. The appeal will be to the Authority s Disciplinary Appeals Panel Non-Standard Workers Guidance March 2005 Page 3

4 4. Compliance with the Code of Practice on Recruitment and Selection (i) All appointments must be made in accordance with the Council s Code of Practice on Recruitment and Selection, with the exception of agency workers. Use of the Code of Practice also applies to casual workers, and it is recommended that a pool of workers should be established using the guidance contained within the Code. 5. Specific Guidance on Working Practice (i) (ii) (a) (b) (c) In considering the deployment of permanent relief workers, a balance must be made between the efficiency savings in using casual workers which could be outweighed by the cost of ongoing recruitment and selection (due to high turnover), and lower job performance and reliability. In fact, the statutory annual leave entitlement for all workers under the Working Time Regs 1998 has reduced considerably the financial advantages of employing casual workers as opposed to permanent, variable hours employees (VHE s). Workers should be employed as VHE s in the following circumstances: Where casual workers undertake work for the same Directorate almost every week with very few short breaks (e.g. relief work covering the absence of several different employees and a variety of different posts). After a period of one year where gaps in employment are short in relation to periods of employment. Where there is a relatively consistent level of demand for relief workers. (iii) Alternatively, when it is known at the outset that a worker is likely to be employed for a month or longer, the worker should be treated as a Temporary, Specific Purpose Contract or Fixed Term Contract employee. (iv) Fixed term contracts or specific purpose contracts should be used in preference to temporary contracts. When it is not possible to forecast precisely how long an employment will last or what event will cause the contract to cease a temporary contract be used. (v) Employees, both full and part time, may also undertake casual or sessional work within the Council (subject to the Council s policy on the Working Time Regulations being adhered to). The work will, however, be regarded as entirely separate and will be subject to different contractual agreements. All people who undertake work for the City Council will be subject to the Council s Code of Conduct for Employees Non-Standard Workers Guidance March 2005 Page 4

5 Appendices 1 Table summarising categories of non-standard workers. 2 Permanent Variable Hours Employment (+ Appendix 2A: Suggested wording for Statement of Particulars and Letter of Appointment). 3 Temporary Employment. 4 Fixed Term Employment (+ Appendix 4A: Sample offer letter plus Statement of Acceptance). 5 Specific Purpose Contracts of Employment (+ Appendix 5A: Sample Clause). 6 Managing Short Term Employment 7 Casual Work (+ Appendix 7A: Sample letter for Pool Casual Workers, 7A1: Basis of calculation for holiday pay, 7B: Sample letter detailing terms of engagement). 8 Sessional Work (+ Appendix 8A: Sample letter for Sessional Workers). 9 Agency Work Non-Standard Workers Guidance March 2005 Page 5

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7 TABLE OF NON-STANDARD CATEGORIES OF EMPLOYMENT Appendix 1 (To be used in conjunction with Appendix Guidance Notes which provide further detail) CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Permanent Variable Hours Employees (VHE s) (See Appendix 2) - Used where there is relatively stable work requirements but amount varies. - Work is allocated where available, locations may be variable. - Code of Practice on R&S must be used. - Payment for actual hours worked. - Appropriate nationally agreed pro rata Terms and Conditions apply. - Same rights apply as for all other permanent employees. - Employees who consistently decline work are liable to disciplinary action. - Holiday pay is calculated as a percentage addition to the basic hourly rate. - The end of the contract is to be treated as a dismissal, it is therefore subject to the statutory dismissal procedures. - Flexibility to cover work fluctuations and at short notice. - More cost-effective than Agency workers. - May promote commitment, motivation, reliability. - More attractive to workers than casual work. DISADVANTAGES TO EMPLOYER - More costly than casuals (as greater holiday & sickness payments). - More difficult to terminate employment relationship than with casuals. - As working hour are indefinite and changeable, this may cause R&R problems. - The requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 6

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9 CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Temporary Employees (See Appendix 3) - Employed for a limited period & uncertain length of time. - Used to cater for medium to longterm work requirement (e.g. seasonal /cyclical). - Set working pattern & number of hours generally. - Code of Practice on R&S must be used. - Same employment rights as permanent employees. - Appropriate nationally agreed terms and conditions apply. Pro rata entitlements based on average hours worked in previous 12 weeks. - Entitlement to statutory rights of protection accrue with length of service. (e.g. unfair dismissal after 1 year & redundancy after 2 years). - Entitlement to redundancy payment after 2 years continuous service only if requirement for that work has ceased or diminished. - Written statement of particulars must include expected duration of employment. - Records should be regularly reviewed, with extensions confirmed in writing. - If a permanent appointment is to be made to a temp. post, the employer is entitled to advertise and appoint another person. - The end of the contract is to be treated as a dismissal, it is therefore subject to the statutory dismissal procedures. - Enables effective management of variations in workloads where duration is uncertain. - More cost-effective than agency workers. - May display higher level of performance & commitment. - More attractive to some workers than casual or VH work. DISADVANTAGES TO EMPLOYER - Less attractive than permanent employment. - Turnover higher than for permanent employees. - May be recruitment and retention difficulties. - No more flexible than proper use of probationary period. - Difficulty in defining temporary duration. - The requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 7

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11 CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Fixed Term Contract Employees (See Appendix 4) - Employment contract for a fixed duration, with the date of termination specified in advance. - Used to undertake a specific project etc. - Code of Practice on R&S must be used. - Appropriate nationally agreed conditions of service apply. - Entitlement to statutory rights of protection accrue with length of service. - Written statement of particulars must include future termination date for clarity. - If FTC is renewed or extended, the offer of renewal must state in writing the revised date of termination (otherwise this converts into a temporary or permanent contract). - No requirement to serve notice as contract ends automatically at expiry of stated term. - A dismissal hearing must take place. - Break clause should be included to enable early termination by notice from either side. - Succession of fixed terms contracts leads to permanency after 4 years, unless objectively justified. - Entitlement to redundancy payment after 2 years continuous service only if requirement for that work has ceased or diminished. - The end of the contract is to be treated as a dismissal, it is therefore subject to the statutory dismissal procedures. - Similar to those for temporary employment. - Clarity for both Council and employee around duration of contract. DISADVANTAGES TO EMPLOYER - Dependant on length of term, not as attractive to potential employees as permanent employment. - Administration of FTC can be complicated (but no more than for temporary contracts). - The requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 8

12 2.6.3 Non-Standard Workers Guidance March 2005 Page 8

13 CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Specific Purpose Contract Employees (See Appendix 5) - Used for a defined specific purpose or task (e.g. maternity cover) or dependent on future event (e.g. continuation of Government funding for a particular project). - Code of Practice on R&S must be used. - Appropriate nationally agreed conditions of service apply. - Reason for issue of SPC must be genuine. - Event must be genuinely outside of Employer s control (e.g. employment is dependant on external funding). - As above for fixed term contracts. - The end of the contract is to be treated as a dismissal, it is therefore subject to the statutory dismissal procedures. - Similar to those for temporary employment. - Employee aware from outset of reason for contract & of event which will cause employment to cease. DISADVANTAGES TO EMPLOYER - Same as those for FTC s. - SPC cannot be extended. - The requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 9

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15 CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Casual Workers (See Appendix 6) - Used where services required for a short time.(e.g. to cover short term peaks of work/sickness absence/annu al leave e.g. Polling Station Workers, City News Deliverers). - No obligation to provide work. - No obligation for worker to accept work offered. - Code of Practice on R&S must be used for new appointments to the pool. - No employee status. - Locally determined rates of pay may be applied, in consultation with Assistant Chief Executive (Organisation Development) - Nationally negotiated conditions of service do not apply automatically. - No contract of employment or written statement of particulars. Terms of engagement detailed in a letter. - National Minimum Wage applies. - Rights to statutory annual leave & statutory sickness pay. - May, over time, build up continuous service and acquire employee status. - Flexibility in meeting short term labour requirements, at short notice. - Establishment of a pool of casual workers enables a degree of continuity. - Receive less holiday and sickness pay than employees. - Less costly than use of agency workers. DISADVANTAGES TO EMPLOYER - May display lower levels of commitment and motivation compared to permanent employees. - Turnover often high, so cost of administration & training is higher on a per capita basis. - Workers may leave without giving notice. - May be recruitment & retention difficulties Non-Standard Workers Guidance March 2005 Page 10

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17 CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Sessional Workers (See Appendix 7) - Used to provide additional resource & To complement normal service provision. - No obligation to provide work. - No obligation for Sessional Worker to accept work offered. - Code of Practice on R&S must be used. - No employee status. - Nationally negotiated conditions of service do not apply. - Rates of payment to be agreed locally in consultation with Assistant Chief Executive (Organisation Development) - No contract of employment or written statement of Particulars. Terms of engagement detailed in a Letter. - Rights to statutory annual leave & statutory sickness pay. - Maximum hours per week determined by Chief Officer. - May attract skilled workers who do not want permanent employment status. - Well qualified workers, with specialist skills can be recruited to undertake sessional work of relatively short duration, as SW s are not required to give up other employment which they may have. - No long term commitment to the SW. DISADVANTAGES TO EMPLOYER - Level of commitment may be lower than for employees. - SW s can leave without giving notice Non-Standard Workers Guidance March 2005 Page 11

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19 CATEGORY DEFINITION CONTRACTUAL MATTERS ADVANTAGES TO EMPLOYER Agency Workers (See Appendix 8) - Employed by Employment Agencies which act as intermediaries, providing workers for a charge. - Used to provide additional resource, or for specialist work, for short term requirements at short notice (e.g. Supply Teachers). - Used only in exceptional circumstances. - Code of Practice on R&S does not apply. - Not employees of the Council, therefore, no contract of employment or written statement of particulars. - Council must ascertain whether there is a contract of employment between the worker and the agency, otherwise a contract with the Council could be deemed to exist by an E.T. - Nationally negotiated conditions of service do not apply. - Agency will invoice council for cost of workers provided. - If an agency worker is satisfactory the Council can decide to employ directly. - The Chief Officer may consult the Legal Services Manager regarding the terms of any contract offered by an employment agency. - The end of the contract is to be treated as a dismissal, it is therefore subject to the statutory dismissal procedures. - Flexibility in meeting short term labour requirements, at short notice. - Minimal administrative work to engage agency workers. - Agency responsible for compliance with employment legislation. - No long term commitment to the agency worker. DISADVANTAGES TO EMPLOYER - Cost is higher to Council. - Induction may be lengthy due to unfamiliarity with Council. - Trade Union opposition. - Lack of control over appointment /vetting procedures. - Lower commitment to the Council. - The requirement to apply the statutory dismissal procedure. NB: -Green Book employees: All local government employees who are not covered by other national negotiating machinery. Covered by the NJC National Agreement, or local agreement under Green Book provisions (e.g. Port). Will be subject to job evaluation if it is extended beyond the pilot exercise. -Other employees: All local government employees who are covered by other national negotiating machinery (e.g. Craft, Teachers, JNC for Chief Officers, Youth & Community, Soulbury). Will not be subject to job evaluation if it is extended beyond the pilot exercise Non-Standard Workers Guidance March 2005 Page 12

20 1. Definition Permanent Variable Hours Employment Appendix Permanent Variable Hours Employees (VHE s) are used where there is a relatively consistent demand for workers but where the amount of work available for them varies. This type of employment relationship is most common in situations where there is a relatively stable demand for relief workers. 1.2 VHE s will usually be allocated some work of a similar nature every week, often in different locations, though the amount may vary considerably. They can expect to be offered appropriate work whenever it is available and, similarly, are required to make every effort to be available to carry out that work. There is, however, no commitment for an employer to provide work for a VHE when none is available. 2. Contractual Matters 2.1 The Code of Practice on Recruitment and Selection must be used. 2.2 Variable hours employees are entitled to the same rights and entitlements as other permanent employees. The appropriate nationally agreed conditions of service should also be applied, including pay rates, annual leave, sickness pay, maternity provisions etc. Pro rata entitlements should be based upon the average hours worked in the previous year. During the first year of service the average during the previous 12 weeks should be used. 2.3 It was agreed that for the first calendar week of sickness absence sick pay would be based on the hours that the employee was scheduled to work. From the second week of absence sick pay would be averaged based on the previous 12 weeks/ previous years average hours. If a PVH employee notifies the Council that they are sick but were not scheduled to work then they would not receive sick pay, subject to any entitlement to statutory sick pay/ benefit. If the employee is contacted and requested to work, however, but is unable to because they are sick then the employee would receive sick pay for that day in respect of the number of hours they were requested to work along with sick pay in relation to any hours they were scheduled to work that week. Sick pay will be averaged as above Non-Standard Workers Guidance March 2005 Page 13

21 2.4 Payment is for the actual hours worked though, in some circumstances, the employer may decide to provide VHE s with a guaranteed payment for a minimum number of hours per week to give a strong commitment to the employee that he/she can expect to be provided with a certain level of work as a means of retention. 2.5 Payment for annual leave will be made by a clearly identifiable addition to your basic hourly rate, which will be expressed as a percentage. This percentage shall be calculated using the calculation detailed below: % Addition to the Hourly Rate = Annual Leave Entitlement x 100 Potential working time in a year <<enter annual leave entitlement expresses in weeks>> <<enter annual leave entitlement>> ( <<enter annual leave entitlement>>) x 100 = <<enter annual leave entitlement>> <<enter answer from calculation in brackets>> x 100 = <<enter percentage addition to the hourly rate of pay>> 2.6 Employees who consistently decline work will be dealt with under the Council s disciplinary procedure. 2.7 VHE s have the right to a written statement of particulars and the right to notice on termination of employment. 2.8 Green Book VHE s will be subject to Job Evaluation if it is extended beyond the pilot exercise. 2.9 When a VHE s contract comes to an end it should be treated as a dismissal and as such is subject to the minimum statutory dismissal procedure, which specifies that the employer must: put in writing why they are considering dismissing the employee; invite the employee to a meeting at which the issue is discussed. The employee must take all reasonable steps to attend this meeting, and has a right to be accompanied by a trade union representative or work colleague of their choice. The decision the employer makes must then be given in writing to the employee and; offer an appeal. The appeal will be to the Authority s Disciplinary Appeals Panel Non-Standard Workers Guidance March 2005 Page 14

22 3. Advantages 3.1 This type of employment relationship has most of the benefits associated with casual work and fewer disadvantages. 3.2 Variable hours employment offers the advantages of a flexible workforce, able to provide cover at short notice and to cater for fluctuations in workload. Because payment is related directly to demand for services, VHE s are more cost effective on an hourly basis than agency workers. 3.3 Employing people as permanent VHE s helps to encourage a more committed and motivated workforce. Less supervision time will be required for training, administration and monitoring of performance. Similarly, because VHE s are expected to accept work when it is offered to them, they also tend to be more reliable than casual workers who have no such obligation. 3.4 Variable hours employment can be a recruitment and retention tool as it offers a more attractive proposition to prospective employees than casual work, thereby assisting in attracting and retaining a higher calibre of applicant. 3.5 Recognising the flexible workforce as permanent VHE s with the associated employment rights, rather than as casual workers, avoids the breaches of employment law which could arise when employees who are not true casual workers are treated as though they were. 4. Disadvantages 4.1 In simple financial terms, VHE s are more costly than casual workers as VHE s receive sickness payments, maternity leave and other benefits etc. As casual workers are entitled to annual leave in accordance with the Working Time Regs, however, this financial differential has been eroded considerably. 4.2 As VHE s are permanent employees, it is more difficult to terminate the employment relationship than with true casual workers who an employer may simply cease to use. (Though in practice it is courtesy to explain to casual workers why they are not being called upon.) 4.3 The very fact that the working hours of VHE s are indefinite and changeable still acts as a disincentive to potential employees who want a regular, secure income. 4.4 The end of a VH contract is to be treated as a dismissal therefore there is a requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 15

23 Permanent Variable Hours Employment Appendix 2A Hours of Work - Suggested Wording for Statement of Particulars and Letter of Appointment Hours of Work Your hours of work will be variable. You can expect to be offered work when it is available and, similarly, you are expected to make every effort to accept work offered to you. The Council is, however, under no obligation to provide work and there may be weeks when no work is required. If you regularly decline work which is offered, this will be dealt with under the Council s formal Disciplinary procedure. You will be provided with as much notice as possible when work is available but, because of the nature of this post, unfortunately the notice may sometimes. be quite short. You will not normally be expected to work in excess of 37 hours in any week, however, if you are required to do so at the request of management, this will be classed as overtime. Any overtime exceeding 30 minutes on any one day shall be paid at a rate of double time for work on a Sunday or public holiday and time an a half for work at any other time. Alternatively, compensatory time off in lieu may be taken subject to the agreement of management. *Normal office hours are 8.30 a.m. to 5.15 p.m. Monday to Thursday and 8.30 a.m. to 4.45 p.m. on Fridays. The Council operates a scheme of flexible working hours which allows some discretion in the arrangement of working time. The flexible working hours scheme is attached to this statement as Appendix * Delete as appropriate Non-Standard Workers Guidance March 2005 Page 16

24 1. Definition Temporary Employment Appendix A temporary employee is a worker who is employed for a limited period and for an uncertain length of time. This is distinct from the situation where an employee works for a fixed term (See Appendix 4) or a specific task (see Appendix 5). However, temporary contracts are likely to be covered by the Fixed Term Employee Regulations. 1.2 Temporary employment is used to cater for medium to long term demand for workers, for example, to undertake work which is seasonal or cyclical or to assist with temporary increases in workload, i.e., longer than would justify the use of a casual worker. 1.3 Temporary employees generally have a set working pattern or shift and usually work a particular number of hours per week. 2. Contractual Matters 2.1 The Code of Practice on Recruitment and Selection must be used. 2.2 Temporary employees have exactly the same rights as workers regarded as permanent. There is no distinction in the terms of the employment protection legislation. 2.3 Temporary employees become entitled to statutory rights of protection which accrue with length of service in the same way as employees on indefinite term contracts, i.e., on termination of employment after one year of continuous service there is a right to complain of unfair dismissal and after two years of continuous service there is a right to a redundancy payment if the reason for dismissal is redundancy (but not if the dismissal is for some other reason). 2.4 When a temporary employee is recruited it is important to make it clear from the outset that the position is temporary to avoid any future confusion. Where the employment continues for a period of a month, the employee should be provided with a statement of particulars and must be advised in writing of the expected duration of the employment, irrespective of whether this is certain. 2.5 There is also a tendency for temporary employment to continue long after the original intention and employees who genuinely believe themselves to have become permanent through the passage of time are more likely to challenge a dismissal decision when their temporary employment comes to an end. A record should therefore be retained for all temporary employees of the date of the estimated duration of the employment and shortly before that time the position should be reviewed and, if the temporary employment is still required, the employee should be given a proposal in writing of an Non-Standard Workers Guidance March 2005 Page 17

25 extension of the temporary contract for an approximate period. The employee should be asked to confirm acceptance of the extension in writing. 2.6 If the above procedure is carried out, the eventual termination of the employment of temporary employees should be less problematic where there is no longer a need for the temporary post. If, however, it is decided to make a permanent appointment to a post currently held by a temporary employee, the employer is entitled to test the market and appoint the most suitable applicant. When the post was advertised originally as a temporary post this was likely to have restricted the applications to those interested in temporary posts. A temporary employee does not have a right to priority of appointment to an available suitable post over any other suitable candidate provided the appointment is handled fairly. This would mean, as a minimum, the temporary employee should be given proper consideration for the post, which would generally include being given an interview. 2.7 A temporary employee with two years continuous service will be entitled to a redundancy payment only if the employer s requirements for employees to carry out work of that kind have ceased or diminished. This would not include situations where a permanent appointment has been made to a post held by a temporary employee, or where a permanent employee has returned from sickness, or maternity leave etc. to a substantive post. 2.8 The use of a temporary contract is not as effective at evaluating an employee s performance as a permanent contract with a probationary period. It should not therefore be used for that purpose. 2.9 The appropriate nationally agreed conditions of service should be applied to temporary employees including pay rates, annual leave, sickness pay, maternity provisions etc. Pro rata entitlements should be based upon the average hours worked in the previous 12 weeks When a temporary contract comes to an end it should be treated as a dismissal and as such is subject to the minimum statutory dismissal procedure, which specifies that the employer must: put in writing why they are considering dismissing the employee; invite the employee to a meeting at which the issue is discussed. The employee must take all reasonable steps to attend this meeting, and has a right to be accompanied by a trade union representative or work colleague of their choice. The decision the employer makes must then be given in writing to the employee and; offer an appeal. The appeal will be to the Authority s Disciplinary Appeals Panel Non-Standard Workers Guidance March 2005 Page 18

26 3. Advantages 3.1 The use of temporary contracts is an effective way for employers to manage variations in workloads where the likely duration of the demand is uncertain but nevertheless short term. 3.2 The use of temporary employees is more cost effective to the Council than the use of agency workers. 3.3 Appropriate use of temporary employment assists in avoiding breaches of employment law through erroneously treating employees as casual workers, and ensures that employees receive the benefits to which they are entitled. 3.4 Temporary employment can be used by employees as a developmental opportunity, enabling them to gain valuable work experience in the knowledge that temporary employment often leads to permanent contracts being offered somewhere in the organisation. 3.5 Because temporary employees usually wish to make a positive impression on the employer, they often display a high level of commitment, reliability and performance. 3.6 While not being as secure as permanent employment, the pre-determined, regular income and fixed hours associated with temporary employment makes it the preferred choice of many rather than casual work or variable hours employment. Consequently very capable employees are often recruited on temporary contracts of employment. 3.7 When redundancies are anticipated in a Department but where there is a need to provide a service until the redundancies are made, temporary employees can be used without raising the expectations of the individuals that the employment will be secure. 4. Disadvantages 4.1 It is unlikely that employees who already have permanent contracts will be attracted to temporary employment, other than current employees who are given an undertaking that they will return to their substantive posts at the end of the temporary period. 4.2 Turnover is higher than for permanent employees. 4.3 It is difficult to define the duration of a temporary contract and there is a tendency for contracts to be extended repeatedly, leading to employees believing that they have become permanent (see Section 2 above). 4.4 The end of a temporary contract is to be treated as a dismissal therefore there is a requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 19

27 1. Definition Fixed Term Employment Appendix A fixed term contract (FTC) is an employment contract for a fixed duration. A clause in the contract specifies in advance the date on which the contract terminates. For example, a FTC would be an employment contract to undertake a specific project for a six month period, terminating on dd,mm,yy. Such employees are covered by the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations A FTC can also include the situation where the termination date is described by some future event which enables the termination date to be determined prior to the contract being formed. The contract must, however, provide for a maximum duration and make no reference to extensions of the term. If a contract refers to expiry on the occurrence of some future event at some uncertain future time, this is a specific purpose contract (see Appendix 5), but is also covered under the Fixed Term Employee (Prevention of Less Favourable Treatment) Regulations Contractual Matters 2.1 The Code of Practice on Recruitment and Selection must be used. Terms and conditions of employment are as per national and local agreements unless objectively justified. 2.2 The recommended format for an offer letter of a FTC and a sample statement of acceptance are attached as Appendix 4.a. 2.3 Fixed term employees have the right to be treated no less favourably than comparable permanent employees because they are fixed term, unless the treatment can be objectively justified. Less favourable treatment will be justified on objective grounds only if it can be shown that the less favourable treatment: - - is to achieve a legitimate objective, i.e. a genuine business objective. - is necessary to achieve that objective. - is an appropriate way to achieve that objective. e.g. The cost of the Council of offering a particular benefit to an employee maybe disproportionate when compared to the benefit the employee would receive e.g. in the case of an employee on a fixed term contract of 3 months with a permanent comparator who has the option to join the subsidised leased car scheme, an option which is not open to the fixed term employee Non-Standard Workers Guidance March 2005 Page 20

28 However in order to determine whether unfavourable treatment maybe justified situations must be considered on a case by case basis. If there is no objective justification then fixed term employees must not be treated less favourably than a comparable permanent employee. This includes e.g. access to training as well as the obvious contractual benefits such as pay and leave entitlement. 2.4 A redundancy waiver clause may have been incorporated into a FTC offer letter or agreed by the parties during the term of the contract. The waiver clause will only be valid if it was incorporated into the FTC before 10 th July 2002 and if the FTC is for a minimum of two years or more, this date refers to the date the European Directive came into force, the UK implemented the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations on 1 st October Since 10 th July 2002, it is no longer possible to incorporate a redundancy waiver clause into a FTC nor can it be agreed by the parties during the term of the contract. 2.5 When a FTC expires without renewal under the same contract this is defined in law as a dismissal. 2.6 If a specific event is linked to the end date, e.g., termination of a specific project, whereas previously the employee was not dismissed, the contract was simply terminated. This is now not the case. Following the introduction of the Fixed Term Employee Regulations such a termination is now classified in law as a dismissal. 2.7 The expiry of a fixed term contract is defined as a dismissal therefore a dismissal hearing must take place to ensure compliance with the minimum statutory dismissal procedures. The employer must put in writing the intention to dismiss, there must be a hearing to consider the proposal and there must be a right of appeal, with a hearing if the individual exercises the right. 2.8 Since 25 th October 1999,it has no longer been possible to incorporate a waiver clause for unfair dismissal into new FTC s. In any event under the Fixed Term Employee Regulations this practice would now be unlawful. In order to defend against claims of unfair dismissal, it is necessary to show that the contract was for a specific purpose and for a prescribed fixed term which were known to the employee at the outset and also that the purpose for the FTC has ceased to apply. 2.9 If a FTC is to be renewed or extended the offer of renewal must be put to the employee in writing and his/her acceptance of the renewal must be obtained. It is important that the offer of renewal must state the date when the extension of the contract will end, otherwise the contract will inadvertently be converted into a permanent contract Non-Standard Workers Guidance March 2005 Page 21

29 2.10 Directorates need to ensure that the eventual termination of the contract is dealt with fairly A FTC comes to an end automatically at the expiry of the stated term therefore there is no need to serve notice. It is good practice and courtesy, however, to send a letter to the employee reminding him/her that the contract is about to terminate and thanking him/her for his/her service FTC s should include a break clause to enable early termination by notice from either side in order to avoid liability for payment for the entire unexpired period of time under the fixed term due to wrongful dismissal The appropriate nationally agreed conditions of service should be applied to employees on FTC s including pay rates, annual leave, sickness pay, maternity provisions etc. Pro rata entitlements should be based upon the average hours worked in the previous 12 weeks, if hours of work vary Employees on a fixed term contract become entitled to statutory rights of protection which accrue with length of service in the same way as employees on indefinite term contracts, i.e., on termination of employment after one year of continuous service there is a right to complain of unfair dismissal and after two years of continuous service there is a right to a redundancy payment if the reason for dismissal is redundancy (but not if the dismissal is for some other reason). When a FTC comes to an end, and the reason for the dismissal is redundancy. The employee will be entitled to a redundancy payment, the entitlement should not differ from that of a comparable permanent employee. Factors taken into account when calculating the redundancy entitlement would be the age of the employee, salary and continuous local government service A fixed term employee with 2 years continuous service will be entitled to a redundancy payment only if the employer s requirements for employees to carry out work of that kind have ceased or diminished. This would not include situations where a permanent appointment has been made to a post held by a temporary employee, or where a permanent employee has returned from sickness, or maternity leave etc. to a substantive post Fixed Term employees must have access to the internal jobs circular and be able to apply for permanent positions by the same process as permanent employees If a FTC is renewed, or the employee is re-engaged on a new fixed-term contract, when they already have a period of four or more years of continuous employment dating from 1 st July 2002, the renewal or new contract takes effect as a permanent contract unless employment on a FTC was objectively justified Non-Standard Workers Guidance March 2005 Page 22

30 2.18 There is no limit on the duration of a first fixed term contract, however, for example; if an employee has a five year contract from 1 October 2002 to 1 October 2007 and it is renewed immediately for three years the contract will become permanent on 1 October 2007, unless the use of a fixed term contract can be objectively justified The 4 year statutory limit requiring objective justification for further renewals has been designed to prevent abuse arising from the use of successive fixed term contracts. It is also permissible to enter a collective argument and provide an alternative scheme by applying either a limit on the duration of successive fixed term contracts, the number of successive fixed term contracts or a list of permissible objective reasons justifying renewals of fixed term contracts. Collective agreements with the Trade Unions should only be reached in consultation with the Assistant Chief Executive (Organisation Development) When a fixed term contract comes to an end it should be treated as a dismissal and as such is subject to the minimum statutory dismissal procedure, which specifies that the employer must: put in writing why they are considering dismissing the employee; invite the employee to a meeting at which the issue is discussed. The employee must take all reasonable steps to attend this meeting, and has a right to be accompanied by a trade union representative or work colleague of their choice. The decision the employer makes must then be given in writing to the employee and; offer an appeal. The appeal will be to the Authority s Disciplinary Appeals Panel. 3. Advantages 3.1 The advantages of using fixed term employees are similar to those for temporary employees. 3.2 Additionally, as it is understood at the outset that the contract is for a specific purpose and for a specific period. 4. Disadvantages 4.1 Dependent upon the length of the term, FTC s will not attract some employees who are in permanent employment. 4.2 Administration of FTC s can be complicated, though no more than temporary contracts. 4.3 The end of a FTC is to be treated as a dismissal therefore there is a requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 23

31 Fixed Term Contract Sample Offer Letter and Statement of Acceptance Appendix 4A Dear Fixed Term Contract as.. Further to your recent application for the above post in my Directorate, I am pleased to offer you the post on the terms explained below and in the attached statement of particulars. The appointment will commence on and be for a fixed term expiring on.. (not less than two years after the date of commencement of the employment). As explained to you, this appointment is for a fixed term for the purpose of. (brief explanation). Include details regarding the following: Hours of work, rate of pay, annual leave, sickness, LGPS, subject to Scheme of Conditions of Service, Probationary period, Code of Conduct, No Smoking Policy, Equal Opportunities Policy, other relevant provisions. This contract is terminable during the course of the contract by.. (insert amount) notice by either side. There will be no entitlement to an additional period of notice extending beyond the expiry date of the contract. I have enclosed a copy of this letter together with two copies of the Statement of Particulars. One copy of each is for your retention and the other is to be signed and returned unamended with the statement of acceptance duly signed and dated. Yours sincerely I accept the offer of a fixed term contract as expressed above/in the enclosed letter (delete as appropriate) in accordance with the terms set out in the accompanying statement of particulars, a copy of which I am returning with this letter as requested. Signed.. Date Non-Standard Workers Guidance March 2005 Page 24

32 1. Definition Specific Purpose Contracts (please also refer to Appendix 4 Fixed Term Employment) Appendix A specific purpose contract (SPC) is for a defined specific purpose or task or is subject to the happening or non- happening of a future event, e.g. the continuation of Government funding for a particular project. 2. Contractual Matters 2.1 The Code of Practice on Recruitment and Selection must be used. 2.2 A SPC is a type of FTC covered by the Fixed Term Employees Regulations. When a SPC ends by fulfilment of the purpose for which it was entered into the employees contract will be terminated in the same way as a FTC. 2.3 To be lawful, it is necessary for the event to be outside of the employer s control, e.g. where external funding is necessary for the performance of a task and the employee s continued employment is expressed as being dependent upon that funding, the cessation of the funding would be an external event bringing the contract to an end without a dismissal. For this purpose, funding would not be sufficient if it was provided by an associated employer. 2.4 A sample clause for insertion in a SPC is included in Appendix 5.a. 2.5 To end a SPC when the purpose has been fulfilled, the employer should confirm this to the employee and indicate that the employment is ending or has ended as a consequence. 2.6 At the end of the specific purpose it is important not to extend the contract for a further temporary period. If this occurs, the contract then becomes a fixed term contract or an open ended temporary contract and the employee will have gained the rights to a redundancy payment and to complain of unfair dismissal if he/she has sufficient continuous service. The continuous service counts from the commencement of the SPC. 2.7 The appropriate nationally agreed conditions of service should be applied to employees on SPC s including pay rates, annual leave, sickness pay, maternity provisions etc. Pro rata entitlements should be based upon the average hours worked in the previous 12 weeks Non-Standard Workers Guidance March 2005 Page 25

33 2.8 When a specific purpose contract comes to an end it should be treated as a dismissal and as such is subject to the minimum statutory dismissal procedure, which specifies that the employer must: put in writing why they are considering dismissing the employee; invite the employee to a meeting at which the issue is discussed. The employee must take all reasonable steps to attend this meeting, and has a right to be accompanied by a trade union representative or work colleague of their choice. The decision the employer makes must then be given in writing to the employee and; offer an appeal. The appeal will be to the Authority s Disciplinary Appeals Panel. 3. Advantages 3.1 The advantages of using SPC s are, again, similar to those for using temporary contracts. 3.2 The employee is aware from the outset of the reason for the contract and of the event which will cause the employment to cease. 3.3 Employees on specific purpose or task contracts expected to last 3 months or less now have the right to a minimum notice period on the same basis as permanent employees and those on longer fixed term contracts. Notice requirements only apply where contracts are terminated before the agreed point at which they would expire. 4. Disadvantages 4.1 The disadvantages in using SPC s are similar to those for Fixed Term Contracts. 4.2 Additionally, SPC s cannot be extended (see Paragraph 2.6 above). 4.3 The end of a SPC is to be treated as a dismissal therefore there is a requirement to apply the statutory dismissal procedure Non-Standard Workers Guidance March 2005 Page 26