Redundancy payment on fixed term contracts

Arathorn

Just a quick question, does anybody know if people on fixed term contracts are entitled to redundancy when the length of their fixed term contract runs out. Specifically after 4 years, which is the maximum you can be kept on a fixed term contract before having to be made permanent.

The_Conductor

Arathorn wrote: »

Just a quick question, does anybody know if people on fixed term contracts are entitled to redundancy when the length of their fixed term contract runs out. Specifically after 4 years, which is the maximum you can be kept on a fixed term contract before having to be made permanent.

Providing the contract has come to a logical end, there is no reason whatsoever that redundancy payments would enter the equation...... You really have to check the wording of the contract- normally it will include specific clauses for the early cancellation of the contract (which can include financial grounds)- but until such time as you are considered a permanent employee under the Fixed Term Working Act- you do not have the security of tenure associated with permanency.

Arathorn

smccarrick wrote: »

Providing the contract has come to a logical end, there is no reason whatsoever that redundancy payments would enter the equation...... You really have to check the wording of the contract- normally it will include specific clauses for the early cancellation of the contract (which can include financial grounds)- but until such time as you are considered a permanent employee under the Fixed Term Working Act- you do not have the security of tenure associated with permanency.

Do you have any sources for this? Its just I was googling around looking for information and found the below, just want all the facts

http://www.lkshields.ie/htmdocs/publications/newsletters/update18/update18_10.htm

It is important to note that a fixed-term employee may be entitled to a statutory redundancy payment at the end of his fixed term contract if he has at least two years' service. Therefore, if the employer does not intend to renew the contract and the employee is not entitled to a permanent position based on length of service, then the employer will need to consider whether the employee is entitled to a statutory redundancy payment.

The_Conductor

I was involved in proofing contracts and clauses. Case law as it exists, that I am aware of, is more to do with the non-awarding of permanent positions at the end of a fixed contract, than the awarding of a redundancy payment (though if it is a fixed term contract- why would a redundancy payment ensue, if the termination of employment was simply due to the expiration of the contract). Perhaps someone with more HR knowledge might elaborate on this.

Arathorn

smccarrick wrote: »

though if it is a fixed term contract- why would a redundancy payment ensue, if the termination of employment was simply due to the expiration of the contract

I think because you are entitled to the same benefits as a full time employee, to stop employers abusing fixed term contracts.

It's only 4 years anyway so would't be a fortune, just trying to plan ahead in these hard times

The_Conductor

Arathorn wrote: »

I think because you are entitled to the same benefits as a full time employee, to stop employers abusing fixed term contracts.

It's only 4 years anyway so would't be a fortune, just trying to plan ahead in these hard times

Not entirely true- which is reflected in the rates paid to contract staff- which tend to be a good deal higher than the basic salaries a permanent staff member will enjoy. You do accrue superannuation rights (post the 2006 ruling), but command a higher salary in general, reflecting the fixed term nature of the work.

Arathorn

Im not a contractor, I dont do my own taxes and all that. Im employed by a company on a fixed term contract, I'm effectively the same as a regular employee get sick leave etc etc so I dont get any extra benefits such as higher pay etc. Companies are allowed hire staff like this for 4 years max. All new staff into the company are now put on these contracts

The_Conductor

Arathorn wrote: »

Im not a contractor, I dont do my own taxes and all that. Im employed by a company on a fixed term contract, I'm effectively the same as a regular employee get sick leave etc etc so I dont get any extra benefits such as higher pay etc. Companies are allowed hire staff like this for 4 years max. All new staff into the company are now put on these contracts

Those are rights which are enshrined in the 2003 Fixed Term Working Act. The Act also specifies, under section 8 of the act, 'objective conditions' for terminating the contract (which can include- financial reasons, arriving at a specific date, completion of a specific task etc). You are supposed to have these 'objective conditions' spelt out in your contract. Failure by an employer to properly document the 'objective conditions' and inform the employee of these 'objective terms' could be taken as a deficiency on the part of the employer under the act- and has been challenged several times, successfully, in the Labour Court and the LRC.

When a fixed term employee is determined to have completed their fixed term contract- they may be let go under one of the 'objective conditions' as spelt out in their contract, have an additional contract drawn up (if 3 years have elapsed in the current position to a maximum of a further 1 year- making 4 years total), be determined to be in a contract of indefinite duration, or offered a permanent position.

If the 'objective conditions' associated with the contract are determined (by the Rights Commissioner) to have been breached- the person may be awarded redundancy payment (up to a maximum of 2 years pay), the employer may be ordered to re-engage the contract employee (in any of a number of different manners- which can include an additional fixed term contract, a contract of indefinite duration or a permanent position).

Redundancy payments- as such, are associated with termination of a fixed term contract, subject to reasons other than 'objective conditions' which must have been spelt out to the employee in their contract- and will be governed by Section 39(17) of the Redundancy Payments Act 1967 (as updated). Once someone has been let go- they have a 6 month window in which to appeal the decision- outside of this they have no automatic right to a hearing.

While in their contract position- a contract employee has most of the rights associated with permanent employees (after the 2006 ruling), it is a mistake to consider the two different employment conditions to be equal.

Hope this helps.