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Ending a Fixed Term ContractBack

“I have an employee who works in the Workshop that I have on a fixed term contract which is now coming to an end.  He has been with me over 2 years but I don’t need him any more, so when the fixed term comes to an end, I presume I can just let him go and he won’t be able to bring any claims.”

Fixed term employees have a number of protections under the Fixed Term Employee Regulations 2002. These Regulations ensure that they are not treated less favourably than a similar permanent employee not on fixed term.  Those protections aside, if an employee has over 2 years’ service, then the non-renewal of a fixed term contract also has to be procedurally fair in order to make sure that the employee cannot bring Unfair Dismissal claims.

In law, the non-renewal of a fixed term contract is known as “some other substantial reason” (more commonly known in the law by its acronym “SOSR”) which is potentially a fair reason to dismiss an employee under the Employment Rights Act 1996.

That does not mean, however, that the employee can just be released without any fair procedure being followed.  It would be advisable in the above scenario for the employer to set up a meeting, giving the employee the right to be accompanied by a trade union rep or work colleague, to consider the issue before any decisions are made.  It would be incumbent on the employer in the above scenario also to review any alternative employment with the employee. Following any decision to not renew the fixed term contract, this should certainly be confirmed in writing and a right of appeal given against the decision.

An Employment Tribunal is entitled to look at the overall fairness and reasonableness of the process. Whilst the Tribunal should not substitute its view for the view of the employer in respect of the exercise of judgement on whether to renew or not, an employer who simply relies on the expiry of the fixed term and takes no other procedural steps is likely to be liable in a Tribunal.

Should you find yourself in a similar situation then we would urge you to seek advice via the RMI legal advice line.

Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.


Posted by Leana Kell on 26/01/2018