Friday, April 19, 2024

Clarifying fixed term contract


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There is no definition of fixed term contract in the Employment Rights Act, 2012.
In England there is a definition in Regulation 1 of the Fixed Term Employees (Prevention Of Less Favourable Treatment) Regulations 2002. It defines a fixed term contract as “a contract of employment that, under its provisions determining how it will terminate in the normal course, will terminate: (a) on the expiry of a specific term; (b) on completion of a particular task, or (c) on the occurrence or non-occurrence of any other specific count other than the attainment by the employee of any normal and bona fide retiring age in the establishment for an employee holding the position held by him”.
Contracts that are expressed to be for a fixed term often contain a clause providing for termination by notice.
There was a time when such a contract was considered not to be a fixed term contract. Therefore in BBC vs IOANNOU (1975), Lord Denning said: “In my opinion a ‘fixed term’ is one which cannot be unfixed by notice. To be a ‘fixed term’, the parties must be bound for the fixed term stated in the agreement; and unable to determine it by notice on either side.”
A few years later the same issue came before the English Court of Appeal in the case of Dixon And Another vs BBC (1979). In that case a porter was employed under a series of fixed term contracts that were determinable by one week’s notice. 
Failed to renew
When the last contract expired, the BBC failed to renew it and Dixon claimed he was unfairly dismissed. The BBC resisted the claim and argued that, where a contract includes a term permitting termination before the end of the fixed term, it was not a fixed term contract for the purposes of the Employment Rights Act, 1996, which contained a similar provision to that included in our own legislation.
The Court of Appeal held that Dixon was dismissed within the meaning of their legislation when his fixed term contract was not renewed, even though the contract provided that it could be determined by one week’s notice within that period.
Lord Denning, who clearly had a change of heart about the meaning of a fixed term contract, observed that to hold otherwise would mean that all a person had to do to evade the act was to insert “a simple clause ‘determinable on one week’s notice’. That can never have been the intention of the legislature at all”.
It is submitted that for the purposes of the Employment Rights Act, 2012, that the decision in Dixon applies.
Not even an agreement not to renew a fixed term contract can prevent its expiry from being a dismissal. This was emphasized in the English case of Thames Television Ltd vs Wallis (1979). In that case, Mrs Wallace was promoted to the position of reporter and employed on a fixed term contract. The employers came to the conclusion that she was not suitable for her new position and informed her that her contract would not be renewed when it expired. She agreed that once her contract expired, it would not be renewed and she would instead revert to her previous position of researcher and be paid an ex-gratia payment.
The Employment Appeals Tribunal (EAT) had to consider whether she was dismissed once the contract expired. Both the Employment Tribunal and the EAT held that she was dismissed.
I shall continue this discussion on fixed term contracts next week by considering some more cases decided on the equivalent English legislation, since this area of the new employment law appears to be presenting some challenges for employers. 
• Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to


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