Many employers, particularly those with projects, like to offer employees a fixed term contract because they think it will be easier to get rid of them.
Their perception is that the contract will just come to an end and they won’t have to do the awkward bit of “giving notice”.
It doesn’t work like that.
They also think that having a fixed term contract means you can throw out all employment law.
Right now we’re helping a company who’s made these exact mistakes.
They’ve employed a remote worker on a fixed term contract, with the idea of renewing or cancelling it at the end of each August, and letting the employee know two weeks before the end of the month.
If the contract was cancelled, then the agreement was that there’d be a three-month notice period.
So, this year they decided to cancel it.
They gave the 2 weeks’ notice and prepared to pay the three months’ notice.
Trouble was, he’d been working with them for three years, which means they needed to take him through a redundancy process, or a performance management process or reach a settlement.
They told him verbally that he was fired, and confirmed it in writing. Then contacted us.
Yes, that’s unfair dismissal. And for us, it’s damage limitation.
The employee could easily win a year’s salary at tribunal (capped at £80,541) plus a 25% uplift for not following a process.
In this particular case, that’d be at least £100k, plus the company would have to pay their own legal fees, and potentially his too.
Here’s the lesson: you have to give your staff notice and you have to have the difficult conversation – that’s part of running a business!
P.S. Once your ‘fixed termers’ get close to two years’ service, make sure you give them the correct amount of notice to part company legally, if that is what you want to do!
If you know of a Club that could do with our help, please let us know – we always reward referrals with chocolate!