5 year fixed term contract, terminated

S

sabre

Registered User
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Hi,

I was wondering where I stood from a legal point of view, considering after 16 months into a 5 year fixed term contract , my employment with a company was terminated after a 4 week temporary lay off period.

Although the entire workforce was laid off at xmas, I was the only person to remain laid off. I was asked to work for the company with no guarantee of pay until their financial situation was resolved. I refused.

After a 4-6 week of layoff I was issued with a P45.

Am I entitled to any severence payment with regard to an early termination of my contract , which I had been working under , although not signed. There was never any issue with my performance in my duties, as I was given a 15k rise after approximately 6 months, and moved into a senior role.

sabre
 
You will need appropriate legal advice, but if there is no provision in the contract to make you redundant, then you have a five year contract and they must pay you until the end of the five years.

However, if they are in financial difficulty, you might have problems claiming.

Brendan
 
Hi,

The only reference to termination terms and conditions , are as follows,

Quote;

11. Notice Of Termination Of Employment,
Except in cases justifying summary dismissal, the period of notice to be given in writing by the company or by you to terminate your employment is that laid down by the Minimum Notice and Terms of Employment Act 1973-2001. The Company reserves the right to pay salary in lieu of the required period of notice. Any papers , keys , equipment or other items held by you relating to your employment or business of the company, are the property of the company and you shall return such things to the company immediately on termination of your employment or at any time during your employment if requested to do so by the company.

12. Retirement Age. Normal retirement age for employees is 65.

13. Lay-off and Short Time.
The company reserves the right to lay you off from work or reduce your working hours where through circumstances beyond its control it is unable to maintain you in employment. You will receive as much notice as is reasonably possible prior to such layoff or short time. You will not be paid during the lay off period. You will be paid only in respect of hours actually worked during the period of short time.

End of Quote.

Thats about the full extent in my contract relating to any termination.

Thanks for the response

sabre
 
It sounds to me like they had the right to terminate at a month's notice at any time, so I don't think there is much you can do.
 
Fine, but I never received a months notice, I received 10 minutes of a lay off period. Then a p45 2 months later. And 1 weeks pay in lieu of notice 6 weeks after the 10 minutes notice .


sabre
 
It says in bold capitals on the top of my contract,

STATEMENT OF TERMS AND CONDITIONS OF EMPLOYMENT-5 YEAR FIXED TERM CONTRACT.

Sabre
 
sabre said:
Fine, but I never received a months notice, I received 10 minutes of a lay off period. Then a p45 2 months later. And 1 weeks pay in lieu of notice 6 weeks after the 10 minutes notice .
Click to expand...
This does seem in line with the terms and conditions, assuming that 1 weeks notice is all that is required under that legislation, i.e.
 
I received 10 minutes verbal notice. I have never received any written intentions of the company to let me go. The only document I received from the was a letter 1 day after the 10 minutes notice saying " the layoff was until a date yet to be determined in January 2008"

I have never received any other document only a p45.

I appreciate your comments..so basically my contract has no protection in it for me.

sabre
 
Hi Sabre

If the heading says it's a 5 year contract, I think you have a very good case.

I know some employment lawyers recommend against fixed term contracts on the grounds that they are like leases on property. If you want to leave early, you have to pay the rent for the rest of the period.

You should definitely get legal advice immediately on this from an employment law solicitor.

Brendan
 
Thanks for you valued input on this one guys.

I,ll take your advice and set up an appointment with an employment law solicitor Brendan. I,ll keep you updated on the outcome for the benefit of any one else in a similar position.

Thanks again

sabre
 
Here is a very interesting recent case summarised by A & L Goodbody

[broken link removed]

It seems that a 5 year contract can have a notice period in it.

Brendan
 
I'm a little confused - what exactly is the point of an x year(s) contract if a company can cancel it at any time for any reason? Are there any advantages over an open ended contract?
 
Hi, If you look at the fixed term contract act 2003, it says that the maximum amount of term a renewal of a fixed term contract is 4 years.

and i take straight from the act

9.​
​
​
—(1) Subject to subsection (4), where on or after the passing of
this Act a fixed-term employee completes or has completed his or
her third year of continuous employment with his or her employer
or associated employer, his or her fixed-term contract may be
renewed by that employer on only one occasion and any such
renewal shall be for a fixed term of no longer than one year.

(2) Subject to subsection (4), where after the passing of this Act a
fixed-term employee is employed by his or her employer or associated
employer on two or more continuous fixed-term contracts and
the date of the first such contract is subsequent to the date on which
this Act is passed, the aggregate duration of such contracts shall not​

exceed 4 years.
 
This comment is not from a legal point of view, just to say what I have found to be common practice in the IT industry.

In my experience, fixed term contracts with explicit notice periods are very very common. I have never been offered one that had no notice periods. Often the notice period is reciprocal.

The durations of the fixed term commonly range from 3 months up to 1 year.

Just because the duration is x months does not guarantee the contract will last that long, otherwise you would have the situation where temp i.e. contract staff have jobs that are more secure than the permies.

I'm not saying that in itself would be impossible, I am just saying that most contracts I have had or seen have had explicit notice periods and gave no guarantee of work / revenue for the full duration (often explicitly stating that as well).

In your case, your notice is not spelled out in weeks / months, but it is explicitly included by reference to the Employment Act 1973-2001, so they are entitled to serve notice to you and terminate the contract early as far as I understand it. I think most contractors would have that understanding as well as regards a notice period.

But maybe that common understanding is legally wrong and you may have a case, only a qualified person can advise you on that.

Whether they followed due process in giving you notice, I will leave to the legally minded people here, it does seem as if they have not.
 
A fixed term contract has advantages.

It spells it out to the employee that it is not a permanent contract and that the job will finish at the end of the fixed term period.
It spells it out that they are required for the full period.

The notice period does sort of contradict it.

If an employee does not have a fixed term contract, the Unfair Dismissals Act kicks in after 12 months and the employer must show that the dismissal is fair.

However, I understood that the downside for the employer was that they were committed to the fixed term as well. But maybe they are not.

Brendan
 
Hi,

If my contract cannot be any longer than 5 years, according to the act below , the contract shall be deemed to be a contract of indefinite duration. And if i am interpreting it correctly , an employer may not dismiss an employee to avoid a fixed term contract being deemed a contract of indefinite duration. Am I reading this correctly.

sabre


[broken link removed]

How often may an employer renew a fixed term contract?
(1) Employees on fixed term contracts that commenced prior to 14th July 2003
Where, on or after the passing of this Act (14th July 2003), a fixed term employee completes or has completed his or her third year of continuous[4] employment with his or her employer or associate employer, his or her fixed term contract may be renewed on only one occasion and any such renewal shall be for a fixed term of no longer than one year.
(2) Employees on fixed term contracts that commence after the 14th July 2003
Where a fixed term employee is employed by his or her employer or associated employer on two or more continuous fixed term contractsand the date of the first such contract is subsequent to the date on which this Act was passed (14th July 2003), the aggregate duration of such contracts cannot exceed 4 years.
(3) Contract of Indefinite Duration
Where any term of a fixed term contract purports to contravene subsection (1) or (2) above that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration;
(4) Objective Grounds justifying renewal of contract on a fixed term basis
Subsections (1) to (3) do notapply to the renewal of a contract of employment for a fixed term where there are objective grounds justifying such a renewal.
An Employer may not dismiss an employee to avoid a fixed term contract being deemed a contract of indefinite duration
Employers are prohibited from dismissing an employee from his or her employment if the dismissal is wholly or partly for or connected with the purpose of the avoidance of a fixed-term contract being deemed to be a contract of indefinite duration under section (3) above.
 
If someone is on a 5 year contract work dries up and they lay you off, say and you go and get another job.
If the work started to come in again can they force you to quit that job and come back to work for them since you are still under contract
 
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