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Document updated/added on 28.01.2020

Topic: Recruitment

renewal of fixed-term employment letter
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Renewal of fixed-term employment letter

Renewal of fixed-term employment letter

Our renewal of fixed-term employment letter is for use when what you’re offering an employee on the expiry of their current fixed-term contract is a further fixed term but in a different job role - so it’s a new fixed-term contract not an extension of the current one.

Options available

When an employee’s fixed-term contract comes to an end, you have four main options:

  1. Terminate their employment - this still constitutes a dismissal and therefore can still be an unfair dismissal if the employee has been employed by you for two years or more.
  2. Offer permanent employment.
  3. Offer to extend the fixed-term contract - see our Extension of Fixed-Term Contract Letter.
  4. Offer a new fixed-term contract in a different job role - this is where our Renewal of Fixed-Term Employment Letter comes in.

It’s important to draw a distinction here between 3 and 4. One is an extension of the current fixed-term contract in the same job role and the other is a renewal of fixed-term employment in a new job role. However, provided the new contract follows on immediately after the end of the current one, the employee will have continuity of employment for statutory purposes in both scenarios because continuity isn’t dependent on the employee being in the same job role. In addition, provided you make the offer to renew and it’s accepted before any notice of termination of the current contract has been given, this will be a mutual variation of contract (on the new agreed terms) and not a dismissal and re-engagement.

New offer

As this is an entirely new job offer, you will need to set out the terms of that offer just as you would on initial recruitment. Therefore, our letter offers to renew the employee’s fixed-term employment in a specified new job role and then it attaches an offer of appointment letter setting out the detailed terms and conditions of the offer. You can use our Offer of Appointment Letter for this purpose, but you will need to adapt it accordingly as you won’t, of course, be doing all the pre-employment checks again so you won’t need to make the offer conditional on various matters, such as satisfactory references and evidence of right to work in the UK.

Probation

You can still have a probationary period in a fixed-term employment renewal situation as it is a new job role, but bear in mind the employee will have continuity of employment for unfair dismissal purposes, so it won’t be as simple as just terminating the employee if their performance isn’t up to scratch in the new role if they have two years’ continuity of employment in total.

Fixed-term Employees Regulations

Under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, an employee who has been engaged on a series of continuous fixed-term contracts for four years or more will automatically achieve permanent status, unless you can objectively justify the employee’s continuing employment on a fixed-term basis. It’s irrelevant for these purposes whether this has been the same fixed-term contract that has been extended one or more times or different fixed-term contracts in various job roles with you.

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