Employees are on a fixed-term contract (FTC) if both of the following apply:
They may also be considered to be on a fixed term contract if:
No need to give employees notice
Usually a FTC is ended once it has reached its agreed end point and there is no need for an employer to give notice. Employers are obliged to inform fixed-term employees of vacancies for permanent positions and this may be done by a general announcement.
Rules change after 2 years' service
If a contract is not renewed, it's considered to be a dismissal. If an employee has 2 years of service, the employer needs to demonstrate that there is a 'fair' reason for not renewing the contract. They may be entitled to statutory redundancy payments after 2 years' service if the reason for non-renewal is redundancy.
Renew up to 4 years
An employer can continue renewing a FTC for up to four years. If the contract is renewed after that period, they become a permanent employee unless the employer can show a good reason why they should remain on a FTC.