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A fixed-term employment means that the employment will end on a specific date or when a particular event occurs. While this type of employment is appropriate for certain jobs, employers who wish to hire fixed-term employees need to be aware of their rights and responsibilities to avoid breaching the law.
A full or part-time fixed-term employee is often someone who is hired to complete a particular project or to cover a busy season, such as a retail position during Christmas. A fixed-term employment must have a genuine reason based on reasonable grounds to be legitimate, and the employee should be aware of this reason upon employment.
A genuine reason can include:
- Covering another employee on parental leave
- A project that requires specialist skills
- To provide adequate labour for work needed during demanding seasons.
Some things that are not considered genuine reasons are:
- Putting an employee on a fixed-term position as a performance trial. A trial period is a separate employment agreement.
- Hiring an employee on a fixed-term role when they are on a work visa that is set to expire during the expected employment period. In such circumstances, the employment agreement should be on the basis of a permanent position where the employee would resign at the expiry of their work visa.
- Hiring an employee on a fixed-term position because the industry or workflow is unpredictable.
Aside from the fact that they will be working for a temporary period, fixed-term employees generally have the same rights and responsibilities as permanent employees. When you hire a fixed-term employee, you should have a written employment agreement that:
- Explains why it is a fixed-term position.
- Specifies when or how the term will end and a reason as to why it will end then.
- Specifies whether they are hired on a full-time or part-time basis.
- Outlines the minimum employment rights.
If these fixed-term conditions are not outlined in the written employment agreement, then it is possible for the employee to be considered a permanent employee by law.
If an employer wishes to prematurely dismiss a fixed-term employee, they must follow the same process as they would for permanent employees and have lawful reasons for dismissal.