Renewal of a fixed term contract
A fixed term contract can only be renewed or extended if there are objective grounds justifying the renewal without offering an indefinite duration (permanent) contract.
The law - Protection of Employees (Fixed-Term Work) Act 2003 - provides that generally an employee cannot have two or more fixed term contracts with an aggregate duration exceeding 4 years.
To renew/extend the fixed term contract then the employee must be notified in writing (no later than the date of renewal) of the objective grounds justifying the renewal/extension and an explanation as to why an indefinite period contract is not being offered.
The objective justification - will be open to challenge if a claim is made. If challenged the employer must be able to justify the failure to offer an indefinite duration contract on the basis of genuine and legitimate objectives that exist at the renewal/extension date.
The renewal must also be necessary for the business of the company. An employer is obliged to advise the fixed term employee in writing of the objective condition determining the end of the fixed term contract - for example, the completion of a specified contract or on a fixed date.
The employee has a right to refer a claim to a Rights Commissioner (or Employment Appeals Tribunal in certain instances).
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The material in this article is for general information purposes only and does not constitute legal or taxation advice. Specific legal and taxation advice should be sought before acting. All information and taxation rules are subject to change without notice.
No liability whatsoever is accepted by M. McLoughlin & Co. for any action taken in reliance on the information in this article