Fixed-term employees and pensions

Draft Regulations have just been published dealing with the treatment of fixed term employees. The Regulations will be made under clause 45 of the Employment Bill which is intended, amongst other things, to give the Government power to extend the protection given by the Fixed Term Workers Directive to pay and pensions.

If the legislation is enacted in its current form, fixed term employees will have a right not to be treated less favourably by their employer than comparable full time employees as regards (a) contract terms or (b) by being subjected to any "other detriment by any act, or deliberate failure to act" of the employer". There are a number of exclusions from the protection given by the Regulations, including agency workers.

Discrimination must be direct, that is on the grounds that someone is a fixed-term employee. In addition, there is an objective justification defence. The Regulations provide that treatment shall be taken to be justified on objective grounds where the terms of the fixed term employee's contract of employment, taken as a whole, are at least as favourable as the comparable permanent employee.

The Regulations should come into force by 10th July 2002 (the last date for complying with the Fixed Term Workers Directive).

The terms of the draft Regulations are wide enough to cover rights under occupational pension schemes. Therefore, schemes which limit membership to permanent employees or have different waiting periods for permanent and non-permanent employees may need to consider whether these provisions will still be permitted once the new Regulations come into force.

To access the draft regulations and accompanying explanatory notes please click here. Comments must be made by 15 April.