Taking on staff - the options

• lasts for a specified time, set in advance
• ends with the completion of a specified task
• ends when a specified event does or does not take place

For example, if you're a shopkeeper you may want to take on someone for just three months to cover the busy run-up to Christmas. Or you may wish to employ someone specifically to cover for someone who is on maternity leave.

Pros and cons

Fixed-term contracts give you the advantage of bringing in specific skills and labour as and when they are needed.

However, employees on fixed-term contracts may not have the same commitment to your business as permanent staff.

It's also important to remember that unless there are special circumstances which can be justified, you must treat fixed-term employees the same as comparable permanent employees. This means you must give them:

• the same pay and conditions
• the same or equivalent benefits package
• the same or equivalent pension scheme
• the same opportunity to apply for vacancies for permanent posts in the business

Fixed-term employees also have:

• redundancy rights
• protection against unfair dismissal

Any employee who has been on a fixed-term contract for four or more years (excluding any period before 10 July 2002) will usually be classed in law as a permanent employee.

These regulations do not apply to apprentices, students on work experience of a year or less or people on certain training courses and temporary work schemes. You can find details on exempt training courses on the DTI website.

Tax matters

You will need to make the same tax arrangements for fixed-term employees that you would for permanent employees. Read our guide on how to set yourself up as an employer with HM Revenue & Customs.

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