DTI explains rules to curb abuse of fixed-term contracts
The Department of Trade and Industry gives UKTECH the answers to the questions being asked by contractors regarding fixed term working, ahead of the Directive's implementation.
DTI spokesman - Tom Curry answered on behalf of the Department...
UKTECH - What abuses regarding successions of fixed term contracts is the legislation being set up to prevent?
TC - "The framework agreement on fixed term work requires member states to establish a framework to prevent abuse arising from the use of successive fixed term contracts or relationships.
"The directive sets out several options for restricting the use of successive fixed term contracts. These are: a maximum number of successive renewals of a fixed term contract; a maximum total duration of a series of fixed term contracts; a requirement for objective justification of any renewal of a fixed term contract; or a combination of more than one of these options.
"The consultation document explained that there appear to be widely different patterns of usage across different sectors, and therefore expressly sought views on what the advantages and disadvantages of successive contracts are at the moment. These views will help us establish what abuses may need to be tackled, and how best to do so. One option on which we sought views was a proposal that the mechanism chosen for restricting the use of successive contracts should be established as a statutory fallback scheme and also allow scope for collective or workplace agreements to operate where agreed."
UKTECH - When, exactly, will it be introduced?
TC - "Once we have analysed responses to the fixed term consultation, we shall consult employer and employee organisations and establish an implementation timetable."
UKTECH - Could the legislation leave recruiters and employers facing claims for unfair dismissals where successions of fixed term contracts result in employees building up a year of continuous service?
TC - "We aim to implement this directive in a way that addresses abuses of fixed term contracts without limiting people's freedom to enter into contracts that suit their circumstances. We are also anxious to avoid any unnecessary burdens on business.
"Consultation will help ensure that the final regulations provide due protection for the vulnerable, without impacting on accepted employment practices and imposing unnecessary burdens on business."
UKTECH - What sectors is this most likely to affect and will it include the abundant contracting market of the IT world?
TC - "DTI published a draft Regulatory Impact Assessment which suggested that fixed term contracts are particularly frequent in sectors such as distribution and leisure, finance, health and education. We also understand that such contracts are common in IT, though it is worth remembering that the regulations will only apply to the directly-employed, not self-employed contractors."
UKTECH - How does this sit with the general implementation of the EU Council Directive on Fixed Working Time? If there is legal opposition to this part of the EU legislation from the recruitment industry, etc... might the implementation of the whole directive be put on hold as has the recent court case from BECTU over holiday rights for freelancers?
TC - "We are anxious to implement in a way which takes full account of the views which are expressed to us. In the light of consultation, we have decided to delay implementation by up to a further year to ensure that we end up with regulations that take full account of UK labour market needs."
The Professional Contractors Group has been lobbying the DTI over the Fixed Term Working Directive and will meet with the department as part of the legislation's consultation process.
The PCG has stated it is concerned with 'the proposed exclusion from the legislation of workers supplied via agencies' and 'the issue of whether, and under what circumstances, the legislation might apply to consultants supplied to clients via a Small Service Business.'
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Richard Powell, UKTECH