What is a Section 278 Agreement?

A Section 278 Agreement is a legal agreement between a developer and a highway authority to carry out highway works.

Fixed-Term Contracts: Key Issues For Employers

Fixed-term contracts are useful for temporary roles – such as maternity cover, project-based work or seasonal demand. But they come with risks that HR should manage carefully.

Legal rights and protections

Employees on fixed-term contracts are protected under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002. From day one, they have the right not to be treated less favourably than comparable permanent staff. That includes equal access to pay, conditions, training, and benefits – pro-rated if needed. You can only justify differences if you have good business reasons and the overall package is of equal value.

After four years on successive fixed-term contracts, an employee may automatically become permanent – unless there’s a strong business reason not to. Employers must also notify them of suitable permanent roles.

Tricky areas to watch

Pro-rata benefits: You don’t have to offer every benefit, like a company car for a short-term hire – but you’ll need to explain why and offer something equivalent if challenged.
Ending the contract: Simply letting a fixed-term contract expire still counts as a dismissal. You’ll need a fair reason if the employee has 2+ years’ service – usually redundancy or “some other substantial reason” (e.g. the return of the employee they were covering).
Early termination: Unless the contract allows for early termination with notice, ending it early may amount to wrongful dismissal. Include clear early termination clauses.
Funding uncertainty: If you rely on external funding, you may be able to justify continued use of fixed-term contracts – but be prepared to defend this at tribunal if necessary.
Permanent roles: If you make the fixed-term role permanent but don’t offer it to the postholder, be cautious. Fixed-term employees should, at the very least, be offered the opportunity to apply for the vacancy. If you don’t want to offer the role to the temp, then you should try and make it as different as possible from the temporary position.
Pregnancy or maternity: Not renewing a contract during pregnancy or maternity leave isn’t unlawful in itself, but a fair process is essential. Offer priority access to suitable vacancies and provide clear, written reasons for dismissal.

Fixed-term contracts can be practical, but they’re not risk-free. A proactive, fair and transparent approach will help you stay compliant – and avoid costly claims.