How to be a responsible employer if you’re forced to offer temporary contracts

In light of reports of a sharp decline in workers being given permanent contracts, Coodes advises businesses on how to approach short-term contracts in a responsible way.

“These are difficult and uncertain times, so the announcement of a sharp decline in employers offering permanent contracts comes as no surprise. In a period of economic uncertainty, it is natural that businesses are more likely to offer short term contracts, which allow them to respond quickly to downturns. It means employers can terminate contracts at short notice and without the cost of redundancy or the risk of unfair dismissal claims, for which employees only qualify after two years’ employment.

“For employees, short term contracts are, of course, far less attractive. This can make recruitment much more challenging – why would someone leave a secure position for a short term contract? It can also make staff less inclined to stay in post, as they are likely to take up any opportunity for a better prospect elsewhere. This cost and inconvenience shouldn’t be underestimated – it is expensive to recruit someone and train them up as well as dealing with any staff shortages.

“Despite this, many businesses do not currently feel confident enough to offer permanent contracts. So, if your business is in this position, how can you alleviate the risks and act responsibly towards your staff? Here are my top tips:

1. Offer short term fixed contracts that guarantee work for specific periods of time. These can be renewed at the end of the period, but bear in mind that a series of fixed term contracts can effectively become permanent and take everyone over the two-year threshold.

2. Offer roles by reference to specific projects with a clearly defined beginning and end.

3. Maintain close communication with any employees on short term contracts to ensure they are aware of where they stand and what, if anything, might make the roles permanent.

4. Offer or negotiate flexible working arrangements with staff, particularly if the volume of work might fluctuate.

5. Offer or negotiate flexibility so staff whose contracts are nearing the end can look for alternative work.

6. Consider offering staff longer notice periods to counter the insecurity of temporary work

“These are difficult times, but this doesn’t take away the importance of employment rights and for businesses to treat staff as well as possible.”

For more information or advice, please contact the Employment team on 0800 328 3282 or info@coodes.co.uk. Alternatively, you can use the contact form.