Can an employer set a shorter notice period for its fixed-term employees than for its permanent employees?

Regulation 3 of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) provides that fixed-term employees have the right not to be treated less favourably than comparable permanent employees as regards the terms of their contract, unless the different treatment can be justified on objective grounds.

Setting a shorter notice period for fixed-term employees than for comparable permanent employees constitutes prima facie less favourable treatment of the fixed-term employees as regards one of the terms of the employment contract. This will, therefore, be permissible only if the employer can demonstrate that it is objectively justifiable to treat fixed-term staff differently from comparable permanent staff when it comes to notice periods. Less favourable treatment will be justified on objective grounds only if it can be shown that the less favourable treatment is to achieve a legitimate objective, such as a genuine business objective, that it is necessary to achieve that objective, and that it is an appropriate way of achieving it. Each case will turn on its own facts and circumstances.

Alternatively, the employer may seek to show that the value of the fixed-term employee's overall package of terms and conditions of employment is at least equal to the value of the comparable permanent employee's total package of terms and conditions of employment. Under this approach, employers can balance a less favourable term against a more favourable one, provided that they ensure that the fixed-term employment package, taken as a whole, is no less favourable than that of the comparable permanent employee.