Can an employer terminate a fixed-term contract to cover maternity leave early, where the employee on maternity leave decides to return early?
Where an employee is employed on a fixed-term contract, the employer can terminate the contract early only if it contains provision for this. For example, it could contain a right for the employer to terminate the employee's employment at any time during the fixed term on giving one week's or one month's notice. The employer will need to ensure that it complies with such a notice provision if it wishes to terminate the contract where the employee on maternity leave decides to return early.
However, where the fixed-term contract contains no early termination provision, terminating the contract before the end of the term would amount to a breach of contract. The employee will be able to seek damages equivalent to the unexpired portion of the fixed term. This could amount to a substantial claim if the fixed term still had a number of months to run before its expiry.