Your rights: Fixed term contract worries

Q: I am employed in a role on a fixed term agreement. The reason stated for the fixed term is that the position is subject to the approval of the global parent of the company I work for. Their approval is only given for a finite term and I accepted that within a global business of the nature of the company I work for that this is a genuine reason for entering into a fixed term agreement.

But is this a genuine reason? Once my term ends in one year and say I got extended for another year in the same role doing the same work could I contest the fixed term and say I was actually a permanent employee?

A: Employment under a fixed term agreement can end:

* At the close of a date specified period.

* On the occurrence of an event.

* At the end of a project.

But, before the employer and employee can agree to the way the agreement can end, the employer has to:

* Have genuine reasons based on reasonable grounds for wanting to end the employment in that way; and

* Advise the employee of how or when the employment will end and the reasons for it ending in that way.

Everything must be in writing.

If a fixed term agreement does not comply with the above requirements, an employer may not be able to rely on the agreement to end the employment at the end of the fixed term. In this way, the employer can find themselves with a permanent employee.

The reasons you have been given a fixed term contract are far from clear. For example, it is not clear how or why your position was 'approved' for one year only. Some of the questions that spring to mind are:

* What is the basis for the company's global parent's approval?

* Why does the company believe that, because it is a global business, it has a greater justification for employing staff on a fixed term basis?

The amendments to the Employment Relations Act 2000 now require all employers to put the reasons for a fixed term arrangement (and the way employment will end under a fixed term arrangement) in writing.

So, for example, even if your employer can reasonably explain the basis for its parent company's approval, your employer can only rely on the reasons it has provided to you in writing (i.e. those in your employment agreement).

In our opinion, it is virtually certain that the reasons your employer has specified in your agreement will not be considered genuine if you decide to challenge the fixed term nature of the agreement in the Employment Relations Authority (ERA). So, the ERA will consider you a permanent employee rather than a fixed term employee.

If your employer wishes to extend your employment after the initial one year term, it will need to meet the same requirements referred to above. So, when your employer extends your agreement it will need to demonstrate that it has genuine reasons based on reasonable grounds for the subsequent fixed term arrangement and advise you of how or when your employment will end and the reasons for it ending.

Again, all of this must be recorded in writing. Employers that are in the practice of 'rolling over' fixed term agreements without revisiting the reasons for each new arrangement risk temporary employees becoming permanent employees.

If you have concerns about your fixed term arrangement, you should raise them with your employer. If you don't accept your employer's explanation, you should get advice from an employment lawyer.

You may need to seek a 'determination' from the ERA on whether the reasons for the fixed term agreement are genuine or not (and therefore whether you are employed on a fixed term or permanent basis).

* Katie Hoyle is a solicitor in the employment team of trans-Tasman law firm, Phillips Fox.