Fixed-term vs indefinite contracts

With the introduction of a new Fixed-term Contracts and Casual Working Policy at Lancaster, you might be wondering what it’s all about. What does fixed-term and indefinite actually mean and what’s the difference between them? Are there benefits to being on a fixed-term or indefinite contract?

What is a fixed-term contract?

Put simply: a fixed-term contract has an end date. You are employed for a specific period of time and once this has elapsed you are at risk of being made redundant.

Typically for research staff, a fixed-term contract could be anywhere from 6 months to 3 years in length. With the exact length normally determined by the amount of funding secured in the research project you’ve been employed to work on.

What is an indefinite contract?

Unlike a fixed-term contract, an indefinite contract does not have an explicit end date. However, this does not mean you have a job for life.

For the vast majority of research staff, “your appointment continues to be contingent on external funding” (HR’s wording). This means that when the money runs out on a project, you are at risk of being made redundant unless further funding (e.g. a new grant/bridging funding) is secured.

You may see indefinite contracts referred to as permanent contracts (even the Universtiy’s new policy does this). However, the RSA disputes this terminology. As a researcher, you are not permanent like other indefinite staff at the University (although we note that anyone could be made redundant regardless of role).

Your position is entirely governed by external funding and the University is not likely to continue to employ you through their own funds for any significant length of time if the external funding runs out.

What are the benefits of an indefinite contract?

It’s a good question. If you’re asking this, it means you’ve probably realised that indefinite doesn’t mean permanent. You are still at risk of redundancy once the external funding runs out. So what’s the point?

There are a few benefits to an indefinite contract but mostly, because fixed-term employees legally cannot be treated less favourably than their indefinite colleagues, it doesn’t matter all that much. The major benefits (that we know of!) are:

• Applying for loans (e.g. mortgages) – you may be asked if you are employed fixed-term or permanently. Most lenders will prefer “permanent” employment, so you may be more likely to receive the loan than if you were fixed-term.

  Note: some lenders will require proof of your employment status and Lancaster’s policy is to include any funding end-date on researcher contracts. Also, some lenders will ask you a question such as “is your financial situation likely to change within the next X years”. In both of these cases, it will be clear that, whilst you might be indefinite, you are not permanent.

• Collective consultation during redundancy. When an employer, such as the University, makes 20 or more staff redundant within a 90-day window, they are required by law to undertake collective consultation with the relevant trade union(s) – regardless of whether or not you are in a union yourself. However, this requirement only applies to indefinite staff and not those on fixed-term contracts. How this really benefits you, in practise, (e.g. if you want to continue in your research career rather than being redeployed to some other job at the University) is a little unclear.
• Applying for funding – though this one is a double edged sword (see below for more). In some cases, funding may only be available to staff whose contractual end dates are longer than the proposed lifetime of the grant being applied for. In which case, an indefinite contract might mean that, because you technically have no end-date, you could apply for such funding whereas you might not have been able to on a fixed-term contract.

  Note: we use may/might here a lot. It will depend on the funder and the scheme you’re considering applying to. Some funders may use “funding end-date” rather than “contract end-date” and some may instead/also set requirements such as “applicant must hold a lecturer or equivalent role”. In which case, your contract type is irrelevant.

What are the benefits to a fixed-term contract?

As far as we are aware, there is only one example where a fixed-term contract may be beneficial over an indefinite contract. For some schemes, particularly research fellowships, some funders may require that the applicant does not hold a permanent contract. In such a case, if you held an indefinite contract you might be ineligible for the scheme.

From the RSA’s perspective, this is simply not acceptable and we are raising this with the UKRSA to lobby for change. It may well simply be a hang-over of the days where contract type (i.e. fixed-term vs indefinite) was indicative of the type of employment you had (i.e. researcher vs permanent academic). However, with most funders and Higher Education employers now signed up to the Concordat to Support the Career Development of Researchers, the use of fixed-term contracts should be diminishing and so using this as a criterion should also be removed.

So what is Lancaster’s new policy about?

New starters

Lancaster University has committed to appointing new researchers on indefinite, rather than fixed-term, contracts with four exceptions:

1. You are employed to cover temporary absence (e.g. parental leave, sickness, secondment)
2. Your role is part of a time-limited training programme (e.g. apprenticeships)
3. You are employed to cover “unexpected, temporary, one-off peaks in demand” to a maximum of 6 months in duration
4. You request to be appointed on a fixed-term contract

Time-limited funding, in itself, will not be justification to place an individual on a fixed-term contract.

Current employees

The policy states that (6.3.4) “all staff currently employed on fixed-term contracts will be automatically moved onto indefinite contracts” unless the exceptions outlined above apply. Additionally, “any fixed-term contract that reaches 2 years in duration will, by agreement of the employee, be converted into an indefinite contract unless objective justification can be provided for not doing so.”

What are my legal rights?

Lancaster’s policy goes beyond what is required by law but we’ll list the legal requirements here too for completeness.

Transfer from fixed-term to indefinite status is covered by Regulation 9 (Requesting confirmation of permanence from your employer) of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. Under this regulation you have the legal right to indefinite status if:

1. You are on, at least, your second contract with the same employer (e.g. Lancaster University) or the contract has been previously renewed; and
2. You have at least four years’ continuous service (inc. parental leave) ; and
3. The use of a fixed-term contract was not justified on objective grounds.

That last point is a little vague – however, it is generally regarded that time-limited funding is not regarded as an objective ground. You can find more on this on the UCU’s webpage.

How can I transfer from fixed-term to indefinite?

Before the new policy was introduced, if you met the legal criteria above you could apply to “transfer from FTC to indefinite status”. However, the link for the required document (https://www.lancaster.ac.uk/hr/staff-relations/files/HRFTC110_Transfer_to_Indefinite.docx) is now dead.

This is probably because, with the introduction of the new policy, all staff should be transferred automatically (assuming none of the exceptions apply to you). When this will actually happen, however, is unclear. So for now, you can either wait for this to happen automatically or contact HR to see if you can speed up the process.

 

 

Noticed anything we’ve missed? Or have a question related to fixed-term vs indefinite contracts that we didn’t answer? Then please get in touch!