Having extra help during your busy trading periods, such as during the summer season, can help your business stay flexible and meet demand.
Allowing as much time as possible to plan recruitment and advertise vacancies can help mitigate the risk of unfilled or poorly filled vacancies, particularly in those sectors where businesses are experiencing greater difficulties in filling vacancies.
So, if you’re looking to hire temporary employees, experts from FSB Employment Protection answer your frequently asked questions about taking on seasonal staff, from employment contracts to your legal considerations.
What is a temporary employee?
Temporary employees are hired on a fixed-term contract for an agreed period of time, either with an end date or upon completion of a specific project.
For example, this includes seasonal employees taken on for up to six months during a peak period, specialist employees or cover for maternity leave.
It doesn’t apply to those who have a contract with an agency (as they are likely to be an employee of the agency).
What are the benefits?
- Meet the demands of your peak trading periods in your industry
- Maintain high levels of service and customer expectations
- Avoid being overstaffed in low season when demand drops
- Support with staffing issues caused by sickness, holidays or maternity leave
What rights does a temporary employee have?
Temporary employees are entitled to the same working conditions and benefits as your permanent employees in comparable roles. For example, they should have the same, rate of pay and holidays entitlement (pro-rated) unless you can justify any less favourable treatment on objective business grounds.
A comparative permanent employee in these circumstances is an employee not on a fixed term contract, employed by the same employer in the same establishment and undertaking the same or similar job.
Temporary employees should be given information about permanent vacancies in your organisation.
What should be in an employment contract for temporary staff?
Whether your employee is permanent or temporary, you should have a contract of employment in place. Legislation requires that any new hire be given a written statement of employment particulars by the date they start the job.
Be extremely clear about what role is being offered, and include all conditions and stipulations. The contract will be largely the same as the ones for your permanent employees, except:
- It’s a fixed-term contract, so you need to include the date you expect employment to end, or for the project to reach completion.
- You can’t end the contract before the end date unless the contract contains a notice clause permitting notice to be given before the end date. Temporary employees with at least two years continuous service have the same unfair dismissal rights as permanent employees with the same amount of service. So when the fixed-term contract ends, you should ensure it is for a potentially fair reason, for example, redundancy or ‘some other substantial reason’.
FSB members can download customisable contract templates, including a template fixed term contract and guidance notes, through the FSB Legal and Business Hub.
Are temporary employees entitled to any holiday entitlement?
Yes. All workers are entitled to a minimum of 5.6 weeks’ holiday per year, which equates to 28 days’ holiday a year for a full-time worker. Your temporary employee will accrue holidays on a pro-rata basis during their first year of employment.
Do you have to auto enrol temporary staff?
Your legal duties will still apply in respect to eligible jobholders.
You must offer temporary employees access to an occupational pension scheme. Depending on the duration of the fixed-term contract, the cost of including the temporary employee in the pension scheme may be disproportionate to the benefits. In such instances, you could objectively justify excluding the temporary employee from the pension scheme, however, you should consider increasing the pay or value of other benefits to ensure that the overall benefits package for the temporary employee is comparable to that of a permanent employee.
The Pensions Regulator has more detailed guidance on pensions and temporary staff.
When does a temporary employee gain permanency rights?
After four continuous years of employment, employees who has been employed on a succession of fixed-term contracts will automatically deemed as permanent employees unless there is an objective business reason that justifies the continued use of the fixed-term contract.
What right to work checks do I need to do?
Employers have a legal obligation to ensure they are not employing individuals, including temporary staff, who do not have the right to work in the UK. If right to work checks are carried out correctly, a statutory excuse against liability for a civil penalty for employing someone who does not have the legal right to work in the UK will be established.
Government guidance on right to work checks explains what employers must do to prevent illegal working in the UK by carrying out document checks on applicants before employing them (including for temporary recruits) to make sure they are allowed to work. A Right to Work checklist and guidance is available on the FSB Legal and Business Hub.
Should I still ask for a reference?
Your pre-employment checks should be the same irrespective of whether the role is temporary or permanent.
Although the recruitment is temporary, it is still a good idea to make receipt of satisfactory references a condition of employment, so that where references are not satisfactory, you can either withdraw a conditional offer of employment if the employment has not yet started, or dismiss on this basis.
FSB members have access to guidance and template letters for obtaining references and conditional offer letters on the FSB Legal and Business Hub.
Can temporary employees give notice to resign?
This depends on the terms of the contract. You may prohibit the employee from leaving before the expiry of the fixed term. If you are agreeable to the employee leaving early, you should set out the notice requirements in the contract. The statutory notice is one week of the employee has been employed for at least one month, or you can specify a longer notice period if you wish.
How much notice do I need to give a temporary employee to terminate?
Fixed-term contracts usually end on an agreed date, and so long as the end date is set out in the contract, you don’t need to give notice. But you should still need to follow a fair dismissal process, particularly if the fixed-term employee has at least two years’ service and has therefore accrued unfair dismissal rights, as the expiry of a fixed-term contract is regarded as a dismissal in law.
If you wish to terminate the contract before the agreed date, you need to ensure that you have an express term in the contract allowing you to do so. If the employment contract allows the employee to be dismissed early, then you need to give the minimum notice period of:
- One week if they’ve worked continuously for at least one month
- One week for each year they’ve worked, if they’ve worked continuously for two years or more
You can find more information about fixed-term contracts on the government website. If you’ve got a specific question, FSB members can call the legal advice line 24/7 for employment advice.
What if I do not know in advance how much work will be available for the employee?
Where you are unable to guarantee a minimum number of hours work per week for the temporary employee, you may wish to consider using a zero hours contract. This is a type of contract where the employee is not guaranteed a set number of hours by the employer. Staff on these contracts are only paid for the hours they work, giving the employer more flexibility during periods where there’s less work for them to do, or where the amount of work is unpredictable.
Template zero hours and casual hours contracts are available on the FSB Legal and Business Hub.
Are temporary employees entitled to statutory redundancy pay?
If the fixed term contract ends on redundancy grounds and the temporary employee has been employed for at least two years, they may be entitled to statutory redundancy pay. The employee will be entitled to the same redundancy rights as a permanent employee.
So, how do I hire the right seasonal staff?
Once you’ve checked all your legal obligations, there’s only one key element that you must remember when hiring temporary staff: choose carefully.
Just because you’re hiring staff on a temporary basis it doesn’t mean you should pick anyone who applies for the job. Do they have the skills and attributes you’d expect from your regular team?
It is always a good idea to try to hold interviews in advance of your busy season. Doing so means trial shifts can take place earlier, if necessary. You should bear in mind that where an individual is asked to carry out a ‘trial’, ‘test’ or ‘recruitment exercise’, the individual may nevertheless be a ‘worker’ and be entitled to the minimum wage during a trial shift.