The European Court of Justice has held that the conversion of a fixed-term contract into one of indefinite duration need not require the new contract to reproduce in identical terms the main clauses of the previous contract.

What does this mean?

If the employee’s tasks and functions remain the same, however, then the conversion of contracts must not involve material changes in their terms which are unfavourable to the employee.  In the UK, the Regulations concerning Fixed Term Employees generally automatically convert the contract to a permanent one after 4 years with no limit on duration. So there should not usually be a problem with terms becoming less favourable, however, if the original fixed term contract did not contain a notice period to carry over, there could be a risk of the notice provisions in the permanent terms being less favourable.

What should employers do?

Employers should always take specific legal advice before issuing or ending a fixed-term contract.