Question

How many consecutive fixed-term contracts can the employer enter into with the same employee before the employer is required to offer a permanent employment relationship?

Our lawyer answers

It is a common misconception that the employer can, for example, enter into three fixed-term employment contracts with an individual employee, and after that the employer has to offer the employee a permanent employment relationship.

According to the Employment Contracts Act, an employment contract is valid until further notice, unless it has been concluded as a fixed-term contract for a justified reason. This means that every fixed-term employment contract must have a justified reason approved by law. Acceptable reasons for a fixed-term employment contract are, for example, family leave substitution or a summer job. The grounds for the fixed-term contract must therefore be related to the fact that the need for work itself is of a fixed-term nature, and after the fixed term, the employer no longer needs “additional workforce” to perform the work in question.

Fixed-term employment contracts made on the initiative of the employer without a justified reason must be considered valid until further notice in accordance with the Employment Contracts Act. Thus, if a fixed-term employment contract has been concluded without a justified reason as mentioned above, the employment relationship in question is considered to be valid until further notice. If you suspect that your fixed-term employment contract is unjustified, you can address the matter with your employer and ask the employer to confirm that your employment relationship is valid until further notice.

It occasionally happens that the employer’s need for labour is considered to be permanent, even if there is a justified reason required by law for each individual fixed-term employment contract, such as substitution. According to the Employment Contracts Act, the use of consecutive fixed-term employment contracts is not allowed when the number of fixed-term employment contracts or their combined duration or the combination of these factors indicates that the employer’s need for labour is permanent.

If the employer refuses to confirm an unjustified fixed-term employment contract as being valid until further notice and lets the employment relationship expire, the employer may be forced to pay the employee damages in accordance with the Employment Contracts Act.

The question was answered by Niina Vettensola, Director of Legal Affairs at Professionals of Business and Technology.

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