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Changing provisions of a fixed term contract when entering into a permanent contract: Terms must not be unfavourable

13 March 2012 #Employment


The recent ECJ decision of Martial Huet v Universite de Bretagne Occidentale has held that where a fixed term contract is converted into a permanent contract the terms and conditions do not need to be identical. However, the court has concluded that where the nature of the work remains unchanged, in order to protect the employee, the new terms must not be “unfavourable”.

In this case, Huet brought proceedings in France. He was employed for six consecutive years as a Researcher for the University under a number of fixed term contracts. Subsequently, the University offered him a permanent contract as a Research Officer. The role carried with it more or less the same duties but a lower salary. Huet therefore submitted a request that the University amend the contract so that the terms and conditions, in particular his salary, reflected the previous provisions under the fixed term contract. The University refused to do this so Huet brought an action against it requesting an amendment to the contract on the ground that French law implies that the main terms and conditions of a fixed term contract should be replicated in the event that a permanent contract is issued.

The ECJ held that employers must ensure that: “the conversion of fixed-term employment contracts into an employment contract of indefinite duration is not accompanied by material amendments to the clauses of the previous contract in a way that is, overall, unfavourable to the person concerned when the subject-matter of that person’s tasks and the nature of his functions remain unchanged.” It was left to the national authorities to determine whether the amendments to Huet’s contract were “material” and therefore void.

This decision will have limited impact in the UK because of legislation we have in place to protect fixed term employees who have been continuously employed for four years or more on a series of successive fixed-term contracts. In this situation, employees are automatically deemed to be permanent employees unless the continued use of a fixed term contract can be objectively justified. Therefore, terms and conditions are preserved.

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For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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