Fixed Term Contracts for Migrant Workers
Are there advantages to engaging migrant workers on fixed term employment contracts?
By its very nature, the sponsorship of migrant workers is for a fixed term. Typically, migrants sponsored under the Skilled Worker visa route will obtain a visa for three or five years. If the migrant then wants to continue to live and work in the UK after five years, they can apply for settled status, negating the need for sponsorship. However, where an employer is only interested in engaging the migrant worker for the duration of their visa, they may be concerned that an unlimited term employment contract, terminated by serving notice on the employee, will make it difficult for them to bring the employment relationship to an end on the expiry of the migrant’s visa.
Employees acquire the right to not be unfairly dismissed after two years of continuous service. This means that an employer must show that one of the five potentially fair reasons applies to the dismissal: capability, conduct, redundancy, statutory restriction/illegality, or some other substantial reason. If the employer cannot show that one of these reasons applied and that a fair dismissal process was followed, then the employee will have an unfair dismissal claim.
Employers might hope that, by putting their migrant workers on fixed term contracts, they can ensure that the employment relationship will come to an end automatically, meaning that they will not need to justify a dismissal as they would with an unlimited term contract. However, for the purposes of employment legislation, the expiry and non-renewal of a fixed term contract amounts to a “dismissal” and would therefore still be unfair if the employer could not justify it under one of the five potentially fair reasons! The mere use of a fixed term contract does not allow an employer to circumvent the law relating to unfair dismissal.
In fact, fixed term contracts might create unnecessary administrative obstacles for employers. Employers will need to remember to renew their employees’ fixed term contracts, or risk unintentionally dismissing them before the expiry of their visa. Employers will also need to remember to renew the fixed term contract if they decide to extend their sponsorship of the migrant worker, or if the migrant worker obtains settled status and wants to continue working for them.
Regardless of whether employers use unlimited or fixed term employment contracts for their migrant workers, they can rely on the potentially fair reason of “statutory restriction/illegality” for dismissing employees where their right to work in the UK has expired, as continued employment would breach immigration rules. The process followed for the dismissal must still be fair, and the employer would still need to give the employee their contractual notice. If employers want to avoid having to give employees their full notice for such a dismissal, they should expressly include a clause in the employment contract which allows them to terminate without notice where an employee ceases to have the right to work.
There is therefore little advantage to using fixed term employment contracts for migrant workers. We would recommend using unlimited term contracts, incorporating provisions to expressly account for situations where an employee’s visa expires.
If you require immigration advice or would like assistance with the drafting of your employment contracts for migrant workers, please get in touch at [email protected]
