If businesses are not aware of the rights of temporary workers, Christmas profits could be eroded by costly employment disputes warns law firm Eversheds.
Many businesses in the food sector will be preparing for the Christmas season by employing temporary or seasonal staff.
Eversheds believes that businesses must be careful how they behave over this busy period.
The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 introduced the concept of parity of treatment between fixed-term employees and comparable permanent employees.
For businesses in the food sector employing staff on a fixed-term basis over Christmas, this could mean potential claims if a fixed-term employee feels they have been treated 'less favourably' than a permanent member of staff.
If there is less favourable treatment, the employer must be able to objectively justify it in order to avoid successful employment tribunal claims.
"Potential problems could arise if, for example, a fixed-term employee is excluded from a Christmas bonus scheme available for permanent staff," said Helen Rice-Birchall, employment law expert at Eversheds.
"An employer can only treat fixed-term employees less favourably if it can justify the treatment, for example if it can show that the cost of offering a particular benefit is disproportionate to the benefit the employee would receive."
Rice-Birchall said that such justification might be easier in the case of more costly benefits - for example, if a permanent employee had a company car and it would not be viable to offer a comparable employee on a short fixed-term contract the same benefit.
"Also, although employees with less than one year of continuous employment do not usually have the right to claim unfair dismissal, businesses should be careful if they dismiss a member of staff taken on for the festive season," she said.
There are also exceptions to the 'one year' rule which mean that, in certain circumstances, for example if an employee is dismissed for trade union membership or participation, an employee can claim unfair dismissal without having worked for the employer for a year. Another such reason is that the dismissal is that the employee has brought or intends to bring proceedings against the employer under the Regulations.
"Employees with less than one year's service may also have other grounds for bringing a claim which do not require a minimum period of service, for example, unlawful discrimination, unlawful deduction of wages or breach of contract. Businesses in the food sector should be fully aware of these rights when employing Christmas staff and should ensure that proper procedures for termination are followed."
The potential for claims under the regulations has led businesses in the food sector to consider alternative contracts for seasonal staff. One option is to employ staff on an open-ended contract, as long as employees are given a clear indication at the outset when their employment is likely to end.
This should largely avoid issues of comparison with permanent employees. A further option is to use agency staff, who are excluded from the reach of the regulations.
"Agency workers are unlikely to be 'employees' of the business and therefore will not be entitled to the same raft of employment rights as permanent workers," said Helen Rice-Birchall.
"Businesses in the food sector should, however, be aware that agency workers can still make a claim under discrimination legislation, for example if a worker is dismissed because of pregnancy.
"Many businesses in the food sector have to take on extra staff at Christmas in order to cope with increased activity. It is advisable to ensure that contracts and the termination procedures adopted for these staff are reviewed thoroughly to avoid potential claims, and to ensure everyone has a happy Christmas."