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As you probably know, it's not easy to use a fixed-term contract repeatedly and renew it, since hiring a fixed-term contract is only done in specific cases. After being renewed twice, you may want to switch your employee to a permanent contract. Here, the rules are also well defined. What should you do as an employer?
📑 Cases for switching from a fixed-term contract to a permanent contract
There are four. If you do not recognize the situation of your company, your employee in these latter then please consult the terms imposed by the Labor Code.
👉 The tasks that your employee performed on a fixed-term contract are no longer occasional, your employee therefore has a full-time job
👉 The employee you were replacing is ultimately no longer your employee and you therefore wish to hire the other full-time instead
👉 You need additional labor to run your business normally
👉 You have already renewed two fixed-term contracts and you still need your employee
The transformation of a fixed-term contract into a permanent contract can therefore be desired (mutual agreement between the employer and the employee) or forced.
In the latter case, the fixed-term contract therefore ends and must make way for a permanent employment. In all cases, the permanent contract corresponds to the normal and general employment contract. It has no duration and ensures job stability for both the employer and the employee.
Rules in case of voluntary change
We have two possible situations:
- Your employee's fixed-term contract is ending, but you have agreed to continue an employment contract. In this case, the transition from a fixed-term contract to a permanent contract is automatic. Nothing has been planned before the end of the contract, and therefore the same employment conditions must be maintained: hours, position, salary, etc. In this case, there is nothing special to do. There is no need to resign the contract and write a new one. However, many employers prefer to do this to set out all the conditions of the job in writing.
- Your employee's fixed-term contract is still in effect, but you already want to change it to a permanent contract: this is called an early transition. In this case, it is often because the conditions are not met for your employee to keep this type of contract. Therefore, you must terminate the contract and replace it with a new permanent contract in which you will be free to renegotiate the position, salary, and hours...
Rules in the event of a forced change
This situation occurs when your employee realizes that the rules were not met to continue on a fixed-term contract (often less advantageous for them than the stability of a permanent contract). In this case, they can refer the matter to the labor court for a reclassification of the fixed-term contract into a permanent contract. Please note that you may be asked to pay severance pay at this time.
What severance pay should you pay?
If your employee's fixed-term contract is coming to an end and you hire them on a permanent contract, there is no severance pay to pay. Please note that this non-obligation to pay 10% of total gross pay only applies if and only if there is no break in time between the first and second contracts. There is also no paid vacation pay to be paid.
Another exception is when your employee's permanent contract follows several fixed-term contracts within your company. In this case, compensation is due for the various contracts preceding the fixed-term contract directly followed by hiring.
If the permanent contract follows several fixed-term contracts within the same company, compensation is due for the contract(s) prior to the fixed-term contract directly followed by hiring.
💡Our advice? If you know that you are already going to convert a fixed-term contract to a permanent contract for one of your employees, don't delay!
What are the rules for the trial period?
Do you have to base the new trial period of the permanent contract on that of the fixed-term contract? Should it be taken into account or is it a new one?
The new permanent contract arriving after a fixed-term contract will define its trial period according to the fixed-term contract. The latter must be determined according to that of the previous fixed-term contracts. In other words, the duration of the fixed-term contract is deducted from the trial period given in the permanent contract. Concretely, depending on the duration of the fixed-term contract in question, this can lead to a total elimination of the trial period, especially if the job is the same (in which case, this trial period no longer really makes sense). If you are transferring your employee to a new position, then you are entitled to offer a new full trial period. Your justification? The job requires new/different qualifications or skills.
What are the rules for seniority?
How should you organize bonuses, additional leave, or training rights? Do old fixed-term contracts have an impact on the new permanent contract?
The retention of seniority will depend on the type of transition from permanent to fixed-term.
- If the permanent contract follows the fixed-term contract, without any break in time, you are obliged as an employer to retain seniority on the new contract. Your employee therefore has the right to request bonuses or additional leave.
- If there is a gap between the permanent and fixed-term contracts, the compensation will depend on your company's collective bargaining agreement or the new employment contract.
