We are a small organisation and have had to replace a key member of staff when she went off on maternity leave. She assured us she was going to be off for a year so we brought in a replacement on a one year fixed-term contract. Well now our new mother has informed us she intends to return early. In fact she will only have been away for three months when she comes back. Unfortunately her replacement is on a 1 year fixed-term contract. I take it we can just terminate this contract because our member of staff is coming back early? We certainly can’t afford to keep on two people doing the same job.
It depends on whether or not the fixed-term contract contains provision for early termination prior to the one year finishing. If the fixed-term contract does contain provision for early termination (i.e. the right for the employer to terminate the employment either at any time during the fixed term, or on a particular event such as the return of the individual on maternity leave), then it is perfectly legal as long as you comply with the notice provisions. You will find example template contracts on our website here.
Unfortunately if you have not made contractual provision for early termination, then early termination is effectively breach of contract and you risk the individual suing for damages which would amount to the equivalent of the unexpired portion of the fixed-term contract. In this case 9 months salary.
(Article reviewed March 2018)