Some governments seek to improve job security and protect vulnerable workers by encouraging employers to recruit staff on permanent contracts. Measures used include only allowing fixed-term contracts in limited situations, restricting how many successive fixed-term contracts employers can offer and introducing financial disincentives for employing fixed-term staff. As a result, it’s harder for employers to recruit using fixed terms. In Mexico, for example, it’s more expensive to terminate a fixed-term contract before the expected end date than it is to end a permanent contract.

Employers can only use fixed-term contracts in Spain to cover temporary increases in demand or absent employees. Employees become permanent if they’re on fixed-term contracts for more than 18 months in any 24-month period.

The number of temporary contracts has dropped and permanent employment has increased, especially permanent seasonal contracts. However, we’ve seen a trend for employers to engage workers on permanent contracts and terminate those contracts at the end of probationary periods. That’s before any severance payment is due. You can expect to see court challenges to these tactics in 2024. The courts may assess, for example, whether employers must prove reasons for terminating a contract during or at the end of a probationary period.

Italy has adopted similar restrictions to deter fixed-term contracts lasting more than 12 months. Generally, employers can use fixed-term contracts of less than 12 months for any reason. They can only use fixed-term contracts of 12–24 months to replace absent employees, or for reasons allowed by a collective bargaining agreement. That said, few collective bargaining agreements include such reasons.

A transitional regime allowing employers to use fixed-term contracts for technical, organisational or productive reasons identified by the parties expires in April 2024.

Poland has a new law that forces employers to justify ending fixed-term contracts as they have to when ending indefinite employment contracts. This aims to dissuade employers from using fixed-term contracts. Not having to justify ending these contracts made them attractive.

Proposals in the Netherlands may make it harder to engage employees on fixed-term contracts. Employees can have three fixed-term contracts within three years. The limit resets after a gap of six months between contracts. The previous Dutch government suggested increasing the six-month gap to five years, to tackle the so-called revolving door where employers employ staff on a series of fixed-term contracts separated by short breaks. We don’t yet know if the new government will take this forward.

The German government is considering whether to restrict when employers can use fixed-term contracts. This is especially for contracts without an objective reason (fixed-term contracts lasting less than two years). Again, it’s not clear whether these proposals will go ahead.