Workers who have been on successive fixed-term contracts for four years or more can now insist that they are given a permanent deal.
Employers will only be able to refuse if they can justify the use of another fixed term spell, but specialists at law firm Eversheds believe this could lead to disputes.
The new rule could impact on project jobs and those covering for people who are off sick or on maternity leave.
Damian Kelly, employment law partner at Eversheds in Birmingham, said: "If employers do not want to put a fixed termer on to a permanent contract, the motivation for this decision must take into account the needs of both the business and the worker.
"For instance, the fixed term contract may be renewed in order for a project to be completed. However, the definition of an 'objective justifi-cation' may be difficult to define in practice, leading to potential issues.
"But, employers need to remember that without this objective justification, the contract will be regarded as permanent and the worker will be able to apply to an employment tribunal for a declaration to that effect."
Since the introduction of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, such workers have to be handled in the same way as permanent colleagues and the benefits of using fixed-term contracts are now less significant.
Mr Kelly noted: "Employers should take the time to review their people in order to monitor whether any workers employed on fixed-term contracts are approaching the four year limit.
"Businesses should also ensure employees are provided with a statement of changes to terms and conditions within a month of them reaching the four year mark."