Non-renewal of a fixed-term contract

The ending and non-renewal of a fixed-term contract is a dismissal (section 95(1)(b), ERA 96). An employee who has been employed on a fixed-term contract for at least two years can bring a claim of unfair dismissal.

Dismissing an employee by failing to renew their contract is potentially fair for “some other substantial reason” (see “Fair reasons for dismissal”, page 252) but the normal standards of fairness still apply. This includes the need to look for alternative posts and to provide a right of appeal against the termination of the contract (Royal Surrey County NHS Foundation Trust v Drzymala [2018] UKEAT 0063/17).

In addition, the employer has an obligation under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 to inform fixed-term employees of available vacancies for permanent jobs.

If a fixed-term contract is not renewed because of a reduced need for employees, the dismissal will be for redundancy (Pfaffinger v City of Liverpool Community College [1996] IRLR 508 (see Chapter 12).