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Ending of fixed-term contracts
[ch 11: pages 328-329]As long as the reason why a fixed-term contract is not renewed is because the employer needs fewer employees to carry out work of a particular kind, this will be a redundancy situation (Pfaffinger v City of Liverpool Community College [1996] IRLR 508). Provided the fixed-term employee has at least two years’ service, they will qualify for a redundancy payment. There could be a redundancy situation, for example, where a fixed-term contract is not renewed because time-limited funding has run out, or because a project has been completed or an undergraduate course has ended (Association of University Teachers v University of Newcastle-upon-Tyne [1987] ICR 317).
The dismissal of a fixed-term employee brought in as temporary cover for a colleague absent due, for example, to sickness, maternity or secondment when their colleague returns will not normally be a redundancy dismissal triggering a right to a redundancy payment. This is because the reason for dismissal is the return of the original post-holder — not a reduction in the need for employees. Members who accept an internal transfer from a permanent role to a fixed-term position need to be aware that their position in any later redundancy exercise may well be prejudiced and should try to negotiate at least access to redeployment opportunities before accepting the fixed-term role, as this case demonstrates:
After three years working for the Health Board, Ms Lamont accepted an internal transfer to the new post of Junior Doctor Monitoring and Liaison Officer. It was a fixed-term contract for two years, filling in for the post-holder who was on a two-year secondment. Lamont was dismissed when the post-holder returned two years later. Her claim for a redundancy payment failed even though she had five years’ service, including three years on a permanent contract, because the reason for her dismissal was not redundancy. Instead it was the ending of the fixed-term contract upon the planned return of the original post-holder.
Greater Glasgow Health Board v Lamont [2012] UKEATS/0019/12/B1
Less favourable treatment of fixed-term employees will be indirect discrimination and will be unlawful if the employer cannot justify it (see page 160). In Whiffen v Milham Ford Girls School [2001] IRLR 468, a school that needed to make redundancies decided to sack its temporary employees first. The Court of Appeal ruled that the policy of dismissing fixed-term employees first had a greater impact on female than male teachers and so was indirectly discriminatory.
The rights of fixed-term or temporary employees improved with the introduction of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (FTERs), which are looked at on page 48. These regulations require an employer to treat temporary employees “no less favourably” than equivalent permanent staff, including in relation to redundancy rights. This includes contractual redundancy procedures, redeployment and redundancy pay.
The FTERs have outlawed contract terms under which a fixed-term employee waives the right to a redundancy payment.