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Ending of fixed-term contracts
[ch 11: pages 371-372]As long as the reason why a fixed-term contract is not renewed is because the employer needs fewer employees to do work of a particular kind, this will be a redundancy situation (Pfaffinger v City of Liverpool Community College [1996] IRLR 508). If the fixed-term employee has at least two years’ service, they will qualify for a redundancy payment. For example, there could be a redundancy situation where a fixed-term contract is not renewed because funding for the post has run out, 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).
An employee whose fixed-term contract was intended to provide temporary cover for an absent employee (for example during maternity leave, sickness or secondment) will not be dismissed for redundancy where the reason for dismissal is the return of the original post holder. This is because the reason for dismissal is not a reduction in the need for employees (see the statutory test on page 365). 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 be prejudiced, and should try at least to negotiate access to redeployment opportunities before accepting the fixed-term role, as this case demonstrates:
After three years spent 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 when selecting for redundancy may amouint to unlawful indirect discrimination, unless the employer can justify it. See page 387: Selection criteria.
Fixed-term employees also have specific statutory protections in the context of redundancy, under the Fixed Term Employees (Less Favourable Treatment) Regulations 2002 (FTERs). See Chapter 2, page 52.
The FTERs outlawed contract terms under which a fixed-term employee waives the right to a redundancy payment.