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Ending of fixed-term contracts
[ch 11: pages 401-402]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, 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).
Where an employee is brought in on a fixed-term contract to provide temporary cover for an absence (such as maternity, sickness or secondment), their dismissal on the return of the absent employee is not a redundancy dismissal and there will be no 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 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 in the context of redundancy may be unlawful indirect discrimination unless the employer can justify it (see Chapter 2: Fixed-term employees). For example, in Whiffen v Milham Ford Girls School [2001] IRLR 468, a school making redundancies targeted temporary employees first. The Court of Appeal ruled that this policy had a greater impact on female than male teachers and so was indirectly discriminatory. The case preceded the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the FTERs), which significantly improved the position of all fixed-term employees on redundancy.
The FTERs are explained in more detail in Chapter 2 on page 60. In the context of redundancy, the regulations require an employer to treat temporary employees “no less favourably” than equivalent permanent staff, including in relation to redundancy rights, such as contractual redundancy procedures, redeployment and redundancy pay. Under regulation 3(2)(c) FTER, a fixed-term employee has the right to the same opportunity to secure a permanent position of alternative employment as a comparable permanent employee at risk of redundancy.
The FTERs outlawed contract terms under which a fixed-term employee waives the right to a redundancy payment.