Ending of fixed-term contracts 


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. 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).


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 is 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 be prejudiced and should try at least to negotiate access to redeployment opportunities before accepting the fixed-term role, as this case demonstrates:


Less favourable treatment of fixed-term employees in the context of redundancy will be indirect discrimination and will be unlawful if the employer cannot justify it (see Chapter 2: Fixed-term employees). For example, in Whiffen v Milham Ford Girls School [2001] IRLR 468, a school making redundancies decided to target 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 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. In the context of redundancy, these regulations require an employer to treat temporary employees “no less favourably” than equivalent permanent staff, including in relation to redundancy rights, which include contractual redundancy procedures, redeployment and redundancy pay. In particular, 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.