Ending fixed-term contracts

The ending and non-renewal of a fixed-term contract will be a redundancy situation for the purpose of a claim for unfair dismissal for redundancy, as long as the contract is ending because the employer’s need for employees to carry out work of a particular kind has ceased or diminished (Pfaffinger v City of Liverpool Community College [1996] IRLR 508). This is the case even if the contract was for a specific purpose or carries only time-limited funding. Any fixed-term employee with at least two years’ continuous service whose employment ends because the need for employees to do that work has ceased or diminished is entitled to a redundancy payment.

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). 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.

These rights are not affected by the government’s decision to limit the duty to consult collectively on the ending of fixed-term contracts (see page 327).

The FTERs have outlawed contract terms under which a fixed-term employee waives the right to a redundancy payment.