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The non-renewal of a fixed term contract (FTC) amounts to a dismissal in law. Therefore any employee who is engaged under an FTC who has the required qualifying period of two years’ service, benefits from the protection against unfair dismissal, and it is therefore not enough to simply rely on the fact that the FTC has come to an end.

In addition, the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (the Regulations) provide further protections for those engaged on an FTC by providing that they must not be treated less favourably than permanent members of staff, and the Regulations impose an obligation on employers to make employees on FTCs aware of any permanent vacancies that exist within the organisation.

A recent case has confirmed that compliance with the Regulations will not necessarily mean that the non-renewal of an FTC is a fair dismissal.

In the case of Royal Surrey County NHS Foundation Trust v Ms M Drzymala, a doctor, who had been employed as a locum consultant on a series of FTCs with the Trust, did not have her contract renewed. Before her contract expired she applied and interviewed for a permanent position but was not successful. When she was informed of this, the Trust suggested to her that other suitable roles might be available but those potential opportunities were not considered further.

The doctor brought a claim for unfair dismissal. The Tribunal found that compliance with the Regulations is not enough to mean that the non-renewal of the FTC was a fair dismissal and it held that an employer must still comply with the over-arching requirement for fairness under the Employment Rights Act 1996 (the Act). Having initiated the conversation about redeployment, the subsequent lack of discussion about those alternative roles led the Employment Tribunal (ET) to find the dismissal unfair. The Trust appealed.

The Employment Appeals Tribunal (EAT) found that whilst it is not compulsory for an employer to consider alternative employment upon expiry of every FTC, fairness will often dictate that other roles are at least considered and made known to the individual. The EAT agreed with the ET that having backed away from discussions about alternative roles, the dismissal was unfair.

While all cases of unfair dismissal are fact specific, the above case makes it clear that employers who employ people on FTCs are subject to two separate sets of obligations under the Regulations and the Act. Further, any discussion about alternative, permanent roles are likely to play an important role in determining whether a dismissal was fair.

If you have any questions or concerns regarding the obligations of an employer when dismissing employees on fixed term or permanent contracts, please contact Linky Trott – Head of Employment or any member of the Edwin Coe Employment Team.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.

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