Fixed-term contracts (FTCs) are a common feature of the modern workplace. In some cases, employers like to ‘test the water’ by offering employment for a finite term to determine whether the employee is suitable. In other cases, a FTC can be used to cover a period of maternity leave or for the duration of a project.
What is not always understood however is that fixed-term employees enjoy a range of protections, including the right not to be treated less favourably because of their fixed-term status. Employers also may not realise that the ending of a FTC is a dismissal in law, and if the employee in question has two or more years’ service, they have the same right not to be unfairly dismissed as a ‘permanent’ employee.
In practice, this means that even on the expiry of the FTC after two years, some form of pre-termination process may be required in order to effect a fair dismissal, depending on the reason for the non-renewal of the contract. Part of that process may be a discussion with the employee on whether there are alternatives to dismissal.
Facts of the case
Ms Drzymala was employed by the NHS Trust as a locum consultant from November 2011, working under a series of six-month FTCs. Around May 2014, Ms Drzymala applied for an ongoing post with the Trust but was not offered the role.
When she and the Trust discussed the outcome of the recruitment process, the Trust raised the possibility of her undertaking the post of ‘speciality doctor’. That role was not at the same level of the hierarchy as a consultant post, but it would have offered Ms Drzymala an ongoing contract as opposed to a FTC.
The possibility of the speciality doctor post was not raised again by the Trust, and indeed when hearing the case the Employment Tribunal (ET) made a finding that the Trust purposely did not discuss it again with Ms Drzymala.
In September 2014 Ms Drzymala was informed that her FTC was not being renewed. In the letter outlining that decision, no reference was made to potential alternative employment, such as the speciality doctor post. In addition, the letter did not state that she could appeal against the decision to dismiss her.
The ET and EAT’s decisions
Ms Drzymala claimed unfair dismissal and the ET found in her favour. The ET’s decision was partly based on the fact that the Trust raised the possibility of alternative employment for Ms Drzymala but then subsequently avoided the subject. In addition, the ET stated that not offering an appeal until after Ms Drzymala’s employment had ended rendered the appeal process pointless. Taking those points together, the ET found that the dismissal was unfair.
The Trust appealed, but the Employment Appeal Tribunal (EAT) dismissed the appeal. In doing so, it pointed out that, while there is no absolute requirement to discuss potential other roles when a FTC is ending, raising the possibility of another role and then avoiding the issue later was enough to make the dismissal unfair.
What does this mean?
Rather than being a shift in the law, this case is more of a reminder to employers that employees on FTCs with more than two years’ service largely enjoy the same protections as other employees, most notably in relation to unfair dismissal.
A FTC may end for a number of reasons, such as the termination of a project or if there is no longer a need for the employee to carry out the work in question. However, while those may be perfectly sound reasons for terminating employment, employers must still ensure that the process is as fair as the substantive reason.
In most cases, the process should involve some form of consideration as to whether there are other roles available to the employee. As such, the EAT’s statement that such a consideration is not technically a requirement should be treated carefully.
Of course, if there are no other vacancies available, the employee can be told that, and the employer will not generally have to create a post out of thin air to keep the employee in a job. However, if the possibility of a role is floated in earlier conversations, it would be wise to keep those conversations going as the FTC end date approaches, even if just to state that there is no longer the possibility of such a post for whatever reason.
As found by the Trust in this case, avoiding previously raised possibilities will call into question the fairness of a dismissal.
If you have any questions on any of the issues raised in the above article, or would like to discuss any issue related to fixed-term contracts, please contact Seanpaul McCahill.