The ending of a fixed-term contract - some information

The ending or expiry of a fixed term contract is regarded as a dismissal in law.

For such a dismissal to be fair it must relate to one of the following reasons:

A member of staff must have completed at least 24 months with the same employer (but not necessarily in the same post or department) to be able to claim for unfair dismissal in an employment tribunal.


Redundancy

Where a member of fixed-term staff is dismissed because the requirements for employees to carry out work of a particular kind have ceased or diminished then the dismissal will be for reason of redundancy. In most cases, the ending of a fixed-term contract will be a redundancy.

If a redundancy is contemplated the employer must inform the employee individually with a view to agreeing, wherever possible, an alternative to redundancy.

If the employer proposes to make 20 or more employees redundant within a 90 day period then they are under a legal obligation to consult with the recognise trade union. However, recent changes to legislation, means that where the redundancies relate to the ending of fixed-term contracts at the end of their term, the requirement to consult UCU no longer applies. Individual consultation requirements are unaffected. However, UCU branches should be seeking local procedural agreements that do provide for such collective consultation in all potential redundancy situations.

In any case, any redundancy process that applies to fixed-term staff should not be less favourable than that afforded to permanent staff. If fixed-term staff are treated less favourably than permanent staff in this regard the employer is likely to be in breach of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 unless in each case less favourable treatment can be objectively justified.

In cases of potential redundancies the employer should also be meeting with the affected members of staff to talk about the situation and discuss ways to avoid any dismissal. In potential redundancy situations employers are also obliged to offer suitable alternative work if it is available and universities should be ensuring that all redeployment opportunities are considered and that training for a new post is provided where necessary.

Selection for redundancy must be fair and any procedure for selection must be reasonably applied. Selection for redundancy based purely on the fixed-term nature of an employee's contract is likely to be a breach of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.

Whilst under notice of redundancy, employees, including fixed-term staff, have the right to reasonable paid time off to look for alternative work provided that they have at least 2 years' service with the employer (at the intended date of dismissal).

Where suitable alternative employment is not offered by the employer, employees with more than 2 years' service are entitled to redundancy. Redundancy payments to fixed-term staff should be paid on the same basis as that paid to permanent staff unless different treatment can be objectively justified. It would not be objective justification to pay fixed-term staff less on redundancy than permanent staff purely because they are on fixed-term contracts.

The legal advice above is without prejudice to the UCU policy of opposing compulsory redundancies.

Higher education

In higher education the Joint Negotiating Committee for Higher Education Staff (JNCHES) guidance on fixed-term and causal employment states that the procedure for terminating a fixed-term contract should, wherever possible, include the following components:

  • up to four months before expiry of the contract, all the alternative options should be considered e.g. renewal, redeployment etc.
  • up to three months before the expiry date, consultation should take place with the postholder on the prospects for alternative options, taking account of the postholder's aspirations
  • the postholder should be give information about other positions in the institution
  • where the expiry of the contract is a redundancy, consultation should take place with the recognised union(s) in accordance with statutory requirements
  • further consultation should take place with the recognised union(s) and the postholder as required.

Higher education LAs/branches should ensure that these steps are included in local procedures.

Fixed-term academic staff (and possibly academic-related staff) in chartered institutions may also be covered by the university's model employment statute and subject to its provisions in relation to redundancy.

Capability or qualification

The dismissal of a fixed-term member of staff on the grounds of performance - before or at the end of the contract - must be dealt with in the same way as for permanent staff ie the university's capability procedure should be followed in all cases. If fixed-term staff are treated less favourably than permanent staff in this regard the employer is likely to be in breach of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.

In some universities (in chartered institutions) fixed-term staff may be covered by the university's capability procedure set out in the model employment statute.

If the employer is considering a dismissal for reason of capability they must follow a fair procedure which we would expect to provide adequate opportunity for the member of staff to be supported in improving their performance to an acceptable level.

Conduct

Fixed-term staff should be subject to the same conduct/disciplinary procedures as their permanent colleagues. If fixed-term staff are treated less favourably than permanent staff in this regard the employer is likely to be in breach of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. In some universities (in chartered institutions) fixed-term staff may be covered by the university's disciplinary procedure set out in the model employment statute.

If the employer is considering a dismissal for reason of conduct they must follow a fair procedure which we would expect to provide for dismissal only in cases of repeated misconduct or a single act of gross misconduct.

Automatically unfair dismissal

Dismissal relating to, inter alia, any of the following is automatically unfair:

  • pregnancy and parental rights
  • trade union membership
  • enforcing a statutory right
  • health and safety reasons.

So for an example, the non-renewal of a fixed-term contract on the grounds that the employee is pregnant would be an automatically unfair dismissal (as well as constituting sex discrimination).

Last updated: 21 November 2017