I recently received an employment tribunal claim from someone we employed on a temporary contract. At the end of the contract, we did not renew his contract and he is claiming unfair dismissal saying that we are in breach of regulations specifically designed to protect employees on fixed-term contracts. Has he got a case? Ranjit Dhindsa, employment partner at Reed Smith reports.
The Regulations he refers to are The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations, designed to protect employees on fixed-term contracts from unfair treatment.
The expiry of a fixed-term contract is deemed to be dismissal. The expiry of a fixed term could be considered to be an unfair dismissal, if it is not for one of the specified fair reasons, or if a fair procedure has not been followed. Therefore, if he has 51 or more weeks’ service and his fixed term contract expired, you do risk an unfair dismissal claim.
If he has less than 51 weeks’ service, you may still risk a claim if he argues he has been dismissed for one of the specifically protected reasons (for example whistleblowing). In order to defeat an unfair dismissal claim at the end of a contract, you would have to show that dismissal was for a fair reason and that a fair procedure was followed.
When dismissing an employee, an employer should follow the minimum statutory dismissal procedure, which involves writing to them, holding a meeting with them, and an appeal if necessary. Although an employee with less than 51 weeks’ service cannot normally bring an unfair dismissal claim, it is always recommended to go through the minimum statutory procedure.
An employee cannot bring a free standing claim for the failure to undertake the statutory procedures. However, by going through the procedure, an employer may be able to negate claims for which there is no service requirement, for example discrimination claims.
Further, a failure to undertake the statutory procedures may lead to an uplift in compensation if the employee is successful in their claim. Compensation must be increased by 10% and may be increased by up to 50%. Compensation can be uplifted for discrimination and other claims where there is no service requirement. Where an employee does have 51 weeks’ service, a failure to undertake the statutory procedures will result in an automatically unfair dismissal.
The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations are designed to protect fixed-term employees from unfair treatment.
Employers should not treat fixed-term employees any less favourably than their permanent employees unless there is some objective justification. This applies both to the terms of their employment and to their treatment in the workplace.
In order to demonstrate that the deemed dismissal on the expiry of a contract is not related to their status as a fixed term employee, the employer will need to establish a proper business reason why their employment was not extended. The employer will need to establish that this reason was sufficient objective justification.
The Regulations also provide that an employer must tell fixed-term employees of any permanent vacancies which become available, either by advertising somewhere which the employees are likely to see, or by notifying them in some other way. The employer is obliged to let fixed-term employees know of all vacancies, not just those that would be suitable for them.
Finally, employers should not forget that, under the Regulations, once someone has been employed by them for more than four years and has had successive fixed-term contracts, they will be treated as a permanent employee, and so will have the same rights as any other permanent employee.
For further information please contact Ranjit at [email protected]
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