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Fixed Term Employees and Unfair Dismissal

In the recent case of Royal Surrey County NHS Foundation Trust v Drzymala, the Employment Appeal Tribunal (“EAT”) considered whether an employer’s compliance with the Fixed Term Employees Regulations meant that it will have acted fairly when making a decision not to renew an employee’s fixed term contract.

Background

The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (“the Regulations”) protect fixed term workers from being treated less favourably than permanent employees. Under the Regulations, fixed term employees are entitled not to be treated less favourably than comparable permanent employees because of their fixed-term status, unless the employer is able to objectively justify the difference in treatment. A fixed-term employee has the right not to be treated less favourably than a comparable permanent employee both in relation to the terms of their contract and by being subjected to any other detriment by their employer.  

In this case, Drzymala was a locum consultant doctor who had been employed by Royal Surrey County NHS Foundation Trust (“the Trust”) on a series of fixed term contracts. Prior to her most recent contract expiring, a permanent vacancy arose for which she was interviewed and was unsuccessful. She was then given notice that her fixed term contract was not going to be extended. In the employer’s letter confirming her dismissal, the employer did not provide her with a right of appeal or any alternative employment. Drzymala lodged a grievance against the Trust who responded by allowing an appeal of the decision. The appeal panel decided that had the Trust allowed an earlier appeal, it would not have made any substantive difference and she would have been dismissed in any event.  

Drzymala brought a claim for unfair dismissal. The Employment Tribunal found that her dismissal had been unfair.

Decision

The Trust appealed to the EAT, arguing that as it had complied with the non-discrimination regime in the Regulations, the earlier Tribunal was wrong to conclude that Drzymala had been unfairly dismissed. The EAT rejected this argument, confirming that compliance with the Regulations was not in itself sufficient to ensure an employee had not been unfairly dismissed. The EAT confirmed that the general law on unfair dismissals still applies to dismissals which were as a result of the non-renewal of a fixed term contract, including the usual question of fairness that applies to “ordinary” dismissals. In this case, the Trust had failed to consider or discuss with Drzymala any potential alternative roles with had failed to provide her with a timely right of appeal to her dismissal. In the circumstances, the EAT therefore upheld the earlier decision that Drzymala had been unfairly dismissed.

Comment

Dismissals due to the non-renewal of a fixed-term contract are often potentially fair for “some other substantial reason”. However, employers should be mindful that when making a decision not to renew a fixed term employee’s contract, the decision should be fair in all the circumstances and employers should be able to evidence this. This case serves as a useful reminder that the dismissal of fixed-term employees, even at the end of their contract, is no different from any other dismissal and employers must have a substantially fair reason, and follow a fair procedure.

This bulletin is for general guidance purposes only and should not be used for any other purpose.

Brabners is a Limited Liability Partnership