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An important reminder about fixed term contracts coming to an end

26th January 2018

It is a common myth that if an employer decides not to renew a fixed term contract when it is coming to an end it need do nothing other than tell the employee so. Employers are reminded that more is required in the recent case of Royal Surrey County NHS Foundation Trust v Drzymala.

The employee was a locum consultant doctor employed on a fixed term contract. A permanent vacancy arose before her fixed term contract was due to expire. She was interviewed, along with another candidate, but not appointed. Subsequently, she was given notice that her fixed term contract would come to an end on the expiry date. She was given no right of appeal nor was there any enquiry about alternative employment for her within the NHS Trust.

An employment tribunal found that her dismissal was unfair and the NHS Trust appealed. The Employment Appeal Tribunal (EAT) held that the general law on unfair dismissal applies equally to dismissals which arise from non-renewal of a fixed-term contract. The question of fairness of a dismissal depends in the normal way on the facts of the case and the application of the general fairness test. This can include such steps as consulting with the employee, allowing them to attend meetings with a companion and considering alternative roles across the employer’s organisation.

Dismissals by non-renewal of a fixed-term contract are often potentially fair. But they are not a special case attracting different considerations from those which normally apply under the general legal fairness test. In this case, the employment tribunal was right to decide that the doctor had been unfairly treated when the NHS Trust failed to pursue a discussion about alternative roles and failed to provide the doctor with a right of appeal at the time of her dismissal. The finding of unfair dismissal was therefore upheld.

Many employers rely on fixed-term contracts for a  variety of reasons, including funding for a specific post or to meet spikes in demand for services. This case is a timely reminder that the employer must take steps to follow a fair procedure with the employee, even where there is a sound business reason for requiring to bring the fixed term contract to an end. A failure to do so could result in an expensive employment tribunal claim.

For further advice on the correct procedure to follow when bringing fixed-term contracts to an end, please contact Jacqueline McCluskey

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Morisons Solicitors Jacqueline McCluskey

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