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Unfair Dismissal of a Fixed Term Employee - Case Law Update

In Royal Surrey County NHS Foundation Trust v Drzymala, the Employment Appeal Tribunal (“EAT”), has highlighted issues for employers when they terminate the employment of employees on fixed term contracts (particularly when they have been employed for two years or more).

Facts

Dr Drzymala was employed directly by Royal Surrey County NHS Foundation Trust (“the Trust”) via a series of fixed-term contracts as a locum for a number of years. Dr Drzymala unsuccessfully applied for a permanent post. Another employee was appointed following a competitive process. Her final fixed-term contract was not renewed.

She claimed unfair dismissal (as well as age discrimination – however that claim was dismissed).

The Trust had mentioned other alternative roles, but only in passing. The Trust also complied with the non-discrimination provisions in the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations. The Trust did not offer a right of appeal against the decision not to renew her contract.

Decision

The EAT found that Dr Drzymala was unfairly dismissed.

They determined that the dismissal did not need to be discriminatory, or less favourable treatment on the grounds of fixed-term status, in order to be unfair. They determined that the non-renewal of a fixed-term contract should be considered in the same way as any other “dismissal” (a non-renewal of a fixed-term contract is a “dismissal” in law) in terms of “reasonableness” and the fairness of a process. Non-renewals of fixed-term contracts do not have different considerations from other dismissals.

In this case, where the Trust had not made adequate attempts to discuss alternative employment and had not offered a right of appeal – the dismissal was unfair.

That said – it is possible that a fair process may not have made any difference to the outcome (which tends to reduce compensation on what is known as a Polkey basis). That will be for the tribunal to determine in a remedy hearing.

It is also worth remembering that (in common with employees on permanent contracts) – fixed-term employees only obtain ordinary unfair dismissal rights at two years’ service. Employees engaged under a (continuous) series of fixed term contracts (or under permanent and then fixed term contracts) may obtain such service.

If you need any help with contracts or advise on grievances and dismissals please get in touch with one of the team on 01924 827869.

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