Unfair fixed-term

The Employment Appeal Tribunal (EAT) has held in Royal Surrey County NHS Foundation Trust v Drzymala that it is not automatically fair to dismiss an employee when their fixed-term contract expires, just because the employer complied with the Fixed-Term Employees Regulations.

Basic facts

Dr Drzymala, a locum consultant in the Oncology department, was employed by the Trust in November 2011 on a series of fixed-term contracts. She was interested in obtaining a permanent position and in April or May 2014, she applied for a permanent post as Acute Oncology breast cancer doctor, but was unsuccessful. She was upset by not being appointed to the permanent post and although the Trust indicated that there might be other permanent posts in the future as a specialty doctor, she was too upset to discuss it at the time. In any case a post as specialty doctor was at a lower grade than her locum consultant post.

Dr Drzymala then went on leave in June which was followed by a period of sickness absence. In the same month, she received notice that her fixed-term contract would not be renewed when it expired on 30 September 2014. The letter made no mention of her right of appeal nor of any alternative employment.

She lodged a grievance complaining about the appointment process which also included a request to appeal against the decision to terminate her contract. A grievance hearing was held in September but was not concluded before her dismissal on 30 September and on 14 November the Trust confirmed she had a right of appeal. In the outcome of the appeal letter the Trust recognised that the June letter should have included an offer of an appeal but that it “would have made no difference to the outcome”.

Dr Drzymala lodged a claim for unfair dismissal, among other things.

Relevant law

When a fixed-term contract is not renewed this amounts to a dismissal under section 95(1)(b) of the Employment Rights Act 1996 (ERA) as amended by the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (FTE).

Under the regulations, employers must not treat staff on fixed-term contracts any less favourably than staff not on fixed-term contracts. That includes the right not to be treated less favourably when being considered for a permanent post. As such, employees must be informed by their employer of available vacancies for permanent jobs.

Tribunal decision

Although the tribunal found that the reason for dismissal was a potentially fair reason (the expiry of a fixed-term contract), it held that it was unfair under section 98(4) ERA for two main reasons.

First, the Trust had made no mention of the possibility of Dr Drzymala working as a specialty doctor apart from straight after the interview. Instead it had “deliberately avoided” the topic even though she could have been offered a specialty doctor role at the time she was serving her notice. Secondly, the Trust failed to inform her of her right to appeal the decision to dismiss her. By the time she was told about it, her employment had already come to an end.

The Trust appealed, arguing that the tribunal had not applied the band of reasonable responses test to the dismissal, it had substituted its own view as to the reasonableness of the dismissal and had failed to consider the FTE regulations.

EAT decision

The EAT disagreed, holding that the fact that the Trust had complied with the FTE regulations was not a defence to an unfair dismissal claim where the dismissal arose because of the non-renewal of a fixed-term contract.

Dismissal because of non-renewal of a fixed-term contract may be for “some other substantial reason” and whether an employer acts reasonably in dismissing on that ground will depend on the facts of the case. In this case the tribunal was entitled to find that having initiated discussions with Dr Drzymala after the interview about the possibility of alternative employment, it then acted unfairly by not discussing it when it decided not to renew her contract of employment shortly after.