FIXED TERM CONTRACTS
DISMISSING FIXED TERM EMPLOYEES
Our experience has highlighted the fact that Boards and schools sometimes believe
that employing an individual on a fixed term contract will provide greater freedom
over employment terms and termination. However, this often proves to be a
misconception. In fact, such employees are afforded extensive protection in their
own right by the Fixed Term Employees (Prevention of Less Favourable
Treatment) Regulations 2002. These regulations introduced the concept of parity
of treatment between fixed term employees and comparable permanent employees
ensuring that they cannot be excluded from the contractual benefits and facilities
offered to permanent staff. If they are, they can seek legislative protection and
complain of less favourable treatment. Similarly, such employees are also protected
from unfair dismissal. The importance of following a fair procedure and in particular
the statutory dismissal procedures in respect of non-renewal of a fixed-term contract
cannot be overlooked.
Under Regulation 8 of the 2002 Regulations, employees who have been
continuously employed for 4 years or more on a series of successive terms and
conditions are automatically deemed to be permanent employees, unless the use of
a fixed term contract can be “objectively justified”. It is not often appreciated that
Regulation 8 only applies where there has been “successive” fixed-term contracts. If
an employee was employed on a single contract for 4 years without it being renewed
there would be no obligation to convert it although such a scenario appears to be
rare in an education setting.
Ask yourself – is there a good reason for treating a particular fixed term employee
less favourably, bearing in mind the needs and rights of the employee balanced
against the school’s business objectives? It is a question of fact and degree which
will be examined on a case by case basis. To establish objective justification you
must show that the treatment in question:1. is to achieve a legitimate aim;
2. is necessary to achieve that aim; and
3. is an appropriate way to achieve that aim.
It is essential that an employer has got the documentation right at the start of
engagement, setting out the term of cover required and on what basis, e.g. maternity
cover or ill health absence etc.
See in particular Article 138 of the Employment Rights (Northern Ireland) Order
1996, which deals with replacement employees and identifies circumstances in
which termination by an employer will automatically fall within the potentially fair
reason of ‘some other substantial reason’, namely:

On engaging the employee, the employer informs him in writing that his
employment will be terminated on the resumption of work by another
employee who is, or will be, absent wholly or partly because of
pregnancy, childbirth or adoption leave, or additional paternity leave

and the employer dismisses him in order to make it possible to give
work to the other employee. The information given to the employee
about the nature of the employment must be clear and unequivocal and
the employment must in fact be terminated to facilitate the return to
work of the other employee.
On engaging the employee, the employer informs him in writing that his
employment will terminate at the end of the suspension of another
employee (suspension on medical grounds or maternity grounds) and
the employer dismisses him in order to allow the resumption of work by
the other employee.
This does not mean that the termination will necessarily be found to be fair - merely
that there is a potentially fair reason. The employer must still go through a fair
procedure in order for the dismissal to be fair (for example, the employer should
consider the availability of alternative vacancies).
If an employer has no need to renew the fixed term contract and its termination is
objectively justified, this will amount to dismissal. For a dismissal to be potentially
fair, it must satisfy Article 130 of the Employment Rights (Northern Ireland) Order
1996; a dismissal relating to capability, conduct, redundancy, breach of statutory
enactment or ‘some other substantial reason’ (sometimes referred to as SOSR). An
employee reaching the end of a fixed term contract has the same dismissal rights as
a permanent employee who is given notice of termination. You must follow the
statutory dismissal procedures and relevant Board policy for dismissal:1. Arrange a meeting and advise the employee of their right to be accompanied.
2. Notification in writing of the meeting and of the outcome of the meeting and
decision to dismiss.
3. Notify the employee of the right of appeal.
Be alert to the reason for dismissal The reason may not automatically be
“redundancy”. For example, where a fixed term contract is used to cover the
absence of a permanent employee, and the permanent employee returns to the
same position, the expiry of the fixed term contract will not be regarded as a
redundancy. The statutory definition of redundancy would not be made out in a
situation where both before and after the dismissal, there was a requirement for one
employee to carry out the particular work. As seen above, an employer should
potentially be able to rely on “some other substantial reason” as a potentially fair
reason when the fixed term employee is replacing an employee who is absent on
pregnancy/family related leave or due to suspension on medical or maternity
grounds and this latter employee is returning to work (see Article 138 of the
Employment Rights (NI) Order 1996).
However, in the case of genuine redundancy, a fixed term employee will be entitled
to receive a redundancy payment if they have qualifying service. If redundancy is
relied upon, remember your obligation to seek alternative employment.
Beware You cannot automatically select someone on a fixed term contract for
redundancy simply on account of their fixed term status, unless selection can be
objectively justified. Do not assume that the fixed term employees are first on your
list!
At the outset of the fixed term contract consider the inclusion of a contractual
provision for termination by notice. A fixed term contract with no notice provision
cannot be terminated until the end of the term!
Also, beware the pit falls of an automatic unfair dismissal of a fixed term employee
as outlined in Regulation 6 of the Fixed Term Employees Regulations. Where
dismissal is automatically unfair, there is no minimum period of qualifying service.
Fixed term employees who believe that they are being treated less favourably than
permanent comparable employees on the grounds of their fixed term status may also
bring claims to the Industrial Tribunal.
Survival tips when permanency is not objectively justified
1. At the outset of the fixed term contract, be very specific as to the reason for the
fixed term contract, for example, to cover a maternity leave or sick leave
absence.
2. Consider inclusion of a notice provision.
3. Ensure systems are in place so that you are aware of the dates when fixed term
contracts are due to expire (noting any notice obligations).
4. Discuss expiry informally well in advance of the expiry date in order to manage
expectations and to agree a date/time for a meeting (before the expiry of the
contract).
5. Send a letter specifying the date that the fixed term contract is due to expire and
arranging a meeting to discuss expiry. Inform employees of their right to be
accompanied. Set out the background of the fixed term contract and its expiry
together with the grounds for objective justification.
6. Establish one of the five potentially fair reasons for dismissal (i.e. capability,
conduct, redundancy, breach of statutory enactment or ‘some other substantial
reason’).
7. If that reason is redundancy, examine redeployment opportunities.
8. Fixed term employees have the right to be informed of any permanent vacancies
in the establishment at which they work. Ensure vacancies are displayed
centrally or appear in newsletters sent to all staff. NB this applies to all of the
available vacancies and not just those that you deem suitable.
9. Ensure compliance with all three stages of the statutory dismissal procedures.