The recent case of Royal Surrey County NHS Foundation Trust v. Drzymala highlights how important it is to handle the non-renewal of a fixed-term contract properly.

A locum doctor was on a series of fixed-term contracts and had accrued more than two years of service (the magic number of years that enable employees to bring ordinary unfair dismissal claims). Before the locum’s current fixed-term contract expired a permanent role became available, which, after a competitive process, she did not get. The Trust subsequently did not extend her fixed-term contract; it also failed to mention her right of appeal.

The Employment Tribunal (ET) found that her dismissal had been unfair. This was subsequently affirmed by the Employment Appeal Tribunal (EAT). The EAT rejected the Trust’s appeal rationale that because it had complied with the non-discrimination regime as applicable to fixed term employees (the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002) the dismissal was fair. Both tribunals emphasised that the fairness of a dismissal depends, as it always does, on the facts and on the fairness test as set out in the Employment Rights Act 1996 – there must be a fair reason for the dismissal.

Whilst most non-renewals of fixed-term contracts will fall under the “some other substantial reason” category, as being a potentially fair reason for dismissal, this is not automatically the case. Therefore employers should be careful, as with any dismissal, to ensure that a fair process is followed and that there is a fair reason for the dismissal. The tribunals were particularly critical of the Trust’s failure to discuss alternative roles within the business with the locum.