Following a similar case involving Lancaster University in 2010, it had been widely assumed in the Higher Education sector that the failure to renew a fixed-term contract of more than three months’ duration would trigger the requirement to consult collectively over redundancies, provided the conditions with regard to the timing, place and number of such dismissals were met. However, the Employment Appeal Tribunal has defied expectations with its recent decision in a claim brought by the University and College Union against the University of Stirling.
The EAT was dealing with an appeal by the University against a finding of the employment tribunal that four employees on fixed term contracts of varying types were dismissed as redundant. The tribunal had decided that since they were dismissed primarily because their fixed-term contacts had come to an end, they were dismissed for a reason which was “not related to the individual concerned”. This in turn meant that their dismissal fell within the extended definition of redundancy for the purposes of statutory collective consultation obligations. It reasoned that only decisions based on an employee’s capability or conduct would fall outside this wide definition of redundancy. The EAT disagreed. It said that in many if not most cases the primary reason for the non-renewal and consequent dismissal of fixed-term employees would be the fact that they had signed up to work on a project of a limited duration which had come to an end. The EAT concluded that this was a reason relating to the individual concerned and was therefore outside the scope of the definition of redundancy for collective consultation purposes.
So what are the implications? Subject to any further appeal by UCU, this decision will create uncertainty about the correct treatment of fixed-term employees where their contracts are not renewed. This will be of some concern in the HE sector given its wide use of such contracts. The decision does provide scope for universities to argue in many cases that dismissals following the non-renewal of fixed-term contracts will not be within the ambit of the collective redundancy legislation. However, we recommend that universities critically analyse the reason and circumstances for the proposed non-renewal of any particular fixed-term contract. Compare the following two examples of the expiry and non-renewal of a fixed-term contract under which maternity leave cover is being provided and the non-renewal of a fixed-term academic researcher’s contract set against a background of cost-cutting reorganisation and redundancies within the university. With the first example, the University of Stirling case certainly makes it easier to argue that the non-renewal of the contract will not fall within the collective consultation requirements. Conversely, in relation to the second example, the fact that the non-renewal is set against a background of institutional reduction in staff means that it will remain difficult to substantiate that collective consultation requirements will not apply.