Non-renewal of fixed term contract must be fair

Royal Surrey County NHS Foundation Trust v Drzymala (Employment Appeal Tribunal)

The EAT has confirmed that an employer’s compliance with the requirements of the Fixed Term Employees Regulations when not renewing a fixed term employee's contract does not create an automatic defence against an unfair dismissal claim.

A doctor was employed on a series of fixed term contracts. Her last contract was not renewed because her employer decided to make a permanent appointment to the role she had been performing. She interviewed for the position but was unsuccessful after a competitive recruitment process. Her employer mentioned an alternative role in a lowerranking post but did not discuss it further with her. The doctor was given three months' notice in writing of the end of her fixed term contract, without mention of a right of appeal or the possibility of alternative employment. She raised a grievance and requested an appeal against the termination of her employment. Her employer acknowledged that it should have offered a right of appeal against the non-renewal of her contract, but did not think that it would have changed the outcome.

The doctor brought a successful claim for unfair dismissal in the ET. Her employer appealed, arguing that informing her of vacancies as required by the Fixed Term Employees Regulations satisfied the requirements of fairness, or at least provided evidence in support of it having acted fairly.

The EAT dismissed the appeal and concluded that compliance with the Fixed Term Employee Regulations does not of itself create a defence to an unfair dismissal claim. Whether an employee is treated fairly is a question of fact. Usually, when an employer decides not to renew of fixed term contract it can rely on "some other substantial reason" (SOSR) as the potentially fair reason for dismissal. In these circumstances however, the Tribunal was entitled to find that the dismissal was unfair due to the employer’s failure to expand upon its initial discussion with the doctor regarding alternative roles, and not providing a right of appeal against the non-renewal of her contract.

Whilst there is no universal obligation to offer alternative employment for an employee on a fixed-term contract, the employer had chosen to engage in such discussions in this case, and therefore it was unfair that it later decided not to pursue that option with her.