Employer was justified in renewing fixed-term contract beyond four years
The Employment Appeal Tribunal (EAT) has upheld the Tribunal's decision in a claim about an employer's refusal to grant a permanent employment contract to a fixed-term employee.
Legal protection for fixed-term workers
The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (Regulations) protect fixed-term workers from being treated less favourably than those on open-ended or permanent contracts. The Regulations also prevent abuse arising from the use of successive fixed-term contracts. The Regulations allow fixed-term employees to become permanent where:
- The worker is employed under a fixed-term contract that has previously been renewed (or was on a fixed-term contract before the start of the current contract)
- They have been continuously employed under fixed-term contracts for four years or more
- At the time of the most recent renewal, there was no objective justification for their continued fixed-term employment
The factual background
In Lobo v University College London Hospitals NHS Foundation Trust [2024] EAT 91, the claimant was employed as a locum breast surgeon through a series of fixed-term contracts. During her time as a locum, the claimant applied on several occasions for a substantive consultant breast surgeon post. Whilst the claimant had the right skills for the job, she was unsuccessful in her applications as on each occasion another candidate was preferred over her. The claimant considered that disputes between her and other consultants was an important reason for her failure to be appointed to a permanent role.
The claimant sought a declaration that her employment had become permanent under the Regulations, having been employed under fixed-term contracts for more than four years. The Trust opposed this, arguing that her role as a fixed-term locum was objectively justified.
Tribunal decision and EAT appeal
The Tribunal found that the continuation of the claimant's fixed-term contract was objectively justified. The locum role was substantively different to the permanent role. For instance, the locum role was a service delivery role, whereas the consultant undertook wider managerial work. Additionally, locums were not expected to carry out formal teaching or research, but consultants were. The recruitment process for the permanent role had been fair and, having been unsuccessful in her applications, the claimant had continued in her locum role in order to provide essential clinical cover during the hiring process.
The claimant appealed unsuccessfully to the EAT. The EAT agreed with the Tribunal's reasoning. Had the locum role been substantively the same as the permanent role, it might have been difficult for the Trust to justify the continued employment of the claimant on a fixed-term basis. The Tribunal had made detailed findings of fact on the substance of each of the roles, and no error of law was identified.
The EAT also agreed with the Tribunal's findings that it was legitimate for the respondent to want to provide a safe, efficient and fully functioning Breast Service during the recruitment process. Again, the Tribunal had made no error of law in its approach.
Learning points
This case is heavily fact-specific, and it may well be that in other sectors an employer would not be objectively justified in continuing with long-term fixed-term employment pending recruitment to a permanent post. This case nevertheless provides an interesting example of how the continued employment of a fixed-term worker can be objectively justified in some circumstances.
Employers should note that fixed-term employees accrue unfair dismissal rights in the normal way, ie by accruing two years' continuous service. This is the case regardless of whether an employee is employed under a fixed-term or permanent contract.