Fixed Term Contracts in Higher Education - are there still underlying dangers?

The University and College Union's (UCU) 'Stamp Out Casual Contracts' campaign and its November 2015 paper, 'Security Matters', show that this is still a priority area for challenge by the unions.

Background

In the dim and distant past of the 1990s, it was possible for staff on fixed term contracts of over two years to waive their rights to claim unfair dismissal and a redundancy payment on the expiry of the fixed term.

However, it was recognised that there was an inherent inequality in the bargaining powers of employer and employee. As a result the law was changed, so that the normal law of unfair dismissal applies to fixed term employees in the same way as to those on open ended contracts. Further protection for those engaged on fixed-term contracts was then introduced by the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.

In many sectors these changes prompted a move away from fixed term contracts, but this was not the case in the higher education sector. The latest statistics suggest that over a third of academics and over two thirds of research staff are employed on fixed term contracts. This heavy reliance on fixed term contracts is subject to ongoing scrutiny in the media, and the unions are regularly backing fixed term contract claims.

Fixed term and other types of atypical contracts allow higher education institutions the flexibility they need to respond to changes in student demand, staff absence, organisational change and, in particular, time limited research funding. Fixed term contracts also help manage employees' expectations. At VWV, we have come across situations where employees on open ended contracts who have been made redundant have argued it was unfair that they were not put on fixed term contracts linked to funding in the first place, rather than being 'misled' into thinking that their employment was secure.

What are the pitfalls?

• Fixed term employees have the right to be employed on no less favourable terms than comparable permanent members of staff, unless there is objective justification for such difference in treatment. This applies not only to pay but also other benefits, such as pension, holiday, sick pay entitlement and access to promotion opportunities. Last year in Ibraz v- University of Sheffield, the Employment Appeal Tribunal found that a detriment relating to access to benefits spanning a series of separate fixed term contracts could be a 'series of similar acts' for the purposes of a less favourable treatment claim.
   
• Fixed term employees have the right to be informed of any permanent vacancies. This is usually simply a case of ensuring they have access to details of job vacancies via an intranet or other means.
   
• After being employed for four years on two or more successive fixed term contracts, a fixed term employee has the right to a permanent contract unless there is objective justification for him/her remaining on a fixed-term contract. In Ball v University of Aberdeen, the Employment Tribunal made a declaration that a research fellow had permanent status following the successive use of fixed-term contracts by the university. The case attracted considerable publicity.
   
• For unfair dismissal purposes a failure to renew a fixed-term contract constitutes a dismissal. This means that if the employee has two years' continuous service there needs to be a fair reason for dismissal. This reason will usually be redundancy. A fair procedure also needs to be followed. It is common for universities to have abbreviated redundancy procedures for those on fixed term contracts, but failing to follow the same procedures that would be followed for permanent staff brings with it the risk of a claim for less favourable treatment and unfair dismissal.
   
• In April 2015, UCU was successful in the Supreme Court in a case against the University of Stirling, in which it was held that fixed term staff should have been included in the collective consultation process for redundancy. However, the law was amended in 2013 so that employees on fixed term contracts that expire at the end of the agreed term are now expressly excluded from the redundancy collective consultation obligations.

We can expect to see more fixed-term contract cases in the higher education sector and will keep you updated as and when they arise.

For more information or advice, please contact Jane Byford on 0121 227 3712.