Irwin Mitchell | IM Educate Briefing | Myth: A teacher or lecturer engaged on a fixed-term contract cannot claim unfair dismissal if their contract is not renewed on expiry

Reality:

This is a common misconception. If an educational establishment decides, for whatever reason, not to renew the fixed-term contract of a teacher or lecturer (or that of any other member of staff) when it ends, it will amount to a dismissal. If the teacher / lecturer is an employee (rather than a worker) and has at least 2 years’ service they may be able to claim a statutory redundancy payment and bring a claim for unfair dismissal.

However, deciding not to offer a teacher / lecturer a further contract does not necessarily mean that the dismissal will be unfair.

The educational establishment must be able to identify and rely on one of the five potentially fair reasons for dismissal (conduct, capability, redundancy, illegality or Some Other Substantial Reason (SOSR)) and, if it clears this hurdle, be able to demonstrate that it acted reasonably in all the circumstances.

In many cases, an educational establishment will be able to rely on a SOSR defence where the reason the teacher / lecturer was dismissed was that their fixed-term contract ended. But what does the requirement to act reasonably require in these circumstances? Do you have to give notice to the employee? Do you have to consider alternatives to dismissal and do you have to meet with them to explain the reasons and offer them the right of appeal?

The steps you take will depend on the circumstances. However, the safest approach is to give the employee reasonable notice (either the amount set out in their contract, or if none is provided, statutory notice) and meet with them to explain why you will not be renewing their contract, and to give them the opportunity to appeal. You do not necessarily have to consider alternatives to dismissal or have to look for alternative work for the employee unless you are making them redundant. However, under the non-discrimination regime set out in The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations, you should inform any employee on a fixed-term contract of available permanent vacancies in your educational establishment that might be of interest to them.

A recent case ‘Royal Surrey County NHS Foundation Trust v Drzymala’ found that just because a fixed-term employee has been notified of other job vacancies it does not mean that their subsequent dismissal will be fair. The Employment Appeal Tribunal (EAT) made it clear that dismissals by non-renewal of a fixed-term contract are not “special cases” attracting different considerations from those that apply to ordinary unfair dismissal claims. In other words, an employer must still demonstrate that it has acted reasonably in treating the non-renewal as sufficient reason for dismissal and will usually have to show that they engaged in some degree of discussion or consultation with the employee.

You may need to discuss alternatives to dismissal as a matter of fairness where these are, or may be, available. If you do this, you must follow through with the discussions and if they don’t result in the employee being offered another contract, give them the right to appeal. In the case mentioned above, Ms Drzymala was found to have been unfairly dismissed when her fixed-term contract ended because the hospital, having taken the decision to discuss alternative roles, “changed direction and retreated from the dialogue it had itself initiated”.

If the reason you do not wish to renew the contract is due to redundancy, you must treat the fixed-term teacher / lecturer in exactly the same way as you would any other member of staff you put at risk.

If the reason you don’t want to renew the contract is because of the teacher / lecturer’s age, sex, disability or any other protected reason, they will be able to bring a discrimination claim against you.

Although we have concentrated on the expiry of fixed-term contracts, you should follow this advice if you are dealing with other limited term contracts, such as a contract that ends once a specific task has been completed.

It is also worth mentioning that if you do renew the contract, it does not have to be on exactly the same terms and conditions as the teacher / lecturer enjoyed previously. Generally, the contract will be treated as having been renewed (and there will be no dismissal) unless the changes are so significant they can be said to go to the root of the contract. So, changing the term of the agreement from say 2 years to 1 year will probably be okay, but substantially reducing the amount of pay will not. If the changes are significant there will be a new contract and the termination of the old one may amount to a dismissal.

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Myth: A teacher or lecturer engaged on a fixed-term contract cannot claim unfair dismissal if their contract is not renewed on expiry

Reality:

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Myth: A teacher or lecturer engaged on a fixed-term contract cannot claim unfair dismissal if their contract is not renewed on expiry

Reality:

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