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Expiry of fixed term contracts does not trigger duty to consult
In quite an interesting case concerning the expiry of fixed term contracts and collective redundancy, the Inner House of the Court of Session has given judgement in University and College Union v University of Sterling.
The University historically engaged a number of employees on fixed term contracts for a variety of reasons, including cover for maternity or sick leave, a post dependant upon funding arrangements, or a specific project. When a number of fixed term contracts expired and were not renewed, the union brought a claim for failure to consult under section 188 of TULR(C)A 1992. It argued that there were more than 20 people who had been made redundant in one establishment and so collective consultation should have taken place. Interestingly redundancy has a wider definition in TULR(C)A under section 195 (1) which is: “Dismissal for a reason not related to the individual concerned”. This case considered whether or not the termination of the fixed term contract was related to the individual concerned to determine whether or not collective consultation obligations were triggered.
The Tribunal considered that the words, “relating to the individual concerned” would encompass things like conduct or capability; things that were close or personal to the individual concerned. Consequently it found that, since the dismissals were not for this reason, they were not related to the individual concerned, so collective consultation applied. The University appealed to the EAT which upheld the appeal and the matter came before the Court of Session.
There were 4 employees who had been put forward as test cases. They had all agreed to enter into contracts for a specified length of time and were aware of, and content with, the fact that the contracts would end at that stage. One was doing a post – doctoral research project dependant on funds; another was engaged to deliver three under-graduate models in a particular semester; and a third was covering for maternity leave. The Court of Session held that the Tribunal was wrong to consider that a reason relating to the individual required a close and direct relationship between the individual and the reason for the job terminating. Instead, it held that the reason for the expiry and non-renewal of a fixed term contract could be for a number of reasons which may not be connected to the individual concerned, such as demands of the business. On the other hand, where an employee voluntarily enters into a fixed term contract for a specified period, the fact of doing so is a matter related to that individual and all these employees had entered into such contracts knowing they would end on a specified date, and this was the reason for dismissal. Since this was related to the individual, the duty to consult did not arise.
This case took place before 6th April 2013 which brought into effect the amendment to section 282 TULR(C)A, which provided that fixed term contracts which expire at the agreed termination point are expressly excluded from the number of dismissals which count towards the total for triggering collective consultation obligations.
This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.
For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222
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