The Court of Appeal, in Department for Work & Pensions v Atasha Webley, has held that a failure to renew or extend a fixed-term
contract did not amount to less favourable treatment of a fixed-term employee
in comparison to a permanent employee.
In accordance with the Department's rules, fixed-term contracts were to be
entered into in exceptional circumstances and were to expire before 52 weeks,
known as 'the 51 week rule'. Mrs Webley brought a claim on the basis that the
Department had discriminated against her as a fixed term employee by treating
her less favourably than a comparable permanent employee.
However the Court of Appeal ruled that it had to be accepted that fixed-term
contracts are not only lawful but are recognised in the Preamble to the Fixed
Term Workers Directive to meet the needs of employers and employees alike.
Therefore the simple expiry of a fixed-term contract through the passage of
that fixed period could not, of itself, constitute less favourable treatment
by comparison with a permanent employee. Indeed the essence of a fixed-term
contract is that it comes to an end at the expiry of the specified period.
Applying a policy of 51 weeks maximum employment for fixed-term workers was
not an abuse of the Directive.
Nevertheless, the Court of Appeal reiterated that employees are protected
from the repeated use of successive fixed-term contracts. Where a fixed-term
employee has been continuously employed under a single fixed-term contract
or a series of such contracts for four years or more and is then re-engaged
on a fixed-term contract without continuity of employment between these contracts
being broken then the new contract will have the effect as a permanent contract
unless the employer can show that it had objective grounds for continuing to
engage the employee under a fixed-term contract.
Employers should also be aware that this decision relates to the non-renewal
of a fixed term contract. Termination of a fixed-term contract because of the
nature of the contract may constitute a breach of the Fixed-Term Employees
(Prevention of Less Favourable Treatment) Regulations 2002 if the reasons for
such a termination were not objectively justifiable.