Expiry of FTCs and collective redundancy consultation

Deadline iStock 000011104806XSmall 146x219A Scottish court has found that the expiry of fixed term contracts did not count for collective redundancy consultation purposes. Simon Lambert analyses the ruling.

References to "dismissal as redundant" in the collective redundancy legislation (TULRCA) are references to "a dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related".

The case of University College Union v The University of Stirling [2014] ScotCS CSIH_5 (14 January 2014) looked at whether the expiry of a fixed term contract was a dismissal related to the individual concerned or not.

Facts

This case concerned four employees who had been employed on fixed term contracts as test cases. The Scottish Court of Session (equivalent to the English Court of Appeal) found that in all four cases at least one of the reasons for dismissal related to the fact that the employee had agreed to accept that the contract under which they were employed would come to an end at a particular time or on the occurrence of a particular event.

This reason was specific to each of the employees; it had to do with their particular circumstances and their particular decisions. As such the dismissals related to the individuals so the expiry and non-renewal of those individuals' fixed term contracts did not fall within the scope of the collective consultation obligations in section 188 of TULRCA.

One of the claimants was engaged as a post-doctoral research assistant and his fixed term contract expired and was not renewed due to funding issues.

Another was engaged to co-ordinate and deliver three undergraduate modules in English Studies in the Spring 2009 semester, ending at the end of May 2009. His contract was not renewed because the semester had ended.

The third was engaged to provide maternity leave cover for the six months ending at the beginning of May 2009. Her contract was renewed twice but thereafter it expired and was not renewed, although she was then employed for a year on a casual basis.

The fourth claimant was initially engaged for one month in July 2007. Her contract was renewed three times before it was terminated, partly because she was a named researcher on a number of projects and partly because one of her colleagues worked reduced hours following a return from maternity leave.

What this means for employers

University College Union are appealing this decision to the Supreme Court so this may not be the end of the matter.

However, since 6 April 2013, proposed dismissals of employees on fixed-term contracts "at the agreed termination point" have been excluded from collective redundancy consultation obligations. This change in the law is also being challenged, but for the moment the law is clear.

What is more difficult is where the reason for the dismissal of an employee on a fixed term contract is driven by, or includes, a need to reduce costs. If cost is the driver then despite the employee being on a fixed term contract they would need to be included in collective consultation as their dismissal would not relate to them as an individual.

Each case will therefore depend to some extent on its own facts, and employers should ensure managers know about the risks inherent in using fixed term contracts.

Simon Lambert is a partner at DAC Beachcroft. He can be contacted on 0117 918 2085 or This email address is being protected from spambots. You need JavaScript enabled to view it..