We took on a person to do a fixed term contract for a four month period. We reached three months and it was clear that there will be no work for them after the 4 month limit. We thought about just telling them on the final day that they would not be extended but decided that we ought to treat this as a redundancy so have put all the people in that section at risk whilst we conduct a formal redundancy selection criteria exercise. Our other staff are now complaining about this.
Peter replies:
You really have gone from one extreme to another. You were right to avoid just letting the person go because ‘their notice period started on day one’ but this is not a situation which calls for the formality/stress of a redundancy procedure.
The fair steps for employers to take when dealing with the end of a number of long term fixed-term contracts might include the following stages as part of a redundancy or dismissal procedure, although the procedure would be adapted to different circumstances:
- A reminder. A reasonable period before a fixed-term contract is due to end it is advisable to remind the employee in writing of the potential end date.
- A meeting. Before the end date a meeting should take place with the employee in which they are reminded that the contract is due to end on the given date. This meeting should be followed up by a letter which confirms the risk of dismissal at the end of the fixed term.
- Suitable alternative work. Any vacancies should be considered and offered to the employee before the end of their current employment if they are suitable.
- Dismissal. A reasonable time before the scheduled end of a fixed-term contract, a dismissal notice should be sent confirming the expiry of the fixed term and including information and the right to appeal.
- Appeal. Fixed-term employees can appeal against notice of dismissal on grounds of redundancy.
Employees on fixed-term contracts which end are entitled to a statutory redundancy payment if they have worked continuously for the employer for the qualifying period of two years.
It is not necessary to follow the structure contained in the Acas Code of Practice on disciplinary and grievance procedures, but in some circumstances it is good practice, even though the Code does not specifically apply to non-renewals of fixed-term contracts (or to redundancy dismissals). Following the Acas procedure when a fixed-term contract expires has some benefits. Employers need to be careful; and the prudent employer will continue to follow a procedure which encompasses at least the three main steps applicable under most procedures (that is letter, meeting, appeal) to try to reduce the risk of any claims. In many cases, the employee will be aware that the employment may not be renewed and may waive their right to a formal meeting under the procedure offered by the employer.
You should therefore withdraw the redundancy consultation process with as much grace and dignity as you can manage, or conclude it quickly and do what you can to restore trust and morale.
The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.
