EAT finds that an NHS Trust was not obligated to make fixed-term employee permanent

A fixed-term contract is a contract of employment that ends on a particular date unless renewed. Employers may use such contracts for temporary projects or surges in work that may not be sustainable.

An employee engaged through fixed-term contracts is entitled to be declared as a permanent employee if:

1. They have been continuously employed for more than four years; and
2. The fixed-term period was not objectively justified when it was entered into or renewed.

 In the case of Lobo v University College London Hospitals NHS Foundation Trust the employee had been engaged as a Locum Consultant Breast Surgeon for more than four years. The employer decided to recruit a substantive Consultant Breast Surgeon post and ring-fenced it for the Claimant. The Claimant was unsuccessful in applying and the role was then advertised nationally.

The claimant brought a claim arguing that as she had more than 4 years' service on fixed-term contracts she should now be declared a permanent worker. She argued that recruitment to the permanent, substantive role was evidence that the fixed-term contract was not justified. She also argued that the decision to not appoint her to the role lacked good faith as she believed it was connected with grievances raised within the department.

The original Tribunal decided that the appointment on a fixed-term contract was justified. The employer argued that in the absence of permanent cover they needed a temporary consultant to meet the demands of the service. This was a legitimate aim but was the renewal of a fixed-term contract proportionate to meeting that aim? Crucially, the Tribunal decided that the substantive role was different to the temporary role and required certain leadership qualities. As such it was proportionate to maintain a temporary role pending recruitment of a permanent consultant in a slightly different role. The Tribunal could not see any evidence from the appointment decision that the employer had not acted in good faith.

The EAT expressed sympathy for the Claimant but found that Employment Tribunal had been entitled to reach this decision. The EAT commented that the position would have been different if the temporary and substantive roles had been identical but as they were not the Tribunal had been entitled to find that the most recent fixed-term contract had been justified.

It's important to note that this decision does not lay down a rule of law that differences between a permanent post and a temporary post will always justify a fixed-term contract. A different Tribunal might have placed more weight on the background of grievances or decided that it was disproportionate to not offer a permanent contract regardless of the newly created role. Nonetheless this case provides helpful guidance as to how the Regulations are applied in practice as cases are few and far between in this area.

If you are considering starting or renewing fixed-term contracts our team of experienced employment lawyers are on-hand to advise throughout the process.

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