Dismissing staff on fixed term contracts: how easy is it?

Fixed term contracts can be an attractive option for schools and colleges and other employers facing uncertainty over future funding. They are not a ‘get out of jail free’ card however, as those on fixed term contracts still have a number of employment rights.

In a recent case involving a teacher on a fixed term contract in a primary school, the Court of Appeal reached a decision which should give employers that use fixed term contracts some comfort when it comes to the termination of these contracts.

Kilrane v Lion Academy Trust : the facts 

Ms Kilrane started working at Thomas Gamuel Primary School as a supply teacher in the summer term of 2013. She was then offered a fixed term contract of employment, and the offer letter specified that she would be employed for a fixed-term from 1 September 2013 to 31 August 2014.  The letter also set out the pay scale that applied to her, but did not contain any other terms and conditions of employment.

On 10 July 2014 the employer wrote to Ms Kilrane:

 “I am writing to notify you that your current fixed term contract at Thomas Gamuel Primary School will end on 31 August 2014 … I would like to add that the decision to not renew your fixed term contract is no way related to your current grievance against the Head of School …”

The 'Burgundy Book'

Ms Kilrane argued that she was entitled to three months’ notice of termination of her employment and that this notice should run to the end of a school term, which in her case would mean the end of the autumn term in December 2014.

She claimed that her employment was subject to the terms and conditions set out in a collective agreement, namely the 2000 edition of the Conditions of Service for School Teachers in England and Wales – the ‘Burgundy Book’.  The Burgundy Book gives teachers the right to a minimum of two months’ notice, and in the summer term a minimum of three months’ notice terminating at the end of a school term.  It also provides that those notice provisions apply to the termination of a teacher’s contract for any reason except gross misconduct.   

The Trust that employed Ms Kilrane argued that the notice provisions in the Burgundy Book do not apply to the expiry of fixed term contracts.

The Employment Tribunal made a clear finding that the Burgundy Book was incorporated into Ms Kilrane’s contract of employment, and this finding was not challenged by either Ms Kilrane or the Trust.

The Court of Appeal decision

The Court of Appeal found that the relevant notice provision in the Burgundy Book did not apply to Ms Kilrane’s fixed term contract.

The essence of a fixed term contract is that it comes to an end by the simple passage of time, without the need for either party to give notice.  The Court commented that the terms of Ms Kilrane’s  contract (as set out in the offer letter) were clear and that it would be ‘unusual’ for terms which have been specifically agreed between the parties to an employment contract to be overridden by general terms in a collective agreement. In the Court’s view there was no inconsistency between what was set out in Ms Kilrane’s offer letter and in the Burgundy Book.

It said that the notice provisions in the Burgundy Book were designed to apply to permanent or ‘open ended’ contracts, rather than to fixed term contracts.

What does this mean for employers?

If you are using fixed term contracts, be very clear in the contract about the fact that the contract is for a fixed term, and the date upon which it will come to an end.  It will also be helpful to state explicitly that the contract will come to an end automatically at the end of the fixed term without the need for either party to give notice.

It is still however, good practice to tell those on fixed term contracts that the contract and their employment will be coming to an end on the expiry of the fixed term. The school had in this case given Ms Kilrane advance notice in writing that her employment would be coming to an end,  which no doubt helped the Trust’s case.

Remember also that the expiry of a fixed term contract is a dismissal.  If the employee has two years’ service when the contract comes to an end they could bring an unfair dismissal claim and the employer will have to establish a fair reason for dismissing and persuade a tribunal that the dismissal is fair.

Need help?

We can help you draft fixed term contracts that protect you or advice if you wish to dismiss someone before their fixed term contract comes to an end or, on it's expiry. Please contact Jenny Arrowsmith (schools) or Helen Dyke (colleges) for further information.

Our fixed price employment law service

If you are interested in finding out about how we can support you with our fixed-fee annual retainer, or flexible discounted bank of hours service, please contact Gareth Finney: gareth.finney@irwinmitchell.com or 0778 317 0084.