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When expiry is dismissal

Cecil McCarthy

When expiry is dismissal

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I continue to receive queries concerning fixed term contracts and the Employment Rights Act, 2012.

The Barbados legislation, unlike other unfair dismissal laws within the region, provides that the expiry of a fixed term contract is a dismissal.

Section 26(1)b of the act states: “An employee is dismissed where he is employed under a contract for a fixed term and the term expires without being renewed under the same contract.”

Let us compare some provisions on fixed term contracts in other Caribbean countries.

In St Vincent and the Grenadines, Section 6 of the Protection of Employment Act provides:

“6(1) The services of an employee who has been specifically employed for a fixed period may, notwithstanding anything contained in this act, be terminated on the expiration of the term so stipulated.

6(2) For the purposes of this section, the effective date of termination of the services of an employee who has been specifically employed for a fixed period, and where that period expires without being renewed under the same contract, shall be the date on which the term expired.”

In Bermuda the provision that requires an employer to give a valid reason for dismissal expressly states that it does not apply where an employee is employed:

“(a) for a fixed period of time which has expired;

(b) for the duration of a project which is complete.”

The Barbados legislation resembles early English law found in Schedule 1, paragraphs 5 and 6 of the Trade Union and Labour Regulations Act 1974.

Two cases in which the English legislation was applied were Terry v East Sussex County Council (1976) and Fay v Northy Yorkshire County Council (1985).

In the first case, John Terry was employed by a local authority under a fixed term contract for 12 months as a lecturer at a college managed by the authority. When the term expired, the contract was not renewed. Mr Terry applied to the industrial tribunal for compensation for unfair dismissal.

 Application dismissed

 When the case came before the tribunal, it dismissed the application, giving no other reason for the dismissal other than to state that the termination of the appellant’s employment “was by expiry of an agreed period and to the extent to which such expiry constituted dismissal under the act, it was for a good and substantial reason”. Mr Terry appealed.

In allowing the appeal, Phillips J., delivering the judgment of the Employment Appeals Tribunal (EAT), concluded that there was no doubt the appellant was employed under a fixed term contract and failure to renew the contract amounted to a dismissal for the purposes of the corresponding purposes of the English legislation. Accordingly, he was entitled not to be unfairly dismissed.

The industrial tribunal appeared to have treated the expiry of the fixed term contract as some other substantial reason.

The EAT held, among other things, that the tribunal ought to identify the reason for the dismissal before going on to consider whether the dismissal was fair.

The case was sent to another tribunal for re-hearing so that it would determine whether the employee was dismissed unfairly.

In Fay v Northy Yorkshire County Council (1985), Mrs Fay was an experienced teacher who was employed at Houghton Comprehension School under a series of fixed term contracts from September 1, 1981, until August 31, 1983. The last contract from January 1, 1983 until August 31, 1983 was not renewed. She was therefore dismissed from that date.

Mrs Fay claimed that her dismissal was because of redundancy and she claimed a redundancy payment and unfair dismissal.

The employers contended that the dismissal was not for redundancy but was because of “some other substantial reason, being the statutory dismissal created by the non-renewal of the contract”.

Sir Ralph Kilner Brown, in delivering the decision of the EAT, observed: “We do not think it sufficient simply to state that because the statute says that non-renewal is a dismissal, that is of itself a substantial other reason. Some indication is required as to why the employer so regards it.”

These two cases illustrate that it is not enough for the employer to assume that the expiration of an agreed contractual period would amount to a dismissal for some other substantial reason and therefore satisfy the requirement of fairness under the legislation. The tribunal must identify the reason for a dismissal and analyse the relevant factors before going on to consider whether the dismissal was fair, having regard to the statutory fair reasons set out in the legislation.

• Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to [email protected]