Fixed-term route to permanent employment 

July 8th, 2024

The Employment Appeal Tribunal (EAT) recently upheld a decision of the Employment Tribunal (ET) that permanent employment did not follow successive fixed-term employment contracts over a period of more than four years. 

This case is Lobo v University College London Hospitals NHS Foundation Trust.

The law

Regulation 9(5) of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 sets out the general proposition (with reference to Regulation 8) that an employee who has been working under successive fixed-term contracts for a period of four or more years may be entitled to be treated as a permanent employee. 

An employer may, however, justify the use of continuous fixed-term employment contracts on objective grounds, in which case Regulation 9(5) will not apply. 

It is generally understood that such justification on objective grounds will only apply if the employer in question establishes:

  1. it has a legitimate objective, for example a genuine business objective;
  2. it is necessary to adhere to that objective; and
  3. it use of successive fixed-term contracts is an appropriate way to achieve that objective. 

Applying the law to the facts of the case 

The Claimant was employed as a Locum Consultant Breast Surgeon under a series of fixed-term contracts and passed four years’ continuous service in early 2020.  The Claimant worked part-time; 60% of full-time hours. 

The Claimant sought a declaration that she had become a permanent employee. 

The Respondent argued that it was appropriate and necessary for it to engage the Claimant on a fixed-term contract in order to fulfil the aim of “…providing a safe, efficient and fully functioning service.”  It also argued that there are differences between the Claimant’s locum role and that of a substantive Consultant Breast Surgeon, to do with the scope of the two roles.   The Respondent also explained that the Claimant was unsuccessful in her application for the substantive role.   

It seems there were arguments about the possibility of a sham, but the EAT decided, among other grounds, that the ET had “…analysed the extent of the differences [between the two roles] and concluded that they were sufficiently different roles that the [substantive role] was not a continuation of the claimant’s locum role…” and there had been no error of law or perversity in the ET’s reasoning. 

This case may be nuanced because it is in the public healthcare setting.  Applying the logic more broadly, each case may turn on its own facts as to whether an employer’s use of successive fixed-term contracts may be justified on objective grounds.  This blog was written by Ben Lindsay, Solicitor at didlaw.

Termination Payments

what our clients say

we are never far away, providing nationwide coverage.

As a nationwide employment law firm, we act for employees across the UK in employment discrimination cases. Contact us today to book your free telephone assessment.

Book Your FREE Consultation