To bring a claim to an industrial tribunal you must have been continuously employed by the same employer for two years. School holidays do not break continuity of employment for these purposes. However, if your employment expires before you have been offered a new contract, by Section 95 of the Employment Rights Act 1996, you have been dismissed.
The surprising results that these apparently simple legal facts can produce were highlighted by the Employment Appeal Tribunal (EAT) last year in the case of Pfaffinger v City of Liverpool Community College.
Gertrude Pfaffinger had been employed for many years in an unbroken succession of contracts, each of which was for one academic term only. The wording of each contract contained no provision for renewal.
Her final contract expired on June 25, 1993, without any new contract having been offered by that time. There was a verbal agreement for her to return in the September term, and, indeed, she was offered a new contract but with nearly a 30 per cent reduction in pay. She refused to accept this and made a claim for redundancy.
On appeal the EAT decided that:
- her fixed-term contract had expired without being renewed, therefore she had been dismissed;
- the reason for her dismissal was that the college's need for part-time lecturers had ceased or diminished for the duration of the summer holiday, which meant that she was redundant; and,
- as she had more than two years' continuous service, she was entitled to a redundancy payment.
Even if Mrs Pfaffinger had accepted the new contract, she could still have claimed her redundancy payment as none of the relevant legal considerations would have been changed. Receipt of a redundancy payment where the employee decides to accept a new contract does not break continuity of employment for later claims for unfair dismissal, although another two years' continuous service would have to be completed before a further redundancy claim could be made.
Any employer who dismissed an employee for making such a claim, which is simply to assert a statutory right, would automatically be guilty of unfair dismissal.
Contracting out of unfair dismissal and redundancy rights is possible but only to a fairly limited extent. Your contract might seek to do so but it will only be effective if all three of the following conditions are met:
- the contract is for a term of one year or more for unfair dismissal, or two years or more for redundancy;
- the dismissal in respect of which you have agreed to exclude your unfair dismissal or redundancy rights consists only of the non-renewal of the fixed-term contract; and
- you have agreed in writing to the exclusion before the expiry of the fixed term.
Suppose you have a two-year fixed-term contract which excludes your statutory rights and then you sign a contract for a further nine months, without any break in continuous service: would you be able to claim redundancy andor unfair dismissal at the expiry of the nine months? Yes, as you would have had more than two years' continuous service and the exclusion clause for the final period of nine months would be completely ineffective as it falls outside the qualifying period for statutory exemption.
A number of important employment rights do not require a two-year qualifying period. Some of the more important include:
- sex discrimination and race discrimination
- dismissal for a trade union reason
- maternity rights.
Remedies for unfair dismissal include reinstatement or re-engagement as well as compensation. But remember there are quite tight time-limits for presenting a claim to an industrial tribunal so don't delay in taking advice and acting.
John Metcalf is a barrister specialising in employment law and a part-time industrial tribunal chairman
How a redundancy payment is calculated
The employee had just passed his 46th birthday when his contract expired. He had 10 years' continuous service. His salary was #163;400 per week gross. (Note: the statutory maximum is #163;210 per week but that is enhanced by 50 per cent for each completed year from the age of 41).
(i) 5 full years' service from the age of 41:
5 x #163;210 x 1.5 = #163;1,575
(ii) 5 full years' service up to the age of 41:
5 x #163;210 = #163;1,050.