Under Regulation 8 of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, employees employed for four years or more under a series of successive fixed-term contracts become permanent employees unless the employer can justify the continued use of fixed-term contracts and show why the employee should not become permanent. This means the employer must demonstrate that the fixed term serves a specific business purpose. If the employee is deemed to be permanent, they are only permanent in that specific role, not in any other.
In the recent case of Lobo v University College London Hospitals NHS Foundation Trust, Ms L (L) was employed as a locum breast surgeon under a series of fixed-term contracts since 2016. In 2021, the Trust decided to appoint a more substantive surgeon. L applied twice but was unsuccessful, as she was deemed to be less qualified than the successful candidate. L made an application to the Employment Tribunal seeking a declaration to confirm her permanence and, in doing so, to place the burden on the Trust to justify its decision to extend her fixed-term arrangement whilst recruiting for a substantially similar permanent role.
There were two elements to her claim: first, that she was entitled to her existing role on a permanent basis; and second, that she should therefore have been appointed to the substantive consultant role.
The Trust’s primary justification was that:
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It required successful candidates for substantive consultant roles to demonstrate the necessary management and leadership qualities in “real time” during the interview process, rather than solely through an application form or CV, which L did not do; and
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It had a legitimate aim of providing a safe, efficient and fully functioning Breast Service and acted in good faith in retaining L as a fixed-term employee, given that the successive fixed-term contracts were intended to cover temporary, rather than permanent, needs.
The Tribunal ruled in favour of the Trust, stating that there was a substantial difference between L’s role and the new substantive role (namely that the new role involved greater managerial responsibilities). L’s appeal to the Employment Appeal Tribunal was unsuccessful.
The essential question under the Fixed-Term Regulations was whether renewal of L’s most recent fixed-term contract was justified. Both the Tribunal and the EAT relied heavily on the differences between the work carried out by L on a locum basis and the duties of the substantive role. They also considered that the Trust was justified in using temporary locums to meet patient needs and maintain service standards.
These arguments led the EAT to conclude that the use of fixed-term contracts was appropriate in the circumstances. As a result, her claim for permanence failed and the Trust was not obliged to offer her the new role.
Employers should seek professional advice in such matters. The HR Helpline is available on 01455 852 028 to provide initial advice and assistance.
