Veitch Penny LLP - Exeter | Crediton, Devon

Case

Allen v National Australia Group Europe Ltd
Employment Appeal Tribunal - (29 July 2004)

Issues

(1) Contract of Employment
(2) Fixed-Term Contracts
(3) Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002

Facts

Mr Allen was employed by the Company on 9th December 2002. His Contract of Employment stated that it was for a fixed-term from 9th December 2002 to 31st July 2003. The Contract went on to state that during the first 6 months of service either party could terminate the employment by giving 1 week’s notice to the other.

On 20th January 2003 Mr Allen’s employment was terminated with 1 week’s notice. He made a complaint to the Employment Tribunal complaining of unlawful discrimination contrary to the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. He argued that he had been dismissed without being given access to a performance improvement procedure which he submitted he was entitled to in line with the employer’s company handbook. If he had been allowed to use this procedure then he submitted it was probable that his employer would not have felt it necessary to terminate his Contract.

An issue arose as to whether the Regulations applied to his Contract.

At first instance it was concluded that the Regulations did not apply to his Contract because it contained a further provision allowing it to be terminated earlier by notice. His claim was dismissed. Mr Allen appealed.

The question then arose as to whether the Regulations applied to the Contract. The definition of “Fixed-Term Contract” is contained in Regulations 1(2) which states that it is a “Contract of Employment that, under its provisions determining how it will terminate in the normal course, will terminate” on a specific date or on the completion of a task or on the occurrence or non-occurrence of a specific event.

Decision

The Employment Appeal Tribunal (EAT) allowed the appeal. Mr Allen was subject to a Fixed-Term Contract within the 2002 Regulations even if the Contract contained a clause allowing it to be terminated before the expiry date by either party giving notice. It was noted that the Contract itself was expressly written to terminate on a finite date which satisfied the primary definition of a Fixed-Term Contract within the 2002 Regulations. Provision for earlier notice did not negate the intention of the parties to see the Contract through to the end of the fixed-term. Termination during the fixed-term would be outside the normal course of events envisaged by the parties.

Comments

This appellate case closes a potential loophole for employers who could have attempted to avoid unfair dismissal law by including a notice clause. It also brings the position in line with unfair dismissal law generally.


Rachel Bickle – Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it