Take care with contract workers’ redundancies

A
Court of Appeal ruling has reminded employers of the risks of discriminating
against fixed-term workers . By 
Nicholas Moore

The
Court of Appeal has recently given employers a salutary reminder that a redundancy
policy by which fixed-term workers are “first out” is likely to be unlawful.

The
case, Whiffen v Millham Ford Girls’ School and another, unreported, 22 March
2001, concerned a teacher in a girls’ school who had been employed under a
series of fixed-term contracts for five-and-a-half years.

The
school needed to make some redundancies and consequently followed the local
council’s Model Redundancy Policy. This stated that those who were not on
permanent contracts should be made redundant first and that the selection
process proper (which included a redundancy avoidance process) would begin
after that.

The
teacher was made redundant on the basis that she was not a “permanent”
employee. This meant she was deprived of the benefit of the redundancy avoidance
procedure. 

Policy
bias claim

She
brought a claim in the employment tribunal to the effect that the school had
been guilty of indirect sex discrimination in applying a policy whereby employees
on fixed-term contracts were to be dismissed before permanent members of
staff. 

The
case went to the Court of Appeal, where the judges applied a three-point test.
First, they considered whether the school had imposed a “requirement or
condition” that applied equally to men and women. They decided that it had. A
teacher was required to be a permanent member of staff to be eligible for the
redundancy selection process.

Second,
the judges considered whether the proportion of women capable of complying with
that requirement was considerably smaller than the proportion of men who could
comply.

They
decided that it was – only 77.7 per cent of female teachers were permanent
staff members compared with 100 per cent of the male teachers.

Finally,
they considered whether the requirement operated to the teacher’s detriment.
They concluded that it clearly did.

Having
found that the Model Redundancy Policy discriminated against women, the court
went on to consider whether this was lawful or unlawful discrimination. This
depended on whether a policy of dismissing fixed-term workers first was
necessary to meet the school’s needs.

The
court found that the school had “wholly failed” to demonstrate this and
therefore decided that the school had committed unlawful indirect sex
discrimination.

Although
the case does not make new law, it provides a reminder that redundancy policies
can be subject to a court’s scrutiny and that they must not, without good
reason, have a less favourable effect on employees of any sex, race or those
with a disability.

The
case should also remind employers to check that their redundancy – and any
other – policies, do not, without good reason, treat fixed-term workers less
favourably than their permanent employees.

The
EU Fixed-term Work directive must be implemented by July this year and
practices which, without good reason, treat fixed-term workers less favourably
than permanent staff will be unlawful, without the necessity to demonstrate
that they bear more heavily on those of one gender.

Key
points


Redundancy policies should not, without good reason, have a less favourable
effect on employees of any sex or race, or those with a disability, or
part-time or fixed-term workers..


Any less favourable treatment must be justified. It was not enough in this case
to justify the need for some sort of redundancy. The specific requirement –
here, to be “permanent” – must of itself be justifiable.


The EU Fixed-term Work directive is to be implemented in the UK by July 2001.

Nicholas
Moore is head of employment at Osborne Clarke OWA

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