Public sector employers may be forced to rethink the use of popular fixed-term contracts after a tribunal ordered the Department for Education and Skills (DfES) to offer redundancy payments equal to those given to permanent staff.
The landmark tribunal hearing ruled that four education advisers on fixed-term contracts should be treated in the same way as permanent colleagues when redundancy payments are calculated.
The DfES must now either retain the claimants on permanent contracts when their current employment ends in 2006, or provide redundancy payments in line with the Civil Service Compensation Scheme.
Charles Howard, a partner at Russell Jones & Walker, represented the workers and said the ruling could have huge implications for the Civil Service.
“This case serves as a warning to employers that discriminating against fixed-term employees can have a very heavy financial cost,” he said.
Paul Quain, a member of the management committee at the Employment Lawyers Association said the ruling had implications for all employers.
“It highlights the fact that employers need to consider all workers, not just permanent staff. Employers need to remember that the law sees no difference between the various categories of employee,” he explained.
“Because fixed-term contracts are widely used across the country we could see many more cases, as this also applies to the private sector and charities,” Quain added.