UK: Collective redundancies - expiry of fixed-term contracts may not count towards threshold

In a surprising judgment, the EAT has ruled that the simple expiry of a fixed-term contract without renewal is a dismissal for a reason "related to the individual concerned".  As such, it is not a "redundancy" counting towards the threshold of 20 proposed redundancies within a 90 day period triggering the collective redundancy consultation duties.

The EAT considered that at least one of the reasons for the 'dismissal' on non-renewal was the individual's own agreement to a fixed term contract accepting that it would come to an end at a particular date or on the occurrence of a particular event.  This was a reason "related to the individual" because it has something to do with what he is or has done, ie the fact that he has agreed to a fixed term.

The decision conflicts with the prevailing view that the expiry and non-renewal of a fixed-term should count for collective redundancy threshold purposes unless the reason for non-renewal is something personal to the individual such as their conduct or capability.  Non-renewal because the funding for a position has ended, or because the role was to provide cover for absence or work on a specific project which has come to an end, was thought to count.  This was particularly relevant to those sectors which use fixed-term contracts extensively (eg, the educational sector), but also where an employer was planning say 18 redundancies in 90 days and the expiry of a couple of fixed-term contracts could tip the scales into collective consultation territory.

The decision is unclear as to whether the non-renewal of a fixed-term contract will always fall outside the definition for collective redundancies or whether it could be covered if it can be seen as part of a wider redundancy exercise being carried out by the employer and/or where the individual can point to a reasonable expectation or common practice of repeated renewal of fixed-terms.

Pending any appeal, employers would be well advised to err on the side of caution when carrying out wider redundancy exercises if the inclusion of fixed-term non-renewals would make the difference as to whether the collective consultation obligations are triggered. (University of Stirling v University and College Union, EATS)