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Employment Law - Ending fixed term contracts

46 replies

sixtiesqueen · 22/01/2012 12:18

Bit of background - I work in a team on the NHS. There are 8 of us in total; two staff members are on substantive contracts which they received prior to the rest of us being appointed, though their jobs are of equal pay and position within the team. The remaining 6 staff members are on fixed term contracts of two years duration due to expire in April.

Our length of NHS service and individual circumstances vary. Two staff members have come from substantive posts into fixed term contracts and both of these members of staff have 20 years+ continuous NHS service. I personally have 13 years but only 3.5 continuous unbroken.

The work we do is around mental health and we work in two residential units where patients are placed from anywhere in the country. We are employed by an NHS trust but the actual funding comes from the local PCT because the residential unit is on their 'patch' - they pay said NHS trust for our services (hope that makes sense).

The PCT who put up the funds for our service recoup their money by billing the local PCTs for each individual patient. SO for example if we have a patient from Sheffield then they send our bills to Sheffield PCT and Sheffield pay. This system works well and we actually make a small profit for the trust.

As our contract renewal dates got closer, we began asking questions about when new contracts would be agreed. We were told at the end of last year (as a staff group) that a decision had been made that our contracts would be renewed because our work is highly regarded, much needed and we are making a profit. This was a huge relief to everyone as you can imagine.

However, last week there were some developments. The government has finally provided a central pot of money to provide services such as ours, which means we no longer have to bill 'home' PCTs. You might think this positive, but the amount we will receive is only £85k and this will fund only two nurses and none of the more specialist clinical staff (such as myself). In addition, we were told that the PCTs being replaced by GP consortium means we can no longer bill PCTs that don't exist.

As a result, we were called together by a senior manager last week and told that all 8 jobs were being 'displaced' and that we would all go on the redeployment register. We were told we would each receive 'aspirational interviews' and be matched against trust vacancies even if we only filled 50% of the recruitment criteria. The trust has a 'no redundancy' policy. We were given copies of the trust's 'Organisational Change' policies by the senior manager which set out the measures they would take to redeploy us.

We were given times to meet for an interview nine days later but it took some time to clarify what the interview was and who would be in attendance. No answers were forthcoming so we came to assume these were the 'aspirational' interviews and we each received redeployment procedure documents in our trays giving an outline of what the interview would discuss. I attended for this interview on my day off work expecting to be told what measures would be taken to redeploy me within the trust.

The meetings ran late because the manager conducting them hadn't arrived. I was first to be seen so while I was waiting, I checked my e-mails to find a letter from our union rep telling us that the afternoon's interviews would only be 'aspirational' for those on substantive posts. It also mentioned that we might want to have our union rep present but by the time this information was received, it was obviously too late to act upon it. The meetings were not aspirational at all - with the exception of the two substantive posts, both of whom were given aspirational interviews and are being given alternative opportunities. Those of us on fixed term contracts are simply being finished up.

The two substantive posts are being treated differently from the rest of us.

I am aware that fixed term employees accrue rights and I assumed we had a right to redundancy pay if we cannot be redeployed, much the same as people on substantive posts. Our employers are instead saying that our contracts are ending due to them decommissioning the service (because funding will cease) rather than because our workload (or need for service) has diminished. On this technicality they are not displacing us, nor offering alternative employment and are not paying redundancy pay. The manager who came to interview us will try to help us find other opportunities in the trust but these are very limited and it is clear that our employers feel they have no responsibility towards those of us on fixed term contracts.

The issue affects me less because I have less continuous service than some of my colleagues but in their case, one full time worker stands to lose in excess of £80k by not receiving redundancy. They want to know where they stand and whether to pursue a case against the trust.

As an aside, it is my understanding that NHS trusts are supposed to consult widely prior to decommissioning services. This includes consulting with service users, which they do not seem intent on doing. Serice users and their carers are appalled that the service is being withdrawn - one of the residential units attracts business largely because its residents will have access to our services and obviously they are worried that this will affect their future. I feel concerned about my job obviously but also worried about the implications for our patients.

Sorry for long post but can anyone advise where my colleagues stand? Thanks.

OP posts:
flowery · 22/01/2012 14:02

"Funding will cease" is equally a reason for redundancy as "need for service has diminished", in fact more so. The need for the posts has diminished because funding has ceased. The posts will no longer exist because there is no funding for them. It's fine not to extend fixed term contracts if the funding for them has been withdrawn. Although fixed term workers shouldn't be selected for redundancy because of their fixed term status, if their contract ends before something else can be found for them there's no obligation to extend the contract in the hope something will later be found. But the posts are redundant and entitled to redundancy pay, and every effort should be made to find something else for those people up until their termination date in April.

The NHS is normally procedure-tastic so this is slightly worrying. I'm not going to comment on the wider consultation issues you mention because I have no knowledge of NHS procedures in that area, but from a legal point of view, those on a fixed term contract who are not being extended due to funding having been withdrawn are entitled to redundancy pay.

here you go directgov, very clear on the issue.

sixtiesqueen · 22/01/2012 14:19

thanks for this. I looked at the direct gov link the day we recieved the news and it looked clear to me, however, there was a sentence about 'objective justification' on business grounds. Can they not say that funding being withdrawn by an external source is a legitimate business objective to get rid of jobs?

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flowery · 22/01/2012 15:07

It is a legitimate justification for getting rid of jobs, and those jobs will then be redundant. The objective justification stuff is about choosing people for redundancy because of fixed term status, not about whether redundancy pay is owed.

sixtiesqueen · 22/01/2012 15:16

The conversation went as follows:

Me: "I don't understand why we are not technically being made redundant. I thought we had the same rights as substantive posts given our service record"

Manager: "There have been changes to employment law very recently. I was in discussion with HR right until lunchtime today. We only have to make you redundant if its diminished workload. In this case, it's de-commisioning the service, so the rules don't apply. The workload has not actually diminished"

Me: "So all that stuff about us going on the redeployment register, it's not applicable?"

Manager: "No, your name won't be on that list. We don't have a duty to help you find alternative work but I will help if I can"

Me: "There's a job at the same level I'm at least 50% suitable for which has just been advertised. I'm sure I wouldn't get the job as an external candidate but if my post was at risk, they would pretty much have to give it to me according to those organisational change documents you gave out last week. If what you're saying is true, I won't stand a chance with it"

Manaager: "I'll speak to the lady advertising the post and put a good word in for you but we have no obligation as a trust"

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sixtiesqueen · 22/01/2012 15:21

could I also clarify the stuff about continuous service? If you work for one PCT for 26 years (for example) and then transfer to another NHS trust for a two year fixed term contract, casn they argue that your continuous service is 2 years? The NHS continuous service is 28 years for many other purposes such as sick/maternity etc.

One of my colleagues was employed on a 6 month contract because she only came last autumn and there was only 6 months left on every one else's contract. Her NHS service is 20 years + however she will have only 6 months with this trust.

Thanks for your continued advice, it's very valuable to our team.

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flowery · 22/01/2012 15:24

That's such rubbish. If the service is decommissed and the posts no longer exist, they are redundant. How bizarre to claim they are not.

I don't know about internal redeployment procedures but fixed term employees should have equal access to vacancies as permanent employees.

flowery · 22/01/2012 15:25

If continuous service counts for sick pay and maternity it ought to also count for redundancy pay calcuations, yes. What do contracts say about continuous service dates?

sixtiesqueen · 22/01/2012 15:46

I dont know I need to check, I'll get back to you

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sixtiesqueen · 22/01/2012 15:52

Ok according to my contract it says that for employment rights act, my period of continuous service is from April 19th 2010 although other benefits are by reckonable NHS service. If my contract runs out on April 18th this means 1 year and 364 days not 2 years. Is this how they worm out of redundancy rights?

Prior to this job I worked for another NHS Trust for 1 year and 10 months. There was no break between the two contracts.

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sixtiesqueen · 22/01/2012 16:02

though it does say 'for a period of two years'

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flowery · 22/01/2012 16:06

Presumably your employer is the specific Trust, so that sounds right. Disclaimer: I have no knowledge of NHS employment.

If you won't have two years' service then you wouldn't be entitled to redundancy pay however it seems weird they are not just saying that rather than trying to say there's been a change in employment law Confused and decommissioning a service doesn't count as redundancy.

sixtiesqueen · 22/01/2012 16:10

Im confused now by the contract. It specifically says a period of two years but dates this as April 19th to April 18th.

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flowery · 22/01/2012 16:12

Doesn't really matter, it's the actual service that counts.

sixtiesqueen · 22/01/2012 16:22

well that's 356 days for each year by my reckoning. I think that's 2 years.

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Lougle · 22/01/2012 17:02

Your 'bible' here is The Agenda for Change Terms of Service Handbook

Section 16, on page 73, states:

"16.2 The Employment Rights Act 1996 Section 139 states that redundancy arises when employees are dismissed in the following circumstances:

??where the employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed; or where the employer has ceased, or intends to cease, to carry on the business in the place where the employee was so employed; or

? where the requirements of the business for employees to carry out work of a particular kind, in the place where they were so employed, have ceased or diminished or are expected to cease or diminish.?

Clearly, the requirement of the Trust has diminished, because they did need 8 of you and now they only need 2 Hmm

"Qualification for a redundancy payment

16.3 To qualify for a redundancy payment the member of staff must be an employee, working under a contract of employment for an NHS employer. ?NHS employer? means any of the organisations listed at Annex A in this Handbook and any predecessor or successor body. Non-executive directors of NHS organisations do not qualify. Contracts of employment may be written or verbal, and can be for a fixed period or be continuous. In law, employees have a contract as soon as they start work and in accepting and undertaking the work required they accept the terms and conditions offered by the employer. To qualify for a redundancy payment the employee must also have at least 104 weeks of continuous full-time or part-time service.

Definition of continuous service

16.4 ?Continuous service? means full-time or part-time employment with the present or any previous NHS Employer. If with more than one NHS employer, there must not have been a break of more than a week (measured Sunday to Saturday) between employments.

Definition of reckonable service

16.5 ?Reckonable service? for the purposes of an NHS redundancy payment, which is calculated on the basis of the service up to the date of termination of the contract, means continuous full-time or part-time employment with the present or any previous NHS employer but with the following additions:

? where there has been a break in service of 12 months or less, the period of employment prior to the break will count as reckonable service;

? periods of employment as a trainee with a general medical practitioner, in accordance with the provisions of the Trainee Practitioner Scheme, will count as reckonable service;

? at employer discretion, any period or periods of employment with employers outside the NHS, where these are judged to be relevant to NHS employment, can be included in reckonable service ? see Section 12 of the handbook.

So, in short, if your colleagues (or yourself) have had periods of employment with the NHS which exceed 104 weeks in total, with no more than a 12 month gap between breaks of service and they haven't had any periods of service counted in prior redundancy situations, then all service with their NHS employers is added together to form their 'reckonable service'.

An example:

B worked for Glasgow NHS Trust for 51 weeks

B left Glasgow NHS Trust and moved immediately to Shropshire NHS Trust for 3 years.

B then took 4 months to find another job. B finds a job at Southampton NHS Trust. B works there for 4 years 6 months, but is unfortunately made redundant.

B gets the following service 'recognised':

51 weeks
+
3 years
+
4 years 6 months
_
Total: 8 years 25 weeks.

Only complete years are counted so B receives 8 years of redundancy pay.

However, if there had been a break of more than a year between leaving Shropshire and joining Southampton, it would break the service and B would only get 4 years of redundancy pay.

sixtiesqueen · 22/01/2012 19:36

wow you are fantastic. Why didn't I think of the AfC handbook?

So - before we go back to HR - are there any funny clauses or caveats anyone can think of as to why they would get away with this? It seems pretty clear to me they're in the wrong and we ought to challenge them.

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Lougle · 22/01/2012 20:07

Not that I can see.

You are all employed. In fact (Flowery may be able to shed more light on it, becasue she is an HR expert and I am far from it) I think I would be asking why only the 2 permanent colleagues have the 'aspirational interviews'.

The directgov link is clearly showing that you shouldn't be selected for redundancy over permanent staff simply because you are fixed term. I think you would be wrong to accept that you are being made redundant, but they are being pushed for redeployment.

flowery · 23/01/2012 12:06

You are all employed and as fixed term contract staff you can't be treated less favourably therefore should have equal access to redeployment opportunities while you are still employed.

It is definitely a redundancy situation, although unless they do extend your contract you won't be entitled to redundancy pay as you won't quite have completed two years' service.

sixtiesqueen · 23/01/2012 12:57

Thanks both for your continued input. I discussed with my colleague last night and she also thinks they are on dodgy ground.

Regarding whether I have worked 2 years, if you work from 19th April 2010 to 18th April 2012 then that's 365 days x 2. If the contract said 19th Apil to 19th April then tht would be 365 days plus 366 days. I'm pretty sure it must be two full years.

According to the AfC handbook contents linked here, we should all be entitled to redundancy because we have more than 2 years service when you count service with this trust and others previously. It's a bit confusing because it looks as though our contracts don't follow the AfC rules set out in the AfC handbook. My colleague with 26 years service (6 with this trust) would lose out if they tried to argue the toss over what was meant by continuous service.

I am still hoping to be redeployed within the same trust because I have a set of transferrable skills which match similar jobs but this is not the case for everyone on the team. My main concern personally is not redundancy money but the redundancy process and to see the trust making an effort to slot me into another role. For others I suspect the issue will be the pay. Either way, as things stand, they are following no redundancy process for those of us on fixed term. We'll ask HR why not and I will come back to you with their response.

OP posts:
sixtiesqueen · 23/01/2012 12:58

(sorry I meant my colleague has 6 months service with them, not 6 years)

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flowery · 23/01/2012 13:48

Well I do disagree with you about the two years. If you started on 19th April 2010 then you won't have completed a full two years' service until 19th April 2012, your two year anniversary. How many days are in any given year isn't relevant imo. I imagine that's why your contract end date is 18th April in the first place.

However they don't seem to be saying they won't pay redundancy on that basis anyway, and as you point out, the Agenda for Change h/b has enhanced redundancy arrangements specified including accommodating breaks in service anyway.

Sounds dodgy all round anyway, and do let us have HR's response.

Lougle · 23/01/2012 15:29

Mmm although, Flowery, a 'year' is from 1st January until 31st December. For example, the 'year' of 2011 is 1st January 2011 until 31st December 2011. 1st January 2012 is the first day of the 'new year'.

Also, a tax 'year' doesn't run from 6th April 20xx-6th April 20xy. It runs from 6th April 20xx to 5th April 20xy.

So, I would think that if the contract is 19th April 2010-18th April 2012 that is 2 years.

KatieMiddleton · 23/01/2012 15:43

Just to add a brief comment about continuous service. I am not sure the introduction of a fixed term contract or the wording in it can legally break the continuous service??

I will have a look at the legislation.

KatieMiddleton · 23/01/2012 15:49

Well the legislation is unclear but the NHS's own policy is not!

Have a look at this: www.nhsemployers.org/PayAndContracts/AgendaForChange/NHS-redundancy/Pages/Retirement-redundancy-pitfalls.aspx So long as you have been employed by an organisation that is an NHS employer with no gaps of a week or more then you are likely to be counted as continuously employed for the whole period (there's a bit more to it but you can read that for yourself).

flowery · 23/01/2012 15:49

I agree with your personal definition of a year Lougle. But without actually checking case law, in terms of an employment tribunal I understand the OP would be entitled to redundancy if her employment ended from 19th April onwards.

I haven't specifically checked as I say. But there was a case I think last year from memory where an employee brought a claim on the 3 month anniversary of termination date (the last possible date to bring a claim being 3 months after termination). The employer argued the 3 months was up the day before and I think the tribunal ruled it was within time. If the same principle applied to redundancy that would imply that two years weren't up until the two year anniversary.

This is all pretty vague and I'm happy to be proved wrong if anyone has a case the other way. In the OP's employer's shoes I would be specifically checking.