Department for Work and Pensions v Webley

Factual and Procedural Background

On 18 March 2003, the Respondent issued a claim in the Employment Tribunal alleging that the Appellant, a government department, discriminated against her as a fixed-term employee by terminating her employment before 52 weeks, a practice referred to as the "51 week rule". The Appellant denied that it was required to convert fixed-term contracts into permanent ones or that the expiry of a fixed-term contract constituted less favourable treatment or a detriment under the relevant regulations.

The facts were undisputed and the case raised a pure point of law. A Regional Chairman of Employment Tribunals heard the preliminary issue and ruled against the Respondent, dismissing the claim. The Respondent appealed to the Employment Appeal Tribunal (EAT), where the appeal was allowed and the matter remitted for a full merits hearing. The Appellant then appealed to the court pursuant to permission granted.

The Respondent had been employed on a series of short fixed-term contracts as an administrative officer, performing general duties competently. Her initial contract was for three months, with extensions allowed up to nine months and exceptionally beyond, subject to written notification. Her last extension expired on 17 January 2003, and her contract was not renewed despite a continuing need for her services, as evidenced by other short-term employees being engaged at the same time.

The Respondent alleged less favourable treatment compared to permanent employees of the same grade performing similar duties, who were not subject to contract termination at 51 weeks. Her complaint was made exclusively under regulation 3(1)(b) of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.

Legal Issues Presented

1. Whether the non-renewal of a fixed-term contract can amount to less favourable treatment under regulation 3(1)(a) or 3(1)(b) of the Fixed-Term Employees Regulations 2002.
2. If such non-renewal constitutes less favourable treatment, whether it is on the ground that the employee is a fixed-term employee and whether such treatment is objectively justified under regulation 3(3).

Arguments of the Parties

Appellant's Arguments

• It was lawful to employ fixed-term contracts and there was no obligation to convert them into permanent contracts.
• The less favourable treatment alleged related to the duration limit of fixed-term contracts, which is inherent and lawful, not discriminatory.
• The regulations and the Directive do not seek to abolish fixed-term contracts but to eliminate discrimination during the contract term.
• The 51-week rule was a lawful policy governed by the Civil Service Order in Council and Recruitment Code, which allowed short-term contracts up to 12 months without full competition.
• Any difference in treatment arising from contract duration does not constitute less favourable treatment under the regulations.
• Reference to the case concerning indirect sex discrimination was misplaced and irrelevant to the present regulatory context.

Respondent's Arguments

• The refusal to renew the fixed-term contract despite a continuing need for the Respondent’s services constituted an act or deliberate failure to act amounting to less favourable treatment under regulation 3(1)(b).
• The 51-week rule was designed to prevent fixed-term employees from acquiring employment rights such as unfair dismissal protection, which permanent employees were not subject to.
• The Respondent suffered a detriment by being dismissed after 51 weeks while permanent employees in comparable positions were not dismissed.
• Reliance was placed on a previous decision where non-renewal of fixed-term contracts was found to constitute indirect discrimination, arguing that the regulations should provide a remedy in similar circumstances.
• Guidance from a government publication supported the proposition that fixed-term employees could be disadvantaged compared to permanent employees in ways prohibited by the regulations.
• Reference was made to European Court of Justice decisions affirming that successive fixed-term contracts could amount to a stable employment relationship, supporting protection against arbitrary non-renewal.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the regulatory framework established by the Fixed-Term Employees Regulations 2002, which implement the EU Directive aimed at preventing less favourable treatment and abuse through successive fixed-term contracts. It acknowledged that fixed-term contracts are lawful and recognized as suitable in certain circumstances, as reflected in the Directive's preamble.

The court emphasized that the essential characteristic of a fixed-term contract is its limited duration, which necessarily results in termination upon expiry. The court found that this characteristic cannot itself constitute less favourable treatment under regulation 3(1)(a) or (b), as the duration term defines the fixed-term status.

The court rejected the Respondent’s argument that the non-renewal of the contract, despite a continuing need for the services, amounted to less favourable treatment. It reasoned that the regulations protect against discrimination during the currency of a contract but do not require the conversion of fixed-term contracts into permanent ones or prevent their lawful expiry.

The court also found that the 51-week rule was a lawful policy supported by the Civil Service Order in Council and Recruitment Code, designed to allow flexibility and avoid abuse of fixed-term contracts. It noted the absence of any abuse or irrationality in the application of this policy.

The court distinguished the present case from the cited precedent concerning indirect sex discrimination, clarifying that the issue here was a straightforward application of the fixed-term contract regulations rather than discrimination on other grounds.

Consequently, the court concluded that the preliminary issue as formulated by the Regional Chairman was appropriate and that the non-renewal of a fixed-term contract in these circumstances did not constitute less favourable treatment under the regulations.

Holding and Implications

DISPOSED OF: The court allowed the appeal, set aside the Employment Appeal Tribunal’s decision, and dismissed the Respondent’s originating application. The Respondent was ordered to pay the Appellant’s costs. Permission to appeal to the House of Lords was refused.

The decision directly affects the parties by confirming that the lawful expiry of a fixed-term contract, even if resulting in dismissal, does not amount to less favourable treatment under the Fixed-Term Employees Regulations 2002. No new legal precedent was established beyond the application of existing regulatory principles to the undisputed facts.