Given that the expiry of a fixed-term contract constitutes dismissal, what will usually be a fair reason for dismissal?
There is no hard and fast rule on what the reason will be for termination due to the expiry of a fixed-term contract. If an employee has at least two years' service, regardless of whether some or all of the service is on a fixed-term contract, he or she has acquired the right not to be unfairly dismissed. The employer must have a potentially fair reason for not renewing the contract. Often, a fixed-term contract has been imposed because there is a set piece of work to do. If that set piece of work has come to an end, the reason for non-renewal is likely to be redundancy, on the basis that the requirement for an employee to do the work has ceased or diminished. In the case of an individual employed to cover an employee's maternity leave, it could be that the expiry of the fixed-term contract constitutes "some other substantial reason" for dismissal.
The employer should always consider why it is not planning to renew a fixed-term contract and be able to match this against one of the fair reasons for dismissal in the Employment Rights Act 1996 (eg conduct, capability, or redundancy). The employer must also follow the correct procedures to ensure that the dismissal is fair.
Regardless of the employee's length of service the employer must ensure that the reason for non-renewal is not an unlawful ground such as pregnancy or asserting a statutory right.