The non-renewal of a fixed-term contract is in law a dismissal. This is set out in s.95(1)(b) of the Employment Rights Act 1996, which provides that an employee is dismissed by the employer if they are “employed under a limited-term contract and that contract terminates by virtue of the limiting event without being renewed under the same contract”.
If an employee’s fixed-term contract comes to an end while they are on maternity leave, there is no express obligation on the employer to re-employ them at the end of maternity leave. If it does not, the key question will be why the contract was not renewed. If the reason for the non-renewal of the fixed-term contract is related to the employee’s pregnancy or the fact that they are on maternity leave, the dismissal will be automatically unfair under s.99 of the Employment Rights Act 1996. Under this section there is no need for the employee to meet the requirement of having two years’ qualifying service in order to present a claim for unfair dismissal. It is also likely that an employee in such a situation would include a claim for pregnancy and maternity discrimination. The employer should ensure that there are other justifiable reasons for not renewing the contract and that these are unconnected with pregnancy or maternity leave.
If the non-renewal of the contract is due to a redundancy situation, the employer should bear in mind that the employee is “entitled to be offered” any suitable alternative employment (reg.10(2) of the Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312). This places the employee in a preferential position to others facing the same redundancy situation in that the Regulations give them a right to be offered any suitable alternative employment. For example, if the employee was hired on a fixed-term contract to carry out work on a particular project and the project has come to an end, the employer has a duty to consider whether or not there is any suitable alternative employment for the employee and, if there is, to offer it to the employee while they are on maternity leave, to commence immediately after the expiry of the fixed-term contract. The employee will have the right to return to work in the new role at the end of the maternity leave period.
Article – Where a fixed-term employee’s contract is due to terminate while they are on maternity leave, does the employer have any obligation to re-employ them at the end of the maternity leave? – originally posted on XpertHR
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