The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 gave employees on fixed-term contracts of at least four years the right to a permanent contract, with some limited exclusions. In Hudson v Department for Work and Pensions (DWP), the Employment Appeal Tribunal (EAT) said that the exclusion relating to trainees only relates to the fixed-term contract under which they are currently employed.

Basic facts

Ms Hudson started working for the DWP on a fixed-term contract in April 2006. This was then extended on a number of occasions, with the latest contract coming into effect on 19 October 2009.

In 2010 she applied for a declaration that she had become a permanent employee under Regulation 8 of the fixed-term Regulations.

The DWP argued that as she had been employed on the government’s New Deal scheme in the period between April 2006 and October 2009, her employment fell within the exclusion in Regulation 18.

Relevant law

Regulation 8 states that employees who have been employed for four years or more on a series of fixed-term contracts are deemed to be permanent employees unless the employer can objectively justify the current contract being for a fixed-term or they fall within one of the exclusions in Regulation 18.

Regulation 18 states, among other things, that the Regulations do not apply to a fixed-term employee who is “on a scheme, designed to provide him with training or work experience for the purpose of assisting him to seek or obtain work, which is ... provided to him under arrangements made by the Government ...”

Tribunal decision

The Tribunal Judge held that as some previous periods of Ms Hudson’s employment fell within the exclusion set out in Regulation 18, she could not claim to be a permanent employee under Regulation 8.

She appealed, arguing that the exclusion in Regulation 18 should be narrowly construed to relate solely to the person’s current contract of employment and not to any previous fixed-term contracts.

In that case, the exclusion would not prevent her from relying on past periods of employment which fell within the conditions in Regulation 18, but would only prevent a successful application under Regulation 8 if her current circumstances fell within the exclusion.

EAT decision

The EAT agreed that exclusions should be construed narrowly and that Regulation 18 was concerned with the present circumstances of the employee.

“That is to say, their circumstances in relation to the fixed-term contract under which they are presently employed”.

Ms Hudson's current contract was not therefore caught by Regulation 18 and there was nothing to prevent her, as a former trainee, from invoking the four-year rule, even though she had been on a scheme for some of those four qualifying years.

The EAT remitted the case to the Tribunal to decide if the DWP could objectively justify the series of fixed-term contracts.

Comment

This decision is an important one for fixed-term employees who have previously been employed on government training schemes. However, the Tribunal in this case did not consider whether the use of successive fixed-term contracts was objectively justified and it may well be that despite this victory, Ms Hudson’s case will be unsuccessful when they do consider this question.