Department for Work and Pensions v Webley

The Court of Appeal held that the simple expiry or non-renewal of a lawful fixed-term contract cannot, of itself, amount to "less favourable treatment" under regulation 3(1)(a) or (b) of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. The essence of a fixed-term contract is that it terminates by effluxion of time; that consequence cannot be treated as a detriment covered by regulation 3(1)(b) unless some other act or difference in treatment, not intrinsic to fixed-term status, is established. The court emphasised the two aims of the Directive and the regulations (non-discrimination during the currency of fixed-term contracts and prevention of abuse by successive fixed-term contracts) and noted that the regulations provide the remedy for abusive succession of contracts by means such as regulation 8 (the four year rule). The Department's policy limiting fixed-term appointments (the "51 week rule") was lawfully grounded in the Civil Service Order in Council and the Recruitment Code and was not, on the facts, unlawful or abusive.

Background and parties: Mrs Atasha Webley sued the Department for Work and Pensions alleging discrimination as a fixed-term employee under the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, complaining that her contract was not renewed after 51 weeks. The Department defended that non-renewal and the distinction between fixed-term and permanent employment were lawful.

Procedural posture: The Employment Tribunal (regional chairman) heard a preliminary issue and dismissed Mrs Webley’s claim. The Employment Appeal Tribunal (HH Judge Peter Clark) allowed her appeal, holding that non-renewal could be "capable" of constituting less favourable treatment depending on the facts and ordered a full merits hearing. The Department appealed to the Court of Appeal.

Nature of the claim and relief sought: The claim alleged less favourable treatment under regulation 3(1)(a) or 3(1)(b) of the 2002 Regulations arising from the non-renewal/expiry of a fixed-term contract before 52 weeks; the practical relief sought was to proceed with a discrimination claim before an employment tribunal and associated remedies available under the regulations.

Issues framed by the court:

• Whether the non-renewal/expiry of a fixed-term contract can amount to less favourable treatment under regulation 3(1)(a) or (b).
• Whether the specific "51 week" term of a fixed-term contract could be compared with a permanent employee’s contract for the purposes of regulation 3.
• Whether the Department’s policy was abusive or objectively justifiable, having regard to the Order in Council and the Civil Service Recruitment Code, and the protection against abuse provided by regulation 8 (four-year rule).

Court’s reasoning and conclusion: The Court of Appeal emphasised that fixed-term contracts are lawful and that their defining feature is that they end by expiry. Consequently the mere fact of termination at the end of a fixed term cannot, without more, amount to less favourable treatment or a detriment under regulation 3(1). The regulations protect fixed-term employees from discrimination in terms and treatment during the currency of the contract and from abusive use of successive fixed-term contracts; where abuse is alleged the four-year rule in regulation 8 provides a statutory test. The Department’s 51-week policy was lawful and objectively justifiable within the Civil Service framework. The court therefore allowed the appeal, set aside the EAT’s order and dismissed the originating application.

Appeal allowed. The Court held that the expiry or non-renewal of a lawful fixed-term contract, being intrinsic to that form of employment, cannot by itself constitute less favourable treatment under regulation 3(1)(a) or (b) of the Fixed-Term Employees Regulations 2002. The regulations protect against unequal treatment during the currency of a fixed-term contract and against abusive succession of fixed-term contracts (not by abolishing fixed-term contracts), and the Department’s 51-week policy was objectively justifiable under the Civil Service Order in Council and Recruitment Code; the claimant’s application was therefore dismissed.

Employment Tribunal (Regional Chairman Mr Ian Lamb) heard a preliminary issue and dismissed the application (reserved decision 11 November 2003); Employment Appeal Tribunal (HH Judge Peter Clark) allowed the claimant’s appeal on 24 March 2004 (EAT/0033/04) and directed a full merits hearing; Court of Appeal allowed the Department’s appeal [2004] EWCA Civ 1745 and dismissed the originating application.