When are Fixed-Term Employees treated less favourably?

In a recent case decided by the Employment Appeal Tribunal the question of less favourable treatment for fixed-term employees was discussed and decided.

The case in question involved Xerox UK Limited who were the employer. They provided income protection insurance to their employees under terms of insurance with Unum. The income protection was provided to permanent and fixed-term staff who were off work for 26 weeks’ due to injury.

In accordance with Unum’s policy terms fixed-term employees did not qualify for the income protection if their fixed-term contract expired before the end of the 26 week qualifying period.

The Law

The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 provide protection from less favourable treatment for fixed-term employees. This means that they have the  the right not to be treated less favourably than a comparable permanent employee as regards the terms of their contract or by being subjected to any other detriment by any act, or deliberate failure to act, of their employer.

Facts

The employee in this case, Mr Hall worked for Xerox under several fixed-term contracts. He suffered a work-related hernia when he was approximately 3 months’ away from the expiry of the most recent fixed-term contract. Consequently  Unum, refused his claim for income protection. This was despite the fact that Mr Hall’s contract had also been extended by a further year.

Mr Hall made a claim to the Employment Tribunal that he had been treated less favourably under the Fixed-term Employees Regulations.

Decision

The Employment Tribunal did not agree with Mr Hall’s claim. Whilst they agreed the policy of insurance did contain a provision that treated Mr Hall less favourably, the treatment was not caused by an act or omission of his employer, Xerox.

The reason for the less favourable treatment was Unum’s policy which Xerox were bound by and they had little or no choice in obtaining insurance in the market. Other insurers applied the same criteria in their insurance policies.

Mr Hall appealed against the decision and the Employment Appeal Tribunal dismissed his appeal.

They agreed that Unum caused the detriment to Mr Hall and Unum was not acting as agent of Xerox.

Points to Note

This case highlights the importance of ensuring that you apply consistent policies to staff but also provides some assurance that you do not have to forego employee benefits just because a comparable benefit is not available for fixed-term employees.

If you have any doubt about your employee benefits please do not hesitate to contact me for a no-obligation discussion

You can read the full Judgement on the Employment Appeal Tribunal website by clicking here Hall v Xerox UK Ltd