Temporary contracts

Case 7: The facts

Derek Allen's fixed-term contract of employment contained a clause under which either party could terminate the contract with notice. He was dismissed, but his employer had not followed the performance improvement procedure that it would have used for a permanent employee.

Allen brought a claim under the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, as he had been treated less favourably than permanent employees. His employer argued that the notice clause took the contract outside the protection of the regulations, because it meant that the term of the contract could be varied and it could not therefore be defined as a fixed-term contract.

The ruling

The EAT held that a contract that is expected to last for a fixed term is still a fixed-term contract, even if there is an option to end it at an earlier date. Allen was therefore protected by the regulations and was entitled to pursue his claim.

Allen v National Australia Group Europe EATS/0102/03