Do employers need to offer fixed term contract employees the same benefits as ordinary employees?
Well normally the answer is yes to avoid claims for less favourable treatment. In the case of Hall v Xerox UK Ltd, the employer provided the benefit of income replacement for ill health through a third party. The Claimant suffered from a condition which would have put him off work for 26 weeks and qualified him for the benefit. However, his fixed-term contract was due to expire within three months and notwithstanding the fact his employers extended it for 12 months, the third party refused his claim relying on a policy provision that restricted the benefit to the unexpired period of the fixed-term as at the time of the injury.
A Tribunal found that there had been less favourable treatment than if he had been a permanent employee but that it was the act of the third party not the employer who had just communicated it. The EAT held that the Tribunal’s decision was one it was entitled to reach. The discrimination was justified as it pursued the legitimate aim of providing employees with PHI at no greater expense than the costs of an annual premium.
As the third party were not the agent of the employer there was no attempt to contract out of the Fixed-Term Workers Regulations and it was therefore justified on this basis. It is reassuring for employers to know that they will not be held liable for the actions of their third party insurers in such cases. It remains to be seen whether employers will use this case as justification for not providing other benefits for fixed term workers where the conditions are set by third parties in particular.
Witten by Robin Aston
11th November 2014