Can my employer not renew my contract if I am on maternity leave?

I understand that you are on a fixed-term contract which renews each year. Prior to proceeding on maternity leave, you were told in a meeting that you would cease to be employed by the company beyond your current contract. You would have attained two years of service at the date of expiry of the current contract.

You would have a number of potential claims on the basis of the circumstances you have described.

Unfair Dismissal

If an employer decides against renewing an employee’s contract (whether on the same terms or otherwise), this will amount to a dismissal. In employment law, an employee who has acquired two years of continuous qualifying service may bring a claim for unfair dismissal if the dismissal is not fair.

A fixed-term contract renewable each year does not break continuity of service. If you have acquired two years’ service, your employer must show that they had a potentially fair reason for the dismissal (whether capability, conduct, redundancy, contravention of a statutory obligation or some other substantial reason justifying the dismissal), have followed a fair procedure and acted reasonably in treating that reason as a sufficient reason for dismissal.

In many cases, the non-renewal of a fixed term contract will be potentially fair by reason of redundancy, if the employer can show that there was a true redundancy situation and the dismissal was for that reason. There does not appear to have been a mention of redundancy during your recent meeting. It appears that the only reasons the employer has given for the non-renewal is the mere fact that the contract is coming to an and the impending maternity leave. If this is the case, you are likely to have a claim for unfair dismissal against the employer.

If it is found that the reason for the dismissal is connected to your pregnancy or maternity leave, the dismissal will also be automatically unfair. This means that such dismissals are always deemed unfair and once this is established, a tribunal will not further explore whether the employer acted reasonably. Quite significantly, in nearly all cases of automatically unfair dismissal (and certainly in pregnancy and maternity cases), the two-year qualifying period does not apply in which case an employee is allowed to bring a claim even if they have less than two years’ service.

Fixed-Term Employees Regulations

Under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) (the “Regulations”), a fixed-term employee has 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 their employer unless the employer can objectively justify the treatment. A comparable permanent employee for the purposes of the Regulations is an employee who is not on a fixed term contract and who is employed by the same employer in the same establishment on broadly similar work having regard where relevant to qualification and skills.

Where an employee can show that a colleague on a permanent contract would not have been dismissed under similar circumstances i.e. due to maternity, you may have a claim under the Regulations. There is no limit on the compensation which can be awarded pursuant to a claim for less favourable treatment under the Regulations, but any award should be just and equitable and will be connected to the financial loss suffered by the employee.

Pregnancy and Maternity Discrimination

Pregnancy and maternity is one of nine “protected characteristics” covered by the Equality Act 2010 (the “Act”). Under the Act, it is unlawful for an employer to treat a woman unfavourably:

–       during the period from the beginning of pregnancy to the end of maternity leave (the “Protected Period”) because of her pregnancy or because of an illness she has suffered as a result of her pregnancy; or

–       because she is on compulsory maternity leave; or

–       because she is exercising or seeking to exercise, or has exercised or sought to exercise, the right to ordinary or additional maternity leave.

Unlike under the fixed term regulations, there is no requirement for a comparator. The emphasis under the Act, is whether the particular pregnant employee is being treated unfavourably rather than less favourably.

Given the circumstances you have described, I consider that you would have a claim for pregnancy/maternity discrimination.

Signed Documentation

I note that you signed some documentation following the meeting. It is not clear whether the paperwork signed was a settlement agreement with the aim of settling claims you could have against the employer. I would note that, in order for a settlement agreement to be valid, an employee is required to take independent legal advice on its terms prior to signing.  It does not appear that this has happened given that you do not seem to have had a chance to consider the documentation. On that basis, if the signed documentation was indeed intended to be a settlement agreement, it would be invalid for failure to satisfy the legal requirements.  It may also be possible to argue that the employer springing the agreement on you  on your last day and requiring you to sign it on the same day constitutes duress, which would also render the documentation void, although this is very rare.

Next Steps 

I would strongly encourage you to take specific legal advice on your employment situation as soon as possible as you have potential claims against your employer. Any claim for unfair dismissal or discrimination must be presented within three months of the dismissal/discriminatory act and you must go through the ACAS early conciliation process before submitting a claim.

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