News and Events

Employment Status - Ultra Vires contracts

  • Posted

[Thanks to Chris Milsom of St Philips Chambers for preparing this case summary]

The EAT (Slade J) has handed down its decision in Shrewsbury NHS Trust v Lairikyengban. In upholding the appeal, the EAT ruled that an employment contract renewed in contravention of the NHS Regulations was ultra vires. However, an employee who continues to work under an ultra vires contract of employment is nevertheless entitled to be treated as an employee under the ERA (Eastbourne Borough Council v Foster [2002] ICR 234 applied).

The EAT stated that a failure to renew a fixed-term contract is not in itself sufficient grounds for a redundancy claim where there was no reduction in the overall level of work required to be completed by an employer and there remained a vacancy for a permanent employee. In those circumstances, the ET's decision to uphold a claim for contractual redundancy payment was perverse.

Further, the ET acted erroneously where it determined remedy on the evidence despite a previous agreement between the judge and the parties to conduct a split hearing.