Mrs Hudson was employed by the Department for Work and Pension (“the Department”) under successive fixed term contracts. The first two lasted in total a period of three years and were offered pursuant to a Government scheme. At the end of the scheme Mrs Hudson secured a further fixed term of 18 months in the post of Diary Administrative Support Officer.

When Mrs Hudson had been working for the Department for four years she sought confirmation that she was now a permanent employee pursuant to Regulation 8 of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. Regulation 8 provides that:

"(1) This regulation applies where – (a) an employee is employed under a contract purporting to be a fixed term contract, and (b) the contract mentioned in sub-paragraph (a) has previously been renewed, or the employee has previously been employed on a fixed term contract before the start of the contract mentioned in sub-paragraph (a).

(2) Where this regulation applies then, with effect from the date specified in paragraph (3), the provision of the contract mentioned in paragraph (1)(a) that restricts the duration of the contract shall be of no effect, and the employee shall be a permanent employee, if -(a) the employee has been continuously employed under the contract mentioned in paragraph 1(a), or under that contract taken with a previous fixed term contract, for a period of four years or more, and (b) the employment of the employee under a fixed term contract was not justified on objective grounds -(i) where the contract mentioned in paragraph (1)(a) has been renewed, at the time when it was last renewed; (ii) where that contract has not been renewed, at the time when it was entered into.

(3) The date referred to in paragraph (2) is whichever is the later of -(a) the date on which the contract mentioned in paragraph (1)(a) was entered into or last renewed, and (b) the date on which the employee acquired four years' continuous employment."

However, certain employees are excluded from the Regulation. Under Regulation 18:

"(1) These Regulations shall not have effect in relation to a fixed term employee who is employed on a scheme, designed to provide him with training or work experience for the purpose of assisting him to seek or obtain work, which is either -(a) provided to him under arrangements made by the Government, or (b) funded in whole or in part by an institution of the European Community.

(2) These Regulations shall not have effect in relation to a fixed term employee whose employment consists in attending a period of work experience”

Mrs Hudson was informed that the Department considered that the period of employment under the Government scheme was excluded by Regulation 18 and so did not count towards the four years required by Regulation 8 to be a permanent employee. Mrs Hudson sought a declaration from the Employment Tribunal that she was covered by Regulation 8, but her argument was rejected. However, the Employment Appeal Tribunal overturned this decision and allowed her appeal. The Department then appealed to the Court of Appeal.

The Court of Appeal had to consider whether the wording in Regulation 18 which refers to an employee “who is employed on a scheme” meant that it excluded only those currently employed on a scheme, which the appellant was not, or excluded the period for which a person was so employed. The Court of Appeal considered that, in keeping with the other exclusions in the Regulation and its general purpose, Regulation 18 was meant to exclude all previous employment under a scheme from the calculation of four years continuous employment required by Regulation 8. As such the appellant‟s three years employment on the Government scheme did not count and she remained a fixed term employee.

Read the full decision in Hudson v Department for Work and Pensions [2012] EWCA 1416 here.