The Association of University Teachers is considering legal action against Nottingham University because, it claims, the profit-related pay scheme fails to offer a fair deal to fixed-term employees.
Sandi Golbey, local AUT president, said she has received complaints from a number of staff who did not receive the full end-of-year bonus because their contracts were terminated during the year.
However Miles Hedges, director of finance, said the scheme had been designed to help staff on fixed-term contracts because 90 per cent of the profit-related pay was paid out in monthly instalments rather than in a lump sum after the end of the financial year.
"Under Inland Revenue rules we cannot pay employees once they leave the university," he said.
The scheme rules state that anyone made redundant would be entitled to a share of the final profit-related bonus. This is where the difficulty lies because universities do not treat the ending of a fixed-term contract as a redundancy while the AUT does. "If fixed-term staff are not redundant on completion of their contracts, why are they obliged to sign a clause waiving their rights to a redundancy payment?" Ms Golbey asked.