Last month, an employment tribunal considering the case of Andrew Ball and the University of Aberdeen ruled that the practice of offering only fixed-term contracts to staff funded by fixed budgets, primarily research staff funded by research council and charity grants, was not lawful (Times ÖйúAƬ, 5 June).

The ruling will affect the status of all fixed-term staff in the UK. Although the judgment could be appealed, in the view of employment solicitors Pinsent Masons it is unlikely to be overturned. The University and College Union has rightly upheld this as a major victory.

University research is a major UK industry. Some 60,000 researchers are employed on projects costing billions of pounds and capable, one hopes, of earning billions more. Short-term contracts are a false economy. New researchers train and leave, project after project.

Why have universities persisted for so long in issuing fixed-term contracts with the expectation of serial unemployment?

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Reason 1: conflation. For legal purposes, there are two distinct contracts in play: the contract for goods and services (funding for research outcomes) between the university and the funding body, and the contract of employment between the university and the researcher. These are different legal entities. There is no necessary reason for ending the second because the first had finished.

Reason 2: culture. In my role as a UCU branch secretary, I am tired of hearing managers telling well-qualified researchers that they should "expect" to be made redundant. Young researchers speak of getting a job or obtaining a grant like winning an audition. Sad to say, despite our universities employing very many diligent and sympathetic principal investigators and research managers, most research staff regularly find themselves faced with unemployment.

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Reason 3: competition and micro-budgeting. The intensity of competition for grants, papers and awards between academics, and the responsibility for devolved budgets thrust upon them, fragments research. University senior management need to take responsibility for improving the situation.

It really doesn't have to be like this. You do not have to follow Imre Lakatos and Thomas Kuhn to recognise that science proceeds by research programmes of interlocking projects. Continuity of principal investigators is not enough. Innovation in research includes improvements in methodology and technique driven forward by practitioners. Breaking the employment of the staff who deliver programmes of research is damaging to the science. A similar argument applies to the arts. Universities persisting in casual research employment should be criticised publicly for putting their bottom line before their mission.

The practice in industrial science is to offer permanent contracts, with research scientists moving from one project to the next, assisted by the employer. Universities in other European Union countries, France in particular, offer staff a permanent status. Within British universities there are many pockets of good practice - sometimes despite senior management.

What would happen if every UK university made research staff permanent? The evidence from University College London, which did so two years ago, is that it would make little financial difference to the institution. But rebranding a fixed-term contract "permanent" is not enough. Universities must rethink the way research is managed.

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The problem is that research is organised into small groups under one or two principal investigators. Research groups tend to "boom and bust", and small groups are more vulnerable than large ones. The solution is to team up research groups in clusters and networks, allowing larger grants to be bid for and collaborative themes to be developed, but also, if one group is particularly successful, for research staff to transfer to that group.

Researchers must be given opportunities to gain transferable skills well before the end of their current project. Real estate and facilities management should be flexible, with space following research activity, to enable a surfeit of projects in one area to be accommodated.

Gaps between projects may thereby be minimised. Where staff find themselves at risk of redundancy, their post can be supported from research overheads (ask your university where the full economic costs money has gone) and the university can consult with the unions if a particular area of research declines.

It is time for a new deal for research staff. The UCU calls this "proactive redeployment and career planning" and has published a Survival Guide for every researcher.

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I prefer a simpler "green" slogan: reuse, recycle ... and research.