Latest in Employment Law>Case Law>Maurice Power v Health Service Executive [2022]
Maurice Power v Health Service Executive [2022]
Published on: 16/02/2023
Issues Covered: Contracts of Employment
Article Authors The main content of this article was provided by the following authors.
Duncan Inverarity
Duncan Inverarity
Background

The Protection of Employees (Fixed-Term Work) Act 2003 (the Fixed Term Work Act) provides that where an employee is employed on two or more successive fixed-term contracts, the aggregate duration cannot exceed four years without objective grounds. Otherwise, the contract concerned will be deemed to be permanent.

The Labour Court had held that application of the Fixed-Term Work Act was confined to situations where the employee's relationship with their employer would end upon termination of the fixed-term contract (FTC).

In 2021 the High Court held that the Labour Court had misconstrued the definition of 'fixed-term employee' by interpreting a contract of employment as being synonymous with an enduring employment relationship. It was held that Mr Power was a fixed-term employee and as such benefited from the Fixed Term Work Act.

The Supreme Court confirmed the approach taken by the High Court and stated that Mr Power was a fixedterm employee during the period in question. The case was remitted to the Labour Court to consider the justification of the renewal of the successive fixed-term contracts.

What happened?

Mr Power was appointed Chief Financial Officer (CFO) of the Saolta University Healthcare Group in 2012. He worked as the Interim Group Chief Executive from October 2014. Mr Power's initial FTC for the role was for a period from October 2014 until the sooner of (a) 31 March 2015, or (b) the role was filled permanently. The period was extended a number of times until September 2019 when he was unsuccessful in a public competition for the role and he resumed his role as CFO.

Mr Power alleged that he was entitled to permanently remain in the position of Group Chief Executive as he was employed under successive fixed-term contracts with an aggregate duration of in excess of 4 years. What did the Supreme Court decide?

The Supreme Court considered the High Court decision that Mr Power was a fixed-term employee during the periods he 'acted up'. In the event that the Supreme Court upheld the decision of the High Court, the HSE would have to establish objective grounds justifying the renewal beyond four years.

The Supreme Court looked at the definition of 'fixed-term employee' in the Fixed Term Work Act and held that the High Court had been correct in its approach. The relevant definition refers to the 'contract concerned'. The Supreme Court determined that this meant the contract was operative at the relevant time, i.e. the fixed-term contract in the present case.

The HSE advanced an argument that there had been a variation of the original contract of employment rather than a series of fixed-term contracts in existence. As such Mr Power's contract persisted during the period of 'acting up' and no termination took place. The Supreme Court rejected that argument and determined that the original contract was either terminated or at least suspended, not varied.

The Supreme Court confirmed in its decision that the Fixed-Term Work Act does not omit employees who are 'acting up' from the remit of the Act. According to Mr Justice Woulfe: "[…] the correctness of the trial judge’s conclusions is reinforced by considering the overall effect of the appellant’s submissions. The effect would be to remove the application of the Act from one entire cohort of employees, i.e. employees who are already in a permanent employment relationship with their employer, but who agree to “act up” in a higher role on a temporary basis. The Framework Agreement, however, and the Irish legislation giving effect to same, contain no express exclusion of such employees, and it seems to me that very clear language providing for any such exclusion would have been necessary."

Key Takeaways

Where employees are on successive fixed-term contracts, or occupying a role temporarily, the employer must:

  • Inform the employee in writing on/before the date of renewal of an FTC of objective grounds justifying the renewal, as opposed to offering a permanent contract.
  • Ensure that there are objective grounds of justification where the employees is on two or more successive FTCs and the aggregate duration exceeds four years.

If the employer fails to do so, the contract will be deemed to be permanent.

The employer should be regularly reviewing the reasons why they are using the FTC, even more so when the aggregate duration is approaching four years.

Objective justification must be based on:

  1. objective transparent criteria;
  2. which respond to a genuine need;
  3. are appropriate for achieving the objective being pursued; and
  4. necessary for that purpose.

Full case: https://ie.vlex.com/vid/power-v-health-service-803278689

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 16/02/2023