The European Union has passed a range of directives prohibiting discrimination at work over the 40 or so years that Ireland has been a member and their transposition into domestic legislation has had a significant impact on workplaces across the State.

These vary from the nine discriminatory grounds outlawed under the Employment Equality Acts 1998 – 2007 namely; gender, civil status, family status, age, disability, race, religious belief, sexual orientation and membership of the Travelling Community to the array of legislation that attempts to ensure that part-time, fixed-term and agency employees are not treated less favourably than their full time or permanent colleagues.

A critical point to understand in terms of presenting or defending a discrimination case is that the Court of Justice of the European Union (and its predecessor the European Court of Justice) has made it clear in a long succession of rulings that measures adopted by employers that are discriminatory in principle may be objectively justified in practice.

The test for demonstrating objective justification is now well established to the extent that it has been incorporated into some anti-discrimination legislation. A case in point in Ireland is the Protection of Employees (Fixed-Term Work) Act 2003, which transposes the framework agreement on fixed-term work concluded by the EU social partners in 1999.

This Act is now perhaps best known for setting a limit of four years on the amount of time an employee may serve under a series of two or more fixed term contracts. Infringement of this rule will in principle entitle the affected employee to a contract of indefinite duration (or permanent status). This is subject, however, to a very important exception. An employer is entitled to argue that it has objective grounds to justify the offer of a further fixed term contract or contracts beyond this notional limit.

For this purpose, Section 7 of the 2003 Act adopts the wording handed down by numerous court decisions and provides that:

‘A ground shall not be regarded as an objective ground unless it is based on considerations other than the status of the employee concerned as a fixed-term employee and the less favourable treatment which it involves for that employee (which treatment may include the renewal of a fixed-term employee's contract for a further fixed term) is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose’.


Overview

Today’s email reviews two recent decisions of the Labour Court on appeal under the 2003 Act where the issue of what may amount to objective grounds to extend a fixed term employee’s employment beyond the four year limit is carefully considered by the Court.

In both cases, the employers in question, both universities, succeeded in arguing that further fixed-term arrangements were objectively justified. Some interesting findings are made in the first case in particular. For example, the Court decided that a fixed term or fixed purpose contract does not have to be put in writing under the Act (though it should be said that it is highly advisable); only the reasons for renewing a fixed term arrangement must be stated in writing.

It also decided that a redundancy arises where a fixed term contract comes to an end and the employer no longer requires the employee in question and therefore a right to a statutory redundancy lump sum may apply.

These cases are:

* University College Dublin and McConnon
* National University of Ireland, Galway and Wurmel


1. University College Dublin and McConnon (FTC/14/33, Determination No. FTD 1423, 9th December 2014).

The claimant in this case was employed by the respondent college in its School of Public Health and Physiotherapy and Population Science on a series of fixed-term contracts performing work associated with externally funded projects. Her claim before a Rights Commissioner that she should be entitled to a contract of indefinite duration failed and she appealed this decision to the Labour Court. For the purposes of the appeal, it was accepted by both sides that the series of contracts took the following form:

* The claimant’s first contract began on 17/9/07 and ran for just over 17 months until 28/2/08. The Court’s decision does not elaborate further on the nature of this contract.

* A second contract was offered to run from 1/3/09 for a period of four years to 1/3/13. The claimant signed this contract on 4/3/09 and her employer signed it on 5/3/09. Her role was to be Data Co-Ordinator on a project described in short as the “HRB contract”. The objective grounds for offering this further contract as opposed to a contract of indefinite duration were set out in writing as required by the 2003 Act. The legitimate objective of the university to be achieved by offering this further fixed term arrangement was described as ‘to provide temporary, specialist expertise to ensure transfer of knowledge on projects to enable their completion’.

* About one year into this four year contract, on or about 10th March 2010, the claimant was reassigned to work as Project Manager on a different project, described in short as the “PF7 contract” and her role under this contract was completely different. She was not issued with a revised written contract of employment to reflect this change, nor was she informed in writing of the objective grounds justifying it, although she was verbally informed that this arrangement would run for the remainder of the existing four year term and her terms of employment remained otherwise unchanged.

* The PF7 project was not completed on time and a further contract was issued on 1/3/13. This final arrangement was a fixed purpose rather than a fixed term contract and was to run until the PF7 project was completed. A written contract was issued and again it described the legitimate objective of the respondent in offering it ‘to provide temporary, specialist expertise to ensure transfer of knowledge on projects to enable their completion’. The claimant’s employment ended with the completion of the project and one month’s notice on 30/12/13. She was offered a redundancy lump sum which she declined.

The Court began by observing that at the time the claimant was offered the HRB contract in March 2009, she had already accrued 17 months' service. Offering her a further four year contract would therefore take her service under a series of two or more fixed term arrangements above the four year limit set by Section 9 (2) of the Act and entitle her in principle to a contract of indefinite duration.

Thus, the respondent had to demonstrate that there were objective grounds justifying this further contract under the terms of Section 9 (4) in order to avoid this conclusion. The Court was ultimately satisfied that the requirement for temporary expertise articulated in the March 2008 contract sought to achieve a legitimate objective of the respondent and was a proportionate and appropriate means of achieving that objective.

One year into the March 2009 four year contract, however, it was clear to the Court that the claimant was assigned to work on another project and it concluded that it was reasonable to infer, therefore, that the contract entered into in March 2009 was discharged by agreement in March 2010. Thus, a new fixed term contract came into operation at this point - the PF7 contract – but no written contract was issued. Equally no objective grounds justifying a new fixed-term arrangement, as opposed to a contract of indefinite duration, were provided in writing to the claimant.


Determination

The Court, however, concluded that although the PF7 contract was not in writing, it was a contract of employment nonetheless. Here it referred to the definition of a contract of employment set out in the Act – a contract of service whether express or implied and, if express, whether oral or in writing – a standard definition used in employment legislation generally. Thus, the Court clarified that a fixed term or fixed purpose contract does not have to be put in writing under the Act, contrary to what many might have perceived to be logical.

It also noted, however, that the respondent was obliged under Section 8 of the Act to provide a statement in writing of the objective grounds justifying the renewal of the claimant’s employment under a further fixed term arrangement and the reasons why a contract of indefinite duration had not been offered. The respondent had clearly failed to do this but the Court found that the claimant had not made a complaint under this specific heading and was now statute-barred, i.e. out of time, to do so.

This in turn, however, did not prevent the Court from drawing any inference that it considered just and equitable from the failure to provide the statement, such as that there were no objective grounds to justify the renewal in question, as the Court had previously decided in the case of Khan v HSE North Eastern Region [2006] ELR 313.

This inference, though was ‘rebuttable’, i.e. evidence could be brought to dispute it. Examining the evidence in this case, the Court effectively concluded that the claimant was verbally informed at the outset that the PF7 contract was scheduled to end on the same date as the HRB contract it had replaced and that she knew at all material times that her employment under the contract had a fixed and temporal lifespan. This was corroborated in its view by the fact that the final renewal in March 2013 did contain a specific written statement of objective grounds – to provide the respondent with temporary, specialist expertise to complete the PF7 project - and logic dictated that if this was the purpose of the extension, it was also the purpose of her employment on that project from its commencement.

The claimant’s appeal therefore failed and she was not awarded a contract of indefinite duration. A further point of interest in this case is the Court’s finding that the dismissal of the claimant at the end of the series of fixed–term contracts is a redundancy and that she was entitled and remains entitled to a redundancy lump sum. Finally, the Court added for good measure that a fixed- term employee who does become entitled to a so called contract of indefinite duration is not legally immune from redundancy, any more than is a permanent colleague under an open-ended contract.

Full Case Decision:
http://www.workplacerelations.ie/en/Cases/2014/December/FTD1423.html


2. National University of Ireland, Galway and Wurmel (FTC/14/35, Determination No. FTD 1422, 9th December 2014).

Similarly in this case, the claimant’s complaint that she was entitled to a contract of indefinite duration from the respondent employer failed before a Rights Commissioner (RC) and she appealed that decision to the Labour Court. The claimant’s fixed term contracts with the respondent took the following form:

* The claimant’s first contract ran from 1/9/09 to 31/8/12, a period of three years. During this time, she was employed to work as a part-time Post-Doctoral Researcher on a project for which the respondent had obtained external funding.

* During the latter end of this contract, she was additionally engaged under a further contract from 19/9/11 to 25/3/12 to act as a temporary part-time teaching assistant in the School of Chemistry, to replace a permanent colleague on a career break.

* A further fixed-term contract to work as a part-time University Teacher in the School of Chemistry was provided from 1/8/12 to 31/7/15. The stated reason for this contract was to cover extra teaching hours which had resulted from increased student numbers and additional funding was made available by the respondent for this purpose.

It should be noted that this claim was lodged with the RC on 13th January 2014, even though the claimant was still working under a fixed-term contract as a teacher in the School of Chemistry at that time. By then she had accrued over four years’ service and was clearly in a position to argue that she should have been entitled to a contract of indefinite duration. The respondent on the other hand was relying squarely on demonstrating that it had objective grounds for offering a further fixed-term contract in August 2012 that exceeded the four year limit. Thus, this case very firmly focused on the question of what constitutes objective grounds.

The claimant’s representative took issue with the respondent’s assertion in the contract that its purpose was to provide ‘additional teaching and academic related resourcing related to the substantial increase in 1st year and subsequent, Chemistry student numbers for which additional funding is available for this period only’.

He argued that the respondent had a fixed and permanent need for the teaching of Chemistry and that no baseline for the numbers of students of Chemistry had been given in the context of the contract and that the contract had been funded from the respondent’s resources and not external sources. He submitted that the objective grounds relied upon by respondent employer must be ascertained by reference to the circumstances prevailing at the time the contract was offered and cannot be subsequently altered.

He referred to a range of case authorities to support his arguments, including the case of Teagasc and McNamara (FTD 8/2013) which cited the Court of Justice view in that work undertaken for the purpose of meeting the fixed and permanent needs of employers should normally be undertaken on permanent contracts of employment and work for the purpose of meeting some temporary or transient need should normally be by way of a temporary or fixed term contract.

He submitted that there was nothing in the correspondence relevant to the sanctioning of the contract that identified the deficit in 1st year teaching as a temporary phenomenon. Finally, he also argued that as a contract of indefinite duration does not confer any special protection, the possibility of redundancy arising from decreased activity did not render the use of a fixed term contract an appropriate or necessary method of meeting a legitimate objective of the respondent.

The respondent’s representative on the other hand submitted that there were clear objective grounds for offering a further fixed term arrangement on 1st August 2012 and that these were outlined to the claimant by letter. He explained that in 2012 it took in an extra number of Chemistry students and it also set out to improve the retention numbers of such students, with the specific objective of boosting the number of Science graduates from the School of Chemistry, in accordance with Government policy at the time.

The improved retention rate that followed meant that it would not be necessary to continue the increase in the intake of first year students. Thus, it was decided to put additional resources into the teaching of first year students for a defined period of time only, in this case for three years and that the post would be made redundant thereafter. He submitted therefore that from its inception, the post was planned and implemented as a fixed term post for a maximum period of three years to deal with a temporary situation and that it will not be renewed.


Determination

In a short determination, the Court examined the covering letter of 26 July 2012 provided to the claimant offering the final fixed-term contract. It noted that the respondent made it clear in this letter that additional funding was available to cover the teaching of increased numbers of Chemistry students for a limited period only and this would only last for the duration of the contract offered.

It was also clear to the Court that the context for this offer was the Government decision to seek to increase the number of Science graduates across the country, including by improving retention rates of students. It concluded that this was much more that the mere generalisation contended for by the claimant and satisfied the test for objective justification required by the legislation. The appeal therefore failed.

Full case decision:
http://www.workplacerelations.ie/en/Cases/2014/December/FTD1422.html