Introduction and Background to Reviews

The Protection of Employees (Fixed-Term Work) Act, 2003 continues to be a busy source of work for the Labour Court, with close to 25 appeals having been heard by the Court in 2013 up to the end of September. This legislation has perhaps become best known for the limit it places on an employer’s use of successive fixed-term contracts.

Thus, according to Section 9 of the Act, an employer may not in principle employ a fixed-term employee under a series of two or more fixed-term contracts for longer than a period of four years, unless that employer can show that there is an ‘objective justification’ for doing so. If this rule is breached, the employee concerned becomes entitled to a contract of indefinite duration (CID), the equivalent of permanent status.

The question of what amounts to an objective justification – a measure or practice that is discriminatory in principle but can be justified in practice because it is an appropriate way of meeting a real need of the employer concerned - has therefore occupied a lot of minds in the decade since the Act came into operation.

The first case reviewed in today’s mail reinforces the view already expressed by the High Court in the case of Russell v Mount Temple Comprehensive School that once an objective justification exists at the time of the renewal of a fixed-term contract, it cannot be rendered unlawful by the occurrence of a subsequent event.

In this instance, the claimant had worked as Chairperson of the Refugee Appeals Tribunal under a five year fixed-term contract. He was then offered a temporary contract by the Minister for Justice and Equality in the belief that a new body to be called the Protection Review Tribunal would be set up to replace the Refugee Appeals Tribunal. This contract was to last until a Protection Review Tribunal Chair Designate would be appointed by open competition. The plans to set up this new body did not materialise and the claimant did not subsequently succeed in being re-appointed as Chair of Refugee Appeals Tribunal. His claim that the temporary contract had therefore ‘transmuted’ to one of indefinite duration failed. The Court held that a valid objective justification existed at the time the temporary contract was offered and subsequent events could not invalidate that justification.

A second provision under the fixed-term legislation was considered in some detail in the second case reviewed in today’s mail. Section 8 (2) of the Act obliges an employer when renewing a fixed-term contract to inform the employee concerned in writing of the reasons for the renewal and the failure to offer a contract of indefinite duration, at the latest by the date of the renewal. Many employers using fixed-term contracts have fallen foul of this fairly simple obligation in recent years to their cost.

In this particular case, the employer in question first failed to comply with this obligation and then issued a fixed-term contract retrospectively that did not state the true purpose for renewing the claimant’s fixed-term contract. The Court found that this failure to disclose was a factor that led to the claimant losing her employment and awarded compensation accordingly.

The final case reviewed today looks at a further employer obligation under the Act. Section 10 obliges an employer to inform a fixed-term employee in relation to vacancies which become available in the workplace to ensure that he or she shall have the same opportunity to secure a permanent position as other employees. In this instance the claimant argued, amongst other grounds, that she was effectively prevented from applying for a permanent position because she was a fixed-term employee and she gave evidence that she was told this by the respondent’s Human Resources Manager.

Despite some doubt, the evidence certainly disclosed that the respondent employer required a fixed-term employee’s section to release him or her and to have a recommendation from his or her Line Manager before an application for a permanent position could be made. On the balance of probabilities, the Court accepted the claimant’s recollection and ruled in her favour.

These cases are respectively:

* Minister for Justice and Equality and Ryan
* St Mary’s Aid and Devlin
* Marks and Spencer (Ireland) Ltd and Lyster


1. Minister for Justice and Equality and Ryan (FTC/13/22, Determination No.FTD 1324, 18th September, 2013)

The claimant in this case, a barrister, was first temporarily appointed as Chair of the Refugee Appeals Tribunal (R.A.T) in December 2003 and this appointment was to cover the period up to the filling of the post by open competition. He applied for that competition and was appointed to the post under a five year fixed-term contract up to September 2010.

Towards the end of this term, he expressed an interest in being re-appointed and wrote to the Department of Justice in this regard. Because a new body to be called the Protection Review Tribunal was envisaged at the time to replace the R.A.T, the Secretary General of the Department in reply offered to continue the claimant in his post temporarily until such time as a new Chair of the R.A.T who would be Protection Review Tribunal Chair–Designate was appointed following an open competition and he was informed that it would be open to him to apply for that post when the time came. He accepted this offer and in September 2010, he continued in the job on these terms – in effect under a specified purpose contract to continue to act as Chair until a new Chair was appointed.

In March 2011, he was informed by letter that the respondent did not now intend to go ahead with the appointment of a Chair–Designate of the Protection Review Tribunal. Instead, the respondent decided to appoint a new Chair of the R.A.T. The claimant was not selected for that post and his temporary contract came to an end when the new Chairperson was appointed.

The claimant brought a complaint under the Act before a Rights Commissioner (RC), claiming that his last contract, issued in September 2010, had ‘transmuted’ to one of indefinite duration under the terms of Section 9 when the respondent changed its mind and decided not to appoint a Chair–Designate of the Protection Review Tribunal. In effect, this amounted to arguing that the objective grounds that had existed at the time his contract was extended could no longer be relied upon by the respondent.

The RC appears to have found against him on the grounds that the terms of the Refugee Act 1996 effectively prevented the State from appointing a Chair of the R.A.T under a contract of indefinite duration at all. On appeal on this particular point, the Labour Court disagreed with this conclusion and took the opportunity to reiterate that any rights that accrued to a claimant under the Act and the directive that it transposed “could not be offset or supplanted by a provision of purely domestic law”.

However, the Court did dismiss his appeal nonetheless. It accepted that at the time the claimant’s contract was renewed, the respondent believed that the body to which he was being appointed would shortly cease to exist and that it was not suggested that this did not amount to an objective justification for such a renewal at the time. It found that the decision of the High Court in Russell v Mount Temple Comprehensive School (Unreported, High Court, Hanna.J, 12th December 2009) was clear authority for the proposition that where objective grounds exist for the renewal of a fixed-term (or specified purpose) contract on the date on which the contract is renewed, they cannot be rendered unlawful by subsequent events.

In this case, the requirements of legal certainty dictated that the lawfulness of the renewal could not be affected by the subsequent decision of the respondent not to proceed in the manner originally envisaged.

Read the full case here:
http://bit.ly/16q3r3Y


2. St Mary’s Aid and Devlin (FTC/13/2, Determination No.FTD 1323, 17th September, 2013)

The claimant in this case was first employed as Chief Executive Officer (CEO) of the respondent on 28th February 2011, under a fixed-term contract for 12 months. The respondent subsequently had some concerns about the claimant’s management style during the performance of this contract, a review was undertaken and a meeting was held with her to communicate how the respondent wanted her to perform her duties. She was then informed that her contract was to be renewed for a further six months when the first one expired. The principal reason for this renewal appears to have been the desire to monitor her adherence to the requirements identified in the review. However, in fact, no further written contract was issued after the first one expired on 24th February 2012, although the claimant continued to work as the respondent’s CEO.

On 4th July 2012, the respondent presented the claimant with a draft contract that was to retrospectively take effect from 27th February 2012 and was to expire on 24th August 2012 (i.e. six months). The contract specified that the claimant’s position as CEO was “dependent on funding from external sources during this period”. It further provided that the Board could terminate the contract at any time should funding be withdrawn and that it was agreed by both parties that such withdrawal “shall constitute an objective ground justifying termination of the contract”. Knowing that further funding was available at the time so as to renew this contract when it in turn expired, the claimant signed it.

However, she was subsequently dismissed when the contract expired despite the availability of continued funding. The claimant’s complaints before a RC that S.6 (less favourable treatment than a comparable permanent employee in being subject to a review process that permanent employees were not) and S.8 (failure to provide a statement of the reasons for renewal of a fixed-term contract by the date of renewal) had been breached were upheld and she was awarded €15,000 in compensation. The respondent appealed this decision to the Labour Court arguing that there had been no breach of Section 6 and that the contravention of Section 8 had been technical in nature as the claimant was at all times aware of the fixed-term nature of her employment.

On appeal, the Court found that the facts of the case did not disclose a breach of Section 6. On the alleged contravention of Section 8, it noted that the respondent’s (eventually) stated objective grounds for renewing the claimant’s contract related solely to the availability of funding. However, it formed the view on the evidence submitted that a second and dominant reason for the renewal which was left unstated was the respondent’s intention to continue to monitor her performance, leaving it free to terminate her employment if it chose to do so. It formed the view that the statement was misleading as the respondent was clearly using the second fixed-term contract “as a performance management tool” and that this was not an objective reason to justify the renewal and constituted an abuse.

It was also satisfied as a matter of probability that the claimant would not have signed the contract had she known the true purpose of it, as “at that stage she was in employment without a written contract and she could have cogently argued that her employment was pursuant to an implied contract of indefinite duration”.

It concluded that the respondent’s failure to disclose the actual grounds for renewal of the contract was a factor that led to the claimant losing her employment. Thus the breach of Section 8 was particularly serious in terms of its consequence. Although the RC’s decision was varied in that no breach of Section 6 was found, the amount of compensation awarded was therefore left unchanged.

Read the full case here:
http://bit.ly/180bbcx


3. Marks and Spencer (Ireland) Ltd and Lyster (FTC/13/20, Determination No.FTD 1321, 28th August, 2013)

The claimant in this case had been employed by the respondent under a number of short term fixed-term contracts to cover busy trading periods. In addition to claiming that she had not received statements justifying the renewal of fixed-term contracts under s.8, she also claimed, initially under Section 6, that she sought to apply for permanent vacancies in the respondent’s workplace but had been refused the opportunity because she was a fixed-term employee. Her complaint before a RC succeeded and she was awarded €4,000 in compensation. The respondent appealed this decision to the Labour Court.

On appeal, the Court noted that the complaint in relation to potential access to permanent employment alleged a breach of Section 6 of the Act when it should more properly have concerned Section 10. However, as the respondent took no issue with this and the facts of the complaint remained unchanged, the Court proceeded. It reviewed some case law concerning the application of Section 10, noting that in Aer Lingus v A Group of Workers [2005] 16 E.L.R. 261, it had found that fixed-term employees not only have a right to be informed of permanent vacancies in the workplace, they have “a concomitant entitlement to compete for available vacancies within an undertaking”.

It also referred to the key decision of the High Court in Minister for Finance v McArdle [2007]2 ILRM 438 that confirmed that an obligation to inform of vacancies clearly carries with it an obligation to allow applications for such positions.

Turning to the case in question, the Court noted that the claimant gave sworn evidence that in June 2012 she became aware of permanent vacancies in the workplace but was told by the respondent’s Human Resources (HR) Manager that she could not apply for them because she was temporary. On the other hand, evidence was provided by other members of management on behalf of the respondent that the practice was that in order to apply for a vacancy, an employee needed a recommendation from his or her Line Manager and would also need to be ‘released’ by his or her section to apply.

Faced with this conflict of evidence, the Court noted that the HR Manager who was alleged to have said that the claimant could not apply for permanent vacancies was not available to give evidence. On the balance of probabilities therefore, the Court accepted the claimant’s recollection of the conversation and found that S.10 (in addition to Section 8) of the Act had been breached. The RC’s decision was affirmed.

Read the full case here:
http://bit.ly/H651SC