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 It further provided that the Board could terminate the contract at any time should funding be withdrawn and that it was agreed by both parties that such withdrawal “shall constitute an objective ground justifying termination of the contract”.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