FULL RECOMMENDATION
SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003 PARTIES : HEALTH SERVICE EXECUTIVE MERLIN PARK REGIONAL HOSPITAL (REPRESENTED BY ERCUS STEWART S.C. INSTRUCTED BY WILLIAM B. GLYNN, SOLICITORS) - AND - CHALIKONDA V.R. PRASAD (REPRESENTED BY TOM MALLON B.L. INSTRUCTED BY O'CONNOR, SOLICITORS IRISH MEDICAL ORGANISATION) DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Appeal against Rights Commissioner's Decision FT18182/04/JC.
BACKGROUND:
2. The appeal concerns a worker who was employed by the HSE and its predecessor the WHB as a Consultant Orthopaedic Surgeon pursuant to a series of fixed term contracts commencing in April, 1998 and terminating on the 15th February, 2004. The respondent sought approval from the Department of Health and Children to create, inter alia, a permanent post of Consultant Orthopaedic Surgeon in June, 2002 and approval was granted in October, 2002. The permanent post was advertised and filled through the Local Appointments Commission and the claimant was not successful.
The claimant maintains that he was treated less favourably than permanent comparators in that funding available to his temporary post was removed and specifically assigned to a permanent post to which he was not appointed. The treatment was different in that no permanent consultant had or could have the funding of his post removed for the creation of a different post or to allow the advertising of the original post for filling by some other person. Having regard to the provisions of the Protection of Employment (Fixed Term Work) Act, 2003 and Council Directive 1999/70/EC and having determined that the post occupied by the claimant over the preceding years should become a permanent post the claimant was entitled to be appointed thereto. The non appointment of the claimant to the permanent post was by reason of his status as a fixed term worker and he was, in those circumstances, treated less favourably than a comparable worker.
The respondent rejected the claim and stated that it was mandatory on it to follow the provisions of the Health Acts, 1953, 1970, the Local Authority (Officers and Employees Act, 1926 and the requirements of Comhairle na nOspideal, the Local Appointments Commission and the Department of Health and Children, to advertise the post and that it would be acting contrary to law if it did not do so. The respondent claimed that its actions met all the provisions of the Protection of Employment (Fixed Term Work ) Act, 2003 and did not contravene any of the provisions of that Act in relation to the claimant's employment.
The dispute was referred to a Rights Commissioner for investigation. On the 9th March, 2005 the Rights Commissioner issued her decision as follows;
"Conditions of employment- Access to Pension Scheme-Section 6(5)
............ I find that the agreement reached between the parties should be implemented without delay.
Conditions of Employment -Less favourable treatment justified on objective grounds-Sections 6(1) and (2) and Section 7(1)
...........I find that the claimant was treated in a less favourable manner than a comparable permanent employee contrary to the provisions of Section 6(1) of the Act and that such treatment was not justified on objective grounds as permitted under Section 6(2) and Section 7(1)
Written statement of employer - Section 8
..........I find that the letter of 14th November, 2003 did not meet the requirements of Section 8(2). I find that when the respondent advised the claimant that his contract would be renewed on a fixed term basis they failed to inform him in writing of the objective rounds justifying the renewal of his fixed term contract and the failure to offer him a contract of indefinite duration by the date of renewal on 1st January, 2004, contrary to Section 8(2). The respondent's reliance on the provisions of the Local Authorities (Officers and Employees) Act, 1926 as amended emerged only when the decision to terminate the claimant's contract was challenged by the IMO. In accordance with the provisions of Section 8(4) I find that the terms of the letter of the 14th November, 2003 were evasive and I conclude that the respondent did not provide any objective grounds justifying their decision to offer another fixed term contract and their failure to offer the claimant a contract of indefinite duration because they were unable and unwilling to address the provisions of the Act in so far as they related to the claimant.
Successive Fixed Term Contracts - Section 9(1) (3) and (4) and Section 13(1)(d)
...........As provided in Section 13(1) (d) I find that the respondent's decision to dismiss the claimant from his employment was wholly connected with the purpose of the avoidance of a fixed-term contract being deemed to be a contract of indefinite duration under Section 9(3). In accordance with the provisions of Section 9(3) I find that the terms of the renewed contract of employment stipulating that the claimant's contract would terminate on 15th February, 2004 and would not be renewed thereafter purport to contravene Section 9(1) and that the terms should have no effect and that the contract concerned should be deemed to be a contract of indefinite duration. I find that there were no objective grounds justifying the renewal of that contract on a fixed term basis and that the renewal is not covered by the provisions of Section 9(4).
Objective rounds for less favourable treatment - Section 7(1)
.........I find that the provisions of the Local Authorities (Officers and Employees) 1926 as amended by the 1940 and 1983 Acts do not meet the requirements of Section 7(1) of the Protection of Employees (Fixed -Term Work) Act, 2003 and do not constitute objective grounds justifying less favourable treatment including the failure to offer the claimant a contract of indefinite duration. In any event I find that the application of the provisions of the Local Authorities (Officers and Employees) Act 1926, as amended, to the claimant in this case was not appropriate or necessary. I find the respondent's decisions to advertise the claimant's post: to terminate the claimant's fixed term contract and not to offer him a contract of indefinite duration did not achieve a legitimate objective of the employer and were not appropriate or necessary.
As a consequence of the actions of the respondent the claimant's employment in the public health service was terminated putting him at a loss of the Category 11 Consultants salary and all of the other benefits of such employment, including continued access to the Pension Scheme".
In all the circumstances of this case I find that the respondent should pay the claimant compensation in the sum of €80,000. This sum to be paid to the claimant within six weeks of the date of this decision".
Subsequently both parties appealed the Rights Commissioner's decision to the Labour Court. The Court heard the appeals on the 15th September, 2005 and the 10th October, 2005.
DETERMINATION:
This is an appeal by the Health Service Executive and a cross-appeal by Dr Chalikonda V.B. Prasad against the Decision of a Rights Commissioner in a claim by De Prasad under the Protection of Employees (Fixed-Term Work) Act 2003 (the Act). Dr Prasad claims that the Respondent contravened a number of provisions of the Act in terminating his employment and in not providing him with a contract of employment of indefinite duration. For ease of reference the parties are referred to as they were at first instance. Hence Dr Prasad in referred to herein as the Claimant and the HSE as the Respondent.
Facts
The Claimant was employed by the Western Health Board (the predecessor of the Respondent) in his capacity as a Consultant Orthopaedic Surgeon under eleven continuous fixed term contracts between April 1998 and 15th February 2004. The Claimant was engaged as part of an initiative to deal with hospital waiting lists. The Department of Health and Children provided the Respondent with funding for the Claimant’s post through the waiting list initiative.
The Claimant was employed on the following series of fixed-term contracts:
• April 1998 to September 1998
• October 1998 to January 1999
• February 1999 to June 1999
• July 1999 to September 1999
• October 1999 to December 1999
• January 2000 to June 2000
• July 2000 to December 2000
• January 2001 to December 2001
• January 2002 to December 2002
• January 2003 to December 2003
• January 2004 to February 2004
On or about June 2002 the Respondent sought the approval of the Department of Health for the creation of a permanent post of Consultant Orthopaedic Surgeon. The Department granted approval by letter to the Respondent dated 7th October 2002. In granting approval the Department stipulated that the funding for the post would be met from the existing financial allocation under the waiting list initiative. The permanent post was subsequently advertised and filled by an open competition organised by the Local Appointments Commission in February 2004. The Claimant applied for the post but was unsuccessful.
The Claimant’s penultimate fixed-term contract expired on 1st January 2004 and was renewed up to 15th February 2004. The contract was not renewed thereafter.
The Claimant presented a complaint to a Rights Commissioner pursuant to Section 14 of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act), alleging that the Respondent had contravened a number of provisions of the Act in relation to him. The complaint was investigated by a Rights Commissioner who held with the Complainant and awarded him compensation in the amount of €80,000. The Respondent appealed to this Court. The Claimant cross-appealed against so much of the Rights Commissioner’s decision as failed to order his reinstatement with the Respondent.
The Legal Context.
Serious questions of national and European law have been raised in this case which it is necessary to identify in detail.
Legislative History
The Act was enacted to implement in domestic law Directive No 1999/70/EC of 28th June 1999 concerning the Framework Agreement on Fixed Term Work concluded by ETUC, UNIC and CEEP.
The purpose of the Framework Agreement is set out Clause 1 thereof as follows:
- “Purpose
the purpose of this framework agreement is to:
What is involved in applying “the principle of non-discrimination” is particularised at clause 4 as follows: -
- “Principle of non-discrimination (clause 4)
1. In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.
2. Where appropriate, the principle of pro rata temporis shall apply.
3. The arrangements for the application of this clause shall be defined by the Member States after consultation with the social partners and/or the social partners, having regard to Community law and national law, collective agreements and practice.
4. Period-of service qualifications relating to particular conditions of employment shall be the same for fixed-term workers as for permanent workers except where different length of service qualifications are justified on objective grounds.”
Section 6 of the Act transposes that clause.
The requirements of Paragraph (b) of Clause 1 of the Agreement (measures against abuse) are particularised at Clause 5 of the Agreement as follows:
Measures to prevent abuse (clause 5)
- 1.To prevent abuse arising from the use of successive fixed-term employment contracts or relationships Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures:
(b) the maximum total duration of successive fixed-term employment contracts or relationships;
(c) the number of renewals of such contracts or relationships;
2. Member States after consultation with the social partners and/or the social partners shall, where appropriate, determine under what conditions fixed-term employment contracts or relationships :
(b) shall be deemed to be contracts or relationships of indefinite duration.
This provision was transposed in Irish law by Sections 8 and 9 of the Act as follows:
Written Statement of Employer
- 8.—(1) Where an employee is employed on a fixed-term contract the fixed-term employee shall be informed in writing as soon as practicable by the employer of the objective condition determining the contract whether it is—
(c) the occurrence of a specific event.
- (2) Where an employer proposes to renew a fixed-term contract, the fixed-term employee shall be informed in writing by the employer of the objective grounds justifying the renewal of the fixed-term contract and the failure to offer a contract of indefinite duration, at the latest by the date of the renewal.
(3) A written statement under subsection (1) or (2) is admissible as evidence in any proceedings under this Act.
(4) If it appears to a Rights Commissioner or the Labour Court in any proceedings under this Act—
the Rights Commissioner or the Labour Court may draw any inference he or she or it consider just and equitable in the circumstances.
Successive Fixed-Term Contracts
- 9.—(1) Subject to subsection (4), where on or after the passing of this Act a fixed-term employee completes or has completed his or her third year of continuous employment with his or her employer or associated employer, his or her fixed-term contract may be renewed by that employer on only one occasion and any such renewal shall be for a fixed term of no longer than one year.
(2) Subject to subsection (4), where after the passing of this Act a fixed-term employee is employed by his or her employer or associated employer on two or more continuous fixed-term contracts and the date of the first such contract is subsequent to the date on which this Act is passed, the aggregate duration of such contracts shall not exceed 4 years.
(3) Where any term of a fixed-term contract purports to contravene subsection (1) or (2) that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.
(4) Subsections (1) to (3) shall not apply to the renewal of a contract of employment for a fixed term where there are objective grounds justifying such a renewal.
(5) The First Schedule to the Minimum Notice and Terms of Employment Acts 1973 to 2001 shall apply for the purpose of ascertaining the period of service of an employee and whether that service has been continuous.
(1) A ground shall not be regarded as an objective ground for the purposes of any provision of this Part 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.
(2) Where, as regards any term of his or her contract, a fixed-term employee is treated by his or her employer in a less favourable manner than a comparable permanent employee, the treatment in question shall (for the purposes of section 6(2) be regarded as justified on objective grounds, if the terms of the fixed-term employee's contract of employment, taken as a whole, are at least as favourable as the terms
Appointment to Permanent Posts in Health Boards (now the HSE)
The appointment of Officers of Health Boards (including Hospital Consultants) is regulated by the Local Authorities (Officers and Employees) Act 1926, the Health Act 1956 and the Health Act 1970. The combined effect of these statutes is that except in circumstances which are not here relevant a Health Board may not appoint a person to a permanent post of the type at issue in this case without having received a recommendation from the Local Appointments Commission.
Supremacy of European Law.
It is now well settled in a line of authorities starting with the decision of the Court of Justice in C-6/64Costa v ENEL[1964] ECR 589 that the law of the Community takes precedence over all provisions of domestic law. It is further established that a National Court or Tribunal must apply the law of the Community and where necessary set aside any conflicting provision of domestic law. InAmministrazione delle Finanze dello Stato v Simmenthal[1978] ECR629 the ECJ stated the position thus: -
“Every national court must, in a case within its jurisdiction, apply community law in its entirety and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it, whether prior or subsequent to the community rule.”
The practical application of the doctrine of supremacy means that in certain circumstances, citizens of the Member States may assert rights derived from the law of the Community before their national courts without having to rely on transposing domestic legislation.
This legal doctrine of direct effect was formulated by the ECJ in the seminal case of C-26.63Van Gend en Loos v Nederlandsc Administratie der Belastingen[1963] ECR 1. Here the Court held that, unlike other treaties and agreements between Sovereign States, the EC Treaty established a new legal order which conferred rights and obligations not only on Member States but on the individual citizens of the Member States. It went on to hold that the rights conferred on individuals could be asserted in proceedings before national Courts. In a celebrated passage from its Judgment the ECJ stated as follows:
In addition the task assigned to the court of justice under article 177, the object of which is to secure uniform interpretation of the treaty by national courts and tribunals, confirms that the states have acknowledged that community law has an authority which can be invoked by their nationals before those courts and tribunals . The conclusion to be drawn from this is that the community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only member states but also their nationals . Independently of the legislation of member states, community law therefore not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage . These rights arise not only where they are expressly granted by the treaty, but also by reason of obligations which the treaty imposes in a clearly defined way upon individuals as well as upon the member states and upon the institutions of the community.
The Court set down two conditions which would have to be met before a measure can have direct effect. The measure must be:
(1) Unconditional, and(2) Sufficiently precise.
A measure will be considered conditional if the rights it grants are dependent on the judgement or discretion of an independent body such as a Community Institution or a Member State. It will be sufficiently precise if it is expressed in unequivocal terms and can be applied by the National Court. The test was summarised by the ECJ in case C – 236/92Comitato di Coordinamento per la Difesa della Cava and others v Regione Lombardia and others.ECR 1-483, where the following appears in the headnote:
- In this connection a Community provision is unconditional where it is not subject, in its implementation or effects, to the taking of any measure either by the institutions of the Community or by the Member States and it is sufficiently precise to be relied on by an individual and applied by the court where the obligation which it imposes is set out in unequivocal terms.
It has, however, been suggested by Weatherill and Beaumont (EU Law, Third Edition, 1999, p 395) that a measure is sufficiently precise where it provides “workable indications” to the national Court on what is intended.
It was some ten years after its Judgment inVan Gend en Loosthat the ECJ was required to consider if Directives can have direct effect. In case C –41/74Van Duyn v Home Office[1974] ECR 1337 the ECJ held that a Directive could be independently relied upon by an individual before a National Court. In so finding, the Court laid down a further condition which would have to be fulfilled in the case of a directive, namely, that the action must be against the State. The rationale for this additional condition was derived from a form of equitable estoppel identified inPubblico Ministero v Ratti[1979] ECR 1629 which denies a defaulting Member State the possibility of benefiting from its own failure to perform its Treaty obligations.
For the purpose of applying this condition the “State” is broadly defined in the case law of the ECJ. It includes, for example, Chief Constable of a police force (C-222/84Johnson v Chief Constable of the RUC [1986] ECR 1651), a Local Authority (C-103/88Fratelli Costanzo v Commune di Malano[1989] ECR 1839) and a State Company (C-188/89Foster v British Gas plc[1991] ECR 1-3313). The Respondent herein undoubtedly comes within the definition of the State.
Indirect effect, or the interpretative obligation is a further means through which a Community law measure which does not have direct effect can nonetheless be applied over conflicting provisions of national law. Indirect effect differs from direct effect in that the latter involves an individual asserting a right before a National Court in reliance solely on a provision of Community law. Indirect effect involves the assertion of a right derived from a Community law measure but in reliance on a provision of national law, which must be interpreted and applied so as to achieve the result envisaged by Community law.
Because the doctrine of indirect effect relies on the provisions of national legislation the requirements of unconditionally and precision required for direct effect do not apply. Furthermore indirect effect applies regardless of the status of the parties and applies in disputes between private individuals as well as disputes involving the State.
This interpretative obligation was first identified by the ECJ in Case C-14/83Von Colson and Kamann v Land Nordrhein-Westfalen[1984] ECR 1891, wherein the Court stated as follows:
- However , the member states ' obligation arising from a Directive to achieve the result envisaged by the Directive and their duty under Article 5 of the Treaty to take all appropriate measures , whether general or particular , to ensure the fulfilment of that obligation , is binding on all the authorities of Member States including , for matters within their jurisdiction , the courts . It follows that, in applying the National Law and in particular the provisions of a National Law specifically introduced in order to implement [Directive no 76/207], National Courts are required to interpret their National Law in the light of the wording and the purpose of the directive in order toachieve the result referred to in the third paragraph of Article 189 .
Subsequently,inMarleasing S.A. v La Commercial Internacional de Malimentacion S.A.ECR 4135, the Court again considered the extent of this interpretative obligation.Here the Court stated as follows:
- [I]t should be observed that, as the Court pointed out in its judgment in Case 14/83 Von Colson and Kamann v Land Nordrhein-Westfalen 1984 ECR 1891, paragraph 26, the Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts . It follows that, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189 of the Treaty.
It is now clear from the decision of the ECJ in C-144/04Mangold v Helm[2006] IRLR 143 that this interpretative obligation applies from the entry into force of a Directive and not from the date on which the Member State was obliged to transpose it into national law (see also the opinion of Advocate General Kokott in C-212/04Adeneler and Others v Ellinikos Organismos Galaktos, delivered 27th October 2005)
Issues arising.
Section 9 of the Act
The Claimant contends that when his last fixed-term contract expired he had become entitled to an appointment in his consultant post on a contract of indefinite duration. This claim is clearly not maintainable by reference to Section 9 of the Act alone. The Claimant commenced his employment with the Respondent prior to the passing of the Act and so any claim which he may have would come with the scope of Section 9(1).
The Claimant was employed on a number of successive fixed-term contracts, the aggregate duration of which exceeded three years, prior to the passing of the Act. His fixed-term contract was then renewed once following the passing of the Act and for a period of less than one year. On this set of facts it could not be seriously contended that the Respondent contravened Section 9(1) of the Act. However, the Act must be constructed in harmony with the Directive and any inconsistence between the two must be resolved by applying the terms of the Directive. Further, the Respondent is an emanation of the State and on theVan Duyn v Home Officeline of authorities the Claimant asserted an entitlement to rely directly on the provisions of the Framework Agreement.
On this latter point the Court is satisfied that the terms of Clause 5 of the Framework Agreement (which corresponds to section 9 of the Act) are neither unconditional or precise within the meaning given to those concepts inComitato di Coordinamento per la Difesa della Cava and others v Regione Lombardia and others.Paragraph 1 of this Clause lists three possible measures which Member States may adopt to prevent abuse of successive fixed-term. However it is left to the discretion of the Member States to adopt one or more of those measures. Moreover, Clause 2 expressly leaves over to the Member States discretion to determine the conditions under which fixed-term contracts will be regarded as successive and, crucially in regard to the instant case, the conditions under which fixed-term contracts shall be deemed to be contracts or relationships of indefinite duration.
It is thus clear that the efficacy of this clause is entirely dependant on implementing measures by the Member States. In such circumstances it is incapable of direct effect. Consequently it is unnecessary for the Court to consider, in the context of this case, whether the jurisdiction conferred on a Rights Commissioner by Section 14 of the Act (and on this Court on appeal) includes a concomitant jurisdiction to apply the Directive on the doctrine of direct effect.
However, the Claimant contends that he is nonetheless entitled to rely on the Directive in advancing his claim. Specifically, he contended through his Counsel that on the authority ofMarleasing S.A. v La Commercial Internacional de Malimentacion S.A.,the prohibition of continuing rolled over contracts set out at section 9 of the Act should be regarded as effective from the date on which the Directive entered in force. In essence the import of Counsel’s submission on this point is that Clause 5 of the Framework Agreement, when read in conjunction with Section 9 of the Act, creates clear and unequivocal rights and obligations which can be applied by the Court with effect from the date on which the Directive entered in force.
It is clear beyond argument that in interpreting domestic law a Court or Tribunal must do so in light of the wording and purpose of a relevant Directive so as to produce the result envisaged by the Directive. What the Court is effectively being urged to do in this case is to interpret a provision of the Directive in light of the wording of a provision of domestic law. That would appear to be the antithesis of what the interpretative obligation entails. No authority was opened to the Court to justify such an approach and none could be identified by the Court.
Section 9(1) of the Act applies, “whereon or after the passing of this Acta fixed-term employee completes or has completed his or her third year of continuous employment with his or her employer”.The words emphasised provide in clear and unequivocal terms the date after which the trigger mechanism by which a contract of indefinite duration can be deemed to exist becomes effective. This provision is entirely consistent with Clause 5 (2) of the Framework Agreement which allows the Member States to determine the conditions under which fixed-term contracts shall be deemed to be contracts of indefinite duration.
The Decision of the ECJ inDori v Recreb[1994] 1 763 indicates that a contra legum construction (the construction of a statute against its express terms) is not required by the interpretative obligation. Having regard to the definitive language used in the subsection at issue a construction which made it applicable to the renewal of a fixed-term contract concluded prior to the passing of the Act would amount to a contra legume construction which would be ultra vires the powers of the Court. Accordingly the Court must conclude that the Respondent did not contravene Section 9 of the Act in failing to appoint the Claimant to the disputed post on a contract of indefinite duration.
Section 6 of the Act
It was also submitted on behalf of the Claimant that in diverting the funding which it obtained for the complainant’s post to an identical permanent post, the Respondent contravened Section 6 of the Act. The line of argument advanced in support of this contention was that a comparable permanent employee would not have lost their employment by having the necessary funding similarly withdrawn or diverted. In that regard it was submitted that every contract of employment contains an implied term that the parties will not deliberately undermine the basis of the contract.
Counsel for the Respondent submitted that it had no duty to continue to fund the complainant’s fixed-term post in preference to creating a permanent post.
There is a certain attraction in the argument advanced on behalf of the Claimant. It is settled law that a contract of employment is based on a duty of mutual trust and confidence and a breach of the duty can amount to a repudiatory breach of the contract. If such a duty were owed to a comparable permanent employee it would also be owed to the complainant. However if this line of argument were to be extended to its logical conclusion it would mean that an employer could never take any decision which would result in a fixed-term employee’s contract not being renewed, since such an decision could not be taken in respect of a comparable permanent employee. This would inexorably lead to the conclusion that a fixed-term contract of employment must be renewed unless the employer can show that the requirement for the work being performed by the fixed-term employee had ceased. This would go significantly further than could reasonably be regarded as coming within the contemplation of either the Framework Agreement or the Act, unless it could be shown that such non-renewal came within the scope of Section 13(1) (d) of the Act.
The question of whether the non-renewal of a fixed-term contract is capable of constituting less favourable treatment for the purposes of the UK equivalent of Section 6 of our Act was recently considered by the Court of Appeal for England and Wales.Department for Work and Pensions v Webley[2005] IRLR 288,concerned a claim by a civil servant employed on a fixed-term contract that her employer’s refusal to renew her contract after 51 weeks, in circumstances where there was a continuing need for the work which she performed, infringed the Framework Agreement and the UK transposing legislation. Her claim was dismissed at first instance on the preliminary point that it did not disclose a cause of action. This was reversed by the EAT. On appeal to the Court of Appeal the decision of the Employment Tribunal was restored. According to Wall LJ, with whom Jacob and Ward LJJ agreed,
- Once it is accepted, as it must be, that fixed-term contracts are not only lawful, but are recognised in the Preamble to the Directive as responding, 'in certain circumstances, to the needs of both employers and workers', it seems to me inexorably to follow that the termination of such a contract by the simple effluxion of time cannot, of itself, constitute less favourable treatment by comparison with a permanent employee. It is of the essence of a fixed-term contract that it comes to an end at the expiry of the fixed-term. Thus unless it can be said that entering into a fixed-term contract is of itself less favourable treatment, the expiry of a fixed-term contract resulting in the dismissal of the fixed-term employee cannot, in my judgment, be said to fall within reg. 3(1).
This is not a binding decision in this jurisdiction. It is, however, of strong persuasive authority and in the absence of any contradictory decision either in this jurisdiction or Europe the Court is of the view that it should be followed.
In these circumstances the Court must hold that the non-renewal of Dr Prasad’s fixed-term contract did not contravene Section 6 of the Act.
Section 13(1) of the Act.
In her Decision the Rights Commissioner held that the Respondent had contravened Section 13(1)(d) of the Act in that the decision to terminate the Claimant’s fixed-term contract was wholly connected with the purpose of avoiding the Claimant’s fixed-term contract being deemed to be a contract of indefinite duration. Section 13(1)(d) provides as follows:
(1) An employer shall not penalise an employee—
- (a) [not relevant]
(b) [not relevant]
(c) [not relevant]
(d) by dismissing the employee from his or her employment if the dismissal is wholly or partly for or connected with the purpose of the avoidance of a fixed-term contract being deemed to be a contract of indefinite duration undersection 9(3)
This aspect of the case was not pursued by the Claimant in the course of the hearing of the appeal. Accordingly the Court holds that the Respondent did not contravene Section 13 of the Act in relation to the Claimant.
Section 8
The Rights Commissioner had found that the Respondent contravened Section 8 of the Act in that it failed to inform the Claimant in writing of the objective grounds justifying the renewal of his final fixed-term contract and the failure to offer him a contract of indefinite duration by the date of that contract.
This matter was not pursued in the course of the appeal and accordingly the Court holds that the Respondent did not contravene Section 8 in relation to the Claimant.
Objective Justification for Less Favourable Treatment- Section 7 of the Act.
It was contended on behalf of the Respondent that if the Claimant was subjected to less favourable treatment (which was denied) this arose from its obligation to comply with the requirements of the Local Authorities (Officers and Employees) Act 1926, the Health Act 1956 and the Health Act 1970 in so far as they relate to the making of appointments to permanents posts. This obligation, it was contended, constitutes objective grounds within the meaning of Section 6 of the Act.
This aspect of the case was fully argued by Counsel for both parties. In light of the findings of the Court on the subject matter of the Claimant’s complaints it is not necessary for the Court to address this aspect of the case. Nonetheless, for the sake of completeness, and to offer some assistance where similar issues arise in other cases, the Court considers it appropriate to set out its opinion on this point.
The statutes relied upon by the Respondent are part of the domestic law. The doctrine of supremacy of European law would preclude a Member State as an employer from relying on a provision of its domestic legislation to offset or supplant the rights of an individual derived from the law of the Community. Moreover, if domestic law is incompatible with the law of the CommunitySimmenhtalis authority for the proposition that the National Court or Tribunal must refuse to apply the domestic law so as to afford supremacy to Community law.
It was, however argued, by that it is not the Acts themselves which are relied upon as providing objective grounds but rather the objective which that legislation seeks to pursue. That objective, it was submitted, is to ensure openness, objectivity and transparency in the making of public appointments.
The second limb of Section 7(1) provides that the grounds relied upon must be justified as being for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose. This is a restatement of the three tier test for objective justification in indirect gender discrimination cases formulated by the ECJ in Case 170/84Bilka-Kaulhaus GmbH v Karin Weber von Hartz[1986] ECR 1607, which is also to be found at Section 22(1)(a) of the Employment Equality Acts 1998 and 2004. The various elements of the test were analysed in detail by this Court inInoue v NBK Designs Ltd[2003] 14 ELR 98.
Each element of this test should be considered in turn.
Legitimate Objective of the Employer
If the objective of the employer is to maintain confidence in the system of making public appointments and to appoint the best available person this undoubtedly constitutes a legitimate objective within the meaning of the first part of the test.
Are the Means Chosen Appropriate
This aspect of the test requires that the means chosen be proportionate to the objective which they are intended to achieve. The policy of filling permanent posts by open competition is undoubtedly appropriate as a means of achieving the objective being pursed by the State. However, what is at issue is whether the efficacy of that policy would be undermined by appointing fixed-term employees to the permanent staff of the health service in the circumstances envisaged by section 9(1). It seems that, given the numbers involved relative to the overall complement of staff employed in the health service a derogation from the normal practice so as to comply with the requirements of the Act would have a minimal impact on the effectiveness of the policy being pursued by the state in its policy of requiring open competition as the normal mode of selection and appointment.
Moreover, in CaseC-476/99Lommers v Minister van Landbouw, Natuurbeheer en Visserij[2002]IRLR 430 paragraph 39,the ECJ pointed out that: -
- “ [A]ccording to settled case-law, in determining the scope of any derogation from an individual right such as the equal treatment of men and women laid down by the Directive, due regard must be had to the principle of proportionality, which requires that derogations must remain within the limits of what is appropriate and necessary in order to achieve the aim in view and that the principle of equal treatment be reconciled as far as possible with the requirements of the aim thus pursued (Johnston, paragraph 38; Sirdar, paragraph 26, and Kreil, paragraph 23).
Are the Means Chosen Necessary to Achieve the Objective being Pursued
The requirement here is for the employer to demonstrate that there were no alternative means, having a less discriminatory effect, by which the objective in view could have been achieved. In this case the Claimant did not meet the criterion specified by Section 9(1) in order to qualify for a contract of indefinite duration. Had he qualified under that Section the Court could not have accepted that his exclusion from such an appointment was necessary in order to maintain the integrity of its recruitment policy
Determination
The Court is satisfied that the Respondent herein did not contravene the Act in relation to the Claimant. The appeal herein is allowed and the Decision of the Rights Commissioner is set aside.
Signed on behalf of the Labour Court
Kevin Duffy
7th April, 2006______________________
TOD/BRChairman
NOTE
Enquiries concerning this Determination should be addressed to Tom O'Dea, Court Secretary.