FTD0813

• Re Locum Consultant Paediatrician
  
  As you are aware, approval has now been granted for the permanent post of Consultant Paediatrician with a special interest in paediatric rheumatology by both the ERHA and Comhairle. This permanent post will be advertised in the coming weeks and we anticipate interviews will be held early in 2004.
  
  In order to facilitate the recruitment of the permanent post holder, your appointment to the post of Locum Consultant Paediatrician has been extended to 30th June 2004 or until the permanent post has been filled, whichever is the sooner. Please find enclosed two copies of your contract for signature and return one copy to us for our files”

• “This appointment is to facilitate the recruitment of a permanent consultant and will not, under any circumstances, extend beyond 31st March 2006. The open competition has been held and a permanent candidate has been selected.
  
  The permanent candidate who was due to take up the post on 1st January 2006 is now unable to take up the post until 1st April 2006. The objective reason for the extension is to cover the delay in the candidate taking up their appointment. You are not being offered a contract of indefinite duration, as a permanent employee has been appointed through the open competition process.”

The Claimant

It is accepted that the Claimant does not have an entitlement to a contract of indefinite duration pursuant to s. 9 of the Act.

Counsel for the Claimant, Ms Maguire B.L., submitted that the Claimant was treated less favourably than a comparable permanent employee in that such an employee would not have been subjected to a continued renewal of his or her contract of employment. It was further submitted that there were no objective grounds justifying the continued renewal of the Claimant’s contract for a fixed-term.

The gist of the Claimant’s case is that the renewal of a fixed-term contract constitutes less favourable treatment of a fixed-term employee and that such less favourable treatment is prohibited by s. 6 of the Act. In support of that contention Counsel for the Claimant referred to s. 7 of the Act which provides as follows: -

• 7.—(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.

Respondent

The Respondent told the Court that in or about October 2002 it received approval to engage a consultant paediatrician with a special interest in rheumatology. The post was advertised in November 2003 and interviews were held on 7th May 2004. While this process was in train the Respondent decided to use the funding available to support a temporary appointment. The Claimant was employed for that purpose. The Claimant’s employment terminated when the permanent appointee took up her position.

The Respondent contends that it complied with the Act in that on each renewal of the Claimant’s contract, after the passing of the Act, it provided him with a statement of the objective grounds justifying his continued employment for a fixed-term. It is the Respondent’s case that the Claimant cannot assert an entitlement to a contract of indefinite duration, as he does not meet the criteria prescribed for obtaining such a contract by s. 9 of the Act. It was further submitted on behalf of the Respondent that s. 6 of the Act cannot avail the Claimant because the entitlement to equal treatment in respect of conditions of employment does not include an entitlement to the same tenure as a comparable permanent employee.

Questions for Consideration

The Act came into effect on 14th July 2003. After that date the Claimant’s contract of employment was renewed for a further fixed term on 1st January 2004, for six months, on 1st July 2004 for 18 months, and on 1st January 2006 for three months to 31st March 2006. The stated grounds for each of these renewals were the arrangements then in train for the recruitment of a permanent consultant. On the coming into effect of the Act the Claimant had not completed his third year of continuous fixed-term employment. Thus, neither s. 9(1) nor 9(2) can have any application in this case.

In essence what the Court has to decide is whether, on its true construction, s.6 of the Act entitled the Claimant to a permanent contract in the absence of objective grounds justifying its renewal for a fixed term. If that question is answered in the affirmative the Court must then consider if, as a matter of law, the grounds advanced by the Respondent for renewing the Claimant’s employment for a fixed-term amounted to objective grounds within the meaning of s. 7 of the Act.

The Purpose of the Act

It is well settled that a statute enacted to transpose a provision of Community law must be interpreted purposively. The Act was enacted to give effect in domestic law to Directive 99/70/EC, concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP. Hence, it must be interpreted and applied in light of the purpose and wording of the Directive so as to achieve the objective pursued by the Directive (Von Colson and Kamann v Land Nordrhein-Westfalen[1984] ECR 1891).

The Framework Agreement annexed to Directive 99/70/EC pursues two objectives. Clause 1 of the Agreement provides: -

• Purpose (clause 1)
  The purpose of this framework agreement is to:
  
  • (a) improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination;
    
    (b) establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.

• Principle of non-discrimination (clause 4)

• Measures to prevent abuse (clause 5)

Less Favourable Treatment

There are other factors which indicate that the prohibition on applying less favourable conditions of employment to fixed-term employees does not extend to matters relating to tenure. If the conclusion of a fixed-term contract was to be regarded as less favourable treatment within the meaning of Clause 4 of the Directive and s. 6 of the Act, all fixed-term contracts would beprima facieunlawful. This could not have been intended. Further, if the renewal of a fixed-term contract for a further fixed-terms constituted less favourable treatment in respect to conditions of employment, Clause 5 of the Framework Agreement and s. 9 of the Act, would be largely superfluous.

In Determination FTD062-Prasad v Health Service Executivethis Court considered a similar proposition to that canvassed by the Claimant in this case. Here it was contended that the decision of the Respondent to divert funding from the Claimant’s temporary post to a newly created permanent post, resulting in the dismissal of the Claimant, constituted less favourable treatment of the Claimant prohibited by s. 6 of the Act. In considering that proposition the Court adopted the reasoning of the Court of Appeal for England and Wales on a similar point inDepartment for Work and Pensions v Webley[2005] IRLR 288. That case 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).

Measures to prevent abuse

In her submissions to the Court Ms Maguire B.L contended that s. 7 of the Act recognises that the renewal of a fixed-term contract for a further fixed-term can constitute less favourable treatment. In advancing this argument Counsel relied on the words “which treatment may include the renewal of a fixed-term employee's contract for a further fixed term” which appear in the text of the Section. It was also pointed out that s 8 of the Act requires, in effect, that there be objective grounds for the initial conclusion of a fixed-term contract and for each subsequent renewal.

It seems to the Court that the words used in s. 7, upon which Counsel placed reliance, relate to s.9(4) of the Act rather than to s.6. Section 9(4) expressly requires objective justification for the renewal for a further fixed-term of a contract which would otherwise become one of indefinite duration by operation of s.9(1) or s.9(2) of the Act. A reading of the Act as a whole suggests that the reference in s.7 relied upon by Counsel is intended to convey that the standard of objective justification required for the purpose of derogating from the requirements of s. 9 are the same as those required to derogate from s.6. However, these words do not imply that a person who cannot avail of s.9 of the Act to obtain a contract of indefinite duration, because he or she does not meet the requirements of that section, could achieve the same result by relying upon s.6.

Section 8 of the Act is also directed at providing protection against the abuse of fixed-term contracts rather than at promoting the principle of non-discrimination in respect to working conditions. This Section requires an employer to provide a fixed-term employee with a statement in writing of the objective grounds for the conclusion or renewal of his or her fixed-term contract. The import of that Section was previously considered by the Court in Determination FTD064-Dr Mohammad H. Khan v HSE, North Eastern Area17 ELR 313. In that case the Court took the view that the requirement to provide a written statement of objective grounds is, in part, for the purpose of ensuring that a ground subsequently relied upon for renewing a fixed-term contract beyond the period normally permitted by s. 9 is the real or operative reason justifying a derogation from the provisions of that Section. Here the Court said the following: -

• Moreover, a purposive interpretation of section 9 indicates that a Respondent must establish that the reason relied upon as constituting objective grounds was the operative reason for the failure to offer a contract of indefinite duration at the time the fixed-term contract was renewed. This suggests that the Respondent must at least have considered offering the Claimant a contract of indefinite duration before renewing his or her fixed-term contract and decided against doing so for the reason relied upon.
  
  Section 8(2) is also of considerable significance on this point. It seems to the Court that the purpose of Section 8 is not just to ensure that a fixed-term employee is informed of the reason why his or her contract is being renewed. On a reading of the Section as a whole it is clear that it is intended to ensure that the employer definitively commits itself, at the point at which the contract is being renewed, to the grounds upon which it will rely if subsequently pleading a defence under Section 9(4). Thus where an employer fails to provide a fixed-term employee with a statement in writing, in accordance with Section 8(2), it is apt to infer, in accordance with Section 8(4) of the Act, that the grounds subsequently relied upon were not the operative grounds for the impugned decision and it would be for the employer to prove the contrary.

The proposition that the proscription of less favourable treatment in respect to conditions of employment, at s.6 of the Act, includes conditions as to tenure was considered by Leffoy J. inMinister for Finance v McArdle18 [2007] 165. Here, at page 174 of the report, the Judge approved certain findings of this Court as follows,:-

• Labour Court found that the defendant and a number of established civil servants performed the same work under the same or similar conditions and each was interchangeable with the other in relation to work. Therefore, the Labour Court found that the established civil servants were comparable permanent employees in relation to the defendant within the meaning of s.5 . On that basis, the Labour Court concluded that the defendant, as a fixed-term employee, was entitled to the same conditions of employment as her nominated comparators who were established civil servants (except, of course, in relation to the duration of her contract).

• Where the Labour Court fell into error in adopting the Rights Commissioner's formulation of the defendant's entitlement to security of tenure was in accepting the underlying assumption of that formulation that the defendant's condition as to duration or tenure of her employment must not be less favourable than that of her chosen comparator. That underlying assumption seems to be predicated on the requirements of s.6(1) . However, s.6(1) only outlaws discrimination in relation to the fixed-term employee's “conditions of employment” as defined, which, as the Labour Court correctly recognised when dealing with the issue of the appropriate comparator in the context of s.6 , does not cover the duration of the contract.