FTD0812

FULL RECOMMENDATION

FTC/07/14

DETERMINATIONNO.FTD0812

(FT47999/06/MR)

INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003

PARTIES :

CLARE COUNTY COUNCIL
(REPRESENTED BY LOCAL GOVERNMENT MANAGEMENT SERVICES BOARD)

- AND -

RIONACH POWER
(REPRESENTED BY IRISH MUNICIPAL, PUBLIC AND CIVIL TRADE UNION)

DIVISION :

Chairman: Mr McGee
Employer Member: Mr Grier
Worker Member: Ms Ni Mhurchu

SUBJECT:
1. Appeal against Rights Commissioner's Decision FT-47999/06/MR.

BACKGROUND:

2. Clare County Council appealed the Rights Commissioner's Decision to the Labour Court on the 7th September, 2007, in accordance with Section 15(1) of the Protection of Employees (Fixed-Term Work) Act, 2003. A Labour Court hearing took place on the 29th January, 2008, the earliest date available to the parties.
The following is the Labour Court determination:-

DETERMINATION:

BACKGROUND:

In the case of the parties, they shall be referred to throughout this Determination by their original designations, namely as Complainant and Respondent. The Complainant was employed by the Respondent as Development Officer on a series of four fixed-Term contracts from 5th March 2003 up to 4th March, 2007.

In July 2003, shortly after commencing her employment, the Complainant was paid an additional acting allowance for extra responsibilities which were assigned to her. In addition, over the ensuing four years, the Complainant’s duties and responsibilities expanded with each new contract. The last such contract was entered into on the 5th of March 2006 and was expressed to be for a period of one year.

At a meeting between the Complainant and the Respondent’s Human Resources department on 20th October 2006, management stated that the Respondent was not in a position to consider the Complainant for a permanent role as Clare Community Forum Development Officer (CCF) and that her employment would be terminated on 4th March 2007. This was allegedly the first indication that the Complainant had that her contract would not be extended.

The Complainant’s Trade Union contacted the Respondent, which made it clear that it was unwilling to change its position. On the 1st December 2006 the Complainant took proceedings under The Protection of Employees (Fixed-Term Workers) Act 2003 (the Act) alleging that the respondent was in breach of sections 7 8 9 and 13 of the Act. The complaint was referred at first instance to the Rights Commissioner Service and hearings took place on 1st May 2007 and 4th July 2007. In his Decision, issued on the 15th August 2007, the Rights Commissioner found: -

"In accordance with the terms of Section 14(2) of the Protection of Employees (Fixed-Term Work) Act, 2003, I hereby declare that this complaint was well founded and I now require Clare County Council to pay Rionach Power compensation of €50,000 in respect of the contraventions of Sections 8 and 13 of the Act, as above."

The Rights Commissioner’s decision did not deal with the complaint under Section 7 of the Act.

The Respondent appealed the Rights Commissioner's Decision to the Labour Court on the 7th September, 2007, in accordance with Section 15(1) of the Act. A Labour Court hearing took place on the 29th January 2008, the earliest date available to the parties.

No direct oral evidence was advanced by either party during the case. The case was decided on the basis of the written and oral submissions of the parties’ representatives.

The only issues for decision on this appeal are whether the Respondent was in breach of Section 8 and Section 13 (1) (d) of the Act.

Complainant’s Arguments under Section 8 of the Act.

1. As an initial submission the Complainant stated that the Respondent on no occasion informed the Complainant of any objective grounds justifying the renewal of her fixed-term contract and the failure to offer a contract of indefinite duration and thus the Respondent was in breach of Section 8 of the Act.Insupport of this submission the Complainant's representative referred the Court to the following passage in the Court’s Determination in the case of”HSE v Dr Mohammad J. Khan”(FTD064) wherein the Court stated: -

“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).

Respondent’s submissions under Section 8 of the Act

The Respondent accepted that it was in breach of Section 8 of the Act in failing to provide the Complainant with written reasons objectively justifying its failure to provide the Complainant with a contract of indefinite duration. It submitted however that this was a technical breach and was not motivated by any bad faith. It was obvious that there was a link between the role of the CCF and the continued employment of the Complainant, which she must have recognised. Since her role was never intended to last beyond the time when the CCF was able to function as an independent body it was perfectly entitled to renew the contract for one year and there were objective reasons for so doing.

Therefore, the Respondent submitted that while there had been a breach of section 8 (2) and therefore under 8 (4) the Court could draw such inference from the breach as it considered just and equitable, The breach was purely technical and that any redress should be measured accordingly. The Court was referred to the caseGalway City Council v Mike Mackey[FTD065], wherein the Court awarded the complainant one week’s salary as compensation for a technical breach of the Act.

Court's Findings on this issue

The Court has carefully read the submissions and listened to the arguments advanced by both sides. The fact that either side gave oral evidence does not advance either case. However the Court has formed the view that the failure to give written objective reasons for the renewal of the complainant’s contract in 2006 was more than just technical. The Court has taken the view that the Respondents decided to, as it were, leave the gate open. They could not make up their minds whether to employ the Complainant on a full time basis and decided to have the best of both worlds by renewing her contract for another year. This is exactly the type of conduct which this Act was enacted to prevent and, in the view of this Court, represents more than a technical breach of Section 8. It should be noted that the Respondents did not make any suggestion that the complainant’s complaint under Section 8 was out of time.

Complainant's Arguments under Section 13 of the Act

1. The Complainant submitted that the Respondent was in breach of S.13 (1)(d) of the Act.

Section 13 (1) (d) states:

13 (1) An employer shall not penalise an employee _

……………..(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 under section 9 (3)

Section 9 of the Act states:

(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 maybe 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 four 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.

The Complainant submitted, that, as part of her duties, her work expanded and she was paid an additional allowance with effect from July 2003. As part of her third (2005/2006) contract, there was a further expansion of her duties and by this time, the post of development Officer with CCF formed only a part of her work. When her contract was renewed on the 5th of March 2006, given her responsibilities were on going and were then only partially linked to the post of Development Officer, the Complainant had every expectation that she would continue to be employed indefinitely. This, the Complainant submitted, was borne out by the fact that the CCF was not fully independent from the Respondent and that specific other duties to which she was assigned did not disappear after she left, but were now being carried out by various members of the Respondent’s staff.

The Complainant submitted that it was clear that her role should continue but the Human Resources Department chose on the 20th October 2006 to advise her that her contract would not be renewed for reasons which had nothing to do with procedures but were to do with the fact that the Respondents suddenly surmised that they were in breach of the Act in having offered the complainant a further fixed term contract on the 5th of March 2006 without giving objective reasons for so doing and therefore were obliged to furnish her with a contract of indefinite duration on the expiry of her current contract. In an attempt to avoid this contract thus being converted into a contract of indefinite duration the Respondents decided to inform the complainant that when her contract expired on the 4th of March 2007 it would not be renewed.

In addition the Complainant submitted that the decision by the CCF to establish an independent office was only taken at the end of January 2007, some three months after she was informed that she was being dismissed. At the time of her dismissal, her role was still ongoing and the CCF still anticipated support from Clare County Council.The Complainant was also, on 13th September 2006, less than 5 weeks before she was informed that her contract was to be terminated, granted funding for the Diploma in Local Government Studies, a course which ran until 27th April 2007 (almost two months after her termination). She was also consulted as to the location of her desk in the new Council Headquarters, which, it was known, would not be occupied until late 2007. Therefore the complainant submitted that the Respondents viewed her as being on a long term contract and the only inference that could be drawn is that when the provisions of the Act were brought to their attention they decided to warn her that her contract would not be renewed on the grounds, whether justified or otherwise that they would have to offer her a contract of indefinite duration on the 4th of March 2007.

The Complainants made a number of other submissions but these arose from confusion as to the effects of Section 9 and are not germane to the central issue.

4.The Complainant also requested that the Court uphold the redundancy compensation award to the Complainant as not being part of any compensation under this Act.

Respondent’s Arguments:- under Section 13 of the Act

As a preliminary issue the Respondent submitted that the Complainant was out of time in bringing her claim under Section 13 (1) (d). Since the act complained of under Section 13(1) (d) was perpetrated on the 20th October 2006 and the Complainant lodged her complaint on the 11th of January 2007 the Court rejects the respondent’s contention and finds that the complaint under Section 13(1) (d) was made within time. The Respondent based its contention that the complaint was out of time on the date of the renewal of the complainant’s last contract, but the Court cannot see how that is germane to the issue.

Substantive Arguments

1. The Respondent submitted that, during the 4-year period of the employment of the Complainant, the role of the CCF continued to expand. At the time it was decided not to renew the complainants contract, as previously envisaged, the Respondent stepped back as facilitator and the CCF no longer needed a Development Officer paid for by the Respondent as the purpose for which the Complainant was employed was no longer being undertaken by the Respondent.

The last fixed-term contract was issued to the Complainant on 4th March 2006,.

In response to the complainant’s allegation that it was in breach of Section 13(1)(d) the Respondent submitted that the provisions of the Act applying to successive fixed term contracts had been complied with in full.

2. The Respondent stated that it was never intended that the Development Officer post should continue after the CCF was established as an independent office. In its 2007 work plan, the CCF envisaged the direct employment of a part-time coordinator into which the Complainan's Role would be subsumed. There was absolutely no intention on the part of the Respondent to avoid a fixed-term contract becoming a contract of indefinite duration, as there was no intention in the first place to renew it beyond 2007. Dismissal for the purpose of the Act does not include the coming to an end of a contract by effluxion of time, which is what occurred in the instant case.3. The Respondent also submitted that the compensation awarded was disproportionate.4. The Respondent made a number of further submissions in relation to a complaint under Section 9. However there was no such complaint before the Court and therefore these submissions need not be considered by the Court.

The Respondent provided a letter at the hearing, dated the day before the hearing, written by the Chairperson of the CCF to the HR Department of the Council, outlining his understanding of the role and position of the complainant during her tenure. He pointed out in the letter that she knew that her job (or at least the CCF part of it) would eventually be eliminated and replaced by an independent CCF Officer, and that she agreed that this was what happened in community development. She also worked towards this goal in the last year of her employment.

The Union,on the complainant’s behalf, took issue with the emphasis of the letter and pointed out that the thrust at all times was towards an independent role for the CCF but that no specific timescale was decided upon until January 2007 and that, by 2005/2006, the CCF was only a part of the complainant’s workload in the community development area of Clare County Council.

Facts established by the Court:

1. Clare County Council was the Complainant’s employer at all times.

2. The complainants contract was renewed on three occasions. At no time was she informed of the objective grounds justifying each renewal of her fixed-term contract.

3. The Complainant was informed by the HR Department of Clare County Council at a meeting on the 20th October 2006 that she could not be made permanent because of the existence of a staffing embargo and limits on organisational resources and therefore her contract would not be renewed when it expired on 4th March 2007.

4. In the course of her employment the Complainant’s duties expanded considerably beyond those of Development Officer to Clare Community Forum (CCF). This expansion is clearly reflected in the statements of Terms and Conditions of Employment supplied to her in April 2005 and April 2006. Therefore, even when the CCF became independent, only that part of the Complainant’s job relating to the CCF no longer came under the responsibilities of the Respondents.

5. Beyond the fact that at some stage the CCF might take on an independent existence, no objective reasons were advanced by the Respondents for their failure to offer the Complainant a contract of indefinite duration in March 2006.

The Issues:

The Court has to first of all decide whether the Complainant was in fact dismissed. It must then decide whether the purpose of the dismissal was to avoid the Complainants then contract being turned into a contract of indefinite duration, whether such a fear was justified or not.

The Law Applicable

Section 13 (1) (d) states:

13 (1) An employer shall not penalise an employee _
……………..(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 under section 9 (3)

This paragraph renders unlawful a dismissal which is connected with the purpose of avoiding a fixed-term contract being deemed to be one of indefinite duration in accordance with Section 9(3). There is however no statutory definition of dismissal for the purposes of the Act.At common law the term “dismissal” means the unilateral termination of a contract of employment by the employer, with or without notice. Hence, at common law, where a fixed-term contract comes to an end in the circumstances specified in the contract there is no dismissal. The contract is discharged by performance and not at the unilateral instance of the employer.The Unfair Dismissals Acts 1977 to 2001 provide that for the purpose of that Act a dismissal includes the termination of a fixed-term contract without it being renewed. The Complainant however has chosen not to issue proceedings under that Act but under the Fixed –Term workers legislation. The absence of a corresponding provision in the Act of 2003, would normally preclude the Court from giving the expression a similarly extended meaning for the purposes of Section 13(1)(d). However on a reading of the Act as a whole there are compelling reasons for construing section 13(1)(d) as applicable to the non-renewal of fixed-term contracts as well as dismissals within the common law meaning of that term. The Court is of the view that a case such as this where a decision is made not to renew a fixed term contract when no objective grounds for it’s extension have been given falls squarely within the ambit of cases which might be heard under Section 13 (1) (d)

The Court is sustained in this view by the Judgement of the European Court of Justice in “Adeneler & Others v Ellinikos Organismos Galaktos [2006] (C-212/04) LR LR 716”which dealt with the thwarting of an employee’s rights when the needs of the job are not of limited duration but fixed and permanent. In those circumstances, the Court ruled “the protection of workers against the misuse of fixed-term employment contracts or relationships, which constitutes the aim of clause 5 of the Framework Agreement, is called into question”.Having regard to this statement it is clear that real and effective judicial protection against abuse of fixed-term contracts can only be guaranteed if the non-renewal of a fixed-term contract, when used as an instrument of abuse, is rendered unlawful.Court’s Conclusions:

Having read and carefully listened to the submissions, both written and oral, the Court is satisfied that the decision not to renew the Complainant’s fixed term contract was born out of a fear that either the Respondent had already by its actions converted the Complainant’s contract into a contract of indefinite duration or that the Complainant would be entitled as of right to a contract of indefinite duration when her then contract expired on the 4th of March 2007

On both the 5th of March (date of contract renewal) and the 20th of October 2006 (date the parties met), no final decision had been taken as to the future of the CCF.

The Court is also satisfied that given the expansion of her duties the Complainant was entitled to expect that her future with the Respondents was assured. Therefore she could not have known before the 20th of October 2006 that the intention was to let her go once the CCF became independent, although she was obviously aware of the link between the CCF part of her position and the continued support of the CCF by the Council.

The Respondent stated that the reason for the decision on the 20th of October was that there were staff changes in the offing and new procedures in place. Neither the new procedures nor the staff changes had ever been outlined to the Complainant. Indeed the Complainant had, in the previous five weeks, been offered a place on a diploma course which was due to complete after the date of her dismissal. She had also been asked to choose her work station in the new Council Offices.

Applying these conclusions, and given the findings of fact already made by this Court the Court is inevitably drawn to the Conclusion that the Respondent was in breach of Section 13(1)(d) of the Act. It is also irrelevant, in the view of the Court, whether it was correct in its apprehension that it might have to offer the Complainant a contract of indefinite duration. If its purpose in reaching the decision was to avoid having to offer the Complainant a contract of indefinite duration, then that is sufficient to bring the Respondent within the ambit of Section 13 (1) (d).

Determination

The Court has decided that the appropriate award is one of compensation. The main function for which the complainant was employed by the Respondents has now disappeared and thus reinstatement is not an option. In deciding the amount of compensation payable however, the Court has taken cognisance of the fact that when the Complainant was originally employed it was for a specific purpose which all parties knew would come to an end. The Court proposes to vary the compensation and to award the complainant €5000 for the breach of Section 8 of the Act and €20,000 for the breach of Section 13 (1) (d). To this extent the appeal is upheld and the decision of the Rights Commissioner is varied.

Signed on behalf of the Labour Court

Raymond McGee
3rd June, 2008______________________
MG.Deputy Chairman

NOTE

Enquiries concerning this Determination should be addressed to Madelon Geoghegan, Court Secretary.