FTD1118

Appearances

At the hearing of the appeal Ms M.P. Guinness B.L. instructed by Cullen & Co Solicitors represented Mr Hogan and Mr Hanniffy. Ms Liz Walsh B.L., instructed by BP O’Reilly &Co, Solicitors, represented Mr McGrath and Mr Holland. Mr Tom Mallon B.L., instructed by Arthur Cox, Solicitors, represented the Respondent.

The Facts

The material facts of the case not in contention and can be summarised as follows:-

• Each Claimant is employed by the Respondent as an Assistant Lecturer in the Department of Trades. The first-and third-named Claimants are Assistant Lecturers in plastering and the second- and fourth-named Claimants are Assistant Lecturers in Brick and Stonelaying although it appears that the fourth-named Claimant was upgraded to the post of Lecturer. They are employed in the provision of-off-the job training of apprentices as part of the statutory apprenticeship scheme administered by FAS. Funding for the courses taught by the Claimants is provided by FAS.
  
  The Claimants commenced employment with the Respondent on various dates in the month of January 2005. Each of the Claimants was originally employed pursuant to a fixed-term contract for one year ending on 31st December 2005. Those contracts were renewed for a fixed-term of two years for the period 1st January 2006 to 31st December 2007. These contracts were in common form and contained the following provision: -
  
  • “Nature of Position”
    “This is a Temporary, Whole Time, Fixed-term appointment, subject to satisfactory service during the probation period, and to this contract of employment. The position is funded in association with FAS and as such is dependant on the continuance of apprentice training in AIT. As this is a fixed-term contract, it is not intended that there should be any entitlement to, or expectation of, any permanent appointment or extension to this contract”
    

• With effect from 1st January 2008 each of the Claimants had their employment with the Respondent renewed on what were described on their face as ‘fixed purpose contracts’ In relevant part each of these contracts provided as follows: -
  
  • “Nature of Position
    This is a fixed purpose contract between the Institute and the lecturer. Subject to satisfactory service, this contract will continue pending the continuation of apprentice course in the [plastering / brick and stonelaying area]”
  
  In January 2009 each of the Claimants had completed four years’ continuous employment with the Respondent. Having been advised by their trade union, the Teachers Union of Ireland (TUI), each of them wrote to the Human Resources Manager of the Respondent, Mr Liam Brennan, by letter dated 19th May 2009 in the following terms: -
  
  • “I have been employed in Athlone Institute of Technology since early 2005 on a temporary wholetime basis in the Engineering School. As such, I now meet the conditions for a Contract of Indefinite Duration under the Protection of Employees (Fixed-term Work) Act 2003. I would ask you to issue me with such a contract as soon as possible”
    

• By letter dated 19 October 2009 Mr Brennan replied to each of the Claimants in the following terms: -
  
  • “With reference to your correspondence of 19 and 21 May 2009, I write to advise you that the Institute is not in a position to issue a contract of indefinite duration to you for the following reasons:
    
    Your current contract of employment issued to you on 22 January 2008, clearly outlines that you are employed on a fixed purpose basis, pending the continuation of apprentice courses in the Trades area. Currently, the apprentice area shows a decline in numbers and are under review nationally. Therefore the institute is not in a position to issue contracts of indefinite duration to employees in an area where the continuation of such courses are not guaranteed.
    
    Subject to satisfactory service, your employment with Athlone Institute of Technology will continue as long as the purpose continues, which in your case is the availability of adequate student numbers in the trades area in your specified field.
    
  The Court was told that consequent upon the decline in construction-related activity nationally the numbers of apprentices in both bricklaying and plastering had fallen dramatically. Numbers for first year registrations in both trades, prepared by FAS, were furnished to the Court. In the case of bricklaying the intake of first year apprentices nationally for the years 2001 to 2011, inclusive was as follows: -
  
  2001 416
  2002 441
  2003 549
  2004 679
  2005 599
  2006 473
  2007 247
  2008 57
  2009 20
  2010 10
  2011 5
  
  
  In the case of plastering the figures are as follows: -
  
  2001 201
  2002 186
  2003 268
  2004 310
  2005 278
  2006 220
  2007 143
  2008 57
  2009 14
  2010 12
  2011 1
  
  
  
  The apprenticeship scheme involves a mix of on-the-job training and off- the- job development. It is generally a four-year programme with seven modules of training. The scheme is standards-based and the apprentice is required to attain the requisite level of competency before progressing to the next phase. Phases four and six are delivered by various Institutes of Technology under the aegis of the Higher Education authority (HEA), including the Respondent.
  
  The Court was told that in light of the declining number of apprentices entering the system various proposals were developed by the HEA to address the situation, including consolidating construction-related trade courses in the Cork Institute of Technology and the Respondent Institute, and discontinuing these courses in all other Institutes. However, following a review by the HEA in January 2011, it was decided to discontinue the bricklaying course at the Respondent Institute with effect from April 2011 and to discontinue the plastering course in August 2011. In consequence, the Claimants have been given notice that their employment with the Respondent will terminate by reason of redundancy. The employment of the first-and third-named Claimants is due to end on 31st August 2011 and the employment of the second-and fourth- named Claimants is due to end on 20th June 2011.
  
  In evidence Mr Jim Coyle, who is employed by the HEA with responsibility for apprenticeship matters, told the Court that concerns about the further involvement of the Respondent in bricklaying and plastering apprentice courses emerged in or about mid-2010. He said that at this time the “alarm bells” sounded in relation to these courses.
  
  Mr Coyle also told the Court that in or about 2006 /2007 negotiation had taken place between the Teachers Union of Ireland and the Department of Education and Science in relation to the granting of contracts of indefinite duration to teachers on fixed-term contracts. These negotiations took place against the background of a significant number of cases pursued by teachers under the Act and it was considered desirable to clarify the circumstances in which fixed-term contracts could be extended and renewed. The negotiations were facilitated by a former Rights Commissioner and agreement was finally reached, the terms of which were set out in Circular 0093/2007 addressed to the Director / President of each Institute of Technology. At paragraph 2.2.1 this Circular provides as follows: -
  
  • “the employer shall issue a contract of indefinite duration to any fixed-term lecturer with 4 years or more successive lecturing service on 1st September 2006 or any date thereafter (those employed for the first time after 14th July 2003 must have 2 or more successive contracts) who is deemed qualified and who is not excluded by reason of one or more of the following which the employer can demonstrate:
    

• The exclusions at (i) and (ii) above shall not apply where the staff member has not received a written contract setting out objective grounds since September 2003.”
  

Ms Guinness, B.L. first submitted that the contracts entered into between the Claimants and the Respondent in January 2008 were not fixed-term contracts within the statutory meaning. She contended that the import of these contracts was that the employment would continue for as long as the employer required the services of the Claimants. Counsel submitted that if it were to be held that such a limitation on tenure made the employment created by the contract fixed-term within the statutory meaning, then practically every contract of employment could be so designated.

In the alternative Counsel submitted that the grounds relied upon by the Respondent for the extension of her Clients’ contracts beyond the period of four years normally permitted by s.9(2) of the Act, namely, the possibility that the post could be discontinued at some indeterminate time in the future, were not objective grounds within the meaning of s.7 of the Act.

Ms Walsh, B.L, adopted the submissions of Ms Guinness and in addition contended that the agreement made between the Department of Education and Science purporting to define the circumstances in which s.9(2) of the Act should not apply did not comply with the Act itself and should not be taken into account. Ms Walsh further submitted that s.8(2) of the Act had not been complied with in relation to her Clients in that the objective grounds relied upon to justify the third contracts were issued some three weeks after the renewal of the earlier contracts.

The Court was told that in the case of Mr Holland, the fourth-named Claimant, he was subsequently offered a further fixed purpose contract with effect from 1st January 2010 when his position appears to have been upgraded to that of Lecturer. This contract, which was not executed until 26th June 2010, contained a more expansive clause describing its purpose. It provided in express terms that the contract would cease should there be a decrease in student numbers resulting in the courses in brickwork becoming non-viable.

Counsel also raised other matters alleging contraventions of s.10 and s.13 of the Act in relation to her Clients. These matters were not raised before the Rights Commissioner but it was submitted that the Court is nevertheless entitled to consider them in a de novo hearing.

Counsel for the Respondent, Mr Mallon, B.L, contended that the Claimants were at all times employed under fixed-term contracts. The last such contracts were determinable by the occurrence of an event. The event in contemplation, according to Counsel, was the eventual discontinuance of the construction trades apprenticeship courses at the Respondent Institute. Counsel submitted that it was not open to the Claimants to now deny that they were fixed-term employees. They had at all time accepted that they had such a status as is evident from the letters which each of the Claimants had sent to the Respondent in May 2009 seeking a change in their status. Counsel further submitted that in bringing the within complaints the Claimants had asserted and relied upon their status of fixed-term employees and could not now resile from that position.

Mr Mallon submitted that the contracts entered into between each of the Claimants and the Respondent were clearly conditional upon the continuation of the bricklaying and plastering courses at the Respondent. The figures opened to the Court demonstrate that from 2007 onwards there was considerable anxiety at the future viability of both courses. It was submitted that the agreement concluded between the TUI (of which all of the Claimants are members) and the Department of Education and Science provides in express terms that an employer to which the agreement relates in not obliged to grant a contract of indefinite duration where the course on which the employee concerned is engaged will cease to be viable within a reasonable time. In this instance, it was submitted, statistics on the intake from 2008 onwards were showing a steep decline in apprentice intake which, if continued, would render the retention of these courses non-viable.

Conclusions of the Court

The Court first considered if the additional complaints raised on behalf of the second-and fourth-named Claimants alleging contraventions of s.10 and s.13 could be entertained. These complaints were not made to the Rights Commissioner and were not adjudicated upon at first instance. This Court has only appellate jurisdiction under the Act. The Court’s jurisdiction under the Act is founded upon a valid decision by a Rights Commissioner in relation to the matter in respect to which that jurisdiction is invoked. A complaint alleging contraventions of either s.10 or s13 of the Act was not before the Rights Commissioner and consequently the Court has no jurisdiction to consider these complaints at this stage.

The 2008 Contracts

It was submitted that the contracts entered into by the Claimants in January 2008 were not fixed-term contracts within the statutory meaning. It is accepted that at all material times the Claimants considered themselves to be fixed-term employees and they relied upon that status in bringing these claims. Nonetheless, if the Claimants were not fixed-term workers within the meaning of the Act, they cannot havelocus standiunder the Act and the Court could not have jurisdiction to grant them any relief under the Act. The Court’s jurisdiction is derived from the statute and it cannot be conferred by the parties either by their agreement or acquiescence. Consequently this is a question which the Court must consider.

Section 2 of the Act provides the following definition: -

• 
  “fixed-term employee” means a person having a contract of employment entered into directly with an employer where the end of the contract of employment concerned is determined by an objective condition such as arriving at a specific date, completing a specific task or the occurrence of a specific event but does not include—
  • (a) employees in initial vocational training relationships or apprenticeship schemes, or
    (b) employees with a contract of employment which has been concluded within the framework of a specific public or publicly-supported training, integration or vocational retraining programme;
    

• 61
  The Framework Agreement proceeds on the premise that employment contracts of indefinite duration are the general form of employment relationship, while recognising that fixed-term employment contracts are a feature of employment in certain sectors or in respect of certain occupations and activities (see paragraphs 6 and 8 of the general considerations in the Framework Agreement).
  
  62
  Consequently, the benefit of stable employment is viewed as a major element in the protection of workers (see Mangold, paragraph 64), whereas it is only in certain circumstances that fixed-term employment contracts are liable to respond to the needs of both employers and workers (see the second paragraph of the preamble to the Framework Agreement and paragraph 8 of the general considerations).
  

Objective grounds

The question of whether objective grounds existed for the continuation of the employment beyond the period of four years period normally permitted by s.9(2) of the Act was fully argued before the Court. For the sake of completeness, and in case it is wrong in its conclusion as to the nature of the contracts concluded in January 2008, the Court considers it appropriate to deal with this question.

Section 9(2) of the Act provides, in effect, that absent objective grounds justifying further renewal, the aggregate duration of successive fixed-term contracts shall not exceed four years. Section 9(3) provides that where any term in a fixed-term contract purports to contravene subsection (2) the term shall have no effect and the contract concerned shall be deemed to be one of indefinite duration. InMinister for Finance v McArdle[2007] 2 ILRM 438 Laffoy J pointed out that where s.9(3) comes into play the offending term is severed from the contractab initioand the contract concerned becomes one of indefinite duration from its conclusion. In January 2008, when the putative ‘fixed purpose’ contracts were proffered to the Claimant, they had completed three years on what were undoubtedly valid fixed-termcontracts. The Court is satisfied on the evidence that at that time it was anticipated that the aggregate duration of their employment relationship would extend beyond four years. Hence, and subject to its being saved by s.9(4), a term extending the employment for a fixed-term beyond four years was void and the contract became one of indefinite duration by operation of law.

That then raises the question of whether objective grounds existed at the time the contracts were concluded justifying their renewal beyond the four-year period specified in s.9(2). Section 7(1) of the Act provides for what can constitute objective grounds for the purposes of the Act 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.
  

• (c) are necessary to that end.
  

• “ According 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).
  

• (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 circumstance.
  

• “Nature of Position
  This is a fixed purpose contract between the Institute and the lecturer. Subject to satisfactory service, this contract will continue pending the continuation of apprentice course in the [plastering / brick and stonelaying area]”
  

• That the post will not be viable within a reasonable period and where such a ground was set out as an objective ground in writing in the previous contract;
  

Determination

The Court finds that the contracts entered into between the Claimants and the Respondent in January 2008 were not fixed-term contracts within the meaning of the Act and that they were, by their own terms, contracts for an indefinite duration. In the alternative the Court finds that there were no objective grounds justifying the renewal of the Claimant’s employment beyond the four-year period specified in s. 9(2) of the Act in consequence of which the term in the contracts issued in January 2008, which purported to have such an effect, was voidab initioand they became contracts of indefinite duration by operation of s.9(3) of the Act.

In relation to the complaint alleging a contravention of s.8(1), which requires that a statement of objective grounds must be issued by the employer prior to the date on which a fixed-term contract is renewed, it is clear that what purported to be objective grounds were set out in the contract some three weeks after the 2008 renewals. The Court regards this as a technical contravention which did not have any material consequences for the Claimants.

Accordingly, the appeals are allowed and the Decision of the Rights Commissioner is set aside and substituted with the terms of this Determination.

Redress

Section 14(2) of the Act provides

• (2) A decision of a rights commissioner under subsection (1) shall do one or more of the following:
  

• (c) require the employer to re-instate or re-engage the employee (including on a contract of indefinite duration);
  
  (d) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances, but not exceeding 2 years remuneration in respect of the employee's employment;