FTD122

The ESB appealed to this Court. There was no cross-appeal.

In this Determination the parties are referred to as they were at first instance. Hence Mr Killally is referred to as the Claimant and the ESB is referred to as the Respondent.

Background

The factual background against which this dispute arose is somewhat unusual. The Claimant was employed by the Respondent, as a regular permanent employee, between 1977 and 1997. In that year he availed of a voluntary severance package. He was then aged 53. As part of the package the Claimant received a pension which now amounts to €303.00 per week. The Claimant was then reengaged by the Respondent as a meter reader on what was expressed to be a contract for services. The Claimant continued in that capacity between 1997 and 2009 on a series of such contracts each of which was for a fixed-duration.

In or about 2002 six meter readers employed by the Respondent on contracts for services took issue with their contractual status and sought a determination from the Department of Social Community and Family Affairs as to whether they were in insurable employment for the purpose of the Social Welfare Acts. The Appeals Officer of the Department concluded that the six applicants were employed on a contract of service and that they were properly classifiable as employees of the Respondent during the totality of their engagement by the Respondent. The Respondent appealed the decision of the Appeals Office to the High Court. The appeal was dismissed in a Judgment delivered by Gilligan J, reported asElectricity Supply Board v Minister for Social Community and Family AffairsIEHC 59.

The Respondent herein further appealed to the Supreme Court against the decision of the High Court. Before the appeal came on for hearing negotiations took place between the Respondent and a trade union representing the meter readers. An agreement was concluded whereby significant sums were paid to the meter readers who then resumed employment with the Respondent under revised contracts for services. The Claimant was excluded from the scope of this agreement because he was in receipt of a pension from the Respondent.

The Claimant’s final contract with the Respondent, which was expressed to be one for services, expired on 31^stMarch 2009 and was not renewed. The circumstances in which this occurred were the subject of some controversy in the appeal but it is unnecessary to rehearse those differences for the purposes of this Determination.

The Claimant’s date of birth is 29^thOctober 1943. At the time his final contract expired he was over 65 years of age.

The Claimant is now seeking reinstatement in his former role on a contract of indefinite duration.

Position of the parties

A number of significant questions of law were raised in this appeal. The Respondent contends that at all material times the Claimant was engaged by it on contracts for services and that he was never its employee. Consequently, it was submitted, he could not maintain a claim under the Act. On this point the Claimant contends that the Respondent is estopped from denying that he was employed on contracts of service by reason of the decision of the Appeals Officer and the subsequent affirmation of that decision by the High Court. While it is acknowledged that the Claimant herein was not a named party in the decision of the Appeals Officer it is contended that the case was a test case and that the Claimant was ade factoparty.

The Respondent denies that the doctrine of issue estoppel arises in this case as the Claimant was not an actual party to the case decided by the Appeal Office nor were the actual parties his privies. The Respondent further denies that the case was a test case as the Respondent had never consented to it being treated as such. It was further submitted on its behalf that he High Court did not decided on the employment classification of the meter readers; it merely held that the Appeals Officer had not erred in her approach to the case.

In the alternative, the Respondent submitted that at the time the Claimant’s final contract expired he was over the normal retirement age for employees of the Respondent. It was submitted that even if the Rights Commissioner was correct in holding that the Claimant became entitled to a contract of indefinite duration on 1^stApril 2007 (which it denies) that contract would have contained an implied term providing for retirement at age 65 in line with the universally applicable retirement age for employees of the Respondent. The Court was told that this retirement age is specified in a collective agreement covering its entire staff. In that regard, it was submitted, the Claimant is seeking to be placed in a superior position to all other employees of the Respondent whose status as such was never in doubt. In these circumstances the Respondent contends that event if the Claimant’s employment status from 1^stApril 2007 was as he contended, he suffered no detriment by reason of the non-renewal of his contract which expired in March 2009, as he was already over the mandatory retirement age for employees at that time.

On behalf of the Claimant it was submitted that, as a matter of law, the contract of employment of indefinite duration that came into being by operation of s.9(3) of the Act on 1^stApril 2007 (in accordance with the decision of the Rights Commissioner) was identical in its terms to the fixed-term contract from which it was derived. That contract did not contain an express provision on retirement and a term cannot be implied requiring his retirement at any particular age. It was further submitted that the retirement age generally applicable within the employment is the age at which employees become entitled to an occupational pension. The Claimant did not have an entitlement to an occupational pension from his employment as a meter reader and he was not claiming an entitlement to such a pension. In these circumstances, it was submitted, the Claimant is not seeking to be placed in a superior position to other employees of the Respondent.

The Respondent raised other issues in relation to the operation of the statutory time limit and the jurisdiction of the Rights Commissioner and this Court on appeal. For present purposes it is unnecessary to address those issues.

Approach of the Court

The Court received careful and comprehensive submissions from Counsel on both sides on the difficult and complex legal issues arising in this case, for which it is grateful. By agreement between the parties the Court decided that it should first consider if, taking the Claimant’s case at its height, the contract of indefinite duration, for which he contends, would have contained an implied term requiring him to retire at age 65. In that event he could have suffered no detriment by reason of the erroneous classification of his employment status on which his complaint is grounded and the question of reinstatement or compensation would not arise. It was accepted that if the Court was to so hold the other issues arising in the case would become moot.

The Court proceeded accordingly.

The Law

The relevant statutory provision is contained at s. 9 of the Act. It provides: -

• “(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 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.

  (5)The First Schedule to the Minimum Notice and Terms of Employment Acts 1973 to 2001 shall apply forthe purpose of ascertaining the period of service of an employee and whether that service has been continuous.”

In Determination FTD063,State Laboratory v Una McArdlethe Court considered the legal effect of s.9(3) of the Act where subss (1) or (2) of that section are contravened. The Court held: -

• “That section applies to a situation where an employee is given a renewed fixed term contract in contravention of sub-sections (1) or (2). In such a case sub-section (3) would operate so as to render void, ab initio , the term of the contract which purports to provide for its expiry by effluxion of time, or the occurrence of an event. Hence, by operation of law the offending term would be severed from the contract thus altering its character from one of definite duration, or fixed term, to one of indefinite duration. However, the remaining terms and conditions of the contract would be unaffected including terms as to pensionability and termination, which, as already observed, would have had to be aligned with those of a comparable permanent employee in accordance with section 6.

  In other words, the expression ‘contract of indefinite duration’ should be understood in contradistinction to a contract of definite duration or a fixed-term contract. The terms and conditions of a contract of indefinite duration which comes into being by operation of s. 9(3) must therefore be the same as those in the fixed term contract from which it is derived, as modified by s. 6 , in all respects other than its fixed duration. Obviously, these terms will vary from one employment to another and every case will be decided mainly on its own facts.”

In that passage this Court was referring to an earlier finding which it had made in the case on the ambit to be ascribed to s.6 of the Act (which deals with the entitlement of a fixed-terms worker to the same conditions of employment as those of a comparable permanent employee). The Court had held that the circumstances in which a contract of employment can be terminated is a condition of employment within the meaning of s.6 of the Act. On that basis it was held that the Claimant, who was an unestablished civil servant, was entitled to a condition in her fixed-term contract providing for its termination on no less favourable terms than those applicable to an established civil servant. Laffoy J held that this Court erred in holding that s. 6 of the Act extended to the question of tenure. The finding by this Court that s.6 does extend to pensionablity was held to be correct in law.

In this case the Claimant has not made any claim pursuant to s.6 of the Act and so the question of what, if any, entitlements he may have had to adjustments in the terms of his prior fixed-term contracts, by virtue of that section, does not arise for consideration.

On the findings inMcArdle, where a fixed-term contract is transmuted to one of indefinite duration by operation of s.9(3) of the Act the resulting contract is identical to that from which it is derived save that the term providing for its expiry by effluxion of time (or the occurrence of an event) is severed. The import of Ms Justice Laffoy’s ruling in the appeal of that case, to the effect that s.6 of the Act does not extend to tenure, is that a fixed-term contract of employment is terminable in accordance with its own terms or on the giving of reasonable notice. That is subject, of course, to other relevant statutory provisions, such as the Unfair Dismissals Acts 1997 to 2007 and s.13 of the Act of 2003 which prohibits,inter alia, a dismissals for the purpose of avoiding a fixed-term contract from becoming one of indefinite duration. It follows that a contract of indefinite duration which comes into being by operation of s.9(3) of the Act is similarly terminable at common law, like all contracts of employment, on reasonable notice subject to any generally applicable statutory restrictions.

That proposition finds support in the recent decision of the High Court inHolland v Athlone Institute of Technology[2011] IEHC 414.

In that case the Court was considering an application by the plaintiff for an interlocutory injunction restraining his dismissal on grounds of redundancy. The plaintiff had been employed on a contract which the defendant had classified as being for a fixed-term. This Court had held that the contract was in reality one of indefinite duration. In dealing with the effect of this Court’s decision Hogan J said, at pars 11& 12: -

• • “The real point here, however, is that a finding of this nature does not place such an employee in a superior position to that of an ordinary employee whose status as the holder of a contract of indefinite duration was never in doubt. It is plain from the context of the 2003 Act that the Oireachtas wished to improve the position of fixed-term workers and, perhaps, approximating that status (within recognized limits) to that of ordinary employees who held contracts of indefinite duration. That is underscored by recital 14 to the 1999 Directive which provides that the signatory parties (which include representatives of industry and the trade unions) to the framework agreement on which the Directive is based:-
    • “….wished to conclude a framework agreement on fixed-term work setting out the general principles and minimum requirements for fixed-term employment contracts and employment relationships; they have demonstrated their desire to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination, and to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.”
    Laudable as this goal is, it is nowhere suggested that either the Oireachtas or, for that matter, the Union legislature had ever intended that the position of such employees should actually be superior to that of an employee whose contract of indefinite duration was never in doubt. It follows, accordingly, that Mr. Holland’s employment status should be treated for the purposes of this application is if his status as the holder of a contract of indefinite duration was never in doubt.”
  
  
  
  

It is accepted that the universally applicable retirement age for employees of the Respondent is 65. Had the Claimant’s putative status as a permanent employee of the Respondent been acknowledged by the Respondent he would undoubtedly have been required to retire on attaining that age.

Counsel for the Claimant, Mr Curran BL, advanced the argument that as a regular permanent employee of the Respondent would have retired with an entitlement to a pension the Claimant is not seeking to be placed in a superior position since he has no such entitlement. Counsel emphasised that he is not seeking an entitlement to a pension but rather that the Claimant be allowed to continue working so as to earn a livelihood. In these circumstances the only claim which he is now pursuing is to remain in employment on a contract of employment unencumbered by a retirement age. If the Claimant were to achieve the benefit of such a contract he would undoubtedly be placed in a superior position to that of an employee of the Respondent whose status as the holder of a contract of employment of indefinite duration was never in doubt.

On the authorities referred to it is clear that s.9 of the Act cannot avail the Claimant in his pursuit of that objective. The Court is further satisfied that the Claimant cannot be held to have suffered any detriment warranting an award of compensation by reason of the Respondent’s failure to continue his employment beyond the normal employment age within the employment. As previously noted, there was no claim grounded on s.6 of the Act before the Rights Commissioner and there is no such claim before this Court. Consequently questions concerning the pensionability of his employment (assuming that it could be so classified) do not arise.

Other matters arising

Having reached the conclusions set out herein the Court must now consider if the other matters arising in this case are moot. It has been held that proceedings are moot if the eventual decision would be of no practical significance to the parties (see the decision of the Supreme Court inGoold v Judge Collins and Others[2004] IESC 38, per Hardiman J,). Since the Claimant cannot obtain the redress which he is seeking, even if all other issues arising in the case were eventually decided in his favour, it would be a pointless exercise for the Court to determine those other issues in this case. Accordingly the Court has not reached any conclusion on those issues.

Determination

The appeal is allowed. Decision of the Rights Commissioner is set aside and substituted with the terms of this Determination.

Signed on behalf of the Labour Court



Kevin Duffy
3rd February, 2012______________________
DNChairman



NOTE

Enquiries concerning this Determination should be addressed to David P Noonan, Court Secretary.