FTD124

Background

The factual background against which this dispute arose is not in contention and can be summarised as follows: -

The Claimant is described as an Information Technology Professional. He commenced employment with the Respondent on 19^thJuly 2004 as an Executive Intelligent Transport Systems Officer. His employment was pursuant to a fixed term contract in writing, initially for a period of three years. The duties of the post to which the Claimant was appointed involved,inter alia,the provision of technical support, traffic signalling and network modelling associated with the development of quality bus corridor network, for which the Respondent was then responsible. It is accepted by the Respondent that it did not provide the Claimant with a statement in writing setting out the objective grounds justifying the issuance of his first contract for a fixed term.

On the expiry of this initial contact on 18^thJuly, 2007, the Claimant’s employment was renewed for a further period of three years. This second contract contained the following statement: -

• “Objective Criteria: The renewal of this contract on a fixed term work contract basis is to facilitate the carrying out of work in the department pending the recruitment of staff in accordance with the normal procedures of the organisation”

• “The Nature of this employment contract is fixed term as the resources that support the post are associated with the Quality Bus Network Project which is time limited. The continuation of this employment is dependent upon the continuation of this project and funds, where applicable, and this contract is therefore issued on such objective grounds”

The Claimant’s second contract expired by effluxion of time on 18^thJuly, 2010. He remained in the employment of the Respondent beyond that date. On 23^rdJuly, 2010, the Claimant was verbally advised by this manager that his fixed term contract was to be extended for one month after which his employment with the Respondent would terminate. By letter dated 26^thJuly the Claimant was informed by the Respondent that his fixed term employment was to be extended to 27^thAugust, 2010, but not beyond that date.

The fact that the Claimant continued in employment with the Respondent after the expiry of his fixed term contract on 18^thJuly, 2010, suggests that he then became employed on an implied contract of employment which was not temporally limited and was, in law, for an indefinite duration. However, this point was not raised in the course of the hearing and it was not further considered by the Court in deciding the case.

By letter dated 28^thJuly, 2010 the Claimant wrote to the Respondent asserting an entitlement to a contract of indefinite duration in accordance .s9(2) of the Act. The Respondent replied by letter dated 4^thAugust 2010 to the effect that there were objective grounds justifying the continuation of the Claimant’s employment for a fixed term beyond the four year period specified in that section. The Respondent particularised the objective grounds relied upon as being those referred to in the Order made by the Executive Manager Human Resources Department, dated 19^thJuly, 2007, the terms of which are recited above.

The Claimant’s employment terminated on 27^thAugust and he was paid a statutory redundancy lump sum. The Claimant then referred the within complaint to a Rights Commissioner. The complaint was heard by the Rights Commissioner on 24^thJune, 2011. In a decision dated 14^thSeptember 2011 the Rights Commissioner found that the Claimant became entitled to a contract of indefinite duration by operation of law and he directed that the Claimant be reinstated on such a contract. The Respondent appealed to the Court.

Position of the parties
The position taken by the parties can be summarised as follows:

The Respondent
The Respondent contends that the reasons stated in the Claimant’s second contract as being the objective grounds justifying the renewal of his employment for a further fixed term were the result of a clerical error. It was submitted on its behalf that the true objective grounds were those recited in the Order made by the Executive Manager Human Resources Department, dated 31^thMay 2007, namely that the purpose of the Claimant’s employment was to undertake work associated with the Quality Bus Network Project which was limited in time. The Respondent contends that this is an objective ground justifying the renewal of the Claimant’s fixed term contract within the meaning of s.7 of the Act and that the renewal in issue was saved by s.9(4) of the Act.

While the Respondent accepts that the Claimant was never formally served with a statement in writing reciting the grounds now relied upon it contends that he was well aware of these reasons and that his employment was at all time for the specific purpose of working on the quality bus corridor project.

Without prejudice to its contention in that regard the Respondent submitted that its requirement for the work for which the Claimant was employed had ceased and that he became redundant in August 2010. In these circumstances it submitted that the redress of reinstatement ordered by the Rights Commissioner was inappropriate as there is no work available with the Council on which the Claimant can be employed.

The Claimant
The case advanced on behalf of the Claimant is that having completed four years continuous fixed term employment on 18^thJuly 2008 the Claimant became entitled to a contract of indefinite duration by virtue of s. 9(2) of the Act. It was submitted that the contract dated 7^thJune 2007, purporting to extend the Claimant’s employment for a further three years to 18^thJuly 2010, contravened s.9(2) and, by operation of s.9(3) the contract was transmuted to one of indefinite duration. It was further submitted on the Claimant’s behalf that the objective grounds relied upon by the Respondent for that renewal were those set out in the contract itself and they could not be regarded as justifying the renewal of the contract for a fixed term beyond the period limited by s.9(2).

The Claimant contends that the Respondent cannot resile from the statement of objective grounds contained in his written contract of employment dated 7^thJune, 2007, and cannot rely on grounds that were never communicated to him until August, 2010. Finally, the Claimant contends that the work on which he was employed by the Respondent is on-going and in these circumstances the order for reinstatement made by the Rights Commissioner is appropriate and should be affirmed.

The Law
This claim in taken pursuant to the terms of the Protection of Employees (Fixed Term Work) Act 2003 and, in particular, s.9 thereof. The Act transposed into Irish law Council Directive 1999/70 of June 28, 1999 concerning the Framework Agreement on Fixed term Work concluded by ETUC, UNICE and CEEP. It is settled law that the Court must interpret and apply the terms of the Act in light of the wording and purpose of the Directive so as to achieve the result pursued by the Directive. Clause 5 of the Framework Agreement provides 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:
  • • (a) objective reasons justifying the renewal of such contracts or relationships;

      (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:
  • (a) shall be regarded as ‘successive’
    • (b) shall be deemed to be contracts or relationships of indefinite duration.”

• “(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—
  • (a) arriving at a specific date,

    (b) completing a specific task, or

    (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

  • (a) that an employer omitted to provide a written statement, or

    (b) that a written statement is evasive or equivocal,

  the rights commissioner or the Labour Court may draw any inference he or she or it consider just and equitable in the circumstances.”

• “(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.”

• “(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 of the comparable permanent employee's contract of employment.”

Subsection (3)is of particular significance. That subsection applies to a situation where an employee is given a renewed fixed term contract in contravention of subsections (1) or (2). In such a case subsection (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 as the case may be, 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 any express or implied terms relating to the circumstances in which the contract can be unilaterally terminated (other than by its expiry).

Section 9(4) allows an employer to renew a fixed term contract in circumstances which would otherwise contravene subsections (1) or (2)where there are objective grounds for so doing. However, since this provision allows a derogation from what is an important social right derived from the law of the European Union it must be construed and applied strictly against the person seeking to rely on the subsection (see the decision to that effect of the CJEU inCase 476/99Lommers v Minister van Landbouw, Natuurbeheer en Visseri[2002] IRLR 430, at par 39)

InRussell v Mount Temple Comprehensive School[2009] IEHC 533, Hanna J made it clear that subsection (3) of s.9 operates at thecommencementof an offending contract. In the instant case, at the time the Claimant was issued with his second fixed term contract, which purported to extend his fixed term employment for a further three years, he had already completed three years of fixed term employment. Hence, unless that contract was saved by subsection (4),the term in that contract providing for its expiry by effluxion of time was severed and that contract became one of indefinite duration by operation of law on the date of its commencement, namely 19^thJuly, 2007.

The Issue Arising

On the facts of this case it is clear that the Claimant was given a statement of the objective grounds upon which the Respondent relied in renewing his fixed term employment in July 2007. The Respondent does not now seek to rely on the stated objective grounds. Rather, it contends that those grounds were stated in error and it seeks to rely on alternative grounds which were stated in the Order made by the Executive Manager Human Resources Department, dated 30^thMay 2007.

Section 8(2) of the Act is of considerable significance on this point. As was pointed out by this Court inHSE Northern Area v Khan[2006] 17 ELR 313, the purpose of s.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 unders.9(4).

The Respondent contends that at all material times the Claimant’s employment was solely for the purpose of working on the quality bus corridor project and that it would come to an end on the completion of that project. In the Court’s view the Claimant was entitled to rely on the statement with which he was provided pursuant to s.8 of the Act and he could not be fixed with actual or constructive knowledge of a document that he had never seen and had never been drawn to this attention. Moreover, other terms of the contract entered into by the parties dated 7^thJune 2007, a copy of which was exhibited by the Respondent at Appendix III of its written submission to the Court, contains provision which seem more consistent with the stated objective grounds than those now relied upon. For example, Clause 6 of the contract, under the heading“Duties and Place of Work”contains the following statement: -

• 
  “ The duties of the post are to give to the local authority and to
  • 
    (a)the local authorities or bodies for which the Manager is Manager, and

    (b)to any other local authority or body with which an agreement has been made by the local authority or by any of the authorities or bodies referred to in sub-paragraph (a) of this paragraph

    • 
      under the general direction and control of the Manager or of such officer as the Manager may from time to time determine, such appropriate technical, management, administrative, executive, supervisory, advisory and ancillary services as may be required by any local authority or body as hereinbefore mentioned in the exercise and performance of any of its powers, functions and duties as may be delegated to him or her by the Manager from time to time including the duties of servicing all committees that may be established by any such local authority or body. The holder of the post will, if required, act for an officer of a higher level.
  Your place of work, initially shall be in the Department, Section and Location as outlined on Page 1 of this Contract in which you will be allocated duties which are appropriate to your grade and to the services provided by that Department / Section.

  Dublin City Council reserves the right to redeploy you or allocate other appropriate duties to you, either temporarily or permanently.”

Conclusions of the Court

Having regard to all the circumstances of this case the Court has come to the conclusion that the Respondent cannot rely on the grounds now contended for in advancing a defence under s.9(4) of the Act. As previously stated in this Determination these grounds were not communicated to the Claimant before August 2010, nor could they be inferred from the terms of his written contract of employment.The Respondent is not seeking to rely on the grounds actually stated in claiming that the renewal of the Claimant’s employment for a further fixed term on 19^thJuly, 2007, was saved by s.9(4). Accordingly, the Court must hold that the said contract was transmuted to one of indefinite duration by operation of s.9(3) of the Act with effect from its commencement. The decision of the Rights Commissioner on that point is affirmed subject to the amendment that the contract of indefinite duration took effect from 19^thJuly 2007 and not 19^thJuly 2008 as found by the Rights Commissioner.

Redress
The Respondent contends that the Claimant was made redundant in August 2010 and that it does not now have any work on which he can be employed. In these circumstances it contends that the order of reinstatement made by the Rights Commissioner is impractical.

The fact that the Claimant’s contract was transmuted to one of indefinite duration did not prevent the Respondent from lawfully terminating his employment on grounds of redundancy if a genuine situation of redundancy existed. On that point the Court takes note of the recent Judgment of Hogan J. inHolland v Athlone Institute of Technology[2011] IEHC 414 to the effect that a person who obtains a contract of indefinite duration by operation of the Act of 2003 is not placed in a superior position to that of a person whose status as the holder of a such a contract was never in doubt. However, if it is established that the Claimant would not have been made redundant had the Respondent acknowledged the nature of his contract as one of indefinite duration an order for reinstatement would, in principle, be appropriate. Nevertheless, before the Court could make such an order it would have to be satisfied that it could, in practice, be implemented and that appropriate work on which the Claimant could be employed is available. While this point was addressed in the course of the hearing the Court is not satisfied that the factual position in that regard has been satisfactorily established.

Accordingly, the Court proposes to reconvene the hearing for the purpose of receiving evidence on the factual position regarding the availability of appropriate work on which the Claimant could now be employed. The Court also wishes to hear evidence on whether the erroneous classification of the Claimant as a fixed term worker was an operative consideration in making him redundant. In light of the evidence adduced at a resumed hearing the Court will hear further submissions from the parties on the issue of redress.

Determination
The Court determines that the contract of employment entered into by the Claimant and the Respondent on 7^thJune, 2007, became one of indefinite duration, by operation of s.9(3) of the Act, with effect from 18^thJuly 2007. The Court will hear the parties further on the question of redress if the matter is not settled by agreement.

Signed on behalf of the Labour Court



Kevin Duffy
10th February, 2012______________________
CONChairman



NOTE

Enquiries concerning this Determination should be addressed to Ciaran O'Neill, Court Secretary.