FTD1228

• 
  1. 16^thJune 2005 - 26 January 2006

  2. 9 June 2006 - 1 February 2007

  3. 1 February 2007 - 4 March 2011

  4. 4 March 2011 - 30 June 2011

  5. 30 June 2011 - 30 September 2011

The Respondent submits that subsection 9(4) of the Act applies in this case; that the fixed term contract of employment is not deemed to be a contract of indefinite duration as the decision to renew the fixed term contract of employment was justified on objective grounds.

Processing the Complaint

Mr Donohoe, on 3 March 2011, made a complaint to the Rights Commissioner pursuant to section 9 of the Act in the following terms:

“I have requested a permanent contract from my employer and they refuse to provide me with one even though I am entitled to a permanent contract according to Section 9”

The Respondent argued that there were objective grounds justifying the renewal of the fixed term contract of employment and accordingly the provisions of Section 9(4) of the Act apply.

The Rights Commissioner found that there were objective grounds justifying the renewal of the fixed-term contract and decided that the complaint was not well-founded.

The Complainant appealed against that decision to the Labour Court pursuant to Section 15 of the Act.

The case came on for hearing before the Court on 25 January 2012.

At the hearing it emerged that the contract of employment dated 1 February 2007 was not in fact issued until October 2007 with a retrospective commencement date. The Court asked the parties to address the employment status of Mr Donohoe immediately after the expiry of the first contract and before the second contract was issued.

In supplementary submissions it was common case that Mr Donohoe was employed on a verbal fixed-term contract of employment the terms of which were reduced to writing in October 2007 with an effective date of 1 February 2007.

Accordingly the Court found that Mr Donohoe was in fact employed on a fixed term contract of employment at all material times and accordingly the Court had jurisdiction to hear the appeal.

A second preliminary issue was raised by Counsel for the Respondent. The Complainant had submitted a complaint to the Rights Commissioner on 5 October 2008 that was subsequently withdrawn prior to hearing. Counsel for the Gallery submitted that, as consequence, the Complainant is estopped from proceeding with the case before the Court. He made two arguments in this regard. Firstly he submitted that it was a general principle of law that a case cannot be lodged, withdrawn and subsequently re-entered for hearing before the Court. Secondly he submitted that it was against public policy, would amount to a waste of Court time and give rise to uncertainty to allow cases to be lodged withdrawn and re-entered in the manner in such a manner.

Counsel for the Complainant submits that there is no legal basis for the objection raised by Counsel for the Gallery and that no issue of public policy arise. She submits that the Complainant submitted a complaint to the Rights Commissioner pursuant to Section 14 complaining of a breach of Section 9 the Act. When he realised that he was in error he withdrew the complaint before it went to hearing. She submits that the Complainant is not thereby estopped as the matter was never considered by the Rights Commissioner and consequently no issue had been decided.

Determination of the Court

The Court finds that the Complainant is not estopped from pursuing the complaint before the Court. No legal issue was identified to the Court. Furthermore the Court can identify no public policy issue that arises in this case. The Complainant made a complaint to the Rights Commissioner in 2008. He subsequently withdrew the case before it went to hearing. Some two years later he submitted a new case, albeit under the same act, to the Rights Commissioner. The Court can see no issue of public policy that would prevent the Court considering this complaint nor can it identify any basis upon which the Complainant is estopped from proceeding with this current complaint.

The Substantive Issue

The Gallery’s Position

The First Contract

The parties agree that the first fixed term contract of employment is not relevant to this case.

It was common case the Mr Donohoe was employed on two fixed term contracts of employment the aggregate duration of which exceeded four years. The issue in dispute between the parties was whether there were objective grounds justifying the renewal of the fixed term contract.

Counsel for the Respondent submits that in this case such objective grounds exist.

He refers to the provisions of Section 7(1) of the Act and submits that the renewal of the Complainant’s fixed-term contract of employment was for the purpose of achieving a legitimate objective of the employer and such treatment was appropriate and necessary for that purpose.

The Second Contract

The Gallery submits that the second contract of employment provides as follows

• “Your employment will be effective from 9^thJune 2006 and will continue until such time as the competition for position of Services Attendant, which is vacated by the retirement of Ms Lil Redmond, has successfully concluded and therefore the Gallery is not in a position to offer you a contract of indefinite duration for this reason”

He submits that this meets the criteria set down in Section 7 of the Act. He submits that the Respondent’s objective was to have the work performed whist the Gallery went through the process of advertising the vacancy and filling the job on a permanent basis. He submits that the appointment of the Complainant on a fixed term employment contract was an appropriate of dealing with the temporary need it experienced and as the work had to be done he submits that the appointment on those terms was necessary for that purpose.

The Third Contract

Counsel for the Gallery submits that the Complainant’s third fixed term contract of employment that commenced 1 February 2007 was for the purpose of undertaking the work involved “on a temporary basis until such time as refurbishment commences at the National Gallery’s Historic Buildings under the Gallery’s Master Development Plan. When this occurs, the specified purpose hereunder will cease and accordingly your employment will terminate.”

He submits that at the time this contract was issued the National Gallery was awaiting approval to proceed with the implementation of the Master Development Plan. It was anticipated that large sections of the Gallery would be closed to the public when the redevelopment work commenced. It was anticipated that the redevelopments would continue for several years during which there would be a reduced demand for the work for which the Complainant was employed and his services would not be required.

In this context he submits that in the period leading up to the commencement of the development works the Gallery had a short term requirement for the work performed by the Complainant. He submits that the renewal of the fixed term contract of employment in those circumstances met a real need of the employer, was appropriate for achieving that purpose and was necessary to that end. He referred the Court to the judgement of the ECJ inBilks-Kaufhaus GmbH v Weber Von Hartz [1986] IRLR 317.

Mr Gerry D’Arcy, Head of Administration in the National Gallery, told the Court that the Gallery’s Master Development Plan had been prepared in the 1990’s and the Gallery had consistently sought financing from the Department of Finance to proceed with the works from that time. In anticipation of approval for the works and in light of the deteriorating condition of the Gallery it was clear that work would necessarily commence as a matter of some urgency. In 2006, when the third contract of employment was issued to the Complainant, no finances were approved by the Department of Finance, no design team had been put in place and no building contracts had been signed. At that stage there was no commencement date agreed with the Department of Finance.

Furthermore at that time Gallery management was in discussions with the Department of Finance regarding funding for staff. He told the Court that the Gallery would have increased the number of permanent staff in employment at that time had they been given approval and funding to do so by the Department of Finance.

He further told the Court that the condition of the Gallery was deteriorating at such a pace that the protection of the national picture collection was at risk of being compromised and that it was clear that approval from the Department of Finance to proceed with the redevelopment would necessarily be forthcoming within a reasonably short time period.

The Complainant’s Case

Counsel for the Complainant submits that the test set out by the ECJ inBilks-Kaufhaus GmbH v Weber Von Hartz [1986] IRLR 317had not been met by the Respondent. She submits that the Court in that case held that in determining whether an employer can have recourse to a series of fixed term contracts of employment it is “insufficient to conclude that a requirement is reasonable”. She submitted that the accepted test is that the requirement not to provide a contract of indefinite duration must be essential. She submits that the Respondent has failed to demonstrate any real need for renewing the Complainant’s fixed-term contract and failing to provide him with a contract of indefinite duration.

The Complainant also relied on the judgement of the Court of Justice inAdeneler and Others v Ellinikos Organismos Galakto (C-212/04 [2006] EUECJ C-212/04,[2006] ECR 1-6057where the Court held that the ground relied upon must “respond to a genuine need, is appropriate for achieving the objective pursued and is necessary for that prupose.” Counsel for the Complainant submits further that the Court stressed that the concept of “objective reasons” within the meaning of Clause 5 of the Framework Agreement could only be understood as referring to “precise and concrete circumstances characterising a specific activity” that might result from the specific nature of the inherent characteristics of the tasks or from the pursuit of a legitimate social policy objective of the Member State.

She submits that neither the refurbishment of the Gallery nor waiting for approval from the Department of Finance to determine how many staff it could retain on a permanent basis amount to an essential need of the Respondent justifying the renewal of the Complainant’s fixed term contract of employment.

She further submits that the Respondent has demonstrated the ongoing requirement for a Services Attendant after the Complainant’s employment was terminated by the use of an external contractor to undertake his work.

She submits further that the ECJ held in its judgement inHill and Stapleton v Revenue Commissioners [1969] 1 ICR 48

• “So far as the justification on economic grounds is concerned, it should be noted that an employer cannot justify discrimination … solely on the ground that the avoidance of such discrimination would involve increased cost”

• “[A]ccording 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 in 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 the principle of equal treatment be reconciled as far as possible with the requirement thus pursued.”

Finally she submits that there were available to the employer alternative means having a less discriminatory effect on the Complainant including but not limited to the redeployment of the Complainant.

Findings of the Court

On the preliminary issue the Court finds that the fact that the Complainant lodged and subsequently withdrew a complaint under this Act with the Rights Commissioner service in 2008 has no bearing on this appeal. The Court finds that the matter is properly before it and that no fundamental legal principle arises in this case that would prevent the Court hearing this appeal. Furthermore the Court can identify no public policy issues that would prevent the Complainant proceeding with this appeal arise in this case either.

In relation to the first fixed term contract the Court notes that it is common case that the first relevant contract in this case was issued by the Respondent to the Complainant on 9 June 2006 and that the contract issued on 16 June 2005 should be disregarded by the Court for the purposes of these proceedings.

Section 9(2) of the Act provides

• (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 4 years

• 9(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.

Objective grounds are prescribed in Section 7(1) as follows

• (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 afixed-termemployee and the less favourable treatment which it involves for that employee (which treatment may include the renewal of afixed-termemployee's contract for a furtherfixedterm) is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose.

The concept of “objective reason” has been addressed by the European Court of JusticeinKonstantinos Adeneler and Others v Ellinikos Organismos Galaktos (ELOG) Case C-212/04where it held

60 As this concept of ‘objective reasons’ is not defined by the Framework Agreement, its meaning and scope must be determined on the basis of the objective pursued by the Framework Agreement and of the context of clause 5(1)(a) thereof (see, to this effect, inter alia Case C-17/03VEMW and Others[2005] ECR I-4983, paragraph 41, and the case-law cited, and Case C-323/03CommissionvSpain[2006] ECR I-0000, paragraph 23).

61 The Framework Agreement proceeds on the premiss 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 (seeMangold, 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).

63 From this angle, the Framework Agreement seeks to place limits on successive recourse to the latter category of employment relationship, a category regarded as a potential source of abuse to the disadvantage of workers, by laying down as a minimum a number of protective provisions designed to prevent the status of employees from being insecure.

69 In those circumstances, the concept of ‘objective reasons’, within the meaning of clause 5(1)(a) of the Framework Agreement, must be understood as referring to precise and concrete circumstances characterising a given activity, which are therefore capable in that particular context of justifying the use of successive fixed-term employment contracts.

70 Those circumstances may result, in particular, from the specific nature of the tasks for the performance of which such contracts have been concluded and from the inherent characteristics of those tasks or, as the case may be, from pursuit of a legitimate social-policy objective of a Member State.

72 Such a provision, which is of a purely formal nature and does not justify specifically the use of successive fixed-term employment contracts by the presence of objective factors relating to the particular features of the activity concerned and to the conditions under which it is carried out, carries a real risk that it will result in misuse of that type of contract and, accordingly, is not compatible with the objective of the Framework Agreement and the requirement that it have practical effect.

Clearly therefore to come within the scope of this section the circumstances in which the fixed term contract of employment was issued must, in order to comply with the provisions of the decision in Adeneler, refer “to precise and concrete circumstances characterising a given activity, which are therefore capable in that particular context of justifying the use of successive fixed-term employment contracts” and in order to meet the requirements of the Act, be for the purpose of “achieving a legitimate objective of the employer” and it must be appropriate and necessary for that purpose.

In this case the Gallery implicitly and explicitly advances three objectives which it submits meets these tests. It submits that the demand for the work performed by the Complainant would cease when the development works commenced; it further submits that it did not wish to have surplus permanent staff employed when the works commenced as it could not make them redundant under the terms of the various collective agreements in place in the public service and thirdly it submits that the Department of Finance had not given approval for the permanent employment of the desired number of Service Attendants.

The question for the Court to decide therefore is whether the grounds advanced by the Respondent for the renewal of a contract of employment for a fixed term amount to objective grounds within the meaning of the Act and the jurisprudence of the European Court of Justice.

In this case the relevant contract is that given to the Complainant dated 1 February 2007. From the evidence of Mr D’Arcy the Court finds that at that time there was no realistic prospect of the development works proposed for the Gallery taking place within any known or foreseeable time frame. The plan had been developed in the 1990’s and thereafter funding for it had been consistently sought from the Department of Finance by the Gallery. In 2006 the funding had not been approved. Indeed he said that no material steps had been taken with regard to advancing the project when the Complainant’s fixed term contract of employment was renewed in 2007.

In addition Mr D’Arcy told the Court that the Gallery had been in regular discussions with the Department of Finance seeking approval for additional permanent staff and that this had not been forthcoming at the levels sought and considered necessary and appropriate. At one point he told the Court that had approval been given the Gallery would have converted more staff from fixed-term contracts to permanent ones. He also told the Court that the work Mr Donohoe was performing met a fixed and permanent need of the Gallery. On foot of the refusal by the Department of Finance to approve the appointment of permanent staff the Gallery, at that time had a number of staff on fixed-term contracts of employment.

At the time the contract was issued in 2007 the Respondent had a real need for a services attendant to carry out the work Mr Donohoe was undertaking. The reason his fixed-term contract was renewed was threefold: firstly the Gallery could not secure Department of Finance approval for a permanent appointment. No explanation was given to the Court for this decision. Secondly the Gallery had a concern that the demand for permanent staff would be reduced during the development works that were planned for some future date. Finally the Gallery did not wish to have surplus staff when the works actually commenced as it could not make them redundant should the need arise.

The Court of Justice of the European Union addressed the concept of objective grounds in Joined Cases C-378/07 to C-380/07Kiriaki Angelidaki and Others v Organismos Nomarkhiaki Aftodiikisi Rethimnis and Dimos Geropotamou[2009] ECR 1-3071, where it said at paragraph 96

• 
  In those circumstances, the concept of ‘objective reasons’ for the purposes of clause 5(1)(a) of the Framework Agreement must, as the Court has already held, be understood as referring to precise and concrete circumstances characterising a given activity, which are therefore capable, in that particular context, of justifying the use of successive fixed-term employment contracts. Those circumstances may result, in particular, from the specific nature of the tasks for the performance of which such contracts have been concluded and from the inherent characteristics of those tasks or, as the case may be, from pursuit of a legitimate social-policy objective of a Member State (Adeneler and Others, paragraphs 69 and 70; Case C-307/05 Del Cerro Alonso [2007] ECR I-7109, paragraph 53; and order in Vassilakis and Others, paragraphs 88 and 89).

From the information provided to the Court the legitimate objective advanced by the Gallery was that its need was to engage a sufficient number of staff to cover the period between the approval of the Master Development Plan and the commencement of the associated works. During the works the Gallery’s requirement for services staff would, temporarily, be considerably diminished as a large number of the galleries would be closed to the public.

When the proposed works would actually commence, what works would eventually be approved and how long they would take was unknown and unknowable in 2007 when the Complainant’s contract was renewed. Clearly the Gallery did not wish to have surplus staff with nothing to do while the works were taking place. However to appoint the Complainant on a series of fixed term contracts of employment at a time when the likely commencement date of the development was unknowable or when the circumstances that would exist when the works began would appear to this Court to amount to the very abuse of successive fixed term contracts of employment the Directive and consequently the Act was designed to prevent.

The Court notes that the work the Complainant was employed to undertake was part of the fixed and permanent need of the Gallery. It was only in the context of the proposed building works; the fear that it would not have work for everyone when the works began and the refusal of the Department of Finance to approve the appointment of permanent staff that caused the Gallery to issue the Complainant with successive fixed term employment contracts.

Taking each in turn, staffing to the levels that would be required when the proposed redevelopment works commenced may be a legitimate objective of the Gallery.

In this case the Court was told that Minister for Arts, Heritage, Gaeltacht and the Islands had in June 2002 agreed in principle to Phase 1 – 6 of the Development Control Plan dated December 1999. However the Minister had suggested a shorter time scale for the completion of the works and this was considered feasible by the Office of Public Works. The revised proposal provided for the work associated with phases 1 – 6 to be carried out between 2002 and 2007. Phases 7 – 10 were scheduled to commence in March 2004 to be completed in April 2008. Accordingly at the time the Complainant was employed on the First fixed term contract of employment the conditions set out above were not in place. When the first contract was renewed no further progress had been made. No finances were in place, no planning approval had been secured, no building contracts had been signed and no commencement date for the works had been agreed. In effect the approval to undertake the Development Plan was no more than an approved in principal as it had been when First Contract had been issued.

In the circumstances where no approvals were in place and no timescale for the commencement of the redevelopment works could be identified the Court finds that the renewal of the fixed term contract of employment was not, within the statutory meaning of the term, meeting a legitimate objective of the Gallery. The Court notes the decision of the European Court of Justice inAdeneler and Others – v –Ellinikos Organismos Galaktos[2006] IRLR 716 P50 where it said

“… the concept of objective reasons within the meaning of clause 5 (1) (a) of the Framework Agreement, must be understood as referring to precise and concrete circumstances characterising a given activity, which are therefore capable in that particular context of justifying the use of successive fixed-term employment contracts.”

In this circumstance it is clear that the Complainant, in the absence of any imminent redevelopment works, was employed to meet a fixed and permanent need of the Gallery. Had the works been imminent in the sense that they were planned, approved, financed and contracts for commencement agreed with the relevant professionals then the temporary nature of the requirement would have been clear. However where the redevelopment works are no more than approved in principle the precise and concrete circumstances characterising that given activity were such that after four years of continuous fixed-term employment, the Complainant was meeting a fixed and permanent need of the Gallery as no realistic date for the commencement of the redevelopment works could be reasonably foreseen.

A concomitant and perhaps more important objective of the Respondent was its desire to avoid a situation in which it might find itself with more permanent staff than it required during the period in which the anticipated refurbishment work was in progress. Rather than deal with this situation when it arose the Gallery decided to prevent the eventuality occurring by employing staff, for whom it had a fixed and permanent need, on successive fixed term contracts of employment. When it did so it was totally unaware of the time scale in which approval and financing to undertake the work would be granted if at all. Accordingly the concomitant objective of the Gallery at this time was its desire to avoid the need to deal with a possible number of surplus staff that would arise if ever and whenever it was given approval to undertake the refurbishment work. A desire to avoid a contingent liability to the Complainant that might arise at some point in the future could not of itself be a legitimate objective of an employer for the purposes of the Act nor could it justify the use of successive fixed term contracts of employment. Avoiding a legal liability to a worker is not a legitimate objective on an employer.

Finally it appears that at all stages during the period the Complainant was employed on successive fixed term contracts of employment the Gallery was seeking approval from the Department of Finance to appoint permanent staff to replace staff that were leaving through natural wastage. However the approval sought was not forthcoming. This appears to have been a further influencing factor in the decision to employ the Complainant on a succession of fixed term contracts of employment. The withholding by a third party of approval to appoint a person on a permanent contract of employment is not a valid basis upon which to issue a series of successive fixed term

In all of the circumstances the Court finds that the fixed term contract of employment that issued to the Complainant on 1 February 2007 became a contract of indefinite duration by operation of law from that date.

Having so determined the matter is disposed of. However for completeness sake the Court also finds that the Gallery had a less discriminatory means available to it to deal with the circumstances it faced. The Gallery had the option to employ the Complainant on single fixed purpose contract or alternatively to employ him permanently and redeploy him, put him on short time or lay him off or make him redundant whilst the development works were taking place. The purpose of the Act is to prevent the abuse of successive fixed term contracts of employment. It is not to guarantee employment for life. Fixed term contracts of employment may be necessary and appropriate where a project has an expected life and runs over. However where permission is sought to undertake a project and no timescale for approval can be realistically anticipated successive fixed term contracts of employment are unlikely to be an appropriate vehicle for employing people over an extended period.

The Court was told that redundancy is not a realistic option in the public service which removed such an option from the Gallery. The Court does not accept this view. The Gallery entered into an agreement with its trade unions as part of a series wider public service agreement by which it limited its capacity to make its permanent staff redundant in return for certain concessions by them on mobility and change. Having willingly done so, the Gallery cannot now seek to use this self imposed limitation as a justification for denying the Complainant assess to the standard for of employment contract. His statutory entitlement cannot be compromised in this this way without his agreement. The fact remains that the Gallery has a lawful option to make staff redundant where there is no work for them. Any decision it takes not to avail of this lawful option does not give rise to a legitimate objective on which the Gallery can rely in deciding to renew a fixed term contract of employment. Furthermore redundancy was not the only option available to the Gallery to deal with a temporary situation that would arise whilst the redevelopment works took place.

The Court was referred to the decision of this Court in National University of Ireland Maynooth v Dr. Ann Buckley (FTD092) in which the Court held

“The Court is of the view that the Appellant, having signed a binding contract agreeing to the objective reasons for its renewal on a fixed-term basis, cannot subsequently resile from this position and is therefore not entitled to a contract of indefinite duration”

The Court has carefully considered the details of that case and is satisfied that the circumstances that applied there do not apply here. The Complainant in that case had approached the University seeking an accommodation to enable her to secure funding to undertake research. The University accommodated her. She then sought to assert an entitlement to a contract of indefinite duration. It was in this context that the determination was issued.

None of those circumstances apply in this case. Accordingly the Court does not consider it to be relevant to the case under consideration.

Determination

The Court determines that the Complaint is well founded. It is the determination of the Court that the Claimant’s fixed-term contract of employment was transmuted to one of indefinite duration by operation of s.9(3) of the Act from the commencement of his second contact fixed term contract of employment. The Court requires the Respondent to comply with the Act by recognising the permanent nature of the Claimant’s employment thereafter. It is clear to the Court from the submissions and evidence tendered by the Respondent that the Claimant’s employment was terminated principally because he was erroneously and unlawfully classified by the Respondent as a fixed-term worker and had he not been so classified he would have been retained in employment. In these circumstances the Court further requires the Gallery to re-instate the Complainant with effect from the date of his purported dismissal. The Court requires the Gallery to pay the Complainant compensation for breaches of the Act in the sum of €3,000.

The Court so determines.

Signed on behalf of the Labour Court



Brendan Hayes
5th September 2012______________________
SCDeputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Sharon Cahill, Court Secretary.