FTD1230

Background

The Claimant was originally employed as a temporary clerk-of-works by Ballymun Regeneration Limited (BRL) on a fixed term contract between 16^thFebruary 2004 and 16^thSeptember 2006. BRL is a limited liability Company of which Dublin City Council is the sole shareholder. He then worked in the same capacity with Kildare County Council on fixed-term contracts between 22^ndSeptember 2006 and 28^thFebruary 2008. Finally he worked, again as a clerk-of-works, with Meath County Council on a series of fixed-term contracts between 3^rdMarch 2008 and 30^thJune 2010. The final contract then expired and was not renewed.

The Claimant’s employment history was as follows: -

BRL

The Claimant commenced employment with BRL on 16^thFebruary 2004. The Court was furnished with a copy of the contract under which he was employed during this period. It was a fixed-term contract and was expressed to be for a two year period. This contract expired on 15^thFebruary 2006. Thereafter, the Claimant remained in the employment of BRL until 1^stSeptember 2006. During this latter period the Claimant’s employment was not governed by a contract in writing and he appears to have been employed pursuant to an oral contract. In the absence of an expressed or implied term in this latter contract limiting its duration by time or the occurrence of an event it would, in law, have to be regarded as one of indefinite duration.

The Claimant then commenced employment with Kildare County Council on 22^ndSeptember 2006. His initial employment was pursuant to a contract in writing dated 21^stSeptember 2006. This contract was expressed on its face as being for a period of three months for the purpose of assisting with a backlog of essential repair grants. That contract of employment was renewed, before its expiry, by a further contract dated 5^thDecember 2006. It was expressed to be for a period of 12 months and for the purpose of dealing with the existing backlog of work associated with ‘the vacant dwellings programme’. This second contract with Kildare County Council expired on 4^thDecember 2007. Notwithstanding the expiry of this contract the Claimant remained in the employment of Kildare County Council, again on what appears to have been an oral contract. As in the case of his final period of employment with BRL, unless this contract contained a term, expressed or implied, limiting its tenure to either the effluxion of time or the occurrence of an event it would, in law, have to be regarded as one of indefinite duration.

• “It is with regret that I tender my resignation from Kildare County Counsel from Friday 29^thFebruary 2008. I am taking a Flexi Day on Wednesday 13^thFebruary and Annual Leave from 14^thto 29^thFebruary (inclusive).
  
  I wish to take this opportunity to thank all those I have worked with since I commenced in Kildare County Council 18 months ago. The work throughout that time has been varied and interesting. I thoroughly enjoyed working with fellow staff and all those I was involved with in other sections”

• “I acknowledge receipt of your letter of 6^thFebruary 2008, indicating your intention to resign from the services of Kildare County Council, as of 29^thFebruary 2008. The County Manager has accepted your resignation with regret (see copy of Manager’s Order attached).
  
  During your period of employment with this Council you performed all tasks assigned to you in a most satisfactory and dedicated manner.
  
  I would like to take this opportunity of wishing you every success in the future”

Meath County Council

The Claimant commenced employment with Meath County Council on 3^rdMarch 2008 pursuant to a contract in writing dated 22^ndFebruary 2008. The contract recited that the Claimant was to be employed for a period of two years, ending on 2^ndMarch 2010, as a temporary clerk-of-works. It also provided that the Claimant could be assigned to such other duties as are appropriate to his grade. The contract stipulated that the Claimant’s initial placement would be on a named contract but that he could be assigned to any other major infrastructural project within County Meath.

It appears that the project to which the Claimant was assigned ran over its expected duration. On the expiry of the Claimant’s contract on 2^ndMarch 2010, his employment was extended by another contract which was to run from that date until 30^thApril 2010. This second contract was expressed to be an extension of the earlier contract. This contract was signed by the Claimant on 2^ndMarch and he qualified his signature by marking it as ‘signed under duress’. In all other respects the terms of this second contract were identical to those of the first contract.

The final contract entered into between the Claimant and the Respondent was dated 21^stApril 2010 and was expressed to run from 1^stMay 2010 until 30^thJune 2010. It again was expressed to be an extension of the earlier contract and contained identical terms to that which preceded it. On the expiry of this contract the Claimant’s employment came to an end. The Claimant was paid a statutory lump sum calculated by reference to his employment with Meath County Council only.

Subsequent correspondence

It is clear from correspondence opened to the Court that the Claimant took issue with the decision to terminate his employment. The gist of his complaint was that the project on which he had been engaged was not completed. It is noteworthy that in the course of this correspondence the Claimant did not claim to have had prior continuous service, nor that this service should have been taken into account in calculating his redundancy lump sum.

The issues now before the Court

Arising from the facts set out above the Claimant now asserts that he accrued a contract of indefinite duration by operation of law. In his written submission to the Court he claims to have become entitled to such a contract on 17^thSeptember 2008 as at that time he had completed four years continuous employment. It appears that the Claimant’s case is, in fact, that he acquired a contract of indefinite duration by operation of law on 17^thFebruary 2008, which is the day following the fourth anniversary of the commencement of his employment with BRL. The legal basis upon which he relies in choosing this date is unclear and will be discussed later.

In any event, in order to succeed in his claim to have accrued a contract of indefinite duration the Claimant will have to establish that he was continuously employed for an aggregate duration of four years on fixed-term contracts by the same or associated employers. If he succeeds in so doing, the Respondent can nonetheless resist the claim by showing the existence of objective grounds justifying the renewal of the Claimant’s fixed-term employment beyond the four-year period specified.

The Rights Commissioner Decision

The Rights Commissioner found that the Claimant’s complaint under the Act was well founded. He directed that the Claimant be given a contract of indefinite duration from 17^thSeptember 2008, the date erroneously referred to in the Claimant’s written submission to the Court on which he claims to have accrued such a contract. If the Claimant’s combined service with BRL and Kildare County Council are to be regarded as continuous employment with associated employers, he would have accrued four years’ continuous / successive employment on 15^thFebruary 2008. The Claimant’s second written contract with Kildare County Council expired on 4^thDecember 2007. He then continued in employment until 29^thFebruary 2008 under a verbal contract. If this was a fixed-term contract, and in in the absence of objective grounds justifying its conclusion as such, it is this contract that would have become one of indefinite duration.

The Rights Commissioner also found that each of the employers for whom the Claimant worked over the relevant period were associated employers. He also found that there were no objective grounds justifying the continued renewal of the Claimant’s fixed-term employment beyond four years.

At the time the Claimant presented his claim (4^thNovember 2010) he had ceased to be employed by the Respondent as his final fixed-term contract expired without being renewed on 30^thJune 2010. The Rights Commissioner did not direct the reinstatement or the reengagement of the Claimant. Yet both the Claimant and the Respondent approached this appeal as if such an order was inherent in the Decision of the Rights Commissioner.

Issues Arising

There are three central issues arising in this case. Firstly, there is the question of whether the Claimant had accrued four or more years’ continuous / successive employment, secondly whether his service was with associated employers and, thirdly, whether or not there were objective grounds justifying the continued renewal of the Claimant’s employment for a fixed-term beyond that normally permitted by s.9(2) of the Act.

If any of these questions is answered in the negative the Claimant’s claim cannot succeed.

Statutory Provisions

The statutory provision that fall for consideration in this case are to be found at sections 2, 7 and 9 of the Act. The terms “associated employer” is defined by s. 2 of the Act as follows: -

(2) Employers are deemed to be associated if—

• 
  (a) one is a body corporate of which the other (whether directly or indirectly) has control, or

  (b) both are bodies corporate of which a third person (whether directly or indirectly) has control.

• (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.

• 
  (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 4 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 for the purpose of ascertaining the period of service of an employee and whether that service has been continuous

Was the Claimant’s service continuous

The Court first considered if the Claimant’s service was continuous within the statutory meaning of that term. It is the Respondent’s contention that the continuity of the Claimant’s employment was broken by his resignation from Kildare County Council. That submission was made without prejudice to the Respondent’s contention that the various employers for whom the Claimant worked over the relevant period were not associated employers. It was submitted on behalf of the Claimant that there was no break in the continuity of his employment as the termination of his employment with Kildare County Council was immediately followed by his employment with Meath County Council.

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.

• • ( a ) the dismissal of the employee by his employer or

    ( b ) the employee voluntarily leaving his employment.

  2. A lock-out shall not amount to a dismissal of the employee by his employer.

  3. A lay-off shall not amount to the termination by an employer of his employee's service.

  4. A strike by an employee shall not amount to that employee's voluntarily leaving his employment.

  5. An employee who gives notice of intention to claim redundancy payment in respect of lay-off or short-time shall be deemed to have voluntarily left his employment.

  6. The continuous of an employee in his employment shall not be broken by the dismissal of the employee by his employer followed by the immediate re-employment of the employee.

  7. If a trade or business is transferred from one person to another (whether or not such transfer took place before or after the commencement of this Act) the continuous service of an employee in that trade or business at the time of the transfer shall be reckoned as continuous service with the transferee and the transfer shall not operate to break the continuity of the service of the employee.

• The fundamental effect of this provision is that all periods of employment are to be regarded as continuous unless broken by dismissal or resignation. Hence successive periods of employment, which are not continuous in the literal sense, because they are broken by, for example, lay-off or authorised absence, are deemed to be continuous. It is accordingly clear that the word ‘continuous’ as used in the Act, has a special meaning which is different to its ordinary or dictionary meaning. As so defined the word can, in certain circumstances, have a meaning more akin to the ordinary meaning of the word successive.

• There can be no magic in the word 'resign', nor in whether the resignation is written or oral. The essence of the matter seems to me to be whether the member has sufficiently manifested his decision to be a member no more. I cannot see why such a manifestation should not be by conduct instead of by words; the only question is whether the member's decision has been adequately conveyed to the society by words or deeds. In short, in addition to resignation by words, I think there may be resignation by conduct; and I do not see why in a proper case a sufficiency of inertia should not constitute resignation by conduct. The point seems to lack authority, and so I must resolve it on principle.

Did the Claimant voluntarily leave his employment?

The point in issue in this aspect of the case turns on whether the Claimant terminated his employment with Kildare County Council by voluntarily leaving his employment with that employer. If he did, paragraph 1 of the First Schedule of the Act of 1973 provides that the continuity of his employment was thereby broken. While this may be a harsh result in the context of this case it would be unavoidable having regard to the clarity of the statutory provision.

The decision of the Court of Appeal for England and Wales inSothern v Franks Charlesly & Co[1981] IRLR278is authority for the proposition that where unambiguous words of resignation are used by an employee and are so understood by the employer, the employee thereby brings his or her employment to an end. There are, however, recognised exceptions to this general rule. The circumstances in which these exceptions can apply was explained by the British EAT inKwik-Fit (GB) Ltd v Lineham[1992] IRLR 156. Here, having reviewed the authorities, the Tribunal held: -

• Let us first look at the problem from the approach of sound management. As we have said, the industrial members take the view that the way in which this industrial tribunal have expressed themselves puts too high a burden upon employers. If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment, personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure (“being jostled into a decision”) and indeed the intellectual make-up of an employee may be relevant (see Barclay [1983] IRLR 313). These we refer to as “special circumstances”. Where “special circumstances” arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further enquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such enquiry is ignored at the employer's risk. He runs the risk that ultimately evidence may be forthcoming which indicates that that in the “special circumstances” the intention to resign was not the correct interpretation when the facts are judged objectively.

• Second, employment law is, at least in large part, a branch of contract law. The principles of contract law ordinarily require that a person's intentions are ascertained not by reference to his subjective intentions but objectively, by reference to how a reasonable man would interpret them. His intentions will therefore be ascertained by reference to a consideration of the words used, whether written or oral, in the context in which he used them...”
  

• Third, the 'special circumstances' exception to which I have referred is one that finds its expression and application in several reported authorities. They are cases in which either the employee has given an oral notice of resignation or (less commonly) in which the employer has given an oral notice of dismissal. The words of the notice so given may, on the face of it, be clear and unambiguous and may take effect according to their apparent terms. Indeed, the general rule is that they will do so. The authorities recognise, however, an exception to that general rule: namely, that the circumstances in which the notice is purportedly given are sufficiently special that it will or may not take such effect. For example, the words of notice may be the outcome of an acrimonious exchange between employer and employee and may be uttered in the heat of the moment such that there may be a real question as to whether they were really intended to mean what they appeared to say. In such circumstances it will or may be appropriate for the recipient of such a notice to take time before accepting it in order to ascertain whether the notice was in fact intended to terminate the employment. If he does not do so and, for example, simply (and wrongly) accepts an employee's purported resignation at face value and treats the employment as at an end, he may find himself on the receipt of a claim for unfair or wrongful dismissal. The general rule and the 'special circumstances' exception to it have been recognised in several authorities of both the EAT and this court.

• The fact that article 11(5) allows a written statement to be received in evidence in the specified limited circumstances means that it cannot be received in other circumstances: expressio unius est exclusio alterius.

It was suggested, without prejudice to the Claimant’s contention that his purported resignation had not in fact severed his employment, that he resigned as an employee of Kildare County Council but not as a ‘Local Authority employee’. Hence, it was argued, that his continuous employment as such an employee was unaffected by the resignation. It is clear from s.2 of the Act that the employer, in relation to an employee, is the person with whom he or she entered into a contract of employment. At all material times the Claimant’s contractual relationship was with individual bodies corporate. There is no basis either in law or in logic upon which it could be held that by entering into a contract of employment with one Local Authority he somehow established a contractual relationship with all Local Authorities. Accordingly, the point arising here could not be accepted.

There are two further considerations which point towards the conclusion that the Claimant’s engagement by the Respondent was understood by both parties as being a new employment rather than an extension of his prior employment by Kildare County Council. Firstly, in its letter of 31^stJanuary 2008 by which the Claimant was formally offered employment, the Respondent stated that the offer was subject to satisfactory references being received and to a satisfactory medical examination. This would be most unusual if the employment was by way of transfer or renewal of an earlier contract. Further, the Claimant was asked to furnish his birth certificate and confirmation of his qualifications. Again, this appears to be inconsistent with the possibility that the employment offered was a renewal of his earlier engagement with Kildare County Council.

Secondly, as noted earlier in this Determination, on the termination of his employment the Claimant was paid a redundancy lump sum which was calculated by reference to his length of service with the Respondent only. The basis of the calculation was set out in a letter from the Respondent to the Claimant dated 6^thJuly 2010. While the Claimant disputed the basis for his dismissal he did not take issue with the calculation of his redundancy lump sum and in particular he did not assert that his prior service with either BRL or Kildare County Council was reckonable service for redundancy purposes.

Conclusion on this point

The Court has taken full account of the careful submissions of Ms Kimber, BL on this point. However the Court is unable to accept that they go far enough to offset or supplant the combined effect of s.9(5) of the Act and the First Schedule of the Minimum Notice and Terms of Employment Act 1973. These provisions make it clear that where an employee voluntarily leaves his or her employment the continuity of the employment is thereby broken. The Claimant voluntarily left his employment with Kildare County Council in February 2008 when he resigned. Consequently, even if each of the employers for whom he worked over the period upon which he now relies are associated employers within the statutory meaning (and the Court makes no finding on that point), his service prior to his resignation cannot be added to his subsequent service for the purposes of applying s.9(2) of the Act. Accordingly the Court must hold that the Claimant did not have the requisite four years continuous / successive service so as to accrue an entitlement to a contract of indefinite duration by operation of s.9(3) of the Act.

Objective Justification

The conclusion reached by the Court on the question of the continuity of the Claimant’s service is sufficient to dispose of this case. Nonetheless, for the sake of completeness, and as the matter was full argued in the course of the appeal, the Court believes that it should give its opinion on the question of whether there were objective grounds justifying the successive renewal of the Claimant’s fixed-term contracts within the meaning of s.7 of the Act. If there were sufficient grounds justifying the renewal of these contracts they would have been saved by operation of s.9(4) of the Act.

• “Your initial placement will be on the Bundled Sewerage Scheme- Network Contract A (Dunleek, Donore, Kilmainhamwood and Moynalty). However at the discretion of the Senior Engineer or his agent/s, you may be assigned to other major infrastructural projects within County Meath”[emphasis added]

• “The terms of the Protection of Employees (Fixed-Term Work) Act 2003 apply whereby the objective condition determining the contract is for the duration of the Bundled Sewerage Scheme – Network Contract A [sic]”.

• “We have been advised that this scheme will be completed by 30^thApril 2010. The objective grounds for not issuing a Contract of Indefinite Duration is due to the completion of the Bundled Sewerage Scheme – Contract B which we anticipate will be completed on 30^thApril 2010.”

• “We have been advised that this scheme will be completed by 30^thJune 2010. The objective grounds for not issuing a Contract of Indefinite Duration is due to the completion of the Bundled Sewerage Scheme – Contract B which we anticipate will be completed on 30^thJunel 2010. With this in mind the termination date of your Fixed-Term Contract of Employment I 30^thJune 2010”

• “These are the duties that I am contracted to perform for the duration of the contract and not for the specific tasks which you sought to introduce as with the term substantially complete which has a specific meaning which differs for [sic] “the duration of the contract”

It seems reasonably, if not absolutely, clear that the Claimant was at all times employed to supervise a specific contract, namely, the Bundled Sewerage Scheme B. While the more general description of his duties at Clause 4 of the contract could leave it open to a claim of ambiguity, taking the contract as whole, and when read in conjunction with the accompanying letters from the Respondent, there can be little doubt as to the real purpose for which the Claimant was employed. In this case the requirement for a clerk- of-works to supervise the project in question was clearly temporary as the work in question had, by its nature, a temporal limitation.

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).

Are Local Authorities Associated Employers

This aspect of the case raises significant and far-reaching issues which, in light of the conclusions reached by the Court on the other aspects of this case, it is unnecessary to address. Accordingly the Court reserves its decision on that question to another case in which it may be determinative.

Overall conclusion

For the reasons stated herein the Court is satisfied that the Claimant did not have the requisite length of continuous / successive service to accrue an entitlement to a contract of indefinite duration pursuant to sections 9(2) and 9(3) of the Act. Even if he had, there were objective grounds, within the meaning of the Act, justifying the continued renewal of his employment for a fixed-term.

Determination

It is the determination of the Court that the within appeal must be allowed and the Decision of the Rights Commissioner is set aside. The Court so determines.



Signed on behalf of the Labour Court



Kevin Duffy
5th September 2012______________________
CRChairman



NOTE

Enquiries concerning this Determination should be addressed to Ciaran Roche, Court Secretary.