FTD135

In effect the Claimant’s case is that he became an employee of the Respondent under a contract of indefinite duration by operation of law when the Respondent purported to extend his employment for a fixed-term in contravention of s.9(2) of the Act. He claims that his dismissal amounted to less favourable treatment contrary to s.6 of the Act. He seeks an order for reinstatement or re-engagement and compensation. The Claimant also contends that the Respondent contravened s.8 of the Act in failing to provide him with a statement in writing setting out the objective grounds justifying the renewal of his employment for a fixed-term and the reason for not offering him a contract of indefinite duration. Finally the Claimant contends that he was dismissed from his employment wholly or mainly for the purpose of avoiding his fixed-term contract becoming one of indefinite duration and that this amounted to penalisation contrary to s.13 of the Act.

Background
The Claimant commenced employment with the Respondent as a Contract Assistant Engineer on 5^thNovember 2007. That contract was expressed to expire on 4^thNovember 2009. The purpose of the contract was to assist the Programme Manager General Works in the design and management of multi-management design projects. By e-mail dated 30^thOctober 2009 Mr Tim O’Connell, HR Manager of the Respondent, wrote to the Claimant informing him that due to on-going capital works projects his employment was being extended to 31^stJanuary 2010.

It appears that on the expiry of the Claimant’s contract on 31^stJanuary 2010 he continued in the employment of the Respondent and performing his duties and receiving remuneration. He was then issued with a contract dated 19^thMarch 2010 which was expressed on its face to commence on 1^stFebruary 2010. That contract was signed on 24^thMarch 2010. It was expressed to be a fixed-purpose contract which contained the following provision at clause 2.1: -

• “This agreement will commence on 01/02/2010 and will continue for a fixed purpose working on capital projects undertaken by General Works, projects to include but not limited to Navan Line and Maynooth Line Works or as business needs in relation to funding dictates unless terminated earlier pursuant to paragraph 2.2 of this clause[which is not relevant for present purposes]”

This e-mail contained a statement of objective grounds for the renewal of the Claimant’s employment for a fixed term in the following terms: -

• “[P]lease note that the objective grounds for issuing a second contract as opposed to a contract of indefinite duration (permanent) is that your role arises out of projects that have a specific budget and time span which will expire in due course as projects progress and the consequent downturn in activity and available funding”

• “As the closure of these projects will run to year end, it is possible to extend your contract up to 31^stDecember 2011. The objective justification for extending your current employment arrangements is due to the specific expertise and knowledge you have gained during the course of your employment in the General Works Section.

  Unfortunately it is not possible to extend this arrangement beyond 31^stDecember 2011 or to offer you employment on a permanent basis as there will be no further project work requirement post this date. …”

Position of the Parties

The Claimant
On these facts the Claimant contends that he became entitled to a contract of indefinite duration by operation of the combined effect of s.9(2) and 9(3) of the Act. He submitted that there were no objective grounds justifying the successive renewal of his fixed-term contracts. That submission was based on the Claimant’s contention that all work undertaken with the Respondent’s New Works Division are capitally funded and that the funding for the work in which he was engaged was available at the time of his dismissal and continues to subsist. It was submitted that the objective grounds relied upon by the Respondent in the letter of 24^thOctober 2011 did not disclose any legitimate aim which the renewal of his employment for a fixed-term was intended to pursue.

The Claimant contends that he was treated less favourably than a comparable permanent employee in being made redundant. He also claims that the timing of the decision to make him redundant coincided with him having accrued four years continuous service as a fixed-term employee and was for the purpose of avoiding his employment becoming permanent by operation of law.

The Respondent
The Respondent’s case is that the Claimant was at all times employed to work on capital projects which had a finite duration and were dependant on specific funding allocations. This was made clear in the various contracts issued to the Claimant and the objective grounds upon which the Respondent relied for the renewal of these contracts, and the reasons for not offering the Claimant a contract of indefinite duration, were set out in writing to the Claimant either in the form of letters or e-mails accompanying the contracts.

The funding for these projects ceased to be available due to the economic downturn in or about the end of 2011. By letter dated 24^thOctober 2011 the Claimant was informed that funding for other projects that the Respondent had hoped to undertake would not be made available and his employment would cease. He was offered and accepted a renewal of his employment until the end of 2011 for the purpose of completing certain work in which he was then engaged. While some work was outstanding at the end of the year members of the Respondent’s core staff were reassigned to complete this work and the Claimant was made redundant. The Claimant was offered a redundancy payment which he refused to accept.

Conclusion

The Claimant’s Employment Status after 31^stJanuary 2010
The hearing of this appeal opened before the Court on 5^thSeptember 2012. Having adjourned to consider its determination it came to the Court’s attention that the Claimant’s second contract expired on 31^stJanuary 2010 and he remained in employment, without a written contract of employment until 24^thMarch 2010 when the third contract was signed. A question thus arose concerning the Claimant’s employment status during that period. This matter had not been raised by either party in the course of the hearing. The Court wrote to the parties asking for further submissions on that point. The hearing was reconvened on 30^thJanuary 2013 for the purpose of considering submissions on this point.

Following the expiry of his fixed-term contract on 31^stJanuary 2010 the Claimant continued in employment on what must have been either an oral contract or an implied contract of employment. Section 2 of the Act defines a ‘fixed-term employee’ as: -

• [A] person having a contract of employment entered into directly with an employer where the end of the contract of employment concerned is determined by an objective condition such as arriving at a specific date, completing a specific task or the occurrence of a specific event

The contract under which the Claimant came to be employed on 1^stFebruary 2010 did not contain any term providing for its determination by an objective condition such as arriving at a specific date, the completion of a specific task or the occurrence of a specific event. Consequently he could not have been a fixed-term employee within the statutory meaning at that time. If he was not a fixed-term employee he could only have been employed on a contract of indefinite duration. The question then arose as to whether the Claimant’s status could then be changed to that of a fixed-term employee by the execution of the contract concluded on 24^thMarch 2010.

Counsel for the Claimant submitted that the parties were at all timesad idemin regarding the Claimant’s employment status as that of a fixed-term employee and that should be regarded as his status throughout his full period of employment.

The Solicitor for the Respondent, Mr Costello, submitted that due to inadvertence on its part the Claimant had, as a matter of law, acquired a contract of indefinite duration following the expire of his fixed-term contract on 31^stJanuary 2010. In consequence, it was submitted, the subsequent contracts which purported to define his employment relationship as that of a fixed-term employee were of no effect. Mr Costello submitted that the Claimant continued in employment on an implied contract of indefinite duration up to the date on which his employment was terminated on 31^stDecember 2011. According to the Respondent the Claimant lackedlocus standiunder the Act at the time his complaint was initiated and if he had a remedy arising from his dismissal it lay under different legislation and at a different forum.

Conclusion of the Court on this Point
The Court finds considerable weight in the arguments advanced on behalf of the Respondent. However, on the other hand, the Respondent treated the Claimant as a fixed-term employee throughout his full period of employment and only made the concession that he was in reality a permanent worker when the matter was raised by the Court. In these circumstances a serious question arises as whether the Respondent can rely on that concession to deprive the Claimant of a remedy under the Act to which he might otherwise be entitled.

In these circumstances the Court has decided that since the case was fully argued it should first consider if the Claimant could have a sustainable case under the Act, if his status was that of a fixed-term employee, before considering if he lackedlocus standifor the purpose of obtaining relief. Accordingly the Court has proceeded on the assumption (without so holding) that the Claimant was a fixed-term employee throughout the full period of his employment.

The Law
The legal principles applicable in a case such as this are well settled and can be briefly reviewed.

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 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.

InMinister for Finance v Una McArdle[2007] 18 ELR 165 Laffoy J quoted with approval the following passage from this Court’s Determination in the case in which the effect s.9(3) was considered: -

• “That section applies to a situation where an employee is given a renewed fixed-term contract in contravention of subss. (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 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.

It is clear from that passage that s9(3) only comes into play where a fixed-term contract is renewed and the duration of the renewal extends the employee’s fixed-term employment beyond the period normally permitted by s.9(1) or s.9(2) of the Act

The Claimant’s fixed-term employment was renewed on 24^thOctober 2011 for the period up to 31^stDecember 2011. Counsel for the Claimant accepts that it is this renewal that is relevant for present purposes since it extended his employment beyond the period of four years normally permitted by s.9(2) of the Act. Consequently, unless that renewal was saved by s.9(4) it was transmuted, from the date of its conclusion, to one of indefinite duration by operation of s.9(3) of the Act. It is also clear that s.9(4), and by extension s.9(3), takes effect at the commencement of the impugned contract. This was made clear by Hanna J. inRussell v Mount Temple Comprehensive SchoolIEHC 533. This can have the practical effect of transmuting a fixed-term contract to one of indefinite duration before the expiry of the duration referred to in s.9(2) of the Act.

Section 9(4) of the Act provides: -

• 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.

• “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”

Conclusion
The Court is satisfied that the Claimant was at all times employed on project work the duration of which was limited in time and the availability of specific funding over which the Respondent did not have control. Consequently the work concerned was not part of the fixed and permanent needs of the Respondent. This was made clear by the Respondent in written notifications furnished to the Claimant on each occasion on which his employment was renewed for a fixed-term.

The letter to the Claimant dated 24^thOctober 2011, the relevant extracts of which are recited above, made it clear that the availability of project work would only last for the duration of the contract being offered. Moreover the letter set out the objective justification for the renewal in question which the Court regards as comporting with the requirements of s.7 of the Act.

In these circumstances the Court is satisfied that the renewal of the Claimant’s employment (if that is what occurred) on 24^thOctober 2011 was saved by s.9(4) of the Act.

The Claimant’s employment then came to an end by reason of redundancy. While the Respondent accepts that there was some work remaining on the projects on which the Claimant had been engaged, this work was undertaken by what it referred to as core workers. The Claimant was not replaced and the Respondent continued to undertake this work with fewer employees. This amounts to a situation of redundancy within the meaning of the Redundancy Payments Acts 1967 – 2003.

For the sake of completeness it should be pointed out that the decision of Hogan J inHolland v Athlone Institute of Technology[2012] 23 E.L.R 1 makes it clear that even if the Claimant had obtained a contract of indefinite duration by operation of law he could not be placed in a superior position to that of a worker whose status as a permanent employee was never in doubt. There is an implied term in every contract of employment that, subject to there being no unfair selection, the employment relationship can be brought to an end by reason of redundancy. Thus the Claimant was in no worse position than if his contract had been recognised as one of indefinite duration. In so far as it is asserted that the Claimant’s selection for redundancy contravened s.6 of the Act it should also be pointed out that inMinister for Finance v Una McArdleLaffoy J held that for the purposes of that section conditions of employment does not include conditions as to tenure.

The Court is further satisfied that the Respondent complied at all times with the obligations imposed on it by s.8 of the Act. Each of the contracts issued to the Claimant was accompanied by a statement in writing setting out the objective grounds for the renewal of his employment for a fixed-term and the reasons for not offering him a contract of indefinite duration. The Court is also satisfied that the Claimant’s dismissal did not amount to a contravention of s.13 of the Act as there was no evidence from which it could be inferred that the dismissal was for the purpose of avoiding his fixed-term contract becoming one of indefinite duration.

Determination
For all of the reasons set out above the Court is satisfied that even if the Claimant remained a fixed-term employee throughout the full period of his employment the Respondent did not contravene any of the provisions of the Act relied upon. It is, therefore, unnecessary for the Court to express a concluded view on whether he lackedlocus standito maintain the within claims.

The decision of the Rights Commissioner is affirmed and the Claimant’s appeal is disallowed.

Signed on behalf of the Labour Court



Kevin Duffy
7th February 2013______________________
SCChairman



NOTE

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