FTD131

At the outset of the hearing of the appeal the Arts Council conceded the Union’s claim under Section 6 that an ex-gratia redundancy payment in line with the Department of Public Expenditure and Reform and the Public Services Committee of ICTU from 1st June 2012, should apply to the Complainant along with a statutory redundancy payment. The Union on behalf of Ms. Harte confirmed for the Court that it accepted the Rights Commissioner’s decision under Section 8 of the Act. Therefore, the only issue before the Court concerned the Arts Council’s appeal under Section 9 of the Act.

The Complainant presented her claim to the Rights Commissioner on 29th February 2012 alleging that The Arts Council had failed to provide her with a contract of indefinite duration from 14th May 2011 in circumstances where she became entitled to such a contract by operation of law pursuant to Section 9(3) of the Act.

For ease of reference the parties are given the same designation as they had at first instance. Hence The Arts Council will be referred to as “the Respondent” and Ms Eimear Harte will be referred to as “the Complainant”.

Background

The Respondent is the national agency for funding, developing and promoting the arts in Ireland. Established in 1951 to stimulate public interest in and promote the knowledge, appreciation and practice of the arts, it is an autonomous body under the aegis of the Department of Arts, Heritage & Gaeltacht.

The Complainant was employed by the Respondent on fixed-term contracts as follows, some of which overlapped and some of which encompassed two roles:

• 3rd October 2007 – 31st January 2008, Temporary Clerical Officer, Press and Communications.
• 31st January 2008 – 8th October 2010, Temporary Clerical Officer, Traditional Arts
• 20th September 2010 - August 2011, Clerical Officer, Arts Participation and Traditional Arts
• 14th May 2011 to 31st March 2012, Executive Assistant/Executive, Traditional Arts
• 2nd August 2011 - 31st March 2012, Clerical Officer, Literature

Mr. Peter Glynn, SIPTU on behalf of the Complainant submitted to the Court that the Complainant was employed on successive and continuous fixed-term contracts covering over a 5 year period and was therefore entitled to a contract of indefinite duration from 14th May 2011. He submitted that contracts issued to the Complainant made no reference to the objective grounds relied upon by the Respondent. Furthermore, he disputed the Respondent’s contention that a review of strategy and structure could be defined as an objective ground. Mr. Glynn disputed this on the basis that such a review was open ended and on-going.

Mr. Glynn also disputed the Respondent’s contention that the restrictions placed on it from the Public Sector Moratorium and the Department of Finance precluded it from issuing a contract of indefinite duration. He contended that the Respondent did not have the liberty to avoid their legal responsibilities and held that the Moratorium did not negate the Complainant's legal right or entitlement.

He cited Labour CourtNational Gallery of Ireland v Mr. Michael Coyne, Determination FTD 1232, where the Court citedHill and Stapleton v Revenue Commissioners[1969] 1 ICR 48 which stated:-

• “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”

Mr. Tim O’Connell, IBEC on behalf of the Respondent appealed the Decision of the Rights Commissioner on the grounds that the Rights Commissioner did not place sufficient weight on the constraints placed upon it by the Moratorium on Recruitment and Promotion in the Public Service. Furthermore, he contended that the prevailing public interest measures in place for the public service constituted objective grounds in accordance with Section 9(3) of the 2003 Act for the renewal of the Complainant's contract for a fixed term.

Objective Justification

Mr. O’Connell submitted that there were objective grounds within the meaning of section 9(4) of the Act which justified the Respondent's failure/inability to offer the Complainant a contract of indefinite duration. He said that the Respondent's budget was set in accordance with the funding provided by the Department of Arts, Heritage and the Gaeltacht and it was mandated by that Department to reduce headcount numbers. Furthermore, it was prohibited from making permanent appointments under the terms of the Moratorium on Recruitment and Promotion in the Public Service. He said that the Complainant was aware of the restructuring and review necessary to achieve this headcount reduction and she was actively involved in the consultation process.

Mr. O’Connell said that following the introduction of the Moratorium on Recruitment in 2009, it was reconfirmed to all staff who were on temporary contracts at the time that these contracts would end, with some temporary roles being offered in an interim structure pending the Respondent’s strategy and structure review. A total of fourteen staff engaged on fixed term/specific purpose contracts left the organisation thereby reducing from 61.5 to 46 whole time equivalent in 2009.

A formal notice was issued to the Complainant in April 2011 confirming the end dates of the contract. However, prior to contract end the Complainant was successful in availing of two further temporary part-time roles that arose in the interim structure. Between May 2011 and March 2012, the Complainant was employed on two (50:50) part-time contracts of different grades within the Literature and Traditional Arts teams. These contracts were advertised as being of a temporary and interim nature due to the organisation's restructuring and strategy review.

Mr. O’Connell contended that any claim in respect of this contract expired in accordance with Section 14 of the Act on 30th April 2011.

Mr. O’Connell cited the Court of Justice of the European Union joined Cases C-378/07 to C-380/07Kiriaki Angelidaki and Others v Organismos Nomarkhiaki, Aftodiikisi Rethimnis and Dimos Geropotamou(2009) ECR1-3071, which addressed the concept of objective grounds, where it said at paragraph 96:

"In those circumstances, the concept of 'objective reasons' for the purposes of clause 5(l)(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 1-7109, paragraph 53; and order in Vassilakis and Others, paragraphs 88 and 89)."

Mr. O’Connell submitted that the terms of the Public Service Agreement 2010 - 2014, the Financial Emergency Measures in the Public Interest Act 2010 and the Moratorium on Recruitment and Promotion in the Public Service combine to create in the state and its emanations a legitimate social policy objective which constitute an objective ground in this instance. It is submitted that the circumstances and context of these measures are sufficiently precise and concrete such as to justify the issue of successive fixed-term contracts.

In support of this argument Mr. O’Connell cited a number of Labour Court’s Recommendations/Decisions;St Angela's College and A Worker, AD1092; HSE Dublin/Mid Leinster (St Brigid's Hospital, Shaen Portlaoise v SIPTU, LCR 20163 and Failte Ireland and A Worker, AD1219all of which, under Industrial Relations legislation confirming the pre-eminence of the Public Service Agreement 2010 - 2014 as a factor in precluding the Court from increasing costs in the public service.

Findings of the Court

The Respondent contended that there were objective grounds for the renewal of her contract when the Complainant became entitled to a contract of indefinite duration, by operation of law, in accordance with the provisions of Section 9(2) of the Act.

The provisions of Section 9(3) of the Act state:

• 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.

The provisions of Section 9(4) of the Act state:

• (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.

Section 7 of the Act deals with what constitutes objective grounds for this purpose and provides:

• “(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.”

In that case the Court set out a three-tiered test by which an indirectly discriminatory measure may be justified. It said that the measure must firstly meet a “real need” of the employer; secondly the measure must be “appropriate” to meet the objective which it pursues and finally the measure must be “necessary” to achieve that objective.

While the test prescribed by Section 7(1) is in slightly different words than that in Bilka, it is essentially the same test. This has now been put beyond doubt by the recent Judgment of the CJEU inAdeneler and Others v Ellinikos Organismos Galakto. Here, at paragraph 74 of its Judgment, the Court referred to the need to show that the grounds relied upon: -

“Respond to a genuine need, is appropriate for achieving the objective pursued and is necessary for that purpose”

In essence the case law of the ECJ equates reliance on objective justification of an otherwise prohibited practice with a derogation from the requirement to fulfil an obligation under Community law. InLommers v Minister van Landbouw, Natuurbeheer en Visseri [2002] ILRM 430 the ECJ pointed out that: -

• “ [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 by 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 that the principle of equal treatment be reconciled as far as possible with the requirements of the aim thus pursued (Johnston, paragraph 38; Sirdar, paragraph 26, and Kreil, paragraph 23).

InHealth Service Executive, North Eastern Area v Khan[2006] 17 ELR 313, this Court considered the effect of Section 8, combined with that of Section 9(4) and concluded as follows: -

• “Section 9(4) allows an employer to renew a fixed-term contract in circumstances which would otherwise contravene subss.(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 Community it must, in the Court's view, be construed and applied strictly against the person seeking to rely on the subsection. Thus the Court must require an employer invoking subs.(4) to establish on credible evidence the factual matrix which is relied upon as constituting objective justification as that term is defined by s.7 of Act and as it is understood in the settled law of the Community.

  Moreover, a purposive interpretation of s.9 indicates that a respondent must establish that the reason relied upon as constituting objective grounds was the operative reason for the failure to offer a contract of indefinite duration at the time the fixed-term contract was renewed. This suggests that the respondent must at least have considered offering the complainant a contract of indefinite duration before renewing his or her fixed-term contract and decided against doing so for the reason relied upon.

  Section 8(2) is also of considerable significance on this point. It seems to the Court that 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 under s.9(4) . Thus where an employer fails to provide a fixed-term employee with a statement in writing, in accordance with s.8(2) , it is apt to infer, in accordance with s.8(4) of the Act, that the grounds subsequently relied upon were not the operative grounds for the impugned decision and it would be for the employer to prove the contrary.”

In the instant case, the Respondent told the Court that the objective grounds for the extension of the Complainant’s contract on 14th May 2011 were due to the restrictions placed on its budget by the Department of Arts, Heritage and the Gaeltacht and the Moratorium on Recruitment and Promotion in the Public Service (“the Moratorium”). The Respondent also stated that it was undergoing a restructuring and review process which involved headcount reductions. However, it accepted that these issues were not addressed in the contract issued to the Complainant on 12th May 2011, which provided her with a fixed term contract for the period 14th May 2011 until 31st December 2011. It merely refers to the fact that the contract was ‘temporary’ and "the role is not being offered on a permanent basis".

It seems to the Court that the purpose of Section 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 under Section 9(4). Thus where an employer fails to provide a fixed-term employee with a statement in writing, in accordance with Section 8(2), it is apt to infer, in accordance with Section 8(4) of the Act, that the grounds subsequently relied upon were not the operative grounds for the impugned decision and it would be for the employer to prove the contrary.

Furthermore, the decision of the CJEU in Case 476/99Lommers v Minister van Landbouw, Natuurbeheer en Visseri[2002] IRLR 430, is authority for the proposition that a plea of objective justification in defence of a claim grounded on a social right derived from the law of the European Union equates to reliance on a derogation from that right. Like all derogations it must be strictly construed against the person by whom it is invoked.

The Court is of the view that neither budgetary restrictions nor the Moratorium could offset or supplant the clear provisions of the Act nor can they be relied upon to determine the entitlement of any person to a benefit created by the Act. Accordingly this case must be determined by application of the legal principles derived from the Act itself, at Sections 7, 8 and 9.

The Court also finds it significant that while the Moratorium came into effect on 29th March 2009 it did not operate as an impediment to the renewal of the Complainant’s employment subsequent to that date.

Having considered the submissions of both sides the Court is satisfied that the contract dated 14th May 2011 gave rise to an entitlement to a contract of indefinite duration since it purported to extend the period of her fixed-term employment beyond four years. Had the Complainant been granted a contract of indefinite duration the Respondent told the Court that there was no impediment upon it making her redundant if such a situation arose.

The Court is satisfied that the objective grounds advanced by the Respondent as constituting the grounds relied upon at the time the contract was entered into do not meet the criteria on objective justification referred to in Bilka-Kaulhaus. In such circumstances the Court is not satisfied that the criteria relied upon by the Respondent constitute objective justification within the meaning of Section 7 of the Act. In this particular case there were other and more appropriate measures that could be taken such as advancing the Complainant a contract of indefinite duration from 14th May 2011 when she became entitled to such a contract by operation of law and subsequently providing for redundancy when such a situation arose.

Therefore the Court determines that the contract of employment entered into by the Complainant and the Respondent effective from 14th May 2011, a whole time contract encompassing two part time roles, one at Clerical Officer level and the second at Executive Officer level, became one of indefinite duration, by operation of Section 9(3) of the Act, with effect from 14th May 2011.

Determination

For the reasons outlined above, the Court determines that the Respondent’s appeal is disallowed. The decision of the Rights Commissioner is upheld.

Signed on behalf of the Labour Court



Caroline Jenkinson
CR______________________
15th January, 2013Deputy Chairman



NOTE

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