FTD158

FULL RECOMMENDATION

FTC/14/24

DETERMINATIONNO.FTD158

(r-138198-ft-13/gc)

INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003

PARTIES :

UNIVERSITY OF LIMERICK
(REPRESENTED BY ARTHUR COX)

- AND -

DONNACHA HAVERTY
(REPRESENTED BY KIERAN MULCAHY SOLICITOR)

DIVISION :

Chairman: Ms Jenkinson
Employer Member: Ms Doyle
Worker Member: Mr McCarthy

SUBJECT:
1. Appeal against a Rights Commissioner's Decision R-138198-FT-13/GC.

BACKGROUND:

2. The Claimant appealed the Rights Commissioner's Decision to the Labour Court on the 10th June, 2014. The appeal is made pursuant to Section 15(1) of the Protection of Employees (Fixed-Term Work) Act, 2003. A Labour Court hearing took place on the 4th March, 2015. The following is the Labour Court's Determination:-

DETERMINATION:

This is an appeal of by Dr. Donnacha Haverty (the Complainant) against the Decision of a Rights Commissioner in which she found against him in his claim taken under Section 9 of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act).

At the Rights Commissioner hearing the Complainant claimed that his employer, the University of Limerick (the Respondent) failed to provide him with a contract of indefinite duration in circumstances where he became entitled to such a contract pursuant to Section 9(3) of the Act.

On 23^rdSeptember 2013, the Complainant submitted a complaint to the Rights Commissioner Service under Section 14 of the Act claiming that the Respondent contravened Section 9(2) of the Act in employing him on successive fixed term contracts which exceeded four consecutive years, therefore in accordance with Section 9(3) of the Act, he claimed that his contract should be deemed a contract of indefinite duration, by operation of law.

The Rights Commissioner upheld the Respondent’s position that there were objective conditions justifying the renewal of the contracts and its failure to offer a contract of indefinite duration.

Background

The Complainant was employed on successive fixed term contracts, as follows:-

First Contract:

1^stDecember 2008 : Postdoctoral Researcher in Process Chemistry in the Department of Chemical and Environmental , the specific purpose in the contract stated the following:-
- "Your employment with the University of Limerick shall be for the purpose of working on the project entitled "Development of a Novel Scalable Process for theManufacture of Calcium Phosphate Nano-Biomaterials " It is anticipated that the funding will be available for the duration. However, should the funding be withdrawn in part or in whole, then the University reserves the right to terminate your contract earlier.”

It was envisioned that this contract would finish on 30^thNovember 2009, however, the Complainant resigned from this contract with effect from 30^thSeptember 2009 and applied for an externally advertised position of Senior Research Fellow in the Respondent’s Department of Chemical and Environmental Science to work on a specified purpose contract. He was successful in his application and commenced his new contract on 1^stOctober 2009.

Second Contract:-

1^stOctober 2009: Senior Research Fellow in the Department ofChemical and Environmental Science, the specific purpose in the contract stated the following:-
- "Your employment with the University of Limerick shall be for the purpose of working on the project entitled "Hydrolysis of Lignocellulosic Waste". It is anticipated that the funding will be available for the duration. However, should the funding be withdrawn in part or in whole, then the University reserves the right to terminate your contract earlier”.

In May 2011 the Complainant applied for and was granted a reduced part-time working arrangement by the Respondent with effect from 1^stMay 2011. This remained in place until 1^stOctober 2012.

Third Contract:

1^stJanuary 2013: By letter dated 8^thNovember 2012, the Respondent notified theComplainantthat his specific purpose contract was due to expire on 31^stDecember 2012 and that his employment would terminate on that date.However due to the provision of additional funding from the EU for the project his contract was extended to 31st March 2013.
- By letter dated 21^stFebruary 2013 the Respondent informed the Complainant that"the specific purpose which is the basis for your contract is set to continue until the 31.03.2013. The EU is not funding this project beyond this date so your contract will continue for this specified period only".

The Complainant’s employment terminated on 31^stMarch 2013. On 23^rdSeptember 2013, the Complainant submitted his complaint under the Act to the Rights Commissioner Service.

On 29^thMarch 2014,the Complainant applied through an open competition for a position as a Postdoctoral Researcher with the University on a project called "CellulosomePlus". The Complainant was successful in his application and was appointed to this role pursuant to a specific purpose contract which commenced on 19^thMay 2014. This latter contract has no bearing on this case.

Preliminary Issue

Having read the submissions of both parties the question of continuity of the Complainant’s employment with the Respondent was examined by the Court as he had resigned from his first contract in 2009 in order to apply for a new position with the University.

This issue arose as the Complainant had relinquished his position as Post-Doctoral Researcher by letter dated 21^stSeptember 2009 and had secured a new position as Senior Research Fellow on 1^stOctober 2009, a position which he successfully secured following his application by open competition. The Court examined this issue as a preliminary matter and sought additional information from both parties on the issue,

Having considered the arguments made by both parties, the Court was satisfied that the Complainant’s continuity of employment was not broken in the circumstances and he continued to be employed by the Respondent.

Summary of the Complainant’s Case

Mr. Cían P. Kelly, B. L. instructed by Mr. Kieran Mulcahy, Kieran Mulcahy Solicitors on behalf of the Complainant submitted that as the Complainant’ssecond contract terminated on 31^stDecember 2012, at which point he had been in employment on allegedly “specified purpose” contracts for in excess of four years, he accrued an entitlement to a contract of indefinite duration.He submitted that there were no objective grounds to justify the renewal of the Complainant employment on a temporary basis.

Mr. Kellystated thatthe Complainant’s second contract commenced on 1^stOctober 2009 and was anticipated to end on 31^stDecember 2012, following the expiration of which he continued to work. By notice dated 8^thNovember 2012 he was informed that his employment would terminate on 31^stDecember 2012 in accordance with the terms of his contract. However, this was subsequently rescinded, he continued in employment and by letter dated 21^stFebruary 2013 he was formally informed that his contract was being extended until 31^stMarch 2013.

Summary of the Respondent’s Position

Mr Kevin Langford, Arthur Cox, denied that the Complainant was entitled to a contract of indefinite duration. He said that the Complainant had been employed pursuant to a specific purpose contract in relation to the EU DIBANET Project. The DIBANET Project was originally scheduled to conclude around the end of December 2012. It subsequently emerged that Project participants from the University of Aston were unable to complete certain elements of the Project and the University of Limerick participants were asked to complete these tasks. In order to facilitate this, the Project was extended by three months to 31^stMarch 2013. This extension was achieved through the redistribution of funding to the University of Limerick participants which had previously been allocated to the Aston University Group. This work was allocated to the Complainant and required him to carry out certain modelling work which was essential to the completion of the Project.

The Complainant was at all times aware that the Project had originally been due to finish on 31^stDecember 2012 and that additional funding had been received to extend the Project to 31^stMarch 2013 only. The Complainant was informed of this development before Christmas 2012 and his employment duly terminated on 31^stMarch 2013 as a result of the completion of the DIBANET Project and the corresponding cessation of the specific purpose for which the Complainant was employed.Mr. Langford contended that the Complainant knew the terms upon which he was offered employment in 2009, he was not offered a contract of indefinite duration at the time, it was a Senior Research Fellowship in relation to a specific research project for a finite period which was externally funding.

Mr. Langfordsubmitted thatthis appeal should not be upheld because there wereobjectivegrounds for renewing the Complainant'scontractand the Respondent relieson Section 9(4) of theAct. He explained the way in which international multi-participant projects operate in universities. A university research group participates in a project by working on a specific aspect of that project in respect of which they have particular expertise. In this case, the Respondent was engaged as Project Manager and Coordinator. The Carbolea Biomass Research Group within the University was tasked with providing a number of specific deliverables as part of the broader project. The Complainant was employed as part of this Group for the purpose of working on particular aspects of the Project for which the Respondent was responsible. A specific skillset, knowledge and range of abilities were required for this role as was clear from the job advertisement. The Complainant fulfilled these criteria. Other projects in which the Respondent may participate or for which individuals may apply for funding are likely to require different skill sets. Mr. Langfordstated that it was essential that the Respondent was in a position to engage employees with the right competencies who are a "match" for each project.

In support of its contention the Respondent relied on the decision of this Court inNational University of Ireland Maynooth and Dr. Ann BuckleyFTD092. Mr. Langford stated that theBuckleycase also related to a third party funded research project in a university environment. In that case the claimant secured the funding and approached the University and asked it to host her. For that purpose the University employed Ms Buckley on a succession of fixed-term contracts. Once Ms Buckley passed the four year threshold she claimed that she should be deemed to be employed under a contract of indefinite duration under Section 9 of the 2003 Act. The relevant clause in Ms Buckley's contract of employment was in the following terms:-

- "Renewal of your employment is justified by the fact that further temporary work has become available and that funding is available to support work for a fixed period. The university is unable to offer a contract of indefinite duration as the funding in question is available for a fixed duration only".

The Court concluded that the text in question was plainly expressed and it was made clear that further fixed-term work, rather than a contract of indefinite duration, was being offered. The Court concluded inBuckleyas follows:-

- "The Court is of the view that the Claimant, 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 ".

Mr. Langford addressed the requirement to determinethe validity of objective grounds. He said that the Court has regardto the threetier test for objective justification in indirect gender discrimination cases formulated by the EuropeanCourt of Justice inBilka-Kaufhaus GmbH v Karin Weber von HartzC -170/84. Insummary,the measure must meeta"real need'or legitimate objective ofthe employer,the measure must be"appropriate"to meet the objective which it pursues and the measure must be
"necessary"inorder toachieve that objective.He submitted that it is clear from the foregoingthat the Respondent satisfies each limb of the three tier test :-

i. In thiscase the Respondent had areal needtoemployasenior research fellow for the purpose of designing,commissioning and validating a laboratory scale continuous reactor process for non-enzymatic hydrolysis,dehydration and separation of lignocellulosic biomass as part of the DlBANET Project.

ii. Given that the Project was initially scheduled to run for a period of 42 months (i.e. to 31^stDecember 2012) and was only funded by the European Commission up to this point, a contract of indefinite duration was not the appropriate form of contract and the issuing of a specific purpose contract to the Complainant was therefore entirelyappropriate.

iii. Furthermore,the issuing of a specific purpose contract to theComplainant wasnecessaryi.e. there were no other means by which the Respondent's objective could have been achieved.

In support of his position he cited CJEU caseAdeneler and others v Ellinikos Organismos Galaktos C-212/04the CJEU heldat paragraphs 69-70 of its judgment: -

- "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.
  
  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 characteristic of those tasks, or as the case may be, from pursuit of a legitimate social-policy objective of a Member State".

The Respondent also referred to the case ofBianca Kucuk v Land Nordrhein-WestfalenECJ C- [2012] IRLR 697.In this case Ms Kucuk was employed as an interim clerk by the District Court of Cologne for eleven and a half years under a total of thirteen fixed-term contracts as a replacement for career court clerks on temporary leave such as maternity leave, parental leave and special leave. The European Court of Justice held that the Framework Agreement does not lay down a general obligation on Member States to provide for the conversion of fixed-term contracts into contracts of indefinite duration.

The Law

In this case the relevant statutory provisions are to be found in Sections 7, 8 and 9 of the Act. The Act was enacted so as to transpose into domestic law the Framework Agreement on fixed-term work concluded by ETUC, UNICE and CEEP annexed to Directive No. 1999/70/EC of 28 June 1999 of the Council of the then European Communities. Consequently the provisions of the Act must be interpreted and applied so as to achieve the objective pursued by the Framework Agreement.

The purpose of Clause 1 of the Framework Agreement is twofold. Firstly, to improve the quality of fixed-term work by applying the principle of equal treatment to fixed-term workers. Secondly, it is intended to provide a framework for the prevention of abuse arising from the successive use of fixed-term employment contracts.

Section 9(2) of the Act, which is relevant for present purposes, 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.

Section 9(4) provides that subsection (2) and (3) does not apply were there are objective grounds justifying the renewal.

Section 7 (1) 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.

Clause 5 of the Framework Agreement is not directed at limiting the use of fixed-term contractsper se.Rather, it is intended to prevent the abuse of successive fixed-term contracts.What constitutes abuse was left to the Member States.Sections 8 and 9 of the Act are intended to give effect to Clause 5 of the Framework Agreement. Consequently these provisions of the Act must be interpreted and applied so as to achieve the objective pursued by the Framework Agreement. In this case the relevant section issubsection (2) of Section 9 of the Act which defines the circumstances in which the successive use of fixed-term contracts is normally to be regarded as an abuse.

Subsection (3) of Section 9 of the Act is of particular significance in the instant case. It provides:

- - - - (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. However, the remaining terms and conditions of the contract would be unaffected including terms as to pensionability and termination, which, as already observed, would have had to be aligned with those of a comparable permanent employee in accordance with section 6."

It is also clear that Section 9(4), and by extension Section 9(3), takes effect at the commencement of the impugned contract. This was made clear by Hanna J. inRussell v Mount Temple Comprehensive School[2009] IEHC 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 either subs (1) or (2) of Section 9 of the Act. Where, as in the instant case, a fixed-term contract is entered into before the expiry of the four year period referred to in Section 9(2), and its duration extends beyond that period, Section 9(3) operates so as to sever the term in that contract providing for its expiry by effluxion of time. The contract is thus converted to one of indefinite duration from the date of its commencement. This construction of Section 9(3) of the Act is supported by the plain and ordinary meaning of the language used in the subsection, which provides that the“contract concerned”shall be deemed to be a contract of indefinite duration.

Section 9(4) of the Act allows an employer to renew a fixed-term contract in circumstances which would otherwise contravene subsections (1) or (2)where there are objective grounds for so doing. This provision allows for a derogation from what is an important social right derived from the law of the European Union. It must, therefore, be construed and applied strictly against the person seeking to rely on the subsection (see the dictum of the CJEU to that effect in Case 476/99Lommers v Minister van Landbouw, Natuurbeheer en Visseri[2002] IRLR 430. As in any case in which a party relies on a statutory defence it is for that person to prove the facts necessary to make out the defence.

Conclusions of the Court

Mr. Kelly provided clarity for the Court on the claim before it and stated that he was relying on the 1^stOctober 2009 contract as the contract which became the contract of indefinite duration by the combined effects of Sections 9(2) and (3) of the Act. This is in accordance with the provisions of the Act which provide that where a fixed-term contract is entered into before the expiry of the four year period referred to in Section 9(2), and its duration extends beyond that period, Section 9(3) operates so as to sever the term in that contract providing for its expiry by effluxion of time. The contract is thus converted to one of indefinite duration from the date of its commencement.

The Court finds that it is clear from the contract of employment furnished to the Complainant dated 1^stOctober 2009 that it was a specified purpose contract for the purpose of working on the project entitled “Hydrolysis of Lignocellulosic Waste”, an EU funded project [EU FP7] called DIABNET. The grant agreement for this project published by the Commission of the European Communities outlined that the project was expected to be completed in 42 months starting from 1^stJuly 2009, in three phases.

The job description for the position which the Complainant successfully applied in June 2009, stated :-

- “ The Carbolea Biomass Research Group in the Department of Chemical and Environmental collaboration in the field of second generation biofuels research between 12 other partners, 5 from the EU and 7 from Latin America. The successful candidate is expected to design and commission a laboratory scale continuous process for the production of useful platform chemicals from the hydrolysis of lignocellulosic biomass while minimising the chemical/energy requirements.”

It is clear from the Complainant’s application letter dated 16^thJune 2009 that when he applied for the job in 2009 that he was fully aware of the nature of the role he was applying for, he knew it was for completion of a specific project; the job description states that it is a “specified purpose” contract, furthermore the contract issued to him is very clear on this point.

As in theBuckleycase, the Court is satisfied that in the instance case, the Complainant at all times understood the nature of his contractual relationship with the Respondent, which was clearly set out in the specified purpose contract which commenced on 1^stOctober 2009 that it was for the purpose of working on the project entitled "Hydrolysis of Lignocellulosic Waste”. The Complainant in this case was always aware that it was never intended that the research position would be available indefinitely.

While the Court must be satisfied that objective grounds exist justifying the successive renewal of fixed-term contracts, there is no dispute that this contract was a stand-alone contract, which the Complainant had applied for. However, the Court has found that the Complainant was continuously employed by the Respondent following his original contract which commenced on 1^stDecember 2008.

Having considered all the submissions made by both parties, the Court must examine whether the work for which the Complainant was employed pursuant to the contract of October 2009 should properly be classified as coming within the fixed and permanent needs of the Respondent or whether it was part of a purely temporary or transient need.

Having examined the details of the project it is clear to the Court that the project in question was in the nature of a stand-alone project rather than forming part of continuum of similar projects which could be regarded as meeting the Respondent's permanent needs. The project was to complete a specific task which was a collaborative project with five EU Universities, grant funded by the EU. This was recognised by the Complainant in his application letter for the job in June 2009 he applied for and accepted a specific purpose contract which was funded by the EU for a finite period.

Having examined the case the Court is satisfied that the objective groundsadvanced by the Respondent as constituting the grounds relied upon at the time the contract was entered into meet the three tier test for objective justification formulated inBilka-Kaufhausand accordingly justify the renewal of the Complainant's fixed-term contract in October 2009. Employing the Complainant for his specialist skills and expertise on a specified purpose contract (which within the statutory meaning, is a “fixed-term contract”) to undertake and complete the EU DIABNET Project, which was of a temporary nature, met theprecise and concrete circumstancesof the University to complete the specific nature of the task at the time and was not for the purposes of meeting the fixed and permanent needs of the Respondent.

As was held in theBuckleycase, the Complainant, having applied for and accepted a contract agreeing to the objective reasons for its renewal on a fixed-term basis, cannot resile from this position and seek a contract of indefinite duration.

1^stJanuary 2013 Contract

For the sake of completeness, the Court will examine the renewal of his employment on a fixed term basis on 1^stJanuary 2013. On the evidence before it, the Court is of the view that the renewal of the Complainant’s fixed term employment from 1^stJanuary 2013 for a period of three months, to finalise that part of the DIABNET project not completed by Aston University, was supported by objective grounds, within the statutory meaning, justifying the renewal. The Respondent had a real need to retain the Complainant with his specialist expertise and knowledge to undertake the remaining work for the purposes of completing the project for which he was employed.

Addendum

By way of observation, it should be noted that at the cessation of the Respondent’s requirement for the service provided by the Complainant his employment came to an end in circumstances amounting to redundancy within the meaning of the Redundancy Payments Acts 1967 to 2003. He became entitled to a redundancy lump sum and remains so entitled.

Determination

In these circumstances the Court has come to the conclusion that on the facts of this case there were objective grounds justifying the renewal of the Complainant's employments for a fixed-term on both 1^stOctober 2009 and on 1^stJanuary 2013. Accordingly Section 9(3) of the Act did not apply to these renewals.

The Court finds that the Respondent was not in contravention of the Act. The Complainant's appeal is disallowed. The Decision of the Rights Commissioner is upheld.

Signed on behalf of the Labour Court

Caroline Jenkinson
CO'R______________________
14th April, 2015Deputy Chairman

NOTE

Enquiries concerning this Determination should be addressed to Clodagh O'Reilly, Court Secretary.