Fixed-Term Contracts
Cases
Catholic University School -v- Dooley & Anor
[2010] IEHC 496
Dunne J.
“The key issue to be determined in these proceedings is whether the determination of the Labour Court made in April of 2009, in respect of the claimants respective claims to the effect that the claimants are entitled to a contract on terms and conditions pro rata with that of his comparator is correct. The Rights Commissioner in her decision on the claimants claim under the Part Time Work legislation, found that the claimant, Mr. Dooley, as a part time worker was treated less favourably than a comparable full time worker. She found that the respondent employer was in breach of s. 9 of the Part Time Work Act, and required the respondent to ensure that the claimant’s pay (i.e. salary scale and incremental progression, payment of qualification allowances and all other conditions of employment) were no less favourable (on a pro rata basis where appropriate) than those of the whole time comparator from that date. She found that in relation to the incremental salary scale the respondent was required to operate the same type of salary scale for the claimant as that for the comparator including incremental progression. In relation to the claimant’s access to the Department of Education’s superannuation scheme, she found that the respondent was to ensure that the claimant was to become a member of the scheme and to make the same employee contributions as the comparator. It is that decision that was subject to minor variations affirmed by the Labour Court. There was also a claim under the Fixed Term Work Act, but for the purpose to these proceedings I do not think it is necessary to deal with that aspect of the matter to any extent.
Three principal issues arose before the Labour Court and indeed on appeal to this Court. The first issue is whether or not the claimants have chosen the appropriate comparator. The second issue relates to whether or not the Directive 97/81/EC has been properly transposed into national law. The final issue relates to the defence of objective justification. I now propose to deal with these issues.
The Appropriate Comparator
There is no dispute between the parties that a claimant is entitled to choose their own comparator. The question is whether the comparators chosen by the claimants are appropriate. The claimants have sought to compare themselves with a permanent teacher on an incremental scale whose salary is paid by the Department of Education. It is contended on behalf of the school that this is not a correct or appropriate comparator. The school contends that the appropriate comparator is a privately paid teacher employed by the respondent directly. There are a number of such teachers employed by the school. The first point made on behalf of the school is that the chosen comparator has to be in the same type of employment contract or employment relationship. There was no issue as to the teaching ability of either of the claimants and that in that regard each of the claimants presents identically by comparison to their chosen comparators. However, the principal point made on behalf of the school is that there is a difference between the contractual arrangements of the claimants and their chosen comparators and that this is a relevant feature. The school contends that the appropriate comparator should be a full time privately paid teacher. Reference was made in that regard to two members of staff employed by the school who are permanent full time privately paid teachers. It was submitted that the claimants had been treated equally and no less favourable than those employees or any other privately paid teacher paid by the school.
Although it was accepted by the school that the claimants are entitled to choose their comparator, it was submitted that they could not be disingenuous in their choice of comparator. The context in which the comparator was employed had to be considered. Indeed it was suggested that it might be appropriate to consider other teachers in a similar employment relationship i.e. someone from within the private sector not the State sector. Reference was made to the decision of the Supreme Court in the case of National University of Ireland v. Ahearn [2005] 2 IR 577. That was a case that considered the provisions of s. 2(3) of the Anti-Discrimination (Equal Pay) Act 1974. An employee under the provisions of that legislation was entitled to compare themselves to another employee in seeking to establish that they were being paid unequal pay for like work. McCracken J. at p. 583 of the judgment in that case commented:-
“The question at issue here is whether the differing rates of remuneration are based on the grounds of sex or whether there are other reasons for the differential. This involves a different approach to the position of the comparators, and in particular of the context in which they were employed. I accept the arguments on behalf of the applicant that for this purpose the Labour Court ought to have looked at the position of the comparators, not only in isolation, but also in the context of the other persons in the same grade who had not been chosen as comparators, namely the remaining switchboard operators.”
Therefore it was submitted that one had to consider the context in which the chosen comparator was employed not in isolation but also in the context of other teachers on the staff who where not chosen as comparators namely, the other privately paid teachers. In this context, particular emphasis was placed by the school on the definition of employer within the meaning of the Protection of Employees (Part Time Work) Act 2001, which is set out above and in particular that part of the definition which states “the person who under a contract from his employment referred to in para. (b) of the definition of contract of employment” is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the individual’s employer”. It was suggested therefore that having regard to the definition of employer in the 2001 Act as set out above that the chosen comparator was not even employed by the same employer as the claimants. In emphasising this particular point, it was noted that the school has no hand, act or part in the negotiations between the teachers or their union and the Department. Criticism of the decision of the Labour Court was based on the fact that the Labour Court allowed the claimants to compare their contract with the school with the contract agreed between two separate parties, namely, the chosen comparators and the Department of Education and Science. Reference in this context was made to a decision of the Employment Appeals Tribunal (Sullivan v Department of Education 1998 E.L.R. 217) in relation to a claim in respect of an alleged unlawful deduction within the meaning of the Payment of Wages Act 1991. It was found in the particular case that there were sufficiently close ties and control exercised by the Department of Education in relation to individual teachers and that therefore the Department was the employer for the purpose of the Payment of Wages Act 1991. On that basis it was argued that the Department could be deemed to be the employer in this context. It was pointed out that the Department can determine the conditions applicable to State paid teachers without any input from the school.
Reference was also made to the decision of the High Court in the case of Wilton v. Irish Steel [1999] E.L.R. 1. That was an equal pay claim. The plaintiff in that case took over the duties of her chosen comparator at a salary of £11,000. Her chosen comparator, Mr. Clarke, had been earning £14,000 when he was in the defendant’s employ. The plaintiff claimed that she was entitled to the same pay on the grounds that she was doing like work and that the only distinction between them was one of sex. An equality officer recommended that the plaintiff was not entitled to the same rate of pay as her comparator because the different rates paid could be justified on grounds other than sex. That recommendation was affirmed by the Labour Court. The equality officer had in the course of reaching a decision made detailed comparison with another individual who had taken on responsibilities similar to those of the plaintiff at the same time and was also paid less than the comparator. It was held by O’Sullivan J. in dismissing the appeal that the Labour Court had relied on the recommendations of the equality officer and had found that there were grounds other than sex which justified the difference in pay which could be “adequately identified”. It was also held that the plaintiff was entitled to choose her comparator and having done so, the equality officer was obliged to make a comparison with that person. Accordingly, if the recommendation showed that the equality officer had not compared the plaintiff with her comparator but with another, then an error of law would have occurred and the matter would have to be sent back to the equality officer. It is clear from that decision, as both parties accept, that a claimant is entitled to choose their own comparator but it is also possible in appropriate cases to conduct an analysis not only of the chosen comparator but also of others not chosen by a claimant as the comparator.
A further authority opened in relation to this particular issue was the case of Minister for Finance v. Una McArdle [2007] 18 E.L.R. 165 a decision of the High Court (Laffoy J.). That case related to a person employed as a lab technician with the State Laboratory on a fixed term contract of one year. It was found by Laffoy J. in refusing the reliefs sought by the Minister for Finance that “the defendant was treated less favourably than her chosen comparator in relation to eligibility for the vacancy and that the difference in treatment was not objectively justified. The defendant was entitled to rely on an established civil servant as a comparator as well as the same conditions of employment as the comparator including pension entitlements and access to a career break but excluding tenure as an established Civil servant.”
In the course of her judgment in that case, Laffoy J. at p. 8 of 14 stated:-
“The Labour Court summarised the combined effect of sub-ss. (1) and (2) of s. 5 as being that a comparable permanent employee for the purposes of the Act the permanent employee employed by the same employer as the complainant, who is engaged in like work with the complainant. The Labour Court followed the decision of this Court (O’Sullivan J.) in Wilton v. Steel Company of Ireland [1999] E.L.R. 1, where it was held that, for the purposes of the Anti Discrimination (Pay) Act, 1974, an employee is entitled to choose his or her comparator. Apropos of the position of the defendant, the Labour Court stated that it was accepted that she was engaged at all material times in doing the same job as permanent civil servants who were designated as established, and it was also accepted that there were no other civil servants employed by the plaintiff engaged in like work with her, who were designated unestablished. The Labour Court found that the defendant and a number of established civil servants performed the same work under the same or similar conditions and each was interchangeable with the other in relation to work. Therefore, the Labour Court found that the established civil servants were comparable permanent employees in relation to the defendant within the meaning of s. 5. On that basis, the Labour Court concluded that the defendant, as a fixed-term employee, was entitled to the same conditions of employment as her nominated comparators who were established civil servants (except, of course, in relation to the duration of her contract).
In this Court, counsel for the plaintiff did not dispute that the defendant was entitled to choose her comparator, but it was submitted that she had to choose a comparator for the purposes of the Act. He submitted that the difference in treatment between the defendant and her chosen comparator of which she complained was not due to her fixed-term status, but to her status as an unestablished civil servant. It was submitted that the discrimination of which she complained was not within the ambit of the Act. . . .
Counsel for the defendant submitted that the Labour Court was correct in holding that she was entitled to select as a comparator an established civil servant working in the State Laboratory. In relation to the application of s. 5 to her, para. (1)(a) was complied with, in that she and her comparator had a common employer and the Labour Court had found as a fact, and there was no appeal against the finding, that she complied with para. (a) of subs. (2). It was submitted that in the Act comparability is defined not by reference to status but by reference to having the same employer and being engaged in like work. Therefore, it was submitted that the plaintiff’s contention that the Labour Court fell into error was misconceived.
I can see no error of law in the conclusion of the Labour Court that an established civil servant in the State Laboratory, who was engaged in like work with the defendant was a ‘comparable permanent employee’ for the purposes of s. 6 because, on the basis of the unchallenged findings of fact made by the Labour Court, such person fulfilled the criteria set out in s. 5 for a comparable permanent employee vis-à-vis the defendant as a fixed-term employee.”
Thus it was argued on behalf of the school relying on the above decision that the chosen comparator does not have the same employer. Indeed it was added that in the case of Sullivan v. The Department of Education referred to above, it is of significance that it was the department and not the relevant board of management that was the defendant in those proceedings. Thus a significant part of the school’s arguments are based on the contention that the appropriate employer in this case is the Department and not the school. In support of these arguments reference was also made to two decisions of Rights Commissioners in the cases of Mannion and Jacques and Keating v. Scoil Áine and the case of Noone v. St. Mary’s Holy Faith Secondary School Killester. In the first of those cases the Rights Commissioner found that there were two separate contracts in existence, one between the school and the claimant funded by the Department and the other which was privately funded between the school and each of the claimants outside the control of the funding of the Department. In other words the Rights Commissioner had regard to the different funding arrangements and contractual arrangements between the claimants and the school. In the second of those cases, that of Imelda Noone, the Rights Commissioner rejected a claim for pro rata pay and conditions in respect of the claimant’s Department paid incremental colleagues and therefore found that the claimant was not comparable to the Departmental paid incremental teachers on the respondent staff.
In support of their arguments on this point, reference was made on behalf of the school to a number of factual matters which it was contended showed significant differences between the claimants and their chosen comparators.
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Decision
The Appropriate Comparator
The arguments on this point centred on the decision in the case of O’Keeffe v. Hickey, the provisions of s. 24 of the Education Act 1998 and the provisions of s. 3(1) of the Protection of Employees (Part Time Work) Act 2001 and s. 2(1) of the Protection of Employees (Fixed Term Work) Act 2003, which define employers respectively as follows:-
“Employer” means, in relation to an employee, the person with whom the employee has entered into or for whom the employee works under (or, where the employment is ceased, entered into or worked under) a contract of employment subject to the qualification that the person who under a contract of employment referred to in paragraph (b) of the definition of “contract of employment” is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the individuals employer” and
“Employer” means in relation to an employee, the person with whom the employee has entered into or for whom the employee works under (or where the employee has ceased, entered into or worked under), a contract of employment.”
It can be seen that there is a difference between the definitions of employer contained in the two Acts. Essentially however, an employer is the person with whom the employee has entered into or for whom the employee works under a contract of employment.
The provisions of s. 24 of the Act apply to schools which are fully State funded and schools which are private schools and partly funded by the State. Section 24(1) provides for the appointment of teachers and staff of a school by the Board of Management. The provisions of s. 24 go on to deal with the number and qualifications of teachers and staff of a school to be paid from monies provided by the Oireachtas and sets out various matters in that regard. It is clear from the terms of the statute that the terms and conditions of employment and other staff of a school appointed by a Board and who are to be paid from monies provided by the Oireachtas, shall be determined by the Minister with the concurrence of the Minister for Finance. Section 24(6) provides as follows:-
“Where all or part of the remuneration and superannuation of teachers and other staff of a school is paid or is to be paid from monies provided by the Oireachtas, such remuneration or superannuation shall be determined from time to time by the Minister, with the concurrence of the Minister for Finance.”
There are some observations which I think it is necessary to make in relation to those provisions. The first point to note as I have already said is that they apply to all schools, private and State schools. It is implicit, for example, in s. 24(6) that not all of the teachers in a school may be paid from monies provided by the Oireachtas. It is also clear that the terms and conditions of employment and the remuneration and superannuation of teachers paid from monies provided by the Oireachtas are matters which will be determined by the Minister. In other words, the Minister determines the terms and conditions of employment of State paid teachers and the Minister determines the remuneration and superannuation of the State paid teachers. I think it is also clear from the provisions of s. 24 that the employer of teachers is the Board of Management. It is the Board of Management of the school that appoints teachers. It is also clear from the provisions of the Act, and in particular s. 24(2), that the numbers and qualifications of teachers paid from monies provided by the Oireachtas is subject to the approval of the Minister. Nevertheless, all teachers are appointed by the Board of Management.
Counsel on behalf of the claimants in this case laid particular emphasis on the decision in the case of O’Keeffe v. Hickey as referred to previously. I have already referred to a number of passages from that judgment which deal with the issue of vicarious liability and which outlined and described in some detail the nature of the relationship between the Minister, teachers and a school. It is undeniably a feature of this case that the contractual arrangements between the claimants and the school, and the chosen comparators and the school are different. The State through the provisions of s. 24 controls key aspects of the contract of employment, namely terms and conditions and remuneration and superannuation of State funded teachers. The school has no input into the contract of employment of a State funded teacher and has no control over the significant terms of such contract of employment. On the other hand, the school does have control over those aspects of the contract of employment as between the claimants and the school. If the school in this case had control over the fixing of the terms and conditions of employment of all the teachers in the school, including the determination of the remuneration and superannuation, there could be no objection to the chosen comparators.
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I have considered the authorities that were opened to me in the course of this hearing. It is interesting to note in the case of Sullivan v.Department of Education, a case before the Employment Appeals Tribunal, that there the respondent in those proceedings was the Department of Education although the claimant was employed by a school. The issue in that case related to the recognition of a degree allowance and she was a Department paid teacher. None of the cases opened to me in the course of the hearing involve a situation where the contract of employment between the employer and the employee is one in which the employer in respect of the chosen comparators has no hand, act or part in fixing important terms of the contract i.e. terms and conditions, including remuneration and superannuation.
In reaching its conclusions on this issue, the Labour Court found:-
“In the instant case, there is no dispute as to like work as between the claimant and his chosen comparator. On the above criteria as set out by Laffoy J., in the McArdle case, although there are some full-time privately funded teachers in the school, the claimant is entitled to choose a full-time department funded teacher as a comparator.”
As can be seen from that particular passage, the Labour Court referred to the decision in the case of Minister for Finance v. McArdle [2007] 18 E.L.R. 165. I now want to look at that decision in more detail. The facts of that case were that the defendant commenced employment in the State laboratory in her capacity as a laboratory technician in March, 2000 on a fixed contract for one year. The purpose of her employment was to assist in the analysis of samples of drivers suspected to have been under the influence of drugs. Her contract was renewed on an annual basis thereafter until 21st March, 2004. at that point, as was accepted before a Rights Commissioner, her contract was not managed appropriately. It was not until May 31st, 2005, that she was furnished with the renewed contract which, in the language of the Labour Court, purported to be in respect of the period from March 22, 2004 until March, 21, 2005. As was recorded in the determination of the Labour Court the plaintiff (the Minister for Finance) accepted that the contract furnished on 21st May, 2004, did not comply with the requirements of s. 8 of the Act and that the defendant became entitled to a contract of indefinite duration with effect from 22nd March, 2004. It appears from the decision that the defendant was governed by the same terms of employment as other permanent employees in respect of “annual leave, sick leave, pay, hours of attendance, etc”. The matters at issue, and which were the subject of complaint related to pension, access to career breaks and tenure.
Having set out the various submissions in relation to the entitlement of the employee to choose his or her comparator, it was noted in the course of the judgment as follows:-
“The Labour Court stated that it was accepted that she was engaged at all material times in doing the same job as permanent civil servants who were designated as established, and it was also accepted that there were no other civil servants employed by the plaintiff engaged in like work with her, who were designated unestablished. The Labour Court found that the defendant and a number of established civil servants performed the same work under the same or similar conditions and each was interchangeable with the other in relation to work. Therefore, the Labour Court found that the established civil servants were comparable, permanent employees in relation to the defendant within the meaning of section 5. On that basis, the Labour Court concluded that the defendant, as a fixed term employee was entitled to the same conditions of employment as her nominated comparators who were established civil servants (except, of course, in relation to the duration of her contract).
In this Court counsel for the plaintiff did not dispute that the defendant was entitled to choose her comparator, but it was submitted that she had to choose a comparator for the purposes of the Act. He submitted that the difference in treatment between the defendant and her chosen comparator of which she complained was not due to her fixed term status, but to her status as an unestablished civil servant. It was submitted that the discrimination of which she complained was not within the ambit of the Act.
…
Counsel for the defendant submitted that the Labour Court was correct in holding that she was entitled to select as a comparator an established civil servant working the State Laboratory. In relation to the application of s. 5 to her, para. 1(a) was complied with, in that she and her comparator had a common employer and the Labour Court had found as a fact, and there was no appeal against the finding, that she complied with para. (a) of subs. (2). It was submitted that in the Act comparability is defined not by reference to status but by reference to having the same employer and being engaged in like work. Therefore, it was submitted that the plaintiff’s contention that the Labour Court fell into error was misconceived.”
In relation to those submissions, Laffoy J. went on to state:-
“I can see no error of law in the conclusion of the Labour Court that an established civil servant in the State Laboratory, who was engaged in like work with the defendant was a “comparable, permanent employee” for the purposes of s. 6 because, on the basis of the unchallenged findings of fact made by the Labour Court, such person fulfilled the criteria set out in s. 5 for a comparable permanent employee vis-a-vis the defendant as a fixed term employee.”
The provisions in s. 7 of the Protection of Employees (Part Time Work) Act 2001, mirror the provisions of s. 5 of the Protection of Employees (Fixed Term Work) Act 2003. Accordingly, an employee is a comparable permanent employee if the employee and the relevant part-time employee are employed by the same employer and one of the conditions referred to in subs (3) of s. 7 is satisfied in respect of those employees namely,
“(a) Both of the employees concerned perform the same work under the same or similar conditions or each is interchangeable with the other in relation to the work,
(b) The work performed by one of the employees concerned is of the same or a similar nature to that performed by the other and any differences between the work performed and/or the conditions under which it is performed by each, either are of small importance in relation to the work of whole or occur with such irregularity as not to be significant, and
(c) The work performed by the relevant part-time employee is equal or greater in value or the work performed by the other employee concerned, having regard to such matters as skill, physical or mental requirements, responsibility and working conditions.”
There is no doubt that the school is the employer of the claimants. Bearing in mind the decision in O’Keeffe v Hickey, it appears that the school is also the employer of the chosen comparators for the purpose of issues of vicarious liability. That decision highlights the unusual tripartite relationship between the Department funded teacher, the Department and the school. However, the provisions of s. 24 of the Education Act 1998 are also of importance. S. 24 (3) makes it clear that the task of appointing teachers funded by the State falls on the board of management of a school. S. 24 (5) of the Act makes it clear that the terms and conditions of teachers funded by the State shall be determined by the Minister, with the concurrence of the Minister for Finance.
In a private school there will be a cohort of Department funded teachers and usually there will also be a cohort of privately paid teachers. The paymaster for each cohort is different. In the case of O’Keeffe v Hickey to which I have referred above, the unusual nature of the tri-partite agreement was described; the Board of management was found to be the employer of the teacher concerned in that case which involved the question of vicarious liability although the teacher was paid by the Department. There is no tri-partite arrangement in the case of the claimants. I have already referred to the case of Sullivan v Department of Education, a decision of the Employment Appeals Tribunal. It was observed in the course of argument in that case which involved a teacher, that the Department, as the paymaster of the teacher, was the respondent. It was argued by the Department in that case that the Department was not the employer but the “paying agent”. The tribunal in that case stated in relation to that argument:
“The tribunal does not accept that the Department is not the employer. The board of management or other managing authority of a school may well have a role in the day-to-day running of the school and indeed in engaging teachers, interviewing etc. The reality is that such boards of management or other managing authority in relation to state schools have little or no role when it comes to the question of remuneration of teachers, which is a most important element and aspect of the relationship between teachers and their employers. The tribunal considers that the role of the Department of education goes beyond that of “paying agent”. The Department is empowered to negotiate teachers salaries and qualification allowances and makes policy decisions in relation to the type of degree to which Ms Sullivan and other teachers have studied for in relation to the starters of such degree. As regards qualification allowances. The Department has a role in the whole area of maintaining appropriate pupil/teacher ratio in directly and regulates the number of teachers in any particular school as in the scheme of redeployment. If ultimately redeployment in the case of any particular teacher it cannot be settled by agreement, the Minister is empowered to withhold the grant of a sum of money which would go towards paying that particular teacher’s salary and effectively has the power to deprive a particular teacher of his or her salary.
In all of those circumstances, the tribunal does not accept that the Department is simply a “paying agent”, which simply pays out the money at the request of the State School concerned. In relation to the question of the hours worked for which a teacher qualifies for his or her monthly salary, the school principal has a role in terms of certifying the hours worked. However in respect of all teachers, when it comes to the question of qualification allowances, these aspects of the teacher’s salary involve no role for the school and are something which go to the teachers particular qualification and are a constant. In fact the school principal describes him or herself as “employer” on the monthly certification form at the form is not conclusive.”
The decision in the case of Sullivan v Department of Education highlights the different and complicated employment arrangements as between Department funded teachers and privately funded teachers. One wonders what relief, if any, could have been obtained by the claimant in the case of Sullivan v Department of Education had she pursued her case against the school concerned as opposed to the Department. It is hard to see how the Tribunal in that case could have come to any other conclusion. The recognition of qualifications and the payment of a qualification allowance was always a matter to be dealt with by the Department of Education, because it set the criteria for the payment of that allowance. That case provides one small example of the different contractual arrangements that exist between Department funded teachers and the school in which they are employed and privately funded teachers and the school in which they are employed.
Although the chosen comparators appear to come within the definition of comparable full-time employees as defined in the legislation, I have come to the conclusion that because of the fact that the Minister determines the terms and conditions of the Department funded teacher and the school determines the terms and conditions of the privately paid teachers, the Labour Court has fallen into error in finding that the claimants were entitled to choose a full time Department funded teacher as a comparator. The school has no hand, act or part in determining the salary and other terms and conditions of the Department funded teacher. In determining the employer for the purpose of the legislation in relation to agency workers, the legislation expressly provides that the party paying the worker is, for the purposes of the legislation, the employer. I think the school is in an analogous position. I do not accept that the chosen comparators have the same type of employment contract or relationship as the claimants with the school. To that extent, it seems to me that the Department has to be viewed as the employer of the chosen comparators for the purpose of the legislation.
Objective justification
I want to make some very brief observations on this issue. The school in this case has argued that the different contractual and/or employment status of the chosen comparators as compared to the claimants constitutes objective justification for a less favourable treatment which has occurred as between the claimants and their chosen comparators. The Labour Court in the course of its determination stated that “the objective justification relied upon by the school appears to be that the School cannot afford to pay the cost associated with affording the claimants equal treatment.” There is an abundance of authority to which reference has already been made to the effect that the issue of cost cannot justify unequal treatment. I have already referred to the decision in Hill & Stapleton v. Revenue Commissioners & Department of Finance and to the decision of the ECJ in Jorgensen above. It seems to me to be very clear and obvious that the purpose of the Directive and the legislation transposing the Directive into Irish law would be defeated if cost alone was accepted as a defence because as pointed out by the Labour Court “in every case in which it is necessary to implement principles of equality there is a cost to the employer”.
As I have already mentioned, part of the argument in this case centred on the omission of the word “solely” from the legislation and in particular from the provisions of section 12 and section 7 referred to above. An argument was made on the behalf of the school to the effect that the omission of that word meant that the directors had been improperly transposed into Irish law. I do not accept that argument on the part of the school and I accept the arguments of counsel on behalf of the claimants in that regard. It is important to remember the purpose of the framework agreement, which has been put into effect by the directive and implemented by the legislation referred to in these proceedings. If one considers Council directive 1999/74/EC in relation to fixed term work it will be seen that its purpose is stated to be to:
“(a) improve the quality of fixed term work by ensuring the application of the principle of non-discrimination;
(b) establish a framework to prevent abuse arising from the use of successive fixed term employment contracts or relationships.”
In the part time work directive it was stated as follows:
“Whereas the signatory parties wished to conclude a framework agreement on part-time work setting out the general principles and minimum requirements of part-time working; whereas they have demonstrated their desire to establish a general framework for eliminating discrimination against part-time workers and to group and to contribute to developing the potential for part-time work on a basis which is acceptable for employers and workers alike.”
In other words, the purpose of the Directives and the legislation implementing the Directives is to prevent discrimination against workers by reason of their status as fixed term workers or part time workers.
I accept that the test to be applied in considering a defence of objective justification is that set out in the case of Del Cerro Alonso referred to above, namely, that the unequal treatment responds to a genuine need; is appropriate for achieving the objective pursued and is necessary for that purpose. However, in the light of the finding as to the chosen comparator, it is not necessary to further address the arguments in this area.
Conclusion
As I have found that the Labour Court fell into error in relation to the selection of the chosen comparators, I will hear further from the parties as to the effect of that finding.”
DUBLIN INSTITUTE OF TECHNOLOGY v W.
DIT v NEALON
In the Matter of An Appeal Pursuant to Section 46 of the Workplace Relations Act 2015 and In the Matter of the Protection of Employees (Fixed-Term Work) Act 2003;
Maurice Power v Health Service Executive
2021/94
Supreme Court [Approved]
31 March 2022
unreported
[2022] IESC 17
Mr. Justice Woulfe
March 31, 2022
JUDGMENT
Introduction
1. The legal backdrop to this appeal is that the Member States of the European Union demonstrated their desire in 1999 to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships. The Council of the European Union adopted Directive 1999/70/EC (“the Directive”) to put into effect the framework agreement on fixed-term contracts concluded on the 18th March, 1999, between the general cross-industry organisations representative of management and labour, as annexed thereto (“the Framework Agreement”).
2. To prevent abuse arising from the use of successive fixed-term employment contracts or relationships, the Member States agreed to introduce, in a manner which took account of the needs of specific sectors and/or categories of workers, one or more of the following measures:
(a) objective reasons justifying the renewal of such contracts or relationships;
(b) the maximum total duration of successive fixed-term employment contracts or relationships;
(c) the number of renewals of such contracts or relationships.
3. The Directive was transposed into Irish law by the Protection of Employees (Fixed-Term Work) Act, 2003 (“the Act”). The provision of the Act which primarily governs the issues in these proceedings is s.9(2), which provides as follows:
“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 contract shall not exceed four years.”
Section 9(3) deals with a purported contravention of subs. (1) and provides:
“Where any term of a fixed-term contract purports to contravene subsection (1)…that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.”
The provisions of the Act will be considered in more detail below.
4. This appeal concerns a decision of the High Court in an appeal on a point of law against a determination of the Labour Court, pursuant to s.46 of the Workplace Relations Act 2015. Simons J. held that the Labour Court had erred in law in its interpretation of the definitions of “fixed-term employee” and “contract of employment”, and that the respondent was a fixed-term employee within the meaning of the Act, and he remitted the matter to the Labour Court for reconsideration.
5. This Court granted leave to the appellant to appeal by a determination dated the 24th September, 2021: see [2021] IESCDET 110.
Background
6. The factual background leading up to these proceedings is as follows. The respondent was employed by the appellant as a permanent pensionable employee since July, 1999. He was appointed as the Chief Financial Officer (“CFO”) of the Saolta University Healthcare Group (“Saolta”), a unit of the appellant, in January 2012. His written contract of employment included terms and conditions regarding his job title (with the main duties of his position set out in an attached job specification), remuneration, superannuation etc. Clause 25 provided that his terms and conditions “may be revised in accordance with agreements reached between the union representing your grade and the Health Service Executive”.
7. It is common case that the respondent, at the invitation of the appellant, took up the role of Interim Group Chief Executive Officer (“Interim CEO”) of Saolta on the 5th October, 2014. On the 20th November, 2014, the appellant wrote to the respondent confirming his appointment on a temporary basis until the 31st March, 2015, or until the role was filled on a permanent basis, whichever occurred sooner. He was also advised in that letter that when his temporary role as Interim CEO ceased, he would revert to his “substantive terms and conditions as a permanent employee of the Health Service Executive”.
8. The deadline of the 31st March, 2015, passed without any express extension, and the respondent continued to perform his job as CEO. The respondent was then advised by letter dated the 7th May, 2015, that his appointment was extended until the 31st December, 2016. He was subsequently advised in December 2016 that his appointment as Interim CEO was being extended until the 31st December, 2017. On this occasion the respondent signed written terms and conditions of appointment for the renewal of the fixed-term contract. As regards tenure, clause 3 provided that the tenure of the appointment as Interim CEO was one year, but at the end of that period the Director General might extend this appointment for a further period. If not extended, the respondent would revert to his substantive permanent position on the terms and conditions of employment applicable to that position, or to an alternative permanent position at the same grade.
9. The respondent was advised again in late 2017 by the appellant that his appointment was extended to the end of 2018, and he again signed written terms and conditions similar to those applicable for 2017. In September, 2018 the post of Group CEO for a five-year term was advertised in a competition administered by the Public Appointments Service on behalf of the appellant. The respondent had acquired four years’ continuous service in his post as Interim CEO by on or about the 4th October, 2018.
10. The National Director of Human Resources of the appellant wrote to the respondent on the 14th November, 2018. The letter was notably headed up “Renewal of Fixed-Term Contract CEO Saolta University Health Care Group”, and the relevant part of the letter reads as follows:
“As you are aware, the Public Appointments Service (PAS) is currently undertaking a recruitment competition to fill a number of Hospital Group Chief Executive Officer (CEO) positions, including the CEO position which you currently hold in the Saolta University Health Care Group. Your fixed-term appointment in this role is due to expire on the 30th December, 2018, which is prior to the expected completion date of the aforementioned PAS competition.
I am therefore writing to you to extend your employment with the Health Service Executive as CEO of Saolta University Health Care Group. Your employment under the terms of this employment commences on the 31st December, 2018 on a fixed-term whole-time basis for the purpose of providing cover for the duration of time that it takes PAS to complete the section process and the successful candidate taking up the CEO position in Saolta University Health Care Group. Your employment under the terms of this contract will terminate when the successful PAS appointees take up the CEO post.
Upon the termination of this contract, you shall revert to your substantive permanent position on the terms and conditions of employment applicable to that position or an alternative permanent position at the same grade.”
11. Similar language was used by another official of the appellant in an internal email dated the 11th December, 2018. In that email the HR Officer, National Acute Operations, referred to the contract for the Interim CEO post having been extended on a “fixed-term whole-time basis”, and also referred to how the “employment under the terms of the fixed-term contract” would terminate when the successful PAS appointee took up the CEO post.
12. The respondent wrote to the appellant by email dated the 14th January, 2019, and asserted an entitlement to a contract of indefinite duration in respect of the role of CEO. The appellant replied by letter dated the 21st January, 2019, and stated as follows:
“The Protection of Employees (Fixed-Term Work) Act, 2003 does not apply to you because you are not a fixed-term employee. You were informed in writing when you were appointed to the position of Chief Executive Officer, Saolta Hospital Group on a fixed-term basis, and upon subsequent renewals, that if your contract was not extended, you shall revert to your substantive permanent position on the terms and conditions of employment applicable to that position or to an alternative permanent position at the same grade.
As the position has been clear at all times, the question of attaining a “contract of indefinite duration” by operation of law does not arise.”
13. The respondent was an unsuccessful candidate in the recruitment competition for the CEO position, and he resumed his position as CFO in Saolta in September, 2019.
14. The respondent presented a complaint to the Workplace Relations Commission in February, 2019, seeking adjudication of his complaint that the appellant had contravened the Act by failing to offer him a contract of indefinite duration as CEO of Saolta, despite his having accrued the four years of continuous service required to become entitled to such a contract on or about the 4th October, 2018.
15. The matter ultimately came before the Labour Court, as an appeal of an adjudication officer’s decision that the respondent’s complaint could not succeed as he was not a fixed-term employee within the meaning of the Act. In its determination dated the 5th August, 2020, the Labour Court dealt with the question of the applicability of the Act as a threshold issue. The Labour Court concluded that the respondent did not have locus standi (standing) to pursue his claim in circumstances where he is a permanent employee, employed on a contract of employment of indefinite duration by the appellant.
16. It became unnecessary, therefore, for the Labour Court to consider the respondent’s claim any further. In particular, the Labour Court’s determination did not address the question of whether there were objective grounds justifying the renewal of the fixed-term contract for an aggregate duration in excess of four years, pursuant to s.9(4) of the Act.
The High Court Proceedings
17. As stated earlier, the respondent appealed the decision of the Labour Court to the High Court on a point of law pursuant to s.46 of the Workplace Relations Act 2015, on the grounds that the Labour Court erred in law in concluding that he did not have locus standi to maintain a claim under the 2003 Act.
18. In his judgment, Simons J. considered the concept of a “fixed-term employee” which is defined under s.2 of the Act as meaning:
“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…”
19. The trial judge noted that the parties were in disagreement as to the meaning to be attributed to the phrase “the end of the contract of employment concerned”. On the appellant’s analysis, it was only when the employment relationship itself will be brought to an end on the occurrence of the relevant contingency that a fixed-term contract can be said to exist. This reflected the approach taken by the Labour Court, which held that a complainant’s employment must be coterminous with the expiry of a fixed-term or fixed-purpose contract of employment. An existing employee, who reverts to their substantive grade and whose employment within the same organisation continues at the end of a fixed-term assignment, is said not to qualify as a “fixed-term employee”.
20. Simons J. stated that he could not agree with the foregoing analysis. When the definition under s.2 speaks of the end of “the contract of employment concerned”, he felt that it is referring to the end of a contract of service. This reference occurs in the context of legislation the very purpose of which is to regulate successive contracts of service between the same employer and employee. It is inherent in the scheme of the legislation that an ongoing employment relationship can be regulated by a series of consecutive contracts of service. Section 9 of the Act expressly envisages that an employee may provide continuous service under successive contracts of employment, i.e. successive contracts of service.
21. The trial judge held that it was incorrect, therefore, to say that a “contract of employment”, as defined under s.2 of the Act, should be interpreted as meaning an enduring employment relationship. The two things were not necessarily coterminous. An individual may be employed by the same organisation in a series of different posts, each subject to its own terms and conditions as specified in a consecutive series of contracts of employment. Such an individual will nevertheless have had continuous service with the employer throughout the overall period, albeit under a number of contracts.
22. Put otherwise, the termination of one contract of employment and the commencement of another does not affect continuity of service. An employment relationship is not synonymous with any particular contract of employment. On the agreed facts of the present case, for example, a further contract of employment was entered into between the parties in January, 2012 upon the respondent’s promotion to the position of CFO. This was so notwithstanding there was already a longstanding employment relationship between the parties, with the respondent having been employed by the appellant in other roles since as long ago as 1999.
23. Simons J. felt that it was instructive to consider the attitude of the appellant at the time of renewal of the respondent’s fixed-term contracts, and he looked at the letter dated the 14th November, 2018, as set out at para. 10 above. He held that it was evident from this letter that, at this point in time at least, the appellant understood the respondent to be employed under successive contracts of employment. The appellant also understood that these contracts of employment would terminate, and that the respondent’s employment under the terms of these contracts of employment would terminate upon his reverting to his substantive permanent position. In his view the stance adopted by the appellant for the purposes of these proceedings was entirely different. It was now said by the appellant that there was only ever one ongoing contract of employment between the parties, and it seemed to him that no proper explanation had been provided for this volte face.
24. In the light of his interpretation of the relevant provisions of the Act, Simons J. held that the Labour Court had mistakenly concluded that the fact that each of the successive contracts entered into between the respondent and the appellant from October, 2014 onwards envisaged that he would revert to his role of CFO was fatal to his claim for redress under the Act. The Labour Court appeared to have thought – mistakenly – that the contract of employment remained unchanged throughout. The employment relationship between the parties was, instead, in the view of Simons J. to be properly characterised as involving a consecutive series of contracts of employment.
25. The trial judge held that the respondent’s employment during the period from October, 2014 to September, 2019 was pursuant to five successive contracts of employment. In each instance, the end of the contract of employment concerned was determined by an objective condition, i.e., the arrival of a specified end date and/or the occurrence of a specific event, namely the appointment of a Group CEO on a permanent basis.
26. Simons J. felt that the decision of the Labour Court did not engage meaningfully with the question of the characterisation of the five contracts of employment entered into between the parties for the relevant period. Instead, the decision placed great emphasis on the definition of “permanent employee” under s.2 of the Act. It was said that the contention that the respondent is a “fixed-term employee” was irreconcilable with his having accepted, for the purpose of the appeal to the Labour Court, that he had been employed as CFO as “a permanent employee and consequently employed on a contract of employment of indefinite duration”.
27. The trial judge was of the view that the reliance placed by the Labour Court upon the definition of “permanent employee” was entirely misplaced. The scope of the Act was delimited by the definition of “fixed-term employee”. The term “permanent employee” was defined exclusively by reference to the definition of “fixed-term employee”. A “permanent employee” is defined negatively as an employee who is not a fixed-term employee. That term was defined for the purpose of identifying a comparator for the application of the principle of non-discrimination under ss.5 and 6 of the Act. The term “permanent employee” was thus a term of art, i.e. it bears a specific meaning for the purposes of the Act. This meaning is not the same as its everyday meaning. For example, the statutory definition includes employees in initial vocational training relationships or apprenticeship schemes. These are not categories of workers which would be described colloquially as being permanent employees.
28. Simons J. held that the Labour Court had approached the matter the wrong way around by seeking to circumscribe the definition of “fixed-term employee” by reference to the subsidiary term “permanent employee”. The Labour Court appeared to have started from the premise that because the respondent was in a permanent employment relationship with the appellant, he should be regarded as a “permanent employee”, and, as such, could not be a “fixed-term employee”. This reasoning was erroneous in that it not only ignored the primacy of the definition of “fixed-term employee”, it also purported to apply a colloquial meaning to the term of “permanent employee”.
29. The trial judge concluded that the correct approach was to apply the definition of “fixed-term employee” to the circumstances of the respondent’s employment as Interim CEO. For the reasons outlined earlier by him, the employment was as a “fixed-term employee”. Simons J. made an order setting aside the Labour Court’s determination and remitting the matter back to the Labour Court for reconsideration, having regard to the findings in his judgment, which would allow the Labour Court to consider whether the use of successive fixed-term contracts may have been objectively justified.
Submissions in this Appeal
Submissions of the Appellant
30. The appellant contends that the High Court erred in its analysis of the contractual relationship between the parties, and in concluding that the respondent had been employed pursuant to five separate contracts of employment in the period from October, 2014 to September, 2019. It is submitted that the Labour Court’s interpretation of the contractual relationship was preferable, in terms of their focus on the permanent employment relationship created and maintained by the contract of employment entered into by the parties prior to the respondent taking up an appointment on a fixed-term basis as Interim CEO, and under the terms of which contract he returned to the role of CFO in 2019.
31. The appellant refers to the principle of contractual interpretation whereby the objectively ascertained intention of the parties is paramount. Applying this approach, it is submitted that the correct interpretation of the agreement between the respondent and the appellant is not that he entered into five separate contracts of employment in the period from October, 2014 to September, 2019, but rather that those engagements (as Interim CEO) constituted an agreed variation of the 2012 contract of employment, in circumstances where that permanent contract was never terminated and continued to subsist at all relevant times. It should be noted that this “variation” argument is a new argument on the part of the appellant in this Court, not having been advanced in the Court below or in the Labour Court.
32. The appellant cites various authorities on the distinction between variation of contractual agreement and termination by agreement. Based on those authorities it is submitted that this Court should first ask whether the objectively construed intention of the parties was to terminate the previously existing contract entirely, or to vary its terms. If it is apparent that the parties intended to vary, rather than terminate the agreement, then it is not necessary to consider the degree of significance of change involved. A significant alteration to a contract – even a major or sweeping change – will not result in the termination of that existing contract, if it is objectively ascertained that the parties did not intend to terminate in the circumstances. If, however, the intention of the parties to terminate (or not) is incapable of being ascertained, then the degree of change will be considered. In that case a fundamental change which goes to the root of the contract will lead to the inference that it has been terminated.
33. It is argued that the objectively construed intention of the parties in this case points decisively to the continuation of the respondent’s 2012 contract of employment throughout the period in which he served as Interim CEO of Saolta. Nowhere was it stated, or agreed, between the parties at any time between 2014 and 2019 that the respondent’s 2012 contract of employment had been terminated. It is submitted that the respondent’s performance of the CEO role derived not from a series of new contracts of employment in the period from 2014 to 2019, but rather from the variation of his extant 2012 contract of employment. This conclusion is stated to derive inexorably from the undisputed fact that the respondent continued, at all times, to enjoy permanent status, as acknowledged in the documents relating to his temporary appointment as Interim CEO.
34. As regards the trial judge’s approach to the term “permanent employee” in the Act, it is submitted that he was mistaken in treating the term as a term of art. By adopting an excessively narrow and technical approach to the interpretation of the Act, it is argued that the trial judge reached a conclusion which did not conform with the intention of the Oireachtas. There is no necessity for a technical definition of the term, because its meaning is readily apparent having regard to the overall scheme of the Act and the object sought to be achieved, i.e. that employees who do not already have a permanent position should be given an opportunity to obtain a permanent position.
Submissions of the Respondent
35. The respondent argues that the appellant and the Labour Court have approached the critical issue of statutory interpretation, namely the meaning of a fixed-term employee, the wrong way around. They have started by taking a colloquial meaning of a permanent employee (namely, from their perspective, a worker with a permanent “employment relationship” with an employer), and then jumping to the proposition that the respondent is a “permanent employee” and therefore cannot be a fixed-term employee. It is submitted that this argument is plainly wrong. The Act defines a “permanent employee” as an employee who is not a fixed-term employee. Accordingly, the correct approach is to first ask whether or not the respondent was, at the relevant time, a fixed-term employee.
36. The legal position is that an employee works pursuant to a contract of employment, and one of the most fundamental terms of every contract of employment is the basic job description applicable to the post. It is submitted that the respondent’s job at all relevant times was as the CEO of Saolta. In legal terms, during the period of his contract as CEO, the respondent was not entitled to present at work and perform the duties of some fundamentally different job, such as the duties of CFO, his previous position.
37. The respondent points out that the appellant now seeks to focus on a new argument, that the respondent’s appointment as CEO was in truth no more than a “variation” to his previous contract as CFO. He argues that aside from the novelty of this argument (not having been advanced before), it is plainly wrong on many levels. It conflicts with the actual communications, letters and contracts issued to the respondent in respect of his role as CEO. None of these documents state that his appointment as CEO is as a variation to his contract as CFO. This new argument therefore does not reflect reality, nor does it reflect how the appellant had previously described the position. In addition, this argument conflicts with the terms of the respondent’s contract for his position as CFO.
38. As regards the “variation” argument now advanced by the appellant, the respondent submits that this argument has not featured in the dispute to date, even though it now appears to be the appellant’s primary argument, and it is argued that this variation argument cannot properly be said to be within the contours of this appeal.
39. The respondent refers to s.2 of the Act, where “contract of employment” is defined, and certain categories are excluded. The type of situation that arises in the respondent’s case is not excluded. The term “fixed-term employee” is defined. Two exceptions are provided for, but an employee in the respondent’s situation is not excluded. Section 17 of the Act is entitled “Exclusions and other Provisions”. Three types of employees are excluded, but again an employee in the respondent’s situation is not excluded.
40. The respondent submits that the natural and ordinary interpretation of the Act is consistent with the Directive. In this context, a national Court is under an obligation not to allow or permit the effectiveness and objectives of the Directive and the Framework Agreement to be undermined. The respondent refers to principles of EU law, whereby phrases in the Framework Agreement may not be defined in such a way as to undermine or jeopardise the attainment of the objectives of the Framework Agreement. It is submitted that a conclusion that the respondent is not a fixed-term employee would wholly undermine and largely negate the Directive. As such, it is submitted that such conclusion would in fact be contrary to EU law.
Decision
41. This appeal centres on the High Court’s interpretation and application of certain provisions of the Act, and in particular the interpretation and application of section 9. As set out above, s.9(3) provides that where any term of a fixed-term contract purports to contravene subs (2), that term shall have no effect and “the contract concerned” shall be deemed to be a contract of indefinite duration. Section 9(2), it may be recalled, provides in essence that where a fixed-term employee is employed by his employer on two or more continuous fixed-term contracts, the aggregate duration of such contracts shall not exceed four years, subject to subs. (4) regarding objective grounds justifying a renewal for a fixed-term.
42. The net question to be decided is whether the High Court was correct as to how these provisions apply to the respondent’s employment with the appellant as of the 4th October, 2018, having taken up the role of Interim CEO on the 5th October, 2014, and having had that role extended for a period in excess of four years. Was the High Court correct that during this period, and at the end of this period, the respondent was a “fixed-term employee” who was employed by the appellant on two or more continuous fixed-term contracts? If he was, then the aggregate duration of such contracts did exceed four years, and the appellant would have to establish objective grounds justifying the renewal of such a contract beyond four years, or else the respondent would become entitled to a contract of indefinite duration pursuant to s.9(3) of the Act.
43. The net question then comes back to the definition of “fixed-term employee” in s.2 of the Act. Between the 5th October, 2014 and the 4th October, 2018, was the respondent “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”?
44. As set out above, Simons J. held that the respondent’s employment as Interim CEO during the relevant period was as a “fixed-term employee” pursuant to a consecutive series of fixed-term contracts. In each case the end of the contract concerned was determined by an objective condition, such as arriving at a specific end date or the occurrence of a specific event, namely the appointment of a Group CEO on a permanent basis.
45. I am satisfied that Simons J. was correct in his approach to the construction of the Act and in arriving at the conclusions which he reached, for the following reasons.
46. Firstly, the construction of the words “fixed-term employee” must take place in the context of the respondent’s claim that there has been a contravention of s.9(2) of the Act. As a consequence, the references to “the contract concerned ” in s.9(3), and to “the end of the contract of employment concerned ” in the definition of “fixed-term employee” in s.2, appear to me to be of significance. These references appear to me to be consistent with the view adopted by Simons J. that an individual may be employed by the same organisation in a series of different posts, pursuant to a consecutive series of contracts of employment.
47. In my opinion the reference to “the contract concerned ” in s.9(3) of the Act relates to the contract operative at the relevant time, being the time that a series of two or more continuous fixed-term contracts has caused the aggregate duration of such contracts to exceed four years, i.e. the last fixed-term contract giving rise to that excessive aggregate duration.
48. In the present case it seems to me that the contractual documents suggest that the respondent was employed as Interim CEO during the relevant period pursuant to five successive contracts of employment. These contracts ran from the 5th October, 2014 to the 31st March, 2015; the 1st April, 2015 to the 31st December, 2016; the 1st January, 2017 to the 31st December, 2017; the 1st January, 2018 to the 30th December, 2018; and the 31st December, 2018 to September, 2019, the date of appointment of the new CEO. On this basis the respondent was on the face of it a fixed-term employee, as the end of each of the contracts of employment concerned was determined by an objective condition, such as arriving at a specific date or the occurrence of a specific event.
49. At para. 10 above, I refer to the letter dated the 14th November, 2018, written by the appellant’s National Director of Human Resources to the respondent headed “Renewal of Fixed-Term Contract” etc. It does appear to me to be significant that this very senior official of the appellant viewed the contractual relationship between the parties as of that date in terms of renewal of a fixed-term contract, in line with the ordinary meaning set out above.
50. In the course of the appeal to this Court, however, the appellant introduced a somewhat new argument. This was to the effect that the respondent was never a “fixed-term employee”, as the “contract of employment concerned” was, and remained at all times, his 2012 contract of employment as CFO as a permanent member of staff. This contract, it is argued, was merely varied by way of assigning him to other duties of CEO between 2014 and 2019, but it never came to an end by being determined by an objective condition. On the contrary, the reassignments to CEO duties always included a stipulation that at the end of same the respondent would revert to his substantive permanent position, which stipulation pointed to the continuing nature of his 2012 contract of employment, and not the ending of same.
51. While this new “variation” argument can be seen as a clever attempt to circumvent the 2003 Act, in my opinion it does not accord with the factual or legal reality of the situation which arose in the present case. The 2012 contract of employment was in respect of a particular role as CFO at a certain salary, while the temporary appointments were in respect of a different role as CEO at a higher salary. The appointments to this different role were not the same as merely reassigning a person holding a particular grade to new and separate duties appropriate to that grade, which reassignment might amount to a mere variation. Changing a person’s actual job is in a different sphere; as Kelly J. stated in Rafferty v Bus Eireann[1997] 2 IR 424 (at 442): “At common law an employee is not required to do a fundamentally different job from that contracted for.”
52. As regards the authorities on variation relied upon by the appellant, the case law suggests that the intention of the parties as to variation or termination of an existing agreement is to be objectively ascertained from all the relevant circumstances “where parties do not expressly agree the mechanism for a change in terms and conditions of employment”: per Slade J. in Potter v. North Cumbria Acute Hospitals NHS Trust[2009] IRLR 900 (at para. 72). In the present case, however, clause 25 of the respondent’s 2012 contract of employment provided that his terms and conditions “may be revised in accordance with agreements reached between the union representing your grade and the Health Service Executive”. There was no evidence in this case that the respondent’s terms and conditions were in fact revised in accordance with any such agreement.
53. As regards the stipulations that the respondent would revert to his substantive permanent position, or to an alternative permanent position at the same grade, if the temporary appointment was not extended, I agree with the respondent’s submission that this stipulation was a term of the successive fixed-term contracts, rather than an indication of the continuing nature of the 2012 contract. If the reversion had been triggered, it would have led to the revival of the 2012 contract or the commencement of a new contract on the same or similar but equivalent terms.
54. In the circumstances it seems to me that the 2012 contract of employment was either terminated, or at least suspended, when the respondent entered into a consecutive series of contracts of employment as Interim CEO between October, 2014 and December, 2018. He did so on each occasion as a fixed-term employee, as the end of each contract of employment concerned was determined by an objective condition.
55. The appellant also submitted that as the respondent remained a permanent employee at all times, he could not by definition also be a fixed-term employee at the same time. Firstly, I do not accept the factual basis underlying this submission. The respondent was not employed as Interim CEO as a permanent employee during the relevant period, although he had a right to revert to his permanent status if his temporary appointment as Interim CEO was not extended. Secondly, I agree with the finding of Simons J. that the Labour Court approached the matter the wrong way around by seeking to circumscribe the definition of “fixed-term employee” by reference to the subsidiary term “permanent employee”.Section 2 of the Act provides that “permanent employee” means an employee who is not a “fixed-term employee”. As the respondent was a fixed-term employee during the relevant period, he could not by definition have also been a permanent employee for the purposes of the Act.
56. I might just add the following comment. It seems to me that the correctness of the trial judge’s conclusions is reinforced by considering the overall effect of the appellant’s submissions. The effect would be to remove the application of the Act from one entire cohort of employees, i.e. employees who are already in a permanent employment relationship with their employer, but who agree to “act up” in a higher role on a temporary basis. The Framework Agreement, however, and the Irish legislation giving effect to same, contain no express exclusion of such employees, and it seems to me that very clear language providing for any such exclusion would have been necessary.
Conclusion
57. In conclusion, I am satisfied that the trial judge was correct in finding that the Labour Court had erred in law in its interpretation of the definition of “fixed-term employee”, and in making an order setting aside the Labour Court’s determination and remitting the matter back to the Labour Court for reconsideration, having regard to the findings in his judgment, which would allow the Labour Court to consider whether the use of successive fixed-term contracts may have been objectively justified.
58. I would therefore dismiss the appeal.
Sunday Newspapers Ltd -v- Kinsella & Anor
[2007] IEHC 324 (03 October 2007)
JUDGMENT of Mr. Justice T.C. Smyth delivered on the 3rd day of October, 2007
This appeal comes before the Court pursuant to Section 15(6) of the Protection of Employees (Fixed-Term Work) Act, 2003 (“the 2003 Act”), which provides:
“A party to proceedings before the Labour Court under this section may appeal to the High Court from a determination of the Labour Court on a point of law and the determination of the High Court shall be final and conclusive.”
The background to the litigation is that on 25th October 2005 a Rights Commissioner heard complaints under the 2003 Act brought by the two Defendants (“the claimants”), both of whom are members of the Technical, Engineering and Electrical Union (T.E.E.U) (“the Union”). The Plaintiff company (“the company”) submitted that both claimants had signed a severance agreement which, inter alia, stated as follows:-
“Lump Sum
This is in full and final settlement of any and all outstanding entitlements whether statutory or otherwise, e.g. Notice Pay, Collective Agreement Notice, Holidays, Statutory Redundancy, and any other discretionary payments/allowances. This is subject to the Parting Terms document.”
“Acknowledgement
This agreement is based on any/all claims in relation to my employment with Sunday Newspapers Limited and/or Terenure Printers Limited, stated or as yet un-stated, being fully resolved (including, but not limited to all claims under the Unfair Dismissals Acts, the Minimum Notice and Terms of Employment Acts, the Protection of Employment Acts and the Redundancy Payments Acts and all or any employment legislation). I have read and understand the above agreement and by my signature below acknowledge and accept the terms in full and final settlement.”
The Rights Commissioner having considered the submissions of the parties found that the claimants voluntarily, and with the benefit of the representation of their Union, accepted a severance package and signed a waiver that confirmed their acceptance of the terms “in full and final settlement” and accordingly, found against the claimants. That decision was appealed to the Labour Court pursuant to S.15 of the Act of 2003. The appeal was successful and it was determined that the complaints were well founded and that the claimants who had received €20,541.36 and €30,103.03 respectively on the signing in July 2006 “in full and final settlement of all claims and entitlements” were entitled to further monies of €27,752.08 and €40,483.85 respectively.
The decision of the Supreme Court in Bates v- Medel Bakery Ltd [1993]/IIR 359 in the context of an appeal from the Employment Appeals Tribunal under the Redundancy Payments Act, 1967 and of the High Court in Ashford Castle Ltd v. Services Industrial Professional Technical Union [2006]/ ELR 201 in the context of an appeal from the Labour Court under the Industrial Relations (Amendment) Act 2001 point to the desirability of the court expressly confining itself in its enquiries in an appeal on a point of law. These cases and C & D Food Ltd. v. Cunnion [1997] I.I.R, 147 and O’Leary v. Minister for Transport [1998] I.I.R, 558 and Costal Line Container Terminal Ltd. v. Siptu [2000] I.I.R 549 make it clear that it is not open to the High Court in its appellate function in the context of a determination on a point of law to seek to try anew or take into account facts put before the Court (in whatever procedural guise) which were not before the expert tribunal. However, the jurisdiction given to the Court by statute has been interpreted as including an entitlement to review the mixed questions of law and fact and in addition whether there was evidence to support any findings of fact made by the statutory body whose decision was under appeal (see Mara (Inspector of Taxes) v. Hummingbird Ltd [1982] 2 I.L.R.M 421 and Henry Denny & Sons (Ireland) Ltd v. Minister for Social Welfare [1998] 1/1.R.34). In the course of his judgment in Denny’s case Hamilton, C.J. said (at p.37/8) as follows:-
“…the courts should be slow to interfere with the decisions of expert administrative tribunals. Where conclusions are based on an identifiable error of law or an unsustainable finding of fact by a tribunal such conclusions must be corrected.”.
More recently Gilligan, J, in Electricity Supply Board v. Minister for Social, Community and Family Affairs (The High Court: Unreported 26th February, 2006) observed:
“Inferences of fact should not be disturbed unless they are such that no reasonable tribunal could arrive at the inference drawn and further if the court is satisfied that the conclusion arrived at adopts the wrong view of the law, then this conclusion should be set aside.”
Much learned argument was put before the Court by counsel for the parties under ss. 6 and 12 of the 2003 Act. It is unnecessary to seek to resolve all the differences of interpretation of nice points of statute law. In the instant case there is as an undisputed fact, a written agreement signed by the parties on 13th July 2005. Section 12 of the 2003 Act provides:-
“Save as expressly provided otherwise in this Act, a provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of the provision concerned of this Act) shall be void insofar as it purports to exclude or limit the application of, or is inconsistent with, any provision of this Act.”
The Labour Court noted that this provision is in similar terms in other employment rights statutes (e.g. s.13 of the Unfair Dismissals Act, 1977, s.11 of the Payment of Wages Act, 1991 and s.14 of the Protection of Employment (Part-time Work) Act, 2001. In Hurley v. Royal Yacht Club [1997] E.L.R. 225 Judge Buckley in the Circuit Court considered “under what circumstances can claims be legitimately compromised”? In the context of s.13 of the Unfair Dismissals Act, 1997, and stated:
“In several areas of the law the Supreme Court has held that any consent by a person to waive a legal right which that person has, must be an informed consent. This doctrine must surely apply to contracting out provisions and to section 13 in particular.”.
(The judge then having reviewed various determinations of the Employment Appeals Tribunal) continued as follows:-
“I am satisfied that the applicant was entitled to be advised of his entitlements under the employment protection legislation and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that this had been taken into account by the employee. I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in his case, would have been legal advice. In the absence of such advice I find the agreement to be void.”
Mr Kerr, B.L, for the claimants accepted that the important aspect of advice was that it be, as stated by the Circuit Judge “appropriate advice”. It is not imperative that it be professional legal advice in writing. In the instant case it is undisputed that at all material times prior to 13th July 2005 an issue existed between the parties as to whether the claimants (fixed term employees or workers) were being treated in a less favourable manner than comparable permanent employees of the company. While the status and skill of the relevant trade union officials representing the claimants differed such was not an issue of moment in the Labour Court determination.
Even if, as determined by the Labour Court, the form of agreement was of a stereotype and even if as determined
“The claimants were called into the office and presented with the waiver and asked to sign it so as to obtain the payment which they had been offered. As a result of the advice which the claimants had obtained from the Department of Enterprise Trade and Employment, and the subsequent advice from their Union, they believed that they could not contract out of their rights and that any document which they signed would not prevent them from pursuing a claim under the Protection of Employees (Fixed-Term Work) Act, 2003.”
altogether from any question of an absence of good faith and straight dealing, if such was the belief of the claimants, there is in point of law the difficulty that the Labour Court in an earlier part of its determination held (referring to the Defendants) “They were advised as to the provisions of the Protection of Employees (Fixed-Term Work) Act, 2003″. If the claimants believed as determined by the Labour Court they could not credibly or at all sign “in full and final settlement”. If the claimants or either of them signed the Severance Agreement in the form in which they did with the intention of taking further action in the matter – they so deceived the company (Appellant employer), that makes a sham and a mockery of seeking to conclusively resolve an employment dispute. In my judgment the Labour Court erred in law in allowing the claimants to consider as void the Severance Agreement because they mistakenly believed they had been advised that s.12 of the 2003 Act meant that the severance agreements would not preclude them from bringing claims pursuant to the 2003 Act. The section does not preclude severance agreements, settlement agreements or other compromises of claims or potential claims pursuant to employment legislation (Talbot v. The Minister for Labour (The High Court, Barron, J. Unreported 12th December, 1984); PMPA Insurance Company Limited v. Keenan & Others [1985] ILRM 173; Minister for Labour v- O’Connor and Irish Dunlop Ltd. (The High Court, Kenny, J. Unreported 6th March 1973).
It was submitted on behalf of the Claimants that the Court should follow the decision of the Supreme Court in PMPA v- Keenan [1985] ILRM 173, but in my judgment that case is clearly distinguishable from the instant case. In Keenan’s case there was no evidence that the Defendant’s claim was included in the settlement which covered their claims. In the instant case the very claim made subsequent to the Severance Agreement was in fact made before the Severance Agreement was arrived at and signed and its all claims provision clearly states such to be in the context of severally enumerated Acts and “all or any employment legislation”.
I accept the submissions of Mr Connaughton, S.C., on behalf of the company that the decided cases indicate that a party may enter into an agreement in relation to his or her statutory rights and the question of whether or not such rights have been compromised is a matter for the proper construction of the agreement itself. In the instant case the agreement is expressly stated to be in full and final settlement and that means what it says. It says so in express terms referable to enumerated Acts and all or any employment legislation in respect of any and all outstanding entitlements whether statutory or otherwise stated or as yet unstated.
In the instant case there was some meaningful discussion and negotiation (which is not to be equated with interminable talks, documents and meetings) and professional advice of an appropriate character before the agreement was signed. The fact that the written document proffered for signature was prepared by one party for signature by another after discussion and negotiation however one might view such “negotiation” – which is “to confer for the purposes of an arrangement or some matter by mutual agreement or to discuss a matter with a view to a settlement or compromise” (per the Shorter Oxford English Dictionary) does not make the agreement void. In my judgment the instant case is clearly distinguishable from that of Fitzgerald v. Pat the Baker [1999] E.L.R 227 cited by Mr Kerr in support of his arguments under s.12 of the 2003 Act.
The submissions referable to s.6 of the 2003 Act may be summarised as follows:-
1. For the claimants
(a) They had been in full time employment with the company from about March 2003. The company acknowledged that the claimants had two years permanent service (in the document setting out the details of the company’s severance package). The package made to permanent employees provides for a minimum payment of one year’s salary.
(b) The 2003 Act provides that a fixed term employee should not, in respect of his conditions of employment, be treated in a less favourable manner to a comparable permanent employee.
(c) The severance agreement signed in July 2005 was signed under duress and without the benefit of legal advice and the claimants were denied natural justice.
2. For the company
(a) The claimants freely and voluntarily entered into the Severance agreement with appropriate advice after discussion or negotiation of the very issue subsequently raised before the Rights Commissioner, the Labour Court and this Court and no intimation was either conveyed to the Company or contained in the Severance Agreement of reservation of their position or without prejudice acceptance to bringing a further claim. The ‘all claims’ were clearly referable to the claimants claim made before (now pursued) post signature of the Severance Agreement and no other and the facts are wholly distinguishable from those adverted to by Carroll, J. In the case of PMPA v- Keenan. Mr Oisin Quinn, B.L., in making the final reply for the company correctly drew the Court’s attention to the fact that the Labour Court expressed no concluded view on a number of points (including adequacy of consideration) and made no finding as to duress.
(b) The payments made to the claimants did not constitute remuneration within the meaning of the 2003 Act. The payments that were made (including the enhanced amount of €5,000) were made in consideration of both claimants entering into severance agreements. They were made separate from and in complete distinction from the severance packages given to permanent employees. The company took the view that the totality of the loss that would be claimed by either claimant was their earnings until the expiration of their fixed term contracts. In response to the claim being made by reference to the 2003 Act in the discussions or negotiations, it is not ad rem from whom the suggestion of the figure may have come.
(c) If there is a difference in the treatment between the claimants and the permanent employees not due to retire within a year, such is permissible pursuant to s.6 (2) of the 2003 Act. It is clear that before the Labour Court the ground relied upon by the company was not simply that the claimants were fixed term employees (although they were such) but rather that their entitlement to work with the company was due to expire in a period of less than a year from the date of the closure of the plant. It was on that basis that the argument rested that it would be manifestly unreasonable for the claimants to be paid a lump sum for a period in excess of that.
(d) There was no legal basis for the Labour Court concluding that if the claimants made a claim (that in fact was never made because the circumstance never arose) that on the conclusion of the fixed term contract upon which they were engaged it was “satisfied that there is a high probability that whether by operation of Section 9 of the Act or otherwise, the claimants could have become entitled to a contract of indefinite duration”.
Determination:
1. In my judgment in law the “Parting Terms” document (being Appendix 1 in the Trade Union Submissions to the Labour Court) is not an acknowledgement that the claimants had two years permanent service. It is the whole or part of a stereotype document which was circulated to persons: The claimants did receive a copy of this document at some time. There is no sustainable credible evidence that those terms were offered to the claimants: What was offered to the claimants was that they would be retained in employment for the balance of their fixed-term contracts. The Parting Terms document contains a separate formula for permanent staff and another for casual staff. Each formula concludes as follows:-
“In all cases, where the above formula, i.e. 1.1, 1.2 & 1.3 combined, does not amount to one year’s gross basic salary only, a minimum all inclusive amount equivalent to one year’s gross basic salary only will apply.”
[Note the word “only” does not occur in the formula conclusion referable to casual staff].
The conditions attached to the Parting Terms document provided (inter alia) the following:-
“2.5 The combined gross amounts of clauses 1.1, 1.2 & 1.3 may not exceed, in any circumstances, the normal expected gross amount that otherwise may have been earned to age 65.
2.6 The company reserves the right to decide in all circumstances who may avail of parting terms, and at what time, regardless of offers, whether written or oral, being made to any individual.
2.7 The company reserves the right to withdraw or amend the parting terms without notice being given to any party.”
As a matter of legal construction clause 2.5 is clearly designed to ensure (“in any circumstances”) that a permanent employee who was due to retire in less than a year from the date of the announcement, would not ‘earn’ more as a result of the closure of the plant and the severance package being offered to permanent employees, than they would have earned had they simply continued to work in the plant until their normal retirement date.
It is this very approach that was taken by the company in its original separate and specific offers made to both claimants, i.e. that they would be offered an equivalent to pay that they would have earned had they continued until the expiry of their fixed term contracts.
In the decision of the Labour Court it is stated (in reference to clause 2.5) “manifestly this clause can have no application”. “It is true that the clause is contained in the General Conditions and does not seek to address any specific category of employee it is a clause of general application and in my judgment as a matter of law includes all employees. There is no exclusion of any category of employee and therefore as a matter of law it does apply to the claimants. The provision limits the amount payable. It is not at all manifest to me on a true construction of the conditions that they can have no application to the claimants. The Labour Court was correct in stating “Patently the claimants are not seeking an amount in excess of their potential up to age 65″. Sixty five was clearly the age at which permanent staff would cease to work with the company: for those on a fixed-term contract their ceasing to work with the company would occur by efflux ion of time irrespective of their age at or before 65. The argument in decision by the Labour Court under ss.6 (2) and 7 (1) of the 2003 Act is logical, on a point of law decision it is irrelevant as to whether factually I agree on what is stated. Regretfully on a mixed point of law and fact I am unable to agree with the conclusion drawn from the argument as correct. In my judgment there is “an unsustainable finding of fact” (as identified by Hamilton CJ in Denny’s case) as to the requirements of the claimants.
2. In my judgment the claimants as fixed term employees were treated differently but in no less favourable a manner to a comparable employee. It was open to both the claimants and the company to put before the Labour Court such “comparables/comparators” as each wished that Court to consider it was then for that Court to consider and decide in the specific circumstances of the case which was the relevant genuine comparable. The Labour Court determined that –
“The claimants are entitled to the same minimum payments under the Respondent’s parting terms as were guaranteed to comparable employees.”
As the entitlement found is related to the company’s Parting Terms which are referable to comparable employees of the company then the appropriate comparable is such person or persons as were doing the same or like work as permanent employees, in the absence of such person or persons then the appropriate comparable is the person or persons who were doing the same or like work who were not employees of the company.
In the specific circumstances of this case I hold that as a matter of law there is an error in the decision of the Labour Court, not that they considered the prime consideration was the nature of the work, but rather than the person or persons to be first considered as the appropriate comparable was to be first sought amongst the permanent employees failing such person, then only does one look elsewhere.
3. On the question of remuneration it was in my judgment open to the Labour Court as a matter of fact to construe the additional payment of €5,000 as remuneration relying on the judgment in Barber v. Guardian Exchange Assurance [1990] ECR [1889] paragraph 13, as a payment [not as contended for by the Company as enhanced consideration … on the claimants entering into severance agreements…]. By citing and relying on Barber’s case the Labour Court accepted that the sum/sums…
“… which is paid to him upon termination of the employment relationship, which makes it possible to facilitate his adjustment to the new circumstances resulting from the loss of his employment and which provides him with a source of income during the period in which he is seeking new employment.”
Yet, the court notwithstanding having doubts as to whether the claimants would have willingly compromised such rights as they, post signing the Severance Agreements, alleged under the 2003 Act which they did not reserve from the Severance Agreement would do so for €5,000, failed to reach any concluded view on the point.
4. In reaching its decision on the question of the waiver there is no evidence in the decision of the Labour Court that it had examined the course of negotiations between the parties so as to ascertain what was intended, yet concluded they were fully satisfied that the claimants did not enter into a binding and enforceable agreement to settle their claim under the 2003 Act. This is not a supportable position in point of law.
In its submission to the Labour Court the claimant’s Union stated:
“This Union made representations to the company at the highest level and expressed the view that these members in question [the claimants] had the protection of the Protection of Employees (Fixed-Term Work) Act, 2003 and therefore were entitled to a minimum of one years gross salary, as contained in the Company’s document entitled “Parting Terms” (Appendix 1). The company rebuked the Union on each occasion and stated that if we were unhappy with their decision we could take it elsewhere.
In mid July 2005, each individual was asked to sign a document accepting what the company were offering, the alternative to signing was that they would not receive anything. Under duress, and without the benefit of legal advice, both members individually signed a severance agreement (Appendix 2 is a copy of one). This document, especially the section titled “acknowledgement” literally asks the individual to sign away all their rights under any employment legislation”.
The inference drawn from primary facts but not the finding of facts themselves, may be, in point of law, disturbed on appeal. The issue that stalled the conclusion of the discussions was solely referable to their having fixed-term contracts and the rights they contended for under the 2003 Act. I accept as correct Mr. Connaughton’s submission that the PMPA v. Keenan case is wholly distinguishable and inapplicable to the instant case. The Severance Agreement was in respect of all claims “stated and unstated” if as appears to have been inferentially accepted by the Labour Court the claimants “signed the form with the intention of taking further action in the matter” the conflict between what is signed up to in the Severance Agreement and the details of the claimant’s case as set out in the letters of 1st October 2005 (which goes to the credibility of the witnesses and the integrity of reliable fact) was not analysed or determined.
One can have considerable sympathy with the Labour Court who clearly went to very considerable research and trouble in their finding but I am nonetheless unable to accept as sustainable their conclusion for the reasons hereinbefore referred to. Accordingly I uphold the appeal of the company.
National Gallery of Ireland v John Cleary
FTD1236
Labour Court
12 October 2012
[2013] 24 E.L.R. 1
The case comes before the Court by way of an appeal by the National Gallery of Ireland (hereinafter referred to as “the respondent” or “the gallery” ) against a decision of a Rights Commissioner dated January 16, 2012 in relation to a claim *4 under the Protection of Employees (Fixed-Term-Work) Act 2003 (hereinafter “the Act” ) by Mr John Cleary (hereinafter “the complainant” or “the worker” )
Background
The complainant worked for the gallery as a services attendant under a series of fixed-term contracts commencing on January 2, 2002 (“the first contract”). The first contract contained the following provision:
“The specified purpose of this contract is that you are being employed to secure the national collection at the gallery incorporating the Millennium Wing, on a temporary basis until such time as refurbishment commences at the National Gallery’s Historic Buildings under the gallery’s development plan. When this occurs, the specified purpose hereunder will cease and accordingly your employment will terminate in accordance with Clause 2. It is not possible to estimate when the specified purpose of your contract will cease but your employment will not in any event continue beyond June 30, 2005 and therefore you are accepting this offer of employment on the strict understanding that the nature of your employment is temporary.”
It is accepted by both parties that the complainant was employed as a service attendant and was not employed to “secure” the national collection at the gallery.” Both parties accept that the reference in the contract to the complainant being employed to “secure the national collection” is an error that is not material to the complaint.
The second contract
The complainant’s employment was renewed by way of a second fixed-term contract of employment commencing on June 30, 2005 that contained the following provision:
“1.1 Your employment will continue on a temporary basis until such time as refurbishment commences at the National Gallery’s Historic Buildings under the gallery’s development plan.
1.2 Your employment will terminate automatically without any right to notice on the commencement of refurbishment as referred to in clause 1.1.
1.3 The Unfair Dismissals Acts 1977–2001 will not apply to the termination of your employment by reason only of the circumstances outlined in clause 1.1.”
Third contract
The first phase of the gallery’s refurbishment works commenced in the “Dargan Wing” on March 7, 2011. The complainant’s contract of employment was renewed on March 3, 2011 until the refurbishment works at the Milltown Wing commenced on June 30, 2011. A letter to this effect was issued to the complainant by the gallery.
*5
Fourth contract
The complainant was issued with a further letter by the gallery renewing his contract of employment until September 30, 2011.
The complaint
The complaint submitted a complaint under s.14 of the Act to a Rights Commissioner on July 22, 2011 alleging a contravention of s.9 of the Act in respect to his employment. He complained that the gallery continued to deny his statutory entitlement to a contract of indefinite duration. He contends that it continued to treat him as a fixed-term worker contrary to the provisions of s.9 of the Act.
The Rights Commissioner conducted an investigation into the complaint and on January 16, 2012 the Rights Commissioner decided as follows:
“According to s.14(2) (a) I declare that the claim is well founded in part.
As per s.14(2)(c) I require the employer to re-instate John Cleary with effect from October 1 on a contract of indefinite duration on the same terms and conditions as applied when he was last employed there. The requisite retrospection in pay should be paid less the statutory redundancy received.
As per s.14(2)(d) I require the employer to pay John Cleary €3,500 in compensation within six weeks of the date below.”
The gallery has appealed that decision to the Labour Court.
The complainant’s position
The complainant submits that he became entitled to a contract of indefinite duration by operation of law on June 30, 2006. He submits that he was employed as a fixed-term worker when the Act came into force. He submits that after he had completed three years’ service the gallery was entitled to renew his contract on one occasion only and for no more than one year. He submits that the gallery exercised this option when it renewed his contract of employment on June 30, 2005. As this contract did not expire within one year the complainant submits that he became entitled to a contract of indefinite duration at that time unless its renewal was justified on objective grounds. He submits that no such grounds justifying its renewal existed at the time. He further submits that his contract was renewed on a number of occasions thereafter and the gallery continued to treat him as a fixed-term worker contrary to the provisions of s.9(3) of the Act.
The respondent’s position
The respondent submits that the gallery was involved in a process of rebuilding and refurbishment and that its need for a services attendant was temporary in nature pending the commencement of the works. The gallery submits that at the time the complainant was employed it had submitted a proposed *6 master development programme to the Minister for his consideration and had received approval in principle to proceed. When the gallery came to renew the complainant’s contract of employment in 2005 it knew that many of the galleries would be closed when the master development programme commenced. This has now come to pass and most of the galleries are closed to the public. As a consequence the gallery does not have a need for the work of as many service attendants as when all the galleries are open to the public. Therefore, it submits, the objective grounds stated in the second contract have been borne out and are fully justifiable. The gallery submits that when the third contract was entered into the first phase of the construction work on the “Dargan Wing” had commenced and it did have a continuing need for the complainant’s services up until June 30, 2011 when the preparatory works for phase 2 commenced. For this reason the gallery offered to renew the complainant’s contract up until June 30, 2011. It submits that this is a fully justifiable ground.
The gallery submits that it offered the complainant a further contract renewal up until September 30, 2011 pending the outcome of its discussions with the Department of Finance as to whether it was possible to offer permanent employment to any of the security and service attendants including the complainant. It submits that this is a fully justifiable objective ground. Furthermore, it submits that it acted in the best interest of the complainant in this matter at all times, by attempting to obtain permanent placements from this group of staff. It submits it would be inequitable if it were now to be penalised for seeking to retain as many staff as possible.
The respondent submits that it is entitled to rely on the provisions of s.9(4) of the 2003 Act. It submits that it had objective grounds for renewal of the fixed-term contract of employment on each occasion as it was for the purpose of achieving a legitimate objective of the employer and such treatment was appropriate and necessary for that purpose. The respondent referred the Court to the decision of the ECJ in Adeneler v Ellinikos Organismos Galaktos Case C-212/04 [2006] E.C.R. I-6057 in which it held as follows, at para.69:
“… the concept of ‘objective justification’, 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.”
The respondent submits that the gallery at all times made its objective grounds perfectly clear to the complainant. On each occasion the contract was renewed the gallery did give consideration to appointing him on a permanent basis but decided that this was not possible for the reasons outlined in the various contracts/letters of renewal.
*7
The respondent referred the to the tests set out by the European Court of Justice in Bilka-Kaufhaus GmbH v Weber von Hartz Case 170/84 [1986] E.C.R. 1620 and to the decision of this Court in Inoue v NBK Designs Ltd [2003] E.L.R. 98. It submitted that the gallery could show that over the course of the complainant’s employment, the measure in question (the use of fixed-term/specified purpose contracts in this case) corresponds to a real need on the part of the employer; is appropriate with a view to achieving the objective pursued; and is necessary for that purpose. It submitted that the means chosen to fulfil its requirements were proportionate to the objectives they were intended to achieve and there were no alternative means having a less discriminatory affect by which the gallery’s objectives could have been achieved.
The respondent submits that when issuing the complainant with a second fixed-term contract of employment in 2005 the gallery knew that when the master development programme commenced, many of the galleries would be closed. This has now come to pass and the gallery does not have work for as many service attendants to carry out. Therefore the objective grounds stated in the second contract have been borne out and are fully justifiable.
The respondent submits that at the time it issued a third fixed-term contract of employment to the complainant the first phase of the redevelopment work had commenced on the Dargan Wing. The gallery did have a continuing need for the complainant’s services up until June 30, 2011 when the preparatory works for phase 2 commenced. For this reason the gallery offered to renew the complainant’s contract up until June 30, 2011. This is a fully objective ground.
The respondent submits that at the time it issued a fourth fixed-term contract of employment to the complainant gallery management was in discussions with the Department of Finance seeking approval to convert a number of staff members from fixed-term to permanent contracts of employment. The gallery extended the complainant’s contract of employment pending the outcome of those discussions. This measure was taken in the complainant’s best interest as it ensured that he was in a position to submit an application for consideration for appointment to a permanent post when approval was forthcoming. It submits that this is a fully objective grounds.
The respondent referred the Court to the decision of the Supreme Court of the United Kingdom in Duncombe v Secretary of State [2011] UKSC 14; [2011] 2 All E.R. 417, and to the decision of the Court of Justice of the European Union in Kucuk v Land Nordrhein-Westfalen Case C-586/10 [2012] 2 C.M.L.R. 499.
The respondent submitted that the purpose of the European Directive on Fixed-Term Workers was to prevent abuse arising from the use of successive fixed-term employment contracts or relationships. It submitted that the facts in this case showed that the gallery did not issue the complainant with a series of fixed-term contracts of employment in order to avoid its obligations to the complainant under the 2003 Act. Finally the respondent referred to the Determination of *8 this Court in National University of Ireland Maynooth v Buckley Labour Court Determination FTD092 (February 24, 2009) in which it held 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 respondent submits that the complainant signed a series of binding contracts agreeing to the objective reasons for their renewal on a fixed-term basis and cannot now resile from this position.
Findings of the Court
The complainant was first employed on a fixed-term contract of employment on January 2, 2002. The Act came into operation on July 14, 2003. Section 9(1) of the Act provides:
“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.”
Section 9(3) of the Act provides:
“…where any terms 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.”
Section 9(4) 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 renewal.”
The combined effect of these provisions is that where a fixed-term contract is renewed beyond the period referred to at either subs.(1) or (2) of s.9, the term providing for its expiry by effluxion of time or the occurrence of an event is rendered void ab inito and the contract is thus transmuted to one of indefinite duration by operation of law, unless the extension is saved by s.9(4) of the Act (see dicta to that effect in Minister for Finance v McArdle [2007] IEHC 98; [2007] E.L.R. 165).
When the complainant’s contract of employment expired on June 30, 2005 he had completed his third year of continuous employment with the respondent. The gallery, in accordance with s.9(1) of the Act was entitled to “renew” the fixed-term contract of employment “on one occasion” for a “fixed term of no longer *9 than one year” . The respondent renewed the complainant’s contract “until such time as refurbishment commences at the National Gallery’s Historic Buildings under the gallery’s development plan.” Work on that development plan did not commence until 2011. Accordingly the complainant became entitled to a contract of indefinite duration by operation of law, with effect from the date on which the contract was renewed, unless the gallery had, within the meaning of s.7 of the Act, objective grounds justifying the renewal of the fixed-term contract of employment.
Section 7 provides:
“Objective grounds for less favourable treatment
(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.”
The net question before the Court therefore is whether the gallery’s decision to renew the complainant’s fixed-term contract of employment beyond the year permitted under s.9(1) of the Act was for the purpose of achieving a legitimate objective of the employer and such treatment was appropriate and necessary for that purpose.
The Court of Justice of the European Union addressed the concept of objective grounds in Angelidaki and Others v Organismos Nomarkhiaki Aftodiikisi Rethimnis Joined Cases C-378/07 to C-380/07 [2009] E.C.R. I-3071, where it said at para.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 v Ellinikos Organismos Galaktos Case C-212/04 [2006] E.C.R. I-6057, paragraphs 69 and 70; *10 Del Cerro Alonso v Osakidetza-Servicio Vasco de Salud Case C-307/05 [2007] E.C.R. I-7109, paragraph 53; and order in Vassilakis v Dimos Kerkyraion Case C-364/07 [2008] E.C.R. I-90, paragraphs 88 and 89).”
The court went on, at para.103 of its judgment, to draw a distinction between successive contracts the purpose of which are to meet needs which are temporary in nature and those which, in reality, are intended to cover the fixed and permanent needs of the employer. In the case of the former the use of successive fixed-term contracts may be legitimate but in the case of the latter their use would be contrary to the objective pursued by the Directive.
From the information provided to the Court the legitimate objective of the employer 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. Thereafter the gallery’s requirement for services staff would be considerably diminished as a large number of the galleries would be closed to the public. These objective reasons do not appear to meet the test set out in Angelidaki; they do not result from the “specific nature of the tasks for the performance of which such contracts have been concluded” , nor do they result from the “inherent characteristics of those tasks” nor do they result from the “pursuit of a legitimate social-policy objective of a Member State.” It is clear from the submissions of the parties that the work the complainant was employed to perform was part of the gallery’s fixed and permanent needs. 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, the proposed redevelopment of the gallery may be a legitimate objective of the employer if the finances to undertake the works were in place, a plan had been prepared and the works were contracted for and scheduled to start at a definite time. 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 in 2005 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. A letter dated September 2005 from Mr *11 John Sydenham, Project Management Services, OPW to Mr Gerry D’Arcy of the National Gallery sets out the position at that time. It says:
“Dear Gerry
Further to your request today please see the following update on the proposed project known as Phases 1 to 4 and 6 to 10.
Description of Project
The National Gallery of Ireland is housed in a composite building, part-modern, part-historical. The current renovations concern themselves with the historic building and not the newly built Millenium Wing. Planning permission will be required for the proposed works, and the building under renovation is a protected structure. The works, while comprising one works package, are conceptually divisible into categories by location and comprise the following:
1864 Wing
• New roof glazing to south and new slates to roof
• Ventilation on roof to lower solar gain temperature
• Glass ceiling to be removed and new glass ceiling installed
• All old heating pipes and systems replaced
• New lighting
• Refurbishment
Portrait Gallery
• Fire protection works
• New Lighting
• All old heating pipes and system to be replaced
Infill Building
• A new building, intended to connect the 1864 Wing to the Milltown Wing, and to contain new conservation and framing departments
Area Over Merrion Square Entrance
• Existing flat roof to be replaced with pitched roof
• Modifications to heating system and ventilation
• Refurbishment
Milltown Rooms
• Removal of old heating system and installation of air conditioning to the three levels at basement, ground and first floor.
• Removal of existing flat roofs and replacement with pitched roofs with vertical glazing and shading
• Refurbishment
*12
Finger Development at rear of No.90 Merrion Square
A new three-story link building intended to connect 88–90 Merrion Square with the main buildings of the gallery.
Programme
The programme for Phases 1 to 4 and 6 was detailed in the last version of the Development Control Plan (June 2002):
Approval to appoint consultants September 2002 (presumes Finance Sanction)
Planning Permission Application March 2004
Contract Placed August 2005
Practical Completion April 2007
Owing to the later inclusion of Phase 10 and the lack of available funds, financial sanction to appoint consultants was not received by OPW until this year. The current indicative programme is as follows:
Approval to appoint consultants 2005
Planning Permission Application March 2007
Contract Placed July 2008
Practical Completion December 2009
This office is currently finalising the EC tender documents for the procurement of the consultant design team and expects to publish the invitation to tender in October 2005.
I trust that the above information is what you require, however if you have any queries please let me know.”
It is clear therefore that at the time the second contract was issued no finance was in place for the project. Planning permission had neither been sought nor granted. Consultants had not been appointed and no contractor had been selected to undertake the works. In effect the approval to undertake the development plan was no more than an approval in principle as it had been in 2002 after the first contract had been issued.
No information was presented to the Court on the situation that pertained in June 2006 the date at which the additional year provided for in s.9(1) expired.
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 in Adeneler v Ellinikos Organismos Galaktos Case C-212/04 [2006] E.C.R. I-6057 where it said, at para.69:
“…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 *13 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 objective of the gallery at this time amounted to 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. Successive fixed-term contracts of employment are intended to address a temporary as opposed to fixed and permanent need for the work performed by the worker to whom they are issued in place of a contract of indefinite duration. The Court finds that a desire to avoid an uncertain eventuality that may or may not occur does not amount to a legitimate objective of an employer within the meaning of the Act.
Accordingly the Court finds that at the time the second contract came into force the gallery had a fixed and permanent need for the work the complainant was employed to perform. There was a contingent possibility that this need might be temporarily interrupted while the refurbishment work was being carried out. Accordingly the objective was no legitimate within the meaning of the Act and furthermore the means chosen to deal with what was in fact a temporary, contingent and uncertain reduction in the demand for the complainant’s services to take effect at an unknowable date was “not capable in that particular context *14 of justifying the use of successive fixed-term employment contracts” .
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 but this was not forthcoming. Accordingly the withholding of the necessary approval 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 of approval to appoint a person on a permanent contract of employment by a third party is not a valid basis upon which to issue a series of successive fixed-term contracts of employment to a worker that is meeting a fixed and permanent need of an employer.
As the Court has found that the renewal of the fixed-term contract of employment was not for the purpose of achieving a legitimate objective of the employer the treatment of the complainant cannot be appropriate and necessary for that purpose.
The Court finds that even if the fixed-term contract of employment was meeting a legitimate objective of the employer the means chosen to do so was not appropriate in this case. The gallery, when renewing the complainant’s fixed-term employment contract in 2005, could not have known the probable timescale within which or if at all the Minister and Department of Finance would approve the financing of the master development plan.
Accordingly the Court finds that the gallery had a less discriminatory option available to it namely to employ the complainant on a permanent contract of employment and to make him redundant if and when the works associated with the master development plan commenced. The purpose of the Act is to prevent the use 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 means of achieving the objective of employing staff pending the commencement of works associated with the project where there is a fixed and permanent demand for that work should approval for the project not be forthcoming. That is what applied in this case. At the time of the renewal of the complainant’s contract of employment in 2005 there was a fixed and permanent need for the work the he was performing. It may well be that at some point in the future there may not, for a temporary period of time, be such a demand whilst the reconstruction work was undertaken. This contingency could have been addressed in a less discriminatory way. The gallery could have employed the complainant on a contract of indefinite duration to meet its fixed and permanent need and either laid him off or made him redundant when circumstances arose *15 in which the work for which he was employed ceased to exist. As this disposed of the matter the Court did not go on to consider the position of the complainant under the subsequent contracts of employment issued to him by the gallery.
The Court was referred to the decision of the Supreme Court of England and Wales in Duncombe v Secretary of State [2011] UKSC 14; [2011] 2 All E.R. 417, and to the decision of the Court of Justice of the European Union in Kucuk v Land Nordrhein-Westfalen Case C-586/10 [2012] 2 C.M.L.R. 499.
The Court has considered these cases in detail and finds that they can be distinguished on their facts from the case before this Court. Ms Kucuk was performing the work left vacant by other staff that were on maternity leave. The work in question fell to be completed while the worker went on maternity. Accordingly the work itself was a fixed and permanent need of the employer and the worker on maternity leave was employed to perform that work. Through measures that comply with public policy objectives of the European Union those workers were afforded maternity leave. Ms Kucuk was employed to replace each of those workers in turn. Accordingly Ms Kucuk was at no point meeting a fixed and permanent need of the employer as the workers she was engaged to replace were entitled as a matter of law to return to work when their periods of maternity leave were at an end. In this case the complainant was himself performing work for which there was a fixed and permanent need. He was not replacing another worker that was on leave with a statutory entitlement to return to work. Accordingly the Court finds that the case cited is not relevant to this case.
The Court takes a similar view of the relevance of Duncombe v Secretary of State [2011] UKSC 14; [2011] 2 All E.R. 417. In that case the complainants were employed as teachers in the European School in Culham, Oxfordshire on a fixed-term contract of employment that, by regulation, could not exceed nine years. The complainant was employed on an initial two-year contract of employment, a probationary period, after which he was employed for a further three-year period, extended for a further four years, and then an additional one year, making a total of 10 years in all. They complainants claimed that they were permanent employees by virtue of Regulation 8 of the Fixed-term Regulations.
Rejecting the claim Lady Hale, delivering the judgement of the Supreme Court, summarises the position at para.23 as follows:
“The teacher’s complaint is not against the three or four periods comprised in the nine-year rule but against the nine-year rule itself. In other words, they are complaining about the fixed-term nature of their employment rather than about the use of the successive fixed-term contracts which make it up.”
She said that the Directive affords protection against the abuse of successive fixed-term contracts of employment and “not against fixed-term employment as such” .
*16
In this case the complainant is objecting to the use of successive fixed-term contracts of employment and not against fixed-term employment itself. Accordingly the Court does not consider the cases to be at all similar.
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 section 9(3) of the Act from the commencement of his second contact on June 30, 2005. 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.
Nerney -v- Thomas Crosbie Holdings Ltd
[2013] IEHC 127 (22 March 2013)
Judgment of Ms. Justice Laffoy delivered on 22nd day of March, 2013.
Factual Background
1. These proceedings arise out of the termination of the employment of the plaintiff as Chief Executive of the “Roscommon Herald”, a regional newspaper, by his employer, the defendant. The plaintiff’s employment had been created by an agreement dated 18th June, 2004 made between the defendant of the one part and the plaintiff of the other part (the Executive Contract). The execution of the Executive Contract was preceded by the coming into effect of a share purchase agreement between the plaintiff, as vendor, and the defendant, as purchaser, whereby the defendant had acquired all of the issued share capital in Roscommon Herald Limited (the Company), the owner of the newspaper.
2. The plaintiff had worked with the Company from approximately 1986. After the death of his mother, who was the sole owner of the Company, in 1994 the plaintiff took over as the owner and managing director of the Company. The Company ran a successful business. The Roscommon Herald was one of the leading regional newspapers in the country with a circulation in the region of sixteen thousand. In 2003 and 2004, before the defendant expressed an interest in the Company, there had been approaches from two entities, which were not Irish companies, in relation to its acquisition. However, in 2004 the plaintiff entered into an agreement with the defendant, which, being an Irish company, was his preferred purchaser. The plaintiff wanted to stay on as Chief Executive of the newspaper and that became part of the deal. His evidence was that he wanted security in that position and that he was assured by Mr. Anthony Dinan, who was then Chief Executive Officer of the defendant, that he would be kept on as Chief Executive of the Roscommon Herald because the defendant was conscious of the importance of having somebody from the Roscommon locality in that position.
3. The plaintiff served as Chief Executive under the Executive Contract for eight years and one month until he ceased to act in that position on 17th July, 2012 in circumstances which I will outline later. Before doing so, it is necessary to consider the terms of the Executive Contract which are relevant to the issues in these proceedings.
The Executive Contract
4. Solicitors for the defendant and solicitors for the plaintiff were involved in the drafting, approval and execution of the Executive Contract which, in my view, was well drafted and is devoid of lack of clarity or ambiguity.
5. Clause 2 set out the term of the plaintiff’s employment and provided as follows:
“The employment of the Chief Executive shall commence on the [18th day of June 2004] and shall be for a period of four years and shall continue for periods of four years unless notice of the [defendant’s] intention not to renew the term is served at least 6 months before the expiration of any four year period, unless earlier determined in accordance with the terms hereof. Notwithstanding the foregoing the Chief Executive may terminate this Agreement on six month’s notice in writing to the [defendant]. This Agreement shall supersede all other agreements between the parties and the provisions of the Unfair Dismissals Acts shall not apply to the termination of this Agreement solely out of the expiration of the fixed term.”
In fact, in the Executive Contract as executed by the parties the date of commencement was left blank. However, it is common case that the date of commencement was 18th June, 2004. The other terms contained in the Executive Contract providing for its determination were contained in Clause 14 which was headed “Summary termination of employment”. That clause set out various events on the happening of which the employment of the plaintiff might be terminated without notice or payment in lieu of notice, for example, if the plaintiff should be guilty of gross default of misconduct in connection with the business, or become bankrupt, or become of unsound mind and so forth. None of the relevant events occurred. Moreover, the plaintiff did not exercise his power of terminating on six month’s notice. What happened was that when the first period of four years expired without the defendant having given notice of its intention not to renew before 18th December, 2007, the plaintiff’s employment continued, and his understanding was that it was continuing for a further period of four years from 18th June, 2008.
6. Remuneration was dealt with in Clause 4, which set out the starting salary and made provision for the salary being increased annually. The succeeding clauses dealt with the pension scheme, the bonus to which the plaintiff was entitled and his entitlement to a payment in respect of the use of his car on company business. The detail of those provisions will be addressed later.
7. The only other provisions of the Executive Contract which are of some, albeit peripheral, relevance in the context of the issues to be determined by the Court are the following:
(a) Clause 15 provided that upon termination by whatever means of his employment thereunder, the plaintiff would, at the request of the defendant, immediately resign from office as a director in the Thomas Crosbie Holdings Group as might be so requested. The plaintiff was a director of the Company and, at the request of the defendant, he resigned from that position after 17th July, 2012.
(b) Clause 16 provided that if the employment of the plaintiff under the Executive Contract was terminated by reason of the liquidation of the defendant or for the purpose of reconstruction and amalgamation and the plaintiff was offered employment with any concern or undertaking resulting from the reconstruction or amalgamation on terms and conditions not less favourable than the terms of the Executive Contract, then he should have no claim against the defendant in respect of the termination of his employment under the Executive Contract, but there was a proviso that such alternative employment “shall be within a 50 mile radius of the town of Roscommon”. While that provision never came into play, it does illustrate the preference of the plaintiff to remain working and living in the Roscommon area, which remains the case to this day.
(c) As one would expect, the Executive Contract contained provisions designed to protect the goodwill of the Company and the business of the defendant. In Clause 17.1(a) the plaintiff covenanted with the defendant that he would not –
“In any Relevant Capacity during the Restricted Period directly or indirectly within the Restricted Business Area (and whether from a place of business inside or outside the Restricted Business Area) carry on or be interested in any Restricted Business”.
In the definitions clause (Clause 1) –
(i) “Restricted Business” was defined as meaning “the businesses of publishing . . . any Print Media”;
(ii) “Restricted Business Area” was defined as meaning “within a radius of 50 miles from the town of Roscommon or from Boyle”; and
(iii) “Restriction Period” was defined as meaning “during the period of the [Executive Contract] and during the period of six months after its termination”.
That provision restricted the plaintiff in pursuing alternative employment in the area in which he had experience until at least six months had elapsed from the termination of the Executive Contract.
Events of June and July 2012
8. On the evidence I am satisfied that by 2010 the revenues of the various regional newspapers owned by the defendant had fallen and that there was a need for restructuring within the organisation. The evidence was that from 2009 onwards revenues were falling in relation to all of the titles and, in particular, advertising revenue was falling in the property, motoring, and recruitment sectors. Evidence was adduced in relation to ten titles owned by the defendant. Leaving aside the Roscommon Herald, in the case of all but two, the person at chief executive or general manager level had ceased to be employed by the defendant by 2012 and had not been replaced. Some titles had been sold or had ceased publication resulting in redundancy at chief executive level. In the case of other titles, while ownership was retained, the person at chief executive level was either made redundant or retired and was not replaced. In the case of the titles which remained in the ownership of the defendant, in effect, the management level was removed from the staffing structure and the employees who had formerly reported to the employee at chief executive level were now reporting to Mr. Dan Linehan, who had been appointed Chief Executive Officer of Regional Newspapers in September 2009. The exception was the General Manager in charge of Waterford News and Star and of Wexford Echo, of which there are five editions producing significant turnover, with more than forty employees. By June 2012, apart from the plaintiff, only the General Manager of the Waterford News and Star and of the Wexford Echo remained at chief executive level. That is the context in which the events of June and July 2012 occurred.
9. On 14th June, 2012 Mr. Barry Colgan, Group Human Resources Manager with the defendant, had a meeting with the plaintiff in Boyle. On the following day, 15th June, 2012, Mr. Colgan sent a letter to the plaintiff in which he recorded that he had confirmed at the meeting the previous day “that the position of Chief Executive Officer, Roscommon Herald is no longer required due to the significant reduction in the Group’s business and the ongoing re-organisation of regional newspaper titles and the broader Company”, and that he had informed the plaintiff of the view of the defendant that his position was redundant and that his employment was at risk. It was stated that the next stage of the process was a two week consultation period with the plaintiff, during which the defendant would explore with the plaintiff whether there were any other alternative positions available within the Roscommon Herald or “the wider Group”. The plaintiff was invited to make submissions or suggest alternative approaches which could possibly result in his not losing his job. Mr. Colgan queried whether the plaintiff was still “not geographically mobile”, which appears to be a reference to Clause 16 of the Executive Contract, and he queried whether any alternative employment opportunity still needed to be “Roscommon-based”. In the last paragraph of the letter it was stated that, once the consultation period was at an end, if it was the case that no alternative positions had been identified as available or accepted by the plaintiff, the defendant would have no option but to confirm the plaintiff’s redundancy would be carried out and he would be served with official notice of redundancy. A further meeting would be arranged to discuss his redundancy package entitlements and notice period. The plaintiff’s solicitors, Reddy Charlton, responded to the letter of 15th June, 2012 on behalf of the plaintiff by letter dated 22nd June, 2012. In that letter it was contended that the redundancy was being used as a cloak to veil the real reasons for the plaintiff’s dismissal. It is not necessary to outline the details of that line of argument, because it was made clear at the hearing of these proceedings that the plaintiff is not contending in these proceedings that his redundancy is not a valid redundancy.
10. Nothing positive emerged during the consultation period. Mr. Colgan called the plaintiff to a further meeting at the Landmark Hotel in Carrick-on-Shannon on the afternoon of 17th July, 2012. At that meeting Mr. Colgan handed the plaintiff a letter of that date signed by him. The letter set out the following matters:
(a) It confirmed that “the position of Chief Executive Officer, Roscommon Herald is being made redundant”. It stated that the reasons for the position becoming redundant, and the economic and financial position driving the redundancy, had already been outlined to the plaintiff.
(b) The “details of the redundancy” and the package that had been proposed were then outlined as follows:
(i) The defendant had calculated the plaintiff’s “exact” statutory redundancy entitlement as being €34,272, which was paid “tax-free” and the basis of that calculation was set out. A cheque for that sum accompanied the letter together with a printout of the statutory redundancy calculation. A Form RP50 accompanied the letter and the plaintiff was asked to complete the relevant declaration and return it to Mr. Colgan.
(ii) The notice period for termination was then dealt with as follows:
“Your contract of employment provides for six month’s notice. The company will pay you in lieu of notice. Therefore, your last day of employment with the company will be today and your termination date with the company will be on 16th January, 2013, which is the date on which your notice expires. You will remain on the company payroll until 17th July, 2012 and thereafter the company will make a lump sum notice payment to you. The company is required to process your notice payment in the usual way so it will be subject to deduction of all tax PRSI and income levies. These monies will be paid to you through payroll. However, it is open to you to make an application to the Revenue with a view to obtaining tax relief on the payment.”
Documentation setting out the calculation of the payment in lieu of notice also accompanied the letter.
(iii) In relation to pension entitlements, it was stated that, as and from the date of the termination of the plaintiff’s employment, no further contributions would be made by the defendant on his behalf in that regard.
(iv) A requirement to which the plaintiff took grave exception was that the plaintiff would not be required to work out the notice period and that, except in case of emergency, he should not attend at any offices of the Roscommon Herald from 18th July, 2012 onwards without the advance agreement of Mr. Linehan.
(v) Finally, the plaintiff was informed that he was entitled to appeal the termination of his employment by way of redundancy by writing to the Chairperson of the Board of the defendant.
While the plaintiff did accept the letter from Mr. Colgan, he did not accept the enclosures, which were subsequently sent by the defendant’s solicitors, Ronan Daly Jermyn, to the plaintiff’s solicitors by letter dated 17th July, 2012. Subsequently, it is not clear when, the defendant paid a sum to the plaintiff in respect of pay in lieu of notice for the six months to 16th January, 2013, the gross amount of which had been calculated at €46,295, representing 50% of the plaintiff’s annual salary (€80,590) and of his annual car allowance (€12,000). I understand that an amount which represented that gross amount net of tax, PRSI and income levies was paid by the defendant.
11. The plaintiff accepted the sums paid in respect of the statutory redundancy payment and the payment in lieu of notice in mitigation of his loss.
12. Following some correspondence between the solicitors in the interim, these proceedings were commenced by plenary summons which issued on 24th July, 2012. Simultaneously with the issue of the plenary summons, the plaintiff was given leave to issue a notice of motion for interlocutory injunctive relief on 24th July, 2012 returnable on 25th July, 2012. The application for interlocutory relief was subsequently refused by order of the Court (Peart J.) made on 13th August, 2012. Thereafter, the parties concentrated on the substantive action, which came on for hearing on 22nd January, 2013. There was some departure from the plaintiff’s case as pleaded and from the defendant’s defence to it as pleaded at the hearing, which I will outline when considering the pleadings.
The pleadings
13. The reliefs claimed by the plaintiff in the prayer in the statement of claim which I understand are being pursued by the plaintiff are as follows:
(a) a declaration that the defendant was obliged to give notice of termination to the plaintiff in accordance with the terms of the Executive Contract, being notice which will expire on 17th June, 2016;
(b) a declaration that the defendant has, by its purported termination of the contract of employment between it and the plaintiff, acted in breach of that contract;
(c) damages for breach of contract; and
(d) interest pursuant to the Courts Act 1981.
In listing the reliefs above, I have omitted the following reliefs originally claimed:
(i) a declaration that the defendant is not by reason of the Executive Contract entitled to pay the plaintiff a sum or sums of money in lieu of the notice period provided for in the Executive Contract, which I have omitted because the basis of the plaintiff’s claim for damages is that the plaintiff is entitled to damages to compensate him for the salary and other emoluments he would have received between 17th July, 2012 and 17th June, 2016;
(ii) a declaration that the Executive Contract does not permit the defendant to terminate it for the reason or purported reason of redundancy with the consequence that such purported termination is of no legal effect, which has been omitted because the plaintiff has abandoned the relief sought in the plenary summons for an order that he be immediately reinstated into his position and it was made clear by his counsel that the plaintiff is not pursuing in these proceedings a claim that the purported making of his position as Chief Executive of the Roscommon Herald redundant was not done bona fide;
(iii) an order for payment of sums in respect of historic salary increases alleged to be due, which has been omitted because it was made clear it was not being pursued;
(iv) an order for payment of all bonus amounts due and owing to the plaintiff, which has been omitted because bonus amounts are included in the plaintiff’s quantification of damages for loss of remuneration, which will be outlined later; and
(v) a claim for aggravated damages, which has been omitted because it was made clear the plaintiff was not pursuing it.
The plaintiff’s claim for damages encompasses damages for loss of remuneration and general damages for alleged reputational damage in consequence of the manner in which the plaintiff’s employment was terminated.
14. The breach of contract alleged in support of the reliefs claimed is that the defendant purported to terminate the plaintiff’s employment otherwise than in accordance with the terms of Clause 2 of the Executive Contract and that the plaintiff is entitled to special damages which compensate him for the contractual entitlements he would have had, if the term of his contract had run its course until 17th June, 2016. The quantum of special damages claimed has been particularised in a revised schedule of special damages handed into court at the hearing, the contents of which will be outlined later.
15. Additionally, the plaintiff alleges that the manner in which the defendant breached the plaintiff’s contract was designed to, and did in fact, cause maximum reputational damage to the plaintiff, particularising the exclusion of the plaintiff from the offices of the Roscommon Herald from 18th July, 2012, which it is alleged caused him grave reputational damage.
16. The elements of the defendant’s defence which address the plaintiff’s case as pleaded, and as pursued at the hearing, are as follows:
(a) It is denied that the Executive Contract is and remains operative until at least 17th June, 2016 and it is denied that the contract may only be terminated on 17th June, 2016 by the defendant giving to the plaintiff at least six month’s notice prior to 17th June, 2016 of its intention to terminate the contract.
(b) Although the issue of the validity of the defendant making the plaintiff redundant has not been pursued by the plaintiff at the hearing, I think it is appropriate to record that the defendant’s position is that it was entitled to exercise its statutory entitlement to make the plaintiff redundant and in that connection it relies, in particular, on s. 7(2) of the Redundancy Payments Act 1967, as amended (the Act of 1967).
(c) More significantly, the defendant pleads that the plaintiff’s contract of employment automatically, by operation of law, became a contract of indefinite duration in accordance with the provisions of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act of 2003) and, in such circumstances, the contract of employment was determinable on the giving of reasonable notice. The position adopted by the defendant at the hearing was that six month’s notice was reasonable notice having regard to the circumstances.
(d) On the basis that six month’s notice was reasonable notice, the position of the defendant, as pleaded, is that the payments it made to the plaintiff reflecting six month’s notice was reasonable in all the circumstances.
(e) The basis on which the plaintiff has quantified the special damages he alleges he is due in consequence of the alleged breach of the part of the defendant is disputed.
(f) As regards the plaintiff’s claim for alleged reputational damage, the defendant traverses all aspects of that claim.
(g) A further element of the defence to the quantification of the damages alleged by plaintiff to be due to him is the defendant’s contention that the plaintiff has not made all reasonable efforts to mitigate his loss.
17. Having regard to what remains in the plaintiff’s claim, the most important aspect of the plaintiff’s reply is that it is denied that the plaintiff’s contract became a contract of indefinite duration automatically by operation of the Act of 2003. Apart from that, the plaintiff has joined issue on all of the matters pleaded by the defendant in the defence, including the allegations in relation to failure to mitigate loss.
The issues on liability
18. The plaintiff having abandoned his challenge to the validity of his redundancy, what remains in this case is a claim for damages for wrongful dismissal at common law. In his closing submissions counsel for the defendant made it clear that the defendant agrees with the proposition advanced on behalf of the plaintiff that the statutory provisions in force in relation to redundancy do not negate the plaintiff’s contractual rights under the Executive Contract. He illustrated that point by the hypothesis that, if the defendant had made the plaintiff redundant in 2006, he would have been entitled to two year’s notice of termination and, if he did not get it, he would be entitled to compensation for two year’s loss of salary and other emoluments. In the light of the approach adopted by the parties, the issue on liability turns primarily on the following questions:
(a) As a matter of contract what was the term of the plaintiff’s employment under the Executive Contract?
(b) Was the plaintiff’s contractual entitlement varied by the application of the Act of 2003?
19. Clause 2 of the Executive Contract, which I have quoted fully above, in my view, raises no issue of construction. It is quite clear that, as a matter of contract, the initial term of the plaintiff’s employment was to be for four years from 18th June, 2004. Unless notice was given at least six months before 17th June, 2008, which the parties are ad idem did not happen, the term was to continue for a further four years to 17th June, 2012. As a matter of contract, the term was to continue for a further four years from 18th June, 2012, unless the defendant had given notice of intention not to renew before 17th December, 2011, which, again, did not happen. Therefore, as a matter of contract, in the circumstances which prevailed on 17th July, 2012 the plaintiff’s term of employment was to continue until 17th June, 2016. The issue of summary termination of the plaintiff’s employment in accordance with Clause 14 of the Executive Contract did not arise at any time.
20. The letter of 17th July, 2012 handed to the plaintiff by Mr. Colgan on that day effectively gave the plaintiff six month’s notice from that day and stipulated that his termination date would be 16th January, 2013. Accordingly, assuming that the duration of the plaintiff’s employment was not varied by the application of the Act of 2003, by only giving him six month’s notice the defendant purported to terminate the plaintiff’s contract of employment in breach of its terms.
21. The Act of 2003, which provided for the implementation of Directive No. 1999/70/EC of 28th June, 1999 concerning the Framework Agreement on fixed-term work, came into operation on 14th July, 2003. Accordingly, it preceded the execution of the Executive Contract.
22. The defendant relied on s. 9 and s. 12 of the Act of 2003.
23. Section 9, insofar as it is relevant for present purposes, provides as follows:
“(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.”
Subsection (4) had no application to the contractual relationship of the plaintiff with the defendant either on 17th June, 2008 or 17th June, 2012.
24. Section 12 of the Act of 2003 provides as follows:
“Save as expressly provided otherwise in this Act, a provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of the provision concerned of this Act) shall be void insofar as it purports to exclude or limit the application of, or is inconsistent with, any provision of the Act.”
25. Subject to two exceptions which are stipulated, the term “fixed-term employee” is defined in s. 2 of the Act of 2003 as meaning –
“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 express exceptions have no relevance to the plaintiff’s employment.
26. The word “renewal” is defined in s. 2 as including “extension”.
27. As a matter of construction of the Act of 2003, in my view, s. 9(3) has not operated so as to deem the plaintiff’s contract of employment after 18th June, 2008 to be a contract of indefinite duration, as contended by the defendant for the reasons set out below.
28. First, on the facts, in my view, subs. (1) of s. 9 has no application to the plaintiff’s employment with the defendant. Accordingly, the question which has to be considered is whether the plaintiff’s contract of employment with the defendant contravenes subs. (2) of s. 9.
29. Secondly, in applying subs. (2), the first question which arises is whether the plaintiff was from the commencement of his employment with the defendant under the Executive Contract “a fixed-term employee”. The application of the definition of fixed-term employee to the plaintiff as an employee of the defendant under the Executive Contract raises the question whether the end of the Executive Contract is determined by an objective condition. Having regard to the examples of “objective condition” set out in the definition, and also in s. 8(1) of the Act of 2003, I understand “objective condition” to mean a condition which is identifiable by reference to the object, that is to say, the condition, without reference to the view or perception or intervention of either party to the contract. A contract, such as the Executive Contract, the term of which is expressed to be from the commencement date for a period of four years and continuing for further periods of four years unless determined by six month’s notice from the employer given at least six months before the expiration of any four year period cannot be said to be determined by an objective condition, because the intervention of the employer, which may or may not happen, and in this case did not happen over a period of eight years, is necessary to give rise to and identify the determining event.
30. Thirdly, apart from the fact that the plaintiff employee did not come within the definition of “fixed-term employee”, the requirement in subs. (2) of s. 9 of two or more continuous fixed-term contracts has not been met on the facts which have been established. Only one contract was entered into between the plaintiff and the defendant, that is to say, the Executive Contract. It commenced on 18th June, 2004 and was still in existence over eight years later when the defendant purported to terminate it in July 2012 with effect from 16th January, 2013.
31. Fourthly, as is frequently reiterated (for example, by Hogan J. in Holland v. Athlone Institute of Technology [2012] 23 ELR 1, at p. 5), Recital 14 of the Directive recites that the signatory parties to the Framework Agreement –
“. . . wished to conclude a Framework Agreement on fixed-term work setting out the general principles and minimum requirements for fixed-term employment contracts and employment relationships; they have demonstrated their desire to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination, and to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.”
The application of the Act of 2003 to the plaintiff’s contract of employment with the defendant in the manner contended for by the defendant certainly does not ameliorate the position of the plaintiff as employee. Having said that, it is not necessary, in my view, to go so far as to find, as was advocated by counsel for the plaintiff, that the construction contended for by the defendant would achieve an absurd result, which can hardly have been intended by the Oireachtas. That is because, for the reasons set out above, I have come to the conclusion that, on the proper application of subs. (2) of s. 9 to the plaintiff’s conduct of employment with the defendant, that provision is not contravened.
32. Accordingly, I reject the defendant’s argument that in June 2012 the plaintiff was employed under a contract of indefinite duration by the operation of s. 9(3) of the Act of 2003. At that time, the plaintiff was still employed by the defendant for the term created by the Executive Contract, which continued from 18th June, 2012 for a further four years and could only be determined by at least six month’s notice given by the defendant prior to the expiration of that four year period, that is to say, prior to 17th December, 2015. In purporting to terminate the plaintiff’s contract by the notice dated 17th July, 2012 with effect from 16th January, 2013, the defendant was in breach of contract. Accordingly, the defendant is liable in damages for the loss which the plaintiff has incurred as a consequence of his wrongful dismissal.
Damages: general observations
33. Counsel for the plaintiff relied on the commentary on the general principles on which damages are awarded set out in Redmond on Dismissal Law in Ireland (2nd Ed.). As it pointed out at paragraph 11.04, where an employee is wrongfully dismissed he is entitled, subject to the rules of mitigation, to compensation for loss of remuneration during an unexpired fixed period of contractual employment, but generally damages on any other basis are excluded. Compensation covers benefits-in-kind, benefits under pension schemes and so forth, as well as commission. The position in relation to fixed-term contracts is outlined as follows (at para. 11.05):
“The general principle applied by the courts to fixed-term contracts which cannot be unfixed by notice recognises an employee’s right to damages in respect of loss of employment for the remainder of the fixed-term, subject only to the rules concerning mitigation of loss.”
In this case there was implicit recognition on the part of the defendant from the outset of the purported termination process that the plaintiff was entitled to be compensated for loss of remuneration for the remainder of the term of his contract, because compensation was proffered (and accepted in mitigation of loss) for the six month’s notice period which the defendant contended would terminate his contract, which, on the basis of the finding made above was not correct.
34. Essentially, the following issues arose at the hearing in relation to the quantification of the damages to which the plaintiff claimed he was entitled:
(a) as regards damages for loss of remuneration, the defendant took issue with the manner in which the plaintiff sought to address taxation issues in the quantification thereof;
(b) the defendant contended that, on the basis of the evidence, the plaintiff had failed to mitigate his loss; and
(c) the defendant contended that the damages claimed by the plaintiff as compensation for alleged damage to his reputation having regard to the manner in which the defendant purported to terminate his contract were not recoverable.
Having set out the relevant provisions of the Executive Contract and the plaintiff’s revised claim for damages for loss of remuneration, I will consider each of those issues in turn.
Plaintiff’s revised schedule of special damages
35. It is common case that as of July 2012 the salary actually being paid to the plaintiff, in accordance with Clause 4 of the Executive Contract, was €80,590 gross per year. Under the provisions of the Executive Contract he was also entitled to:
(a) payment by the defendant into the executive defined contributions pension scheme established by the plaintiff of a sum equivalent to 7.5% per annum of his basic salary until the age of fifty and 10% per annum of his basic salary until the age of sixty five until the expiration or termination of the Executive Contract (Clause 5);
(b) at a minimum a yearly bonus of 7.5% of his basic salary (Clause 6); and
(c) €1,000 per month in relation to the use of his car on company business (Clause 7).
Further, the plaintiff established that there had been an agreement entered into between the defendant and the plaintiff, which was executed on 31st January, 2011, to the effect that the plaintiff would receive a “minimum 2% pay increase from 1st March, 2012”, which had not been implemented when his contract was purported to be terminated.
36. The “revised schedule of special damages” presented at the hearing set out the plaintiff’s claim for damages for loss of remuneration on the basis of the remuneration which would have continued to be paid to the plaintiff if the Executive Contract had continued to run its course until 16th June, 2016 as follows:
(a) contractual entitlements (gross salary including 2% increase
effective from 1st March, 2012, bonus payments, car allowance
and pension contributions for which the defendant would have
been liable from 17th July, 2012 to 16th June, 2016 €421,328.48
(b) arrears of salary increase from 1st March, 2012
to 17th July, 2012 at 2% €613.81
(c) outstanding bonus payment for one year up to July 2012 €6,044.25
(d) total of (a), (b) and (c) €427,986.54
(e) tax which would have been payable on amount at (d) over the
period, i.e. in 2013, 2014, 2015 and 2016 (€150,390.16)
(f) net entitlements under (a), (b) and (c) on an
“after tax” basis €277,596.44
(g) less allowance for payments received (pay in
lieu of notice and statutory redundancy) calculated on
an after tax basis (€56,493.60)
(h) net contractual entitlements after deducting
payments received at (g) if the Executive Contract
had continued until 16th June, 2016 €221,102.84
(i) gross amount in damages required to produce a
sum equivalent to the net “after tax” position €430,611.75
37. The revised schedule was based on a report prepared by Sheila Mullen, a director of Stephens Cooke and Associates, Chartered Accountants, dated 21st January, 2013 which Ms. Mullen put in evidence when she was testifying. The report, which was very clear and comprehensible, and Ms. Mullen’s oral testimony revealed the following:
(a) The employer pension contributions, which would not have been subject to tax, were calculated over the period from 17th July, 2012 to 16th June, 2016 at €27,710.04 and were included in the figure at (a) in the revised schedule.
(b) The assumption made by Ms. Mullen in relation to the taxation of damages awarded to the plaintiff was set out in her report as follows:
“Under s. 123 TCA 1997, the payments being claimed by [the plaintiff] arising from the wrongful termination of his Employment are taxable under Schedule E in the tax year in which they are paid and subject to the normal Income Tax, Prsi and USC provisions. Accordingly [the plaintiff] will only be allowed one year’s tax credits and standard rate tax band in relation to any amounts paid. Therefore after the standard rate band has been reached all of Mr. Nerney’s income will be taxed at the top rate of tax i.e. 41%.”
As will be outlined later, in my view, that assumption is correct. However, the revised schedule was based on Ms. Mullen’s calculations in Appendices 1 and 3 to her report of what would have been received by the plaintiff had he continued to be paid on an ongoing basis until 16th June, 2016. Her calculation on the basis of that assumption, that is to say, in accordance with s. 123, is contained in Appendix 2, based on figures in Appendix 1.
(c) One calculation which does not appear in the revised schedule but was addressed in the report in Appendix 2 is the amount which Ms. Mullen calculated as the “after tax” amount which would be receivable if the total amount in respect of contractual entitlements (€427,986.54) was paid in one amount in the year 2013. It would be €254,114.75, which is €23,481.69 less than the amount at (f) in the revised schedule, the reason for the difference being that the plaintiff would only be allowed one year’s tax credits and standard rate tax band in 2013, whereas, if the payment was spread out over 2013, 2014, 2015 and 2016, the tax due would be calculated in respect of each year, as the figures in the revised schedule have been.
(d) The “bottom line” figure of €430,611.75 in the revised schedule is based on the proposition that the plaintiff would have a tax liability on his contractual entitlements at current rates for PAYE in the sum of €162,822.82 and a liability in the sum of €46,686.09 in respect of PRSI at 4% and the Universal Social Charge at the current rate had his contract continued until 16th June, 2016. However, that wholly ignores the assumption set out at (b) above.
Taxation issues
38. The revised schedule, in my view, created confusion in relation to the tax situation and the confusion was compounded by the evidence adduced, other than the evidence of Ms. Mullen. In addition to Ms. Mullen, two taxation experts gave evidence, one on behalf of the plaintiff and the other on behalf of the defendant. The plaintiff’s objective in calling a tax expert was to demonstrate that the appropriate approach is to assess the plaintiff’s damages for loss of remuneration on the basis of his gross “before tax” entitlement, whereas the defendant’s position was that the assessment should be on the basis of net “after tax” entitlement, citing the decision of the High Court in Carey v. Independent Newspapers (Ireland) Ltd. [2004] 3 I.R. 52, in which Gilligan J. calculated the damages due to the plaintiff as “six months’ net pay in lieu” of notice. The final position adopted by counsel for the plaintiff in his closing submissions was that the claim for loss of remuneration could be based on net “after tax” pay provided it was clear that the plaintiff had no liability for tax.
39. Notwithstanding that position, I find it necessary to consider the tax position in depth. The evidence has given rise to a lot of confusion. In particular, I did not find the evidence of either tax expert to be in point, because both seemed to envisage that the payment to the plaintiff would involve an assessment of tax due by the plaintiff in accordance with s. 112 of the Taxes Consolidation Act 1997 (TCA 1997) and that the defendant, as employer, would be making deductions in respect of PAYE, PRSI and the Universal Social Charge from the damages awarded by the Court. That fails to take account of the manner in which the Court awards damages for wrongful dismissal, which has been applied since the decision of the High Court (Kenny J.) in Glover v. B.L.N. Ltd. (No. 2) [1973] I.R. 432, by which this Court is bound.
40. Three elements of the plaintiff’s claim for damages for wrongful termination in the Glover case which were allowed were sums claimed in respect of salary for twenty months, directors’ fees, and commission. It had been contended by the defendant that, when calculating the part of the damages referable to those three elements, the Court should make a deduction for the income tax and surtax which the plaintiff would have had to pay on those elements, if he had remained in the defendant’s employment until the expiration of his contract, reliance being placed on the decision of the House of Lords in British Transport Commission v. Gourley [1956] AC 185. In addressing the issue before him, Kenny J. (at p. 438) stated that ss. 8 and 9 of the Finance Act 1964 (the Act of 1964), which had been in force at the relevant time, had the effect that amounts exceeding £3,000 awarded for damages for wrongful dismissal were taxable. Those sections had been replaced by s. 114 and s. 115 of the Income Tax Act 1967 by the date of the judgment of Kenny J. The relevant corresponding provisions are now contained in s. 123 TCA 1997 and s. 201 of the same Act. The first question which was addressed by Kenny J. was whether damages for loss of earnings, fees and commissions, apart from ss. 8 and 9 of the Act of 1964, were chargeable to tax. In answering that question he stated (at p. 438):
“In an action for wrongful dismissal, the damages are not an award of the remuneration which would have been earned: they are intended to compensate the plaintiff because he has not been allowed to earn it. . . . This is the justification in principle for the many decisions in which judges have said that damages for wrongful dismissal are not taxable. . . The measure of the damages may be the amount of the remuneration but that does not make them taxable. In so far as the damages in this case consist of a sum calculated by reference to salary, commission and director’s fees, they are not taxable in Mr. Glover’s hands, apart from ss. 8 and 9 of the Act of 1964.”
41. Kenny J. then went on to consider the question whether ss. 8 and 9 of the Act of 1964 had made damages, insofar as they related to salary, directors’ fees and commission, chargeable to tax or whether so much thereof as exceeded £3,000 only was taxable. He answered that question as follows (at p. 439):
“In my view, when the amount of the damages for loss of remuneration exceeds the sum mentioned in s. 9, the first £3,000 is not chargeable to tax. It follows that £3,000 of the damages in this case, insofar as they relate to loss of salary, commission and fees, are not liable to tax under sections 8 and 9.”
The current threshold corresponding to the sum of £3,000 stipulated in s. 9 is identifiable in s. 201(5)(a) of TCA 1997, which provides that income tax shall not be charged by virtue of s. 123 in respect of payment of an amount not exceeding the basic exemption and, in the case of a payment which exceeds that amount, shall be charged only in respect of the excess. In s. 201(1)(a) the expression “the basic exemption” is defined as meaning “€10,160 together with €765 for each complete year of service, up to the relevant date, of the holder in the office or employment in respect of which the payment is made”.
42. In the Glover case it had been argued before Kenny J. that the decision in the Gourley case applied only to damages awarded for loss of remuneration in accident cases and not to those given for wrongful dismissal. Kenny J. rejected that argument. He also rejected an argument that the Gourley case had been wrongly decided and he stated (at p. 441):
“An award of damages by a court is intended to compensate the plaintiff for the loss which he has suffered: in some cases the damages may be punitive but compensation or restoration (so far as money can do it) to the position before the accident is the main element. Therefore, it is irrelevant that the defendant will profit by an allowance being made for tax against the loss. If the damages under £3,000 are not chargeable to tax while the lost remuneration would have been, the plaintiff would be getting an award which would exceed the loss which he had suffered by being deprived of the remuneration.”
Applying the decision in the Gourley case, which he stated accorded with reason and principle, Kenny J. held that it should be applied to the first £3,000 of the damages for loss of salary, fees and commission in the Glover case.
43. The effect of the Glover decision was considered in the Supreme Court in Sullivan v. Southern Health Board [1997] 3 I.R. 123, in which Murphy J. made some observations in relation to the incidents of taxation on damages (at p. 137). He quoted from his own judgment in Allen v. Ó Súilleabháin (Unreported, Supreme Court, 11th March, 1997) at p. 11 where he had stated:
“As I understand it, the principle enunciated by Kenny J. in Glover v. B.L.N. (No. 2) . . . and accepted by Finlay P. in Hickey v. Roches Stores [1980] ILRM 107, is that where damages (or the actual or notional income to be derived from the investment thereof) are exempt from tax that an appropriate adjustment or reduction in those damages must be made if the plaintiff is being compensated for a loss of income or profits which would have been liable to tax in his hands. The logic of this proposition is clear. The failure to make such an adjustment would result in the plaintiff receiving compensation which might very much exceed the loss which he suffered.”
Referring to the Glover case, Murphy J. stated that what he described as “the silver handshake” provisions of s. 8 of the Act of 1964 imposed tax on damages awarded as compensation for wrongful dismissal subject to an exemption in respect of the first £3,000 of such damages, which brought into play the deduction of the tax element from all or part of the award.
44. In the Sullivan case, the problem with which the Supreme Court was confronted was that the liability to tax in respect of the damages awarded or a part thereof had not been explored in argument at first instance. Murphy J. stated that he considered it would be improper for any court to compute the defendant’s liability to damages on the basis of the plaintiff’s liability to tax without a convincing case having been made for the adoption of that course. A retrial on the issues of damages was directed.
45. Having reviewed the evidence of the taxation experts and Ms. Mullen’s report in the light of the authorities to which I have referred, I think the following observations are pertinent:
(a) On the authority of the decision of Kenny J. in the Glover case, it would appear that s. 112 TCA 1997, to which the experts referred, is not the charging provision for the assessment of tax on damages for wrongful dismissal.
(b) On the basis of the same authority, it would appear that s. 123 TCA 1997 is the charging provision. It applies to any payment not otherwise chargeable to income tax which is made, whether in pursuance of any legal obligation or not, either directly or indirectly in consideration or in consequence of, or otherwise in connection with, the termination of employment. Subject to s. 201, income tax is charged under Schedule E in respect of such payment. In a case such as this, by virtue of subs. (4)(b) of s. 123, the payment is treated as income received on the date of termination and is treated as emoluments of the past holder of the employment assessable to income tax under Schedule E. Sub-section (6) provides that where a payment chargeable to tax under s. 123 is made, it shall be the duty of the person by whom the payment is made to deliver particulars of the payment in writing to the inspector not later than fourteen days after the end of the year of assessment in which the payment is made.
(c) Notwithstanding that s. 192A TCA 1997 was also referred to in evidence, my understanding is that it was accepted that it has no application, because the Court is not concerned with statutory protection of an employee’s rights.
(d) While, if it was being assessed, the liability of the plaintiff under s. 123 would be subject to the exemptions and reliefs provided for in s. 201 TCA 1997, which I have outlined in para. 41 above primarily for illustrative purposes, the approach adopted in the Glover case to reverse the more benign effect of the application of s. 123, than the effect if the employee continued in employment and s. 112 applied, which must be followed by the Court, means that it is not necessary to assess the effect of s. 201 and I noted that Ms. Mullen did not do so in Appendix 2.
(e) Of course, there remains the consequence of the application of s. 123(4)(b), which is adverse to the plaintiff and the effect of which Ms. Mullen calculated at €23,481.69 as referred to at (c) in para. 37 above. It has been suggested by Redmond (op. cit.), (at fn. 82 at p. 224) that a solution to that problem might be to introduce income averaging or “top slicing” provisions to ensure that these damages were not subjected to unduly high rates of tax by virtue of being taxed wholly in one year. As I understand it no such provisions have been enacted and the plaintiff must bear that consequence.
46. To complicate matters even further, counsel for the plaintiff introduced a recent decision of the High Court of England and Wales into the taxation arguments: the decision in BSkyB Ltd. v. HP Enterprises U.K. Ltd. [2010] EWHC 862. Counsel referred the Court to the note on that decision in the Second Supplement to McGregor on Damages (18th Ed.), which states the law up to 20th August, 2011. The note states that in the BSkyB case –
“. . . after a very full review of the authorities . . . ending with a reference to our strong approval of Amstrad Plc. v. Seagate Technology Inc (at para. 14 – 19 of the main work), Ramsey J. elected to follow Amstrad rather than Deeny v. Gooda Walker Ltd.(at para. 14 – 20 of the main work). All three cases were concerned with the profits which, had they been achieved rather than lost, would have been taxable at a higher rate of tax than the rate at which damages representing them were to be taxable. Ramsey J. held that in awarding damages:
‘An allowance should be made for the difference between the corporation tax treatment which the lost benefit would have received and the corporation tax treatment which the sums awarded as damages are likely to receive’.”
As counsel for the defendant pointed out, what was at issue in the BSkyB case was a variation of 2% in the context of lost benefits which the defendant accepted were quantifiable at Stg. £270m. In that case, the Court was looking back. Here the Court has to look forward and the reality is that it is impossible to predict with any degree of certainty what the incidence of tax would be on the plaintiff’s income from his employment with the defendant, if he were to continue in his employment with the defendant until 16th July, 2016 or such shorter compensatory period as the Court will allow.
47. The evidence adduced and the submissions made in this case bear out the comment in Redmond (op. cit.) (at para. 11.46) that the law governing the calculation of the effect of tax liability on damages for loss of earnings or earning capacity is unsatisfactory and controversial. The evidence adduced by the parties in this case suggests that the taxation experts found the law confusing. In particular, the evidence in this case as to the relevant charging provision, whether it is s. 112 or s. 123 TCA 1997, and as to who is responsible for paying the tax, was very confusing. As I have found, the relevant charging provision which the Court has to have regard to is s. 123. Further, although the proposition that, while the Court should ensure that the plaintiff does not get an award which would exceed the loss which he has suffered by being deprived of remuneration, “it is irrelevant that the defendant will profit by allowance being made for tax against the loss” (per Kenny J. in the passage in Glover quoted at para. 42 above) is somewhat disconcerting in the current economic climate, it is clear that this Court is bound to follow the approach adopted in the Glover case. Liability for remission of tax is a matter which concerns the defendant and the Revenue Commissioners, and liability for tax on income received by the plaintiff is a matter which concerns the plaintiff and the Revenue Commissioners. Finally, on the very unusual facts of this case arising, principally, from the unusually long term of the plaintiff’s employment under the Executive Contract and the fact that he will be compensated “up front” in respect of prospective loss, the justice of the situation may be met notwithstanding that subs. (4)(b) of s. 123 is applied without any adjustment or “top slicing”.
48. However, before reaching any firm conclusion on the quantum of damages for loss of remuneration, it is necessary to address the argument advanced by the defendant that the plaintiff has not mitigated his loss.
Mitigation of loss
49. Each of the parties produced evidence by a person with expertise in recruitment of personnel at senior management level.
50. Mr. Ronan Colleran, who testified on behalf of the plaintiff, was the founder, and is now, effectively, the manager of Accreate which is described as an “executive search” firm. Mr. Colleran identified two issues which will militate against the plaintiff in his search for alternative employment: competition in the print industry, which he described as being “intense” and as being eaten into by social media; and the recession. He also emphasised that there is limited opportunity in the area around Boyle, County Roscommon, where the plaintiff lives with his family, for recruitment at executive level. Mr. Colleran’s conclusion was that the likelihood of the plaintiff being in a position to secure similar employment at an appropriate level within the next three to four years is remote. He also raised doubts about other possible options open to the plaintiff. Starting up a new business in the current economic climate would be high risk, he opined, and might not deliver an equivalent executive level salary for a number of years. Even if the plaintiff were to secure lower level employment, not only could his salary be approximately half his final salary with the defendant without the benefit of a car allowance, but he might have to commute a distance from his home in Boyle. Further, the transition from his former position as a Chief Executive Officer to lower level employment could “lead to its own problems”.
51. Mr. Pat Beechinor, the founder of Network Personnel Consultants, who testified on behalf of the defendant, while acknowledging that the market is “tight”, was of the opinion that, if the plaintiff focused and concentrated his job hunting efforts within the “growing SME sector”, he would secure a managerial position within the next three to six months. Mr. Beechinor emphasised the plaintiff’s commercial experience in having sold The Roscommon Herald and his managerial skills.
52. Clause 17.1 of the Executive Contract precluded the plaintiff from working in the business of publishing print media for six months after termination. He unsuccessfully canvassed the prospect of employment after January 2013 at management level with two media enterprises in the Border Midland Western area.
53. By way of general observation, endeavouring to resolve the issue of mitigation of loss in this case is difficult, and, like all other difficult aspects of the case, it is difficult because of the extremely unusual basis on which the plaintiff was employed by the defendant, which, in the events which happened, prima facie, have entitled the plaintiff to damages for breach of contract which represent three years and eleven month’s remuneration. Even in the uncertain economic climate prevailing, it is reasonable to conclude that it is probable that at some time prior to 16th June, 2016 the plaintiff will be in a position, either by obtaining suitable employment or establishing his own business, to obtain an income to replace the remuneration which he would have received from the defendant. As regards setting up his own business, while the evidence as to his current assets is far from precise, it is reasonable to infer that he is in a much more advantageous position than most employees who are made redundant. Finally, apart from the unusual features of the plaintiff’s contract of employment with the defendant, another unusual feature of this case is that his claim came on for hearing in the same month as his payment in lieu of notice and his obligations under Clause 17.1 expired. Therefore, his situation is not analogous to the situation which Smyth J. faced in Sharkey v. Dunnes Stores (Ireland) Ltd. [2004] IEHC 163, an authority relief upon by counsel for the defendant.
54. Obviously, there is an element of unpredictability involved in determining at what point in time prospectively the plaintiff should reasonably obtain an alternative source of income. However, on the basis of the evidence, I think that a reasonable cut-off point would be the expiration of two years from 17th July, 2012. It is important to emphasise that no finding is being made that up to this point in time the plaintiff has failed to take steps to mitigate his loss.
Quantum of damages characterised as special damages
55. In summary, I consider that the basis on which damages for loss of remuneration should be quantified is that the plaintiff should be compensated for being deprived of the remuneration he would have received from the defendant under the Executive Contract for two years from 17th July, 2012. The benefits under the Executive Contract in respect of which he is entitled to be remunerated or reimbursed are:
(a) the salary including the 2% increase agreed between the parties with effect from 29th February, 2012;
(b) the bonus;
(c) the car allowance; and
(d) the pension contributions.
Items (a) to (c) inclusive are the remuneration elements of the damages.
56. As regards the pension contributions, which Ms. Mullen has classified as not being subject to tax, which for the years 2013 and 2014 (per Appendix 1 to Ms. Mullen’s report) aggregate €12,376.28, there was no real debate at the hearing as to whether they should be included or excluded in the award of damages. Having regard to the fact that the pension scheme was in being when the Executive Contract was entered into, that the defendant agreed to continue to pay the defined contributions into it at the rate and for the period by reference to the plaintiff’s age set out therein and that the plaintiff is now forty eight years of age and will be within the agreed age related period until 16th July, 2014, I think it is reasonable to assume that the plaintiff will continue to pay the contributions, so that for, the period which I have identified, he should recoup those payments from the defendant.
57. The tax exigible on the remuneration element of the damages should be assessed in accordance with the decision in the Glover case under the relevant charging provision, that is to say, s. 123 TCA 1997. As it is not the Court’s function to attempt to calculate the tax exigible on the remuneration elements under the relevant charging provision (s. 123) from 17th January, 2013 (which I consider to be the “date of termination” for the purposes of s. 123(4)) to 16th July, 2014, factoring in the necessary adjustment in accordance with the Glover decision, unless the parties can agree a figure, that calculation will have to be carried out by Ms. Mullen. If the defendant disputes her calculation, then the matter will have to be the subject of further evidence and submissions to the Court. The objective is to ascertain the net “after tax” amount which will compensate the plaintiff for the loss of salary, car allowance and bonus in the period from 17th January, 2013 to 16th July, 2014, the six month period up to 17th January, 2013 having been already addressed by the defendant in the payment in lieu of notice.
58. Finally, as has been made clear earlier, the Court is not concerned with the issue of redundancy or any entitlement of the plaintiff to a payment under the Act of 1967. Therefore, in assessing the damages for the loss of remuneration of which the plaintiff has been deprived, in my view, the payment of €34,272 made by the defendant to the plaintiff in respect of statutory redundancy should not be deducted, as was done at (g) in the revised schedule.
General damages
59. It was submitted on behalf of the defendant that, as a matter of law, having regard to the decision of the House of Lords in Addis v. Gramophone Co. Ltd. [1909] AC 488, which has been followed in this jurisdiction, the plaintiff is not entitled to compensation for loss of reputation and injury to his feelings as regards the manner in which his employment was terminated. On the other hand, counsel for the plaintiff made it clear that, while it is the plaintiff’s position that the manner in which his employment was terminated had a prejudicial effect on him and was stressful, he is not claiming damages for personal injuries. The basis of his claim is that there was damage to his reputation in the community. Counsel for the plaintiff submitted that there has been a practice to award a small amount of compensation in cases such as this and that that practice prevails at Employment Appeals Tribunal level.
60. I do not consider it necessary to consider the current status in this jurisdiction of the principle established in the Addis Gramophone case, which was analysed by Gilligan J. in the Carey case (at p. 9 et seq.) because I consider that the plaintiff’s claim is simply not maintainable on the facts.
61. The fact is that the plaintiff got slightly in excess of a month’s notice that he would be made redundant. Following receipt of that notice his solicitors were in correspondence with the defendant. Accordingly, the letter of 17th July, 2012 should not have come as a surprise to him. It is understandable that the defendant was upset by the fact that he was being precluded from access to the offices of the Roscommon Herald from 18th July, 2012. However, despite Mr. Colleran’s evidence, I do not think that that factor could have in any way damaged his reputation. If, as suggested by Mr. Colleran, the fact that the plaintiff was given “six hours notice to leave” would “raise suspicions”, a person who harboured such suspicions would clearly be unaware of the real situation, namely, that the termination of the plaintiff’s employment was part of a restructuring within the Thomas Crosbie Group. Since judgment was reserved in this case there has been a considerable media focus on the restructuring of the companies in the Thomas Crosbie Group following, inter alia, the appointment of a receiver to the defendant in early March, so that nobody likely to be engaging with the plaintiff in the future could be unaware of the real situation, and the unfortunate circumstances, not just for the plaintiff, which have flowed from it.
62. As regards the conversation which the plaintiff’s wife testified she overheard at a checkout in a supermarket in Boyle to the effect that the termination of the plaintiff’s employment suggested that “something must have gone on”, in my view, that must be treated as nothing more than idle gossip.
63. Having regard to the foregoing, there will be no award of general damages.
Order
64. I am postponing making any order until the position in relation to the quantum of damages for loss of remuneration is re-assessed by the parties in light of what I have said above. I propose adjourning the proceedings for a sufficient length of time to enable the parties to address the issues I have outlined earlier.
PJ Kenny, Hilary Neville, Rose Quinlan & Mary Murphy v Cork County Council
FTD057
Labour Court
23 August 2005
[2006] 17 E.L.R. 172
Subject
Appeal against Rights Commissioner’s Decision FT19517, FT21310, FT21311, FT021312/04/DI.
Background
The matter was referred to a Rights Commissioner for investigation and recommendation. His decision issued on January 19, 2005, as follows.
I confirm the matters conceded by the council at the commencement of the hearing.
I find against the claimants, that they were incorrectly graded and should be upgraded to the position of area-based officer, at Grade V level, on the same terms and conditions as their permanent comparable colleagues.
The agreement reached between IMPACT and the council set down an *175 agreed list of duties that the new area-based officers could be asked to perform. On appointment many of the new area-based officers have taken up a rage of these new responsibilities. As these new duties do not apply to former revenue collectors, I find that the position of area-based officers and the new position of revenue collectors are not comparable.
I believe the claimants are correctly graded at Grade IV and should enjoy the same benefits as other council employee’s whose jobs have been evaluated at this level.
On February 28, 2005, the claimants appealed the Rights Commissioner’s Recommendation in accordance with s.15(1) of the Protection of Employees (Fixed-Term Work) Act 2003. A Labour Court hearing took place on June 15, 2005.
Determination
This appeal by IMPACT is on behalf of four complainants who were employed on a fixed-term contract with the County Council on August 5, 2003 when the union lodged complaints under the Protection of Employees (Fixed-Term Work) Act 2003. The union contends that the complainants were been treated less favourably than comparable permanent employees contrary to section 6 of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act). The union referred three complaints to the Rights Commissioner:
(a) the complainants had not been offered permanent contracts,
(b) the complainants had been placed on a lower salary scale than comparable permanent employees despite carrying out the same/ similar duties, and
(c) the complainants had not been granted incremental credit.
At the commencement of the hearing in dispute on October 28, 2004, the county council conceded claims (a) and (b).
The Rights Commissioner found that the duties of the comparators were not comparable, therefore, the complainants’ case failed.
Background
It is common case that all four comparators were employed as revenue collectors Grade IV and were “fixed-term employees” within the meaning of the Act, at the time of the union’s claim to the Rights Commissioner.
An agreement was reached between Cork County Council and IMPACT in December 2001 following lengthy negotiations on the rationalisation of revenue collection. This agreement resulted in the abolition of the grade of revenue collector (Grade IV) and the creation of an area-based officer grade at Grade V level, on a red-circling basis, with new duties attaching to the post. The *176 agreement allowed for the introduction of “Bill Pay” for the collection of rent annuities, and as a result, door-to-door collections were eliminated.
Union’s arguments
Following the December 2001 agreement on the abolition of the revenue collector grade for permanent employees, the permanent revenue collectors were appointed to the new area-based officer posts and received the higher Grade V salary, backdated to the date of the agreement. However, not all of the permanent revenue collectors took up the agreed new duties on appointment to Grade V. The union point specifically to three former permanent revenue collectors who have continued to carry out their former revenue collector duties and are paid at the higher area-based officer grade. All four complainants carry out the same/similar duties.
It is the union’s position that the county council discriminated against the four named appellants solely by reason of their temporary contract status contrary to section 6 of the Act. It contends that the complainants would have been appointed to area-based officer positions had they been employed/classified as permanent revenue collectors by Cork County Council in accordance with the Act. The union accepts that the terms of the 2001 agreement was on a personal to post-holder basis only, however, it stated that the County Council interpreted this as personal to ‘permanent’ post-holders only and contents that this is contrary to the provisions of the Act.
The Act became law on July 14, 2003. The latest date on which the state was required to implement the Directive was July 10, 2002. The union contends that by application of the doctrine of direct effect of Community law the complainants are entitled to rely on the Directive to have application from that date.
County Council’s arguments
The duties allocated to the posts of revenue collector and area-based officer are considerably different. This can be seen from the protracted negotiations with the union on the introduction of the new grade of area-based officer. The fact that the duties allocated to the post of area-based officer are considerably different is the reason for the difference in salaries, and not that one is on a fixed-term contract and the other on a permanent contract.
The complainants were recruited initially to act as relief for revenue collectors for short-term absences and as replacement for retirees pending the implementation of rationalisation. At no stage during the rationalisation discussions leading to the December 2001 agreement did IMPACT include the complainants in the discussions. This was due to the union understanding that they would be let go at the end of the rationalisation process. The union clearly accepted the above position and understood that there was objective justification *177 for the decision not to include the complainants in the negotiations. Due to the protracted negotiations, situations arose where revenue collectors retired during that period and the positions were filled temporarily on a continuing basis by the complainants. The agreement provided for a substantial change of duties for all area-based officers compared to their previous position as revenue collectors.
The council explained that the agreement was completed in two of the three Divisions, i.e. North and South Cork, and that there had been a delay in the implementation process in West Cork, the area in which the comparators work, but once the implementation process is completed, their duties will be significantly different to those carried out by the complainants. The Council decided to make the area-based officer posts personal to holder and red-circled them as it will not require any further posts at area-based officer level and does not intend to fill any further posts at that level following retirements. Since the agreement was put in place any retirements from that grade have been filled as office based positions at Grade VI level.
While the respondent accepted that higher salaries were attached to the area-based officer post, the respondent contended that these posts were created specifically for the incumbents at a time when major rationalisation of revenue collection was envisaged in the Cork area and they were paid at the higher level for that contingency whether they were required to take up those positions immediately or at a later date. The complainants were recruited specifically to fill in for absences and as replacement for retirees, pending the implementation of the rationalisation programme. The respondents contended that the complainants would not be required to carry out area-based officer duties at any time now or in the future.
The respondents condended that the commitment to carry out the new duties associated with the Grade V position on completion of the rationalisation programme together with the reasons already given for the appointment of the comparators to the area-based officer posts constitutes objective grounds for the less favourable treatment of the comparators.
Court findings
Whilst the court accepts that the 2001 agreement was completed in industrial relations terms between the parties on agreed lines to exclude those on temporary contracts, and was not in breach of the law at the time, if the alleged discriminatory treatment continues after the coming into being of the Act, the complainants may bring a claim under the Act.
If the higher salary is paid to the comparators for carrying out the same duties as are carried out by the complainants, then the reason for withholding the higher salary from them would, prima facie, be related to their fixed-term status. In such circumstances, it is of no consequence that other employees on *178 the same grade as the comparators are carrying out duties of a higher value.
The Act states:
“6.
(1) Subject to subsections (2) and (5), a fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee.
(2) If treating a fixed-term employee, in respect of a particular condition of employment, in a less favourable manner than a comparable permanent employee can be justified on objective grounds then that employee may, notwithstanding subsection (1), be so treated.”
Section 7(1) of the Act states:
“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 that 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.”
Section 7 (1) of the Act by allowing for less favourable treatment on objective grounds, provides a defence for the employer. It is, however, clear that an employer seeking to rely on that defence must prove that the differentiation is genuinely attributable to grounds other than the status of the employee concerned as a fixed-term employee and is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose.
This requires that the respondent establish to the satisfaction of the court the actual reasons why the comparators are paid the higher salary, that those reasons are genuine, and that they do not apply in the case of the complainants. Further, as appears from the judgment of Barron J. in Flynn v Primark [1997] E.L.R. 218, the respondent must show that there is objective justification for the difference in treatment, and that the justification is not merely historical but exists at the date of the determination.
It is against those general principles that the court has considered the respondent’s submissions on the applicability in this case of s.6 of the Act.
The court notes that the respondent accepts that the current duties of the complainants are equal in value to that of three named comparators located in the West Cork area, where the rationalisation programme has not yet been *179 implemented.
In relation to the higher salary attached to the Grade V area-based officer post, the respondent contends by way of objective justification for the difference, that these posts were created specifically for the incumbents at a time when major rationalisation of revenue collection was envisaged in the Cork area and they were paid at the higher salary level for that contingency whether they were required to take up those positions immediately or at a later date. In contrast the complainants were recruited specifically to fill in for absences and as replacement for retirees, pending the implementation of the rationalisation programme. The respondents contended that the complainants would not be required to carry out area-based officer duties at any time now or in the future. This, the respondent says, constitutes objective grounds unrelated to their status as fixed-term employees.
The court having carefully examined the submissions and evidence is satisfied that the decision to pay the higher salary to the comparators was solely due to their permanent status in December 2001 and that no factors have been presented to change that decision in the meantime. Since 2001, the three named comparators have been paid at the higher salary while continuing to carry out similar duties to the four named complainants.
In the view of the court, the respondent has failed to adduce any admissible or reliable evidence showing objectively justifiable and subsisting grounds other than the status of the employees as fixed-term workers for the pay difference between the complainants and the comparators in receipt of higher salary. Accordingly, the court accepts that the complainants are entitled to the higher salary attaching to Grade V.
Doctrine of direct effect
One of the tenets of Community law laid down by the European Court of Justice in Case C-26/62 Van Gend en Loos v Nederlandse der Belastingen [1963] E.C.R. 1, is that the Community constitutes a new legal order that confers rights on individuals which national courts must protect without the need for implementing legislation in Comitato di Coordinamento per la Difesa della Cava v Regione Lombardia Case C-236/92 [1994] E.C.R. I-483.
Van Duyn v Home Office Case C-41/74 [1974] E.C.R. 1337 the ECJ held that, subject to certain conditions, a Directive could be independently relied upon by an individual before a national court. The conditions identified as being necessary before a Directive can have direct effect are:
1. The relevant provision must be unconditional and sufficiently precise,
2. The time-limit for implementing the Directive must have expired without the relevant part of the Directive being correctly and *180 completely implemented into the law of the Member State,
3. The action must be against the state.
The requirement that the action be against the State or an emanation of the state is central to the rationale of the ECJ giving Directives direct effect. This is derived from a form of equitable estoppel identified in Pubblico Ministero v Ratti Case C-148/78 [1979] E.C.R. 1629 that denies a defaulting Member State the possibility of benefiting from its own failure to perform its Treaty obligations.
The respondent did not contest that it was an emanation of the State providing a public service under the control of the State. Neither did it contest that the relevant provisions of the Treaty or the Directive were insufficiently precise and unconditional.
Accordingly, the court is satisfied that the respondent herein is an emanation of the State and that the Directive is directly effective in an action against it.
Determination
For the reasons set out above the court determines that the complaint herein is well founded. Accordingly, the appeal is allowed and the complainants must succeed.
It only remains for the court to consider the appropriate remedy and the dates between which it must be paid. In this particular case the court will make an order directing the respondents to pay Grade V salary to the complainants from July 10, 2002 until the date on which they became permanent full-time workers by agreement with the respondent-October 28, 2004. The provisions of s.9 of the Act do not apply, so their terms and conditions of employment on becoming permanent workers became negotiable under the provisions of any relevant industrial relations legislation and the court could not make an order under this Act in respect of such terms and conditions, from that date.
The court so determines.
Division of the Labour Court: Ms Jenkinson (Chairman), Mr Grier, Mr Nash
Department of Arts, Heritage and the Gaeltacht v Rebecca Dobson
FTD1515
Labour Court
16 December 2015
[2016] 27 E.L.R. 72
Determination
This is an appeal under s. 15(1) of the Protection of Employees (Fixed-Term Work) Act 2003 (“the Act”).
Ms Rebecca Dobson (the complainant) has been employed by the Department of Arts, Heritage and the Gaeltacht (“the Department”) on a series of successive fixed-term contracts of employment commencing in April 2009. On 14 October 2014 she made a complaint to the Rights Commissioner claiming that, as the aggregate duration of the successive fixed-term contract of employment exceeded four years, she therefore, by operation of law, became entitled to a contract of indefinite duration pursuant to s.9(3) of the Act. The Department rejected the claim arguing that while it employed the claimant on a number of fixed-term contracts of employment they were not successive within the meaning of Act and that, taken together, their aggregate duration did not exceed four years. It further argued that if the duration did exceed four years there were objective grounds justifying the renewal of the fixed-term contract of employment. It argued that s.9(4) of the Act operated to prevent ss.9(2) and 9(3) taking effect.
The history of the complainant’s employment with the respondent is set out below. *75
Site Name
Job Description
Contract Type
Start date
End Date
Reason for Employment Termination
Glenveagh National Park
Visitor Guide
Fixed-Term Seasonal
09/04/2009
18/12/2009
End of Contract
Northern Division Office
Education Guide
Fixed-Term Seasonal
17/02/2010
31/05/2010
End of Contract
Northern Division Office
Education Guide
Fixed-Term Seasonal
18/08/2010
22/12/2010
End of Contract
Northern Division Office
Education Guide
Fixed-Term Seasonal
15/03/2011
30/06/2011
End of Contract
Northern Division Office
Education Guide
Fixed-Term Seasonal
01/09/2011
30/12/2011
End of Contract
Northern Division Office
Education Guide
Fixed-Term Seasonal
01/03/2012
31/12/2012
End of Contract
Northern Division Office
Education Guide
Fixed-Term Seasonal
14/03/2013
31/12/2013
End of Contract
Ballycroy National Park
Visitor Guide
Fixed-Term Seasonal
10/03/2014
30/04/2014
End of Contract
Clara Bog Nature Reserve & Visitor Centre
Education Guide
Fixed-Term Seasonal
01/05/2014
29/12/2014
End of Contract
Clara Bog Nature Reserve & Visitor Centre
Education Guide
Fixed-Term Seasonal
02/04/2015
30/11/2015
End of Contract
On the basis of the evidence presented the Rights Commissioner decided that the complaint was well-founded and ordered the Department to comply with the relevant provision of the Act and to pay the complainant €5,000 compensation. The decision was issued on 3 July 2015. On 14 July 2015 the Department appealed against that decision to this Court.
The case came on for hearing on 10 September 2015. The court adjourned to allow the parties to make further submissions. The court reconvened and heard the submissions of both sides. On 3 November 2015 the court asked the parties for additional information which was provided on 10 November 2015.
The complainant acknowledges that there is no continuity of employment between the first and second contracts of employment in the table above. That *76 matter was decided by the Rights Commissioner in r-132217-ft-13/SR. That decision was not appealed and accordingly cannot be revisited at this time.
The Department initially raised issues regarding what it describes as the complainant’s resignation on 30 April 2014. However, in the course of the hearing it withdrew that element of its defence.
The complainant’s case, therefore, taken at its height, is that the contracts of employment with the Department are successive, within the meaning of the Act, and that, taken together they exceed four years’ duration. As a consequence, she argues, they trigger the provisions of s.9(2) of the Act.
The department disputes that assertion. It argues that the contracts are separate and distinct. It argues that the complainant was not laid off between each of the contracts of employment. It argues that as each contract ended the complainant’s relationship with the respondent terminated. As each subsequent vacancy was advertised, the complainant competed for the post and was successful in each of those competitions. It argues that such a policy and procedure does not constitute a lay-off within the statutory meaning of that term. It argues that the complainant, at the date of the complaint, did not have the required four years’ service and s.9(2) did not take effect.
A number of questions arise in this case. The first is whether the complainant’s employment meets the threshold set out in s.9(2) of the Act. In that regard the court must decide if the aggregate duration of the complainant’s contracts of employment exceeds four years. If it does not, s.9(2) does not come into effect and the complaint must fail. Accordingly, the court addressed that question as a preliminary issue.
The law
Section 2(1) of the Act defines a year in the following terms;
“2.-(1)(a) ‘year’ means any period of 52 weeks.”
Section 9(2) of the Act states:
“9. – (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(3) of the Act states:
“9. – (3) Where any term of a fixed-term contract purports to contravene subsection that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.”
In that regard the law is clear. However, s.9(5) of the Act states:
“9. – (5) The First Schedule to the Minimum Notice and Terms of Employment Acts 1973 to 2001 shall apply for the purpose of ascertain the period of service of an employee and whether that service has been continuous.”
The Schedule in relevant part states:
The service of an employee in his employment shall be deemed to be continuous unless that service is terminated by –
(a) the dismissal of the employee by his employer, or
(b) the employee voluntarily leaving his employment.
2. A lay-off shall not amount to the termination by an employer of his employee’s service.
If an employee is absent from his employment for not more than 26 weeks between consecutive periods of employment because of –
(a) a lay-off …,
such period shall count as a period of service.”
Discussion
It is common case that the first relevant contract began on 17 February 2010. This was followed by a further six fixed-term contracts of employment, the final one of which ran from 1 May 2014 to 29 December 2014. The complaint was lodged on 14 October 2014.
The complainant maintains that the fixed-term contract of employment that commenced on 1 May 2014 was converted by operation of law into a contract of indefinite duration.
However, a review of the table above discloses that the “aggregate duration” of those contracts of employment amounts to 193.43 weeks, some 14.6 weeks short of the statutory requirement.
The complainant argues that the periods of lay-off should be included for the purposes of calculating the period of service.
The respondent argues that they should not be so included as they are not part of the aggregate duration of those contracts of employment.
If those periods of lay-off are included the aggregate duration of the complainant’s employment exceeds 208 weeks and she comes within the scope of the Act. Conversely, if they are not included she does not come within the scope of s.9(2).
*78
There is a difficulty for the court in how to interpret the Act. The difficulty that arises is that s.9(2) refers to the “aggregate duration” of the “contracts” while the First Schedule to the Minimum Notice and Terms of Employment Acts 1973 to 2001, which must also be taken into consideration, states: “A lay-off shall not amount to the termination by an employer of his employee’s service”.
The question that arises therefore is whether the term “aggregate duration” means total service including any period of lay-off or whether s.9(2) requires that the court confine its consideration to the “aggregate duration” of the contracts of employment without making an allowance for periods of lay-off.
The court notes that paras 5 and 8 of Sch.3 to the Redundancy Payments Act 1967 draw a distinction between “continuous employment” and “reckonable service”. It states:
Where an employee’s period of service had been interrupted by any one of the following –
(a) not relevant
(b) a period of not more than 26 consecutive weeks by reason of –
i. lay-off,
ii. holidays,
iii. service by the employee in the Defence Forces of the State,
iv. any cause (other than the voluntary leaving of his employment by the employee) not mentioned in clauses (i) to (iii) but authorised by the employer,
(c) any period during which an employee was absent from work because of a lock-out by his employer or because the employee was participating in a strike, whether such absence occurred before or after the commencement of this Act, continuity of employment shall not be broken by such interruption whether or not notice of termination of the contract of employment has been given.”
However, it goes on to distinguish such service from “reckonable service” as follows:
None of the following absences from work shall be allowable as reckonable service –
(a) absence in excess of 52 consecutive weeks by reason of an occupational accident or disease within the meaning of the Social Welfare (Occupational Injuries) Act 1966,
(b) absence in excess of 26 consecutive weeks by reason of any illness not referred to in paragraph (a),
(c) absence in excess of 13 weeks in a period of 52 weeks and caused by any reason not referred to in subparagraph (a) or (b) but being an absence authorised by the employer, *79
(d) absence by reason of lay-off by the employer.”
It appears, therefore, that continuous service and reckonable service are two distinct concepts for the purpose of determining entitlement to redundancy pay. The court considered whether such a distinction was envisaged in this Act.
In determining whether s.9(2) of the Act applies the court must firstly establish that there were two or more continuous contracts of employment and secondly it must establish that the aggregate duration of those contracts of employment exceeded four years.
The parties are agreed that there were two or more contracts of employment in this case. The respondent argues that they were not successive as they were interrupted by breaks in employment that did not amount to periods of lay-off within the meaning of the Act.
Having examined the detail of the contracts under which the complainant worked and the circumstances in which they arose, the court finds that they were in fact successive and that the complainant was employed by the same employer to undertake broadly similar work each year when work became available.
In answer to the first question before it, therefore, the court finds that the complainant was employed on a series of fixed-term contracts of employment that were continuous for the purposes of the Act.
The second question that the court must answer is whether the aggregate duration of those contracts of employment exceeds four years.
In answering that question the court considered the wording of s.9(2) of the Act. That wording requires that the court confine its consideration to the “aggregate duration of those contracts” when deciding whether two or more successive or consecutive contracts of employment are converted, by operation of law, into a contract of indefinite duration.
In this case there are successive contracts of employment interspaced with periods of lay-off. It is settled law that the continuity of employment continues through the period of lay-off and is then replaced with a further fixed-term contract of employment.
The Act expressly states that the terms of the First Schedule above shall apply for the purpose of ascertaining the period of service of an employee and whether that service has been continuous.
Clearly the Act is to be interpreted to mean that a period of lay-off is a period of service and is to be taken into account when determining whether that service has been continuous.
Section 9(2) of the Act, however, states that there must be two or more successive fixed-term contracts of employment with an aggregate duration of four years before it converts into a contract of indefinite duration by operation of law. In the court’s view the wording of the Act envisages the prospect that a worker may, over a period of, say, five years, be employed on a series of successive *80 fixed-term contracts of employment, the aggregate duration of which may or may not exceed four years. Where the duration of those contracts exceeds four years, s.9(2) of the Act is triggered. Where it does not, s.9(2) has no effect. Had the Oireachtas intended otherwise it would not have included the term “aggregate duration” in s.9(2). It could have used the term four years’ “service” and omitted the term “aggregate” from the statute. It did not do so and accordingly the court finds that that term must have some meaning. The only logical meaning the court can discern in this case is that periods of lay-off may be included for the purpose of determining whether a series of contracts of employment are continuous for the purposes of the Act but are not included for the purpose of calculating the aggregate duration of those contracts.
This interpretation appears to be consistent with the decision of the CJEU in Adeneler v Ellinikos Organisimos Galaktos Case C-212/04 [2006] E.C.R. I-6057; [2006] C.M.L.R. 30 where it states at para.89 “In light of the foregoing reasoning, the answer to the third question must be that clause 5 of the Framework Agreement is to be interpreted as precluding a national rule, such as that at issue in the main proceedings, under which only fixed-term employment contracts or relationships that are not separated from one another by a period of time longer than 20 working days are to be regarded as ‘successive’ within the meaning of that clause.”
It would appear from this paragraph that fixed-term contracts may be separated by period of unemployment without severing their “successive” nature. That also implies that the aggregate duration of those contracts does not include that period of interruption. Thus, in the 2003 Act successive contracts of employment separated by periods of lay-off are continuous for the purpose of the Act but such periods do not form part of the aggregate duration of those contracts of employment.
Applying that to the instant case the court finds that the complainant commenced her claim with the contract issued to her on 17 February 2010. She submitted the complaint to the Rights Commissioner under the Act on 14 October 2014. The aggregate duration of those contracts amounts to 193.43 weeks which is less than the statutory requirement to trigger ss.9(2) and 9(3) of the Act. Accordingly, the complainant has not made out a case under the Act and the appeal must succeed.
As this matter disposes of the case the court makes no decision on the other issues raised by the parties.
Determination
At the time the complaint was filed with the Rights Commissioner the aggregate duration of the complainant’s successive fixed-term contracts of employment did not exceed four years. Accordingly, s.9(2) of the Act has no effect.
The complaint is not well-founded. The appeal is allowed. The decision of *81 the Rights Commissioner is set aside.
The court so determines.
Louise Doyle v National College of Ireland
2005 No. 2563P
High Court
13 December 2005
[2006] 17 E.L.R. 267
(Laffoy J.)
The issue
The defendant’s application at the conclusion of the evidence adduced by the plaintiff for a dismissal of the action on the basis that a case has not been made out falls to be determined in accordance with the principles laid down by the Supreme Court in O’Toole v Heavey [1993] 2 I.R. 544. As counsel for the defendant indicated that, in the event of a refusal of the application, the defendant would intend to go into evidence, the court’s task is to reach a decision as to whether the plaintiff has made out a prima facie case. Therefore, the question for the court is whether there can be inferred from the evidence adduced by the plaintiff either or both—
(a) an actionable breach of the plaintiff’s contract of employment, or
(b) an actionable misrepresentation in relation to the employment of the plaintiff.
The breach of contract claim
On July 14, 2004 the plaintiff accepted the written terms and conditions of employment for the position of “Lecturer Human Resources Management and Director Off-Campus” offered to her by the defendant in a letter dated July 2, 2004. In that letter the plaintiff was invited to seek clarification of any points she wished to have clarified. The provisions of the letter of offer which are relevant for present purposes are as follows:
(a) The opening paragraph, which described the position as “a threeyear fixed-term contract … commencing on August 9, 2004 until August 3, 2007.”
(b) Clause 6, which was in the following terms:
“There will be a probationary period of 11 months. This period may be extended at the college’s discretion. During this probationary period the college reserves the right to terminate your employment at its discretion. The contract may be terminated by either party, subject to three months’ notice. However, in the event of gross misconduct or breach of contract on your part, the NCI reserves the *269 right to terminate your contract without notice. In the event of termination both parties are free to waive their rights to this notice and/or accept pay in lieu of notice, if agreed.”
(c) Clause 18, which provided:
“The terms of the Unfair Dismissal Act shall not apply to the expiry only of the contract. Notwithstanding that this is a fixed-term contract, it is understood that where performance, conduct or capability falls serious (sic) below requirements, National College of Ireland reserves the right to terminate the contract prior to the expiry date and similarly for any other substantial grounds justifying dismissal. Obviously, remuneration in respect of any unexpired position of the contract would not be paid.”
(d) Clause 19, which provided:
“Notwithstanding, the fact that this is a fixed-term contract, the college reserves the right to terminate your employment prior to the expiry of the fixed term. In the event of such early termination, the college undertakes to give you and you are required to give three months’ notice. However, both parties are free to waive their rights to notice and/or accept pay in lieu of notice, if agreed.”
The breach of contract alleged is the termination of the plaintiff’s employment by letter dated June 27, 2005 from the defendant’s human resources manager to the plaintiff, which referred to a meeting of June 22, 2005 and confirmed “that the college is to give you three months’ notice of termination on your contract of employment, terminating on September 27, 2005.” It is common case that no question arose as to the performance, conduct or capability of the plaintiff. On the contrary, Dr David Keane, who was the head of the defendant’s business and humanities faculty during most of the period of the plaintiff’s employment testifies that she was an excellent employee.
The plaintiff’s case is that, as a matter of the construction of her contract, which was described as a “three-year fixed-term contract”, the defendant was not entitled to invoke clause 19 during the currency of that fixed term. In advancing that case, counsel for the plaintiff referred the court to the decision of the English Court of Appeal in BBC v Ioannou [1975] I.C.R. 267. In that case, which was concerned with the application of employment and redundancy legislation in force in the United Kingdom, Lord Denning, M.R., rhetorically asked the question: if a contract of employment is for a stated two or three years, but is determined by three months’ notice during that time, is it a “fixed term”? He answered the question as follows (at p.271):
“This is a very important point. There has been no discussion of it in the cases. But Professor Grunfeld in his book Law of Redundancy (1971), *270 p.29, suggests that it is a ‘fixed term’ even though it is determined by notice. He says:
‘… a notice clause does not alter the character of a contract for a fixed term. Had the legislature intended to refer to contracts for definite periods containing no notice clause, one would have expected the use of the fairly established common law phrase, “term certain”.’
I take a different view from the Professor. In my opinion a ‘fixed term’ is one which cannot be unfixed by notice. To be a ‘fixed term’, the parties must be bound for the term stated in the agreement: and unable to determine it by notice on either side. If it were only determinable for misconduct, it would, I think, be a ‘fixed term’ because that is imported by the common law anyway. But determination by notice is destructive of any ‘fixed term’.”
In a subsequent decision, Dixon v BBC [1979] 1 Q.B. 546, the Court of Appeal overruled the decision in Ioannou. Lord Denning M.R., at p.551, disclosed that in the earlier case the ground of the decision that a fixed term is one which cannot be unfixed by notice had not been taken in the lower courts and it had been taken by the Court of Appeal itself. He stated that that ground was mistaken; that it was a wrong ground; that the Court of Appeal had not considered the relevant statutory provision and, if it had done so, it would have held that a fixed term is sufficiently satisfied if the contract is for a specific stated period, even though it is determinable by notice within that period.
For a number of reasons the passage from the judgment of Lord Denning M.R, in the Ioannou case, which I have quoted, is not persuasive as regards the issue which arises here. First, the Court of Appeal was concerned with the application of a statutory provision. Secondly, the Court of Appeal overruled itself just four years later. Thirdly, insofar as it is to be inferred from the passage that Lord Denning was of the view that at common law a “fixed term” contract was not determinable on notice, that view was clearly obiter.
Counsel for the plaintiff submitted that there was an inconsistency in the contract itself. It was submitted that the provision in clause 19 in relation to termination on notice was inconsistent with the promise of a fixed term of three years. Therefore, it was submitted that the court should endeavour to give a harmonious interpretation to the contract. It was further submitted that the provision in clause 19 for termination on notice was analogous to an exemption clause, so that the contra proferentum rule should be applied in construing it. Clause 19 should be construed on the basis that it did not permit the termination of the employment on notice. To construe clause 19 otherwise, it was submitted, would be to render the promise of a fixed-term contract illusory.
While the contract was described as “a three-year fixed-term contract”, it is clear from clause 6 that there was a probationary period of 11 months and that *271 during that probationary period the contract could be terminated either by three months’ notice on either side or summarily for gross misconduct or breach of contract. Clauses 18 and 19 dealt with the situation beyond the probationary period and provided for termination before the fixed term expired in two situations. The first was where performance, conduct or capability fell seriously below the defendant’s requirements or there were other substantial grounds justifying dismissal. The fact that it was stated that remuneration in respect of any unexpired portion of the contract would not be paid, makes it clear that what was envisaged was summary dismissal. Clause 19 then provided for termination on three months’ notice. The argument advanced on behalf of the plaintiff that clause 19 could be construed as stipulating the notice period applicable where an entitlement to terminate under clause 18 arose simply does not stand up. Clause 18 and clause 19 provide for two distinct methods of termination prior to the expiry of the fixed term. It would be absurd to construe the two clauses together as entitling an employee to three months’ notice where there were substantial grounds justifying dismissal. Further, it seems to be implicit in clause 19 that notice of termination under that clause could have been given by either the defendant or the plaintiff, because it was provided that both parties were free to waive their right to notice.
As counsel for the defendant submitted, the purpose of including the first sentence of clause 18 in the plaintiff’s contract was to disapply the provisions of the Unfair Dismissals Act 1977 to the contract of employment by bringing it within the provisions of s.2(2)(b) of that Act. Whether that was done effectively or not is not at issue here. Here the issue is whether at common law there can be agreement between an employer and an employee that a contract of employment is a three-year fixed-term contract but subject to summary dismissal on justifiable grounds and also subject to termination on notice before the expiry of the fixed term at the behest of either side. I see no reason why at common law the parties should not be free to make such an agreement.
Accordingly, I find that there is no evidence from which a breach of contract may be inferred. On the paper construction of the contract, in my view, the defendant was entitled to terminate the plaintiff’s employment and it did so effectively.
The misrepresentation claim
The second limb of the plaintiff’s claim which seeks damages for alleged misrepresentation or negligent misstatement or both is not grounded in contract but is grounded in tort. At the hearing the plaintiff did not contend that the alleged misrepresentation or misstatement had become a term of the contract, either expressly or by implication.
I propose considering first how this component of the plaintiff’s claim was pleaded.
*272
In her statement of claim the plaintiff alleged that the defendant was guilty of misrepresentation and/or negligent misstatement. In particularising that allegation in a reply to notice for particulars raised by the defendant, the plaintiff alleged that the defendant had failed in its duty of care to her at interview and in a telephone conversation in which she was offered the job. It was alleged that the plaintiff was induced to act to her detriment. If she had been informed of the true position she would not have entered into the contract of employment with the defendant at all or, alternatively, it would have been material to her decision that she could have been terminated without cause in the context of a fixed-term contract. The plaintiff further pleaded that the defendant was negligent in offering the plaintiff a three-year fixed-term contract when there was not sufficient work to be carried out by the plaintiff for the period of the contract. In particular, the plaintiff alleged that because a member of staff was returning from maternity leave, there were not sufficient hours for the plaintiff each week. In her reply to the notice for particulars, the plaintiff alleged that the defendant was negligent in its pre-contract representations to the plaintiff in offering the position to her by the way of a three-year fixed-term contract in that the defendant knew or ought to have known that there were not sufficient hours for the plaintiff for the duration of the fixed-term contract. It was alleged that the defendant thus induced the plaintiff into the contract and that she acted upon the inducement to her detriment. In their defence the defendants denied all of the allegations of misrepresentation, negligent misstatement and negligence.
The evidence adduced by the plaintiff established that the defendant advertised a number of positions in the national press and on a recruitment website in April 2004 including the position of lecturer in human resource management. The plaintiff applied for that position. In response, she was sent an e-mail inviting her to an interview on June 11, 2004 and attaching a job description. Under the heading “working conditions” the job description set out a salary range, the annual leave entitlement and described the contract as “three-year fixed term contract”. At the top of a list outlining the benefits of the position there was reference to “strong emphasis on life-long career development.” It was not disclosed that the contract would be determinable on notice within the three-month period. The plaintiff attended for interview on June 11, 2004. That the contract of employment would not provide for termination before the expiry of the fixed term of three years by notice was not disclosed at the interview. Following a second interview, the plaintiff received a telephone call from the then human resources manager offering her a threeyear fixed-term contract at point two on the lecturers’ salary scale, subject to a medical examination and reference checks. There was no discussion in relation to possible termination of the contract and the plaintiff’s attention was not drawn to the relevant clauses in the letter of offer embodying the written contract, *273 which was to be sent to her in the post. There was no mention of the fact that a staff member who is now teaching the hours which the plaintiff taught while she was in the employment of the defendant was on maternity leave.
The letter of offer, which was dated July 2, 2004 was received by the plaintiff on July 9, 2004. She read it and saw that it was for three years. She had been given no reason to believe that work would not be available for her for three years so she decided to accept the offer. On July 14, 2004 she gave notice of termination of her then existing employment, which was with the Arts Council. Her contract with the Arts Council had been expressed to be “for a limited period of five years only from the date of commencement”, with provision for termination on notice at any time prior to the expiry. The commencement of the plaintiff’s employment with the Arts Council had been November 6, 2003. Having given notice of termination to the Arts Council the plaintiff executed acceptance of the letter of offer from the defendant.
At the meeting on June 22, 2005 at which she was told that her contract was being terminated, the plaintiff was told that the defendant had no hours for her. She was told that somebody would be teaching in the current year, who had not been teaching in the previous year. She has since learned that the classes which would have made up her teaching hours are being taught during the current academic year by an employee of the defendant who was on maternity leave during the currency of the plaintiff’s contract.
The plaintiff’s claim in tort was that the defendant owed her a duty of care in its pre-contractual dealings with her; that in reliance on her pre-contract dealings with the defendant she believed she would be working for the defendant for three years, that by its silence and non-disclosure as to the possibility of termination on notice without cause and as to the fact that, in effect, she was being offered the job to cover for an employee who was on maternity leave, the defendant misrepresented the situation; that the plaintiff was induced by the misrepresentation to leave her employment with the Arts Council; and in consequence she has suffered damage.
The defendant’s answer was that, if there was a misrepresentation, it was overtaken by the terms of the contract. In signing up to the terms and conditions set out in the letter of offer, after she had read and considered the terms and conditions, the plaintiff signed up to the termination on notice and that superseded what went before the signing of the contract. It was also submitted that there was no evidence from which one could infer negligence on the part of the defendant.
I am not satisfied that the fact that the plaintiff accepted the terms and conditions set out in the letter of offer is an answer to the plaintiff’s allegations of wrongdoing by the defendant in its pre-contractual dealings with her. I am *274 of the view that the plaintiff has made out a prima facie case for damages in tort.
Decision
The defendant’s application for a direction is refused.
Martin Henderson v Scoil Íosagáin
FTD055
Labour Court
18 April 2005
[2005] 16 E.L.R. 271
Appeal against Rights Commissioner’s decision FT17376/03/TB.
Background
The claimant is a qualified teacher who secured an Honours BA Degree from NUI Galway and subsequently a Postgraduate Certificate in Education from the University of Wales. He was then granted provisional recognition in this jurisdiction by the Department of Education and Science. Since the claim commenced the claimant has passed all the requisite Irish language examinations.
In June 2003, while at a board of management function the claimant learned that six positions had been advertised in a national newspaper on May 29, 2003. The claimant had not been informed that the advertisement would be inserted nor was his attention drawn to the fact that there were vacancies, nor was a notice posted on the staff notice board about this.
The day after he learned of the vacancies he approached the principal who indicated that he could not get an interview at that stage because there were rules and regulations to be adhered to.
The claimant, on investigating the rules and regulations in respect of appointments, confirmed that under Department of Education and Science procedures he should have been informed of the vacancies.
The claimant subsequently became aware of the provision of the Protection of Employees (Fixed-Term Work) Act 2003, where at s.10(1) it states “An employer shall inform a fixed-term employee in relation to vacancies which become available to ensure that he or she shall have the same opportunity to secure a permanent position as other employees”. This Act came into force in July 2003 at a time when the claimant had a contract of employment with the school which ran until the end of August of that year.
*274
The matter was referred to a Rights Commissioner for investigation. His decision issued on July 19, 2004 as follows:
“The matters of which the claimant complains occurred before the enactment of the legislation in July 2003.
On the grounds that I do not have jurisdiction prior to the enactment of the legislation the complaint fails.”
On August 27, 2004 the worker appealed the Rights Commissioner decision to the Labour Court in accordance with s.15(1) of the Protection of Employees (Fixed-Term work) Act 2003. A Labour Court hearing took place on March 9, 2005.
Determination
The claimant is a teacher. The respondent is the board of management of a national school located in Buncrana, Co. Donegal. The claimant was employed by the respondent on a fixed-term contract between August 2002 and August 2003.
On or about the month of May 2003 the respondent placed an advertisement in a national newspaper seeking applications for six permanent teaching posts. The claimant contends that he was not advised of these vacancies and that he did not see the advertisement. It is contended by the Irish National Teachers Organisation (INTO) on behalf of the claimant that the respondent’s failure to inform him of these vacancies constituted a contravention of s.10(1) of the Protection of Employees (Fixed-Term) Work Act 2003 (the Act). In the alternative it is contended that it constituted a contravention of clause 6(1) of the Framework Agreement on Fixed-Term Work concluded between ETUC, UNICE and CEEP of March 18, 1999 which was implemented by and annexed to Directive 99/70 (the Directive).
The Act became law on July 14, 2003. The latest date on which the State was required to implement the Directive was July 10, 2002. The claimant contends that by application of the doctrine of direct effect of Community law he is entitled to rely on the Directive in the within proceedings.
The claimant presented his complaint to a Rights Commissioner pursuant to s.14 of the Act. The Rights Commissioner held that he lacked jurisdiction to investigate the complaint. The claimant appealed to the court.
Conclusions of the court
Clause 6 (1) of the Framework Agreement annexed to the Directive provides as follows: *275
“Information and employment opportunities (clause 6)
1. Employers shall inform fixed-term workers about vacancies which become available in the undertaking or establishment to ensure that they have the same opportunity to secure permanent positions as other workers. Such information may be provided by way of a general announcement at a suitable place in the undertaking or establishment.
Section 10 of the Act is expressed in almost identical terms as follows:
“10.—(1) An employer shall inform a fixed-term employee in relation to vacancies which become available to ensure that he or she shall have the same opportunity to secure a permanent position as other employees.
(2) The information referred to in subsection (1) may be provided by means of a general announcement at a suitable place in the undertaking or establishment.”
The placing of an advertisement in a newspaper does not meet the requirements of either the Directive or the Act. What is clearly required is that information on relevant vacancies be imparted personally to fixed-term employees or that a notice be placed in the workplace. Accordingly, the court holds as a matter of fact that the respondent did not comply with the obligation imposed on it by clause 6(1) of the Framework Agreement annexed to the Directive or, to the extent to which it is applicable, s.10(1) of the Act.
Doctrine of direct effect
One of the tenets of Community law laid down by the European Court of Justice in Van Gend en Loos v Nederlandse der Belastingen Case C-26/62 [1963] E.C.R. 1, is that the Community constitutes a new legal order that confers rights on individuals which national courts must protect without the need for implementing legislation in the Member States. In Pubblico Ministero v Ratti Case C-148/78 [1979] E.C.R. 1629 the court further decided that where a provision of Community law is unconditional and sufficiently precise it can produce direct effect and can be relied upon by individuals in their national courts in asserting legal rights. A measure is unconditional if it is not subject, in its implementation or effect to the taking of any measure either by the institutions of the Community or by the Member States. It is sufficiently precise if the obligation which the provision imposes is set out in unequivocal terms (see Comitato di Coordinamento per la Difesa della Cava & others v Regione Lombardia & Others Case C-236/92 [1994] E.C.R. I-483).
The earlier jurisprudence of the ECJ on the doctrine of direct effect related to Treaty Articles and Regulations. In a later line of authorities starting with Van Duyn v Home Office Case C-41/74 [1974] E.C.R. 1337 the ECJ held that, *276 subject to certain conditions, a Directive could be independently relied upon by an individual before a national court. The conditions identified as being necessary before a Directive can have direct effect are:
1. the relevant provision must be unconditional and sufficiently precise;
2. the time-limit for implementing the Directive must have expired without the relevant part of the Directive being correctly and completely implemented into the law of the Member State;
3. The action must be against the State.
The requirement that the action be against the State is central to the rationale of the ECJ it giving Directives direct effect. This is derived from a form of equitable estoppel identified in Pubblico Ministero v Ratti which denies a defaulting Member State the possibility of benefiting from its own failure to perform its Treaty obligations.
Positions of the parties
The INTO on behalf of the claimant submitted that all three conditions for direct effect are present in the instant case. The respondent did not dispute the presence of the first two conditions. It was, however, submitted on its behalf that the within action is not against the State as it is well settled that teachers are employed by the board of management of the school and not by the Department of Education and Science.
Further, the solicitor for the respondent submitted that this court has no jurisdiction to investigate an alleged contravention of a provision of the Directive. This submission was based on the contention that the jurisdiction of the court in this appeal is to be found in s.15(1) of the Act and that the court may only investigate an alleged contravention of the Act where such alleged contravention occurred on or after July 14, 2003.
Is the claim against the State?
The ECJ has adopted a broad definition of “the State” for the purpose of applying direct effect and has included within that concept bodies which emanate from the State. Thus it has included the Chief Constable of a police force ( Johnston v Chief Commissioner of the RUC Case 222/84, [1986] E.C.R. 165; [1987] Q.B. 129), a local authority ( Fratelli Constanzo v Commune di Malamo Case C-103/88 [1989] E.C.R. 1839) and a state company ( Foster v British Gas Case C-188/89 [1991] E.C.R. I-3313; [1990] I.R.L.R. 353).
In Foster v British Gas it was acknowledged that the defendant was not under day-to-day state control. It was, however, held that a Directive could be invoked against it because it had been made responsible for the provision of a public service under the control of the state and for that purpose it had special powers beyond those that result from the normal rules applicable in relations between individuals.
*277
In this case the respondent is part of the national school network established by law for the purpose of providing primary education. The history of State involvement in the provision of primary education in national schools can be traced to the early part of the nineteenth centenary when it was entrusted to the Commissioners of National Education in Ireland, a body corporate created by Royal Charter in 1845. The development of the system from that time up to the present is comprehensibly traced in the judgment of Laffoy J. in O’Shiel v Minister for Education and Science, Ireland [1999] 2 I.R. 321; [1999] 2 I.L.R.M. 241. From this it is clear that at every stage in its development the national school system was regulated controlled and funded by the State. Moreover, State provision of primary education was elevated to a constitutional imperative in the Constitution of 1937, Article 42.4 of which provides:
“The State shall provide for free primary education and shall endeavour to supplement and give reasonable aid to private and corporate educational initiative and, when the public good requires it, provide other educational facilities or institutions with due regard, however, for the rights of parents, especially in the matter of religious and moral formation.”
The State fulfils this constitutional obligation by providing funding to schools such as the respondent. The School Attendance Act 1926 places a general obligation on parents to send their children to national school. Section 4 of the Act provides:
“4.—(1) The parent of every child to whom this Act applies shall, unless there is a reasonable excuse for not so doing, cause the child to attend a national or other suitable school on every day on which such school is open for secular instruction and for such time on every such day as shall be prescribed or sanctioned by the Minister in respect of such day.”
Teachers employed in national schools are not employed by the State in that their contract of employment is with the board of management of the school. However, all of the main terms and conditions of their employment are prescribed by the State. The qualifications which a teacher must hold is also regulated by the State and the salary and allowances which they receive is paid out of funds made available by the State. The role and functions of the board of management and those of the patron of a national school are prescribed by the Education Act 1998. Section 14 (1) of that Act provides:
“(1) It shall be the duty of a patron, for the purposes of ensuring that a recognised school is managed in a spirit of partnership, to appoint where *278 practicable a board of management the composition of which is agreed between patrons of schools, national associations of parents, recognised school management organisations, recognised trade unions and staff associations representing teachers and the Minister.”
Subsection (2) of the Act goes on to provide:
“(2) A board established in accordance with subsection (1) shall fulfil in respect of the school the functions assigned to that school by this Act, and, except in the case of a school established or maintained by a vocational education committee, each board shall be a body corporate with perpetual succession and power to sue and may be sued in its corporate name.”
A similar question to that arising in the instant case regarding the status of a private funded school for the purpose of applying the doctrine of direct effect was considered by the Court of Appeal for England and Wales in NUT v St Mary’s Church of England Junior School [1997] I.R.L.R. 242. This was a case in which the Church of England school in question was part of the state system of education. Both central and local government had statutory power to control the actions of the governors of the school. They were also responsible under Acts of Parliament for the provision of funding to the school.
In considering if the school was an emanation of the state Schiemann L.J. started by looking at the opinion delivered by Mr Advocate General Van Gerven in Foster v British Gas wherein he stated:
“As I have already repeatedly emphasized, the point of departure must be the reasoning lying behind the Marshall and Johnston cases: a Member State, but also any other public body charged with a particular duty by the Member State from which it derives its authority, should not be allowed to benefit from the failure of the Member State to implement the relevant provision of a directive in national law.”
The court was satisfied that the school was responsible pursuant to a measure adopted by the state for providing a public service and that service was under the control of the state. The court was not, however, convinced that the school had any special powers beyond those which apply between individuals. It was nonetheless satisfied that the extent to which it provided a public service under statute made it an emanation of the state.
The reasoning in that case is of strong persuasive authority and it is adopted by the court.
In relation to the present case it is clear beyond argument that the provision *279 of primary education in a national school is a public service performed under the control of the State. Accordingly the court is satisfied that the respondent herein is an emanation of the State and that the Directive is directly effective in an action against it.
Jurisdiction of the court
The court is an institution of the State and as such is obliged to take all measures necessary to achieve the result envisaged by a Directive (see Von Colson and Kamann v Land Nordrhein-Westfalen Case C-14/83 [1984] E.C.R. 1891; [1986] 2 C.M.L.R. 430.
In Amministrazione delle Finanze dello Stato v Simmenthal SpA Case C-106/77 [1978] E.C.R. 629 the ECJ held that every court which is called upon to adjudicate in a matter involving Community law must apply that law in preference to its domestic law where they are in conflict. The court stated:
“A national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provisions by legislation or other constitutional means.”
The judgment in Simmenthal was considered by the High Court in Murphy v Telecom Eireann [1989] I.L.R.M. 53. This was a case in which the claimant had sought equal pay with male comparators pursuant to the Anti-Discrimination (Pay) Act 1974. The Labour Court had held that the claimant was engaged in work of a higher value to that of the comparator, and that she could have no remedy under the Act. The decision was appealed to the High Court which made a reference to the ECJ for a preliminary ruling on whether the relevant provision of the 1974 Act was consistent with the requirements of the Equal Pay Directive and Article 141 of the Treaty. In its preliminary ruling the ECJ held that the domestic legislation was improperly transposed in failing to provide a woman with equal pay for work of higher value to that of a male comparator.
When the matter was returned to the High Court a question arose as to whether the case could be remitted to the Labour Court to be decided in accordance with the terms of the Directive and the Treaty Article, as they had been interpreted by the ECJ, or whether the case would have to be decided by the High Court within its inherent jurisdiction. In deciding to remit the case to the Labour Court Keane J. (as he then was) said:
“In my view, it does not follow that, if the national law is inapplicable, the rights of the appellants under Article 119 can be protected only by *280 proceedings in this court. The Oireachtas has provided in the Act of 1974 a statutory machinery intended to give effect to the principle of equal pay for equal work and has entrusted the arbitral role between employers and employees in this area to the Labour Court. That tribunal in discharging its statutory function is as much bound to apply the law of the community as is this court. Similarly, where national law and community law conflict, it must give precedence to community law. It is accordingly entirely appropriate in the light of the ruling of the Court of Justice of the EC in the present case to remit the matter to the Labour Court with a direction that the issues between the parties should be determined on the basis that the appellants and the male employee are employed in ‘like work’. The statutory adjudication must, in other words, be arrived at by applying the relevant principle of community law enunciated by the Court of Justice of the EC rather than the words of ss.2 and 3 of the Act of 1974 literally construed as our principles of statutory construction require. This seems to me entirely in accordance with the judgments of the Court of Justice in Simmenthal and in the present case.”
There is a further tenet of Community law applicable in the instant case which is often referred to as the interpretative obligation or the doctrine of indirect effect. This is a rule of law first developed by the ECJ in Von Colson whereby a national court is required to interpret and apply its domestic law in light of the wording and purpose of a Directive so as to achieve the result envisaged by the Directive. This obligation was developed further by the ECJ in Marleasing SA v La Comercial International de Alimentacion SA Case C-106/89 [1990] E..C.R. I-4135; [1992] 1 C.M.L.R. 305 wherein the court stated:
“In order to reply to that question, it should be observed that, as the court pointed out in Von Colson and Kamann v Land Nordrhein-Westfalen Case C-14/83 [1984] E.C.R. 1891; [1986] 2 C.M.L.R. 430, paragraph 26, the Member States’ obligation arising from a Directive to achieve the result envisaged by the Directive and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts. It follows that, in applying national law, whether the provisions in question were adopted before or after the Directive, the national court called upon to interpret it is required to do so, as far as possible, in light of the wording and the purpose of the Directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189 of the Treaty.”
*281 It is a clear from these authorities that this court is not only endowed with jurisdiction to apply the law of the community where it conflicts with a provision of national law, but that it is obliged to do so. The obligation to inform fixedterm workers of vacancies is unconditional, it is expressed in sufficiently unequivocal language and the respondent is an emanation of the State. Accordingly the conditions necessary to allow the claimant to rely on clause 6 of the Agreement annexed to the Directive are fulfilled.
Moreover, it is clear from the long title of the Act that its purpose is to implement the Directive in Irish law. The objective envisaged by the Directive is that individuals would have the rights prescribed therein from the date set out for its transposition. The interpretative obligation placed on this court by Community law requires it to interpret and apply national law so as to achieve the objective envisaged by the Directive. If there is a conflict between a provision of the Act and a provision of the Directive, the law as contained in the Directive must prevail.
Determination
For the reasons set out above the court determines that the complaint herein is well founded. Accordingly the appeal is allowed.
The INTO had submitted that by way of redress the court should direct the respondent to inform the claimant of vacancies arising in the school in the future. Having considered the terms of s.14(2) of the Act the court is satisfied that such a course is not open to it in a case where the claimant is no longer employed by the respondent.
The court considers that the appropriate redress is an award of compensation. The court measures the amount which is fair and reasonable in the circumstances at €2,000. The respondent is directed to pay the claimant compensation in that amount.
Division of the Labour Court: Mr Duffy (Chairman), Mr Grier, Ms Ní Mhurchú
Representation
An Post v Finbarr Monaghan & Ors
[2013] IEHC 404 (26 August 2013)
Judgment of Mr. Justice Hedigan delivered on 26th day of August 2013.
Application
1. This case is an appeal on a point of law. The appellant maintains that the Labour Court erred in law and seeks a declaration to that effect in respect of its determination that:-
(i) The respondents’ right to equal treatment in respect of their employment conditions was contravened in circumstances where voluntary severance/voluntary early retirement schemes which were available to permanent employees were not applicable to the respondents by virtue of the fact that they were fixed-term workers;
(ii) the appellant could not rely on its need to incentivise permanent employees to leave employment voluntarily, in circumstances where those permanent employees currently enjoy security of tenure and cannot be made compulsorily redundant.
Factual background
2.1 The appellant appeals on a point of law against a decision of the Labour Court pursuant to s.15 (6) of the Protection of Employees (Fixed-Term Work) Act 2003 (hereinafter “the 2003 Act”) . The respondents are fixed term workers within the meaning of the 2003 Act and were employed by the appellant on a series of fixed-term contracts the last of which ended on the 30th September, 2011. The first named respondent was continuously employed by the appellant from the 6th October, 2008, until the 30th September, 2011, and the second named respondent was similarly employed from the 20th October, 2008, to the 30th September, 2011.
2.2 The appellant sought expressions of interest in a voluntary severance/voluntary early retirement scheme (hereinafter “VS/VER scheme”) by notice dated the 20th August, 2010. There are two parts to the VS scheme- VS1 and VS2. The respondents sought to apply under VS1 which is available to those having more than one year but less than five years service reackonable for pension. The scheme however is restricted to permanent employees of the appellant who were paid enhanced redundancy payments. The respondents were excluded from the scheme and they received statutory redundancy payments only. The first named respondent received a payment of €3,169.70 and the second respondent received €3,225.93. The first named respondent accepted his payment on the 3rd February, 2012, and signed the relevant documentation. The second named respondent has refused to accept her cheque or to sign the relevant documentation.
2.3 The respondents claim that they should have been treated in an identical manner to comparable permanent employees for redundancy purposes, entitling them to avail of the terms of the VS1 scheme.
2.4. The Civil Public and Services Union (CPSU) on behalf of the respondents lodged a complaint in this regard with the Labour Relations Commission on the 9th December, 2011, in which the respondents claimed that the appellant was in breach of s. 6(1) of the 2003 Act. The complaints were heard by the Rights Commissioner on the 27th February, 2012, and his decision issued on the 14th May, 2012. It found that the appellant was in breach of s.6 (1) of the Act. Each respondent was awarded the terms of the VS1 scheme. For the first respondent this amounted to €10,784.63 and for the second respondent it was €11,011.67.
2.5 The appellant appealed this decision to the Labour Court on the 7th June, 2012.The appellant submitted that the Rights Commissioner erred in law and in fact in concluding that either complaint was well founded.
The appeal was heard before the Labour Court on the 4th September, 2012. By determination dated the 21st September, 2012, the Court dismissed the appeal and affirmed the decision of the Rights Commissioner that the respondents had been treated less favourably than their comparators and that such treatment had not been objectively justified. It is against this determination that the appellant now appeals to this Court.
Appellant’s Submissions
3.1 Comparators;
A comparable permanent employee is defined in s.5 of the 2003 Act.
The appellant argues that the respondents were not treated differently to the comparators, Mrs Dredge and Mrs Mooney, as fixed-term workers. The circumstances between them were not the same therefore there could have been no discrimination. Although the respondents and their two named comparators were engaged in the same or similar work and were both employed by the appellant, the respondents claim an entitlement pursuant to the appellant’s Voluntary Severance 1 Scheme( hereinafter “VS1 scheme”) whereas the two named comparators had expressed an interest in availing of the Voluntary Severance 2 Scheme (hereinafter “VS2 scheme”). Furthermore, the appellant argues that the Labour Court did not compare like with like as the two comparators (and indeed many other applicants for the VS scheme) are not entitled to receive statutory redundancy payments as they pay a reduced rate of PRSI (class D1).The respondents however, pay the full rate of PRSI (class A) and are entitled to, and were in fact paid, a redundancy lump sum.
The appellant accepts that the High Court in UCC v Bushin [2012] IEHC 76 ruled that an ex gratia redundancy payment represents a “condition of employment” for the purposes of s.6 of the 2003 Act. However it is argued that that decision involved comparing the plaintiff with someone who was being made compulsorily redundant in another educational institution and who was therefore entitled to redundancy payments. In the instant case the payments made to the respondents’ two named comparators are not enhanced redundancy payments since neither comparator was, as a matter of law, entitled to a statutory redundancy payment. Thus, the appellant submits that Bushin does not bind the Court as it is factually different to this appeal.
The appellant asserts that different outcomes can be expected if the facts are different and this does not mean there has been a difference in treatment. They further contend that if the Court were to find that a difference in treatment had been made there were objective reasons for any difference of treatment that there may have been.
3.2 Objective grounds for less favourable treatment;
The 2003 Act transposes the provisions of Directive 99/70/EC concerning the framework agreement on fixed term work. The preamble to the framework agreement annexed to the Directive recognises the general principle of non-discrimination “needs to take account of the realities of specific national, sectoral and seasonal situations”. This principle is described in clause 4(1) of the Directive as:-
“In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed- term contract or relation unless different treatment is justified on objective grounds.”
Clause 4 is implemented by s.6 of the 2003 Act which provides:-
“6 (1) Subject to subsection (2) and (5), a fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee.
(2) If treating a fixed-term employee, in respect of a particular condition of employment, in a less favourable manner than a comparable permanent employee can be justified on objective grounds then that employee may, notwithstanding subsection (1), be so treated.”
The appellant argues that the provisions of the VS/VER schemes are justified by the legitimate objective pursued. The appellant must reduce staffing levels to meet the challenges facing its business. Rather than resort to compulsory redundancies a reduction in staff numbers has been achieved through the use of the incentivised VS/VER schemes. The appellant argues that this is currently the only method available to it to reduce staff levels i.e. secure the attainment of its objective, otherwise than through natural wastage. It argues that it does not go beyond what is necessary in order to attain it and therefore is proportionate.
It is submitted that permanent staff on such schemes receive lump-sum payments-not because they are permanent staff-but because the appellant has encouraged and incentivised those individuals to voluntarily forfeit their positions. The scheme does not apply to fixed-term workers, such as the respondents, it is argued, as their employment terminates at an agreed date. Neither respondent has any entitlement to remain in the appellant’s employment after the determination of their contract and there is therefore no need for the appellant to incentivise their departure from its service.
The Labour Court, it is submitted, unconvincingly distinguished the circumstances of this case from the case of Sunday Newspapers Ltd. v. Kinsella & Bradley [2008] E.L.R. One of the issues in that case was if the complainant fixed-term employees had been treated in a less favourable manner than comparable permanent employees when they had been offered voluntary severance packages by their employer based on the earnings they would have received up to the expiration of their fixed-term contracts whereas permanent employees had been offered a minimum of one year’s salary based on the fact they would cease working at the age of 65.
Smyth J. held at para. 2 of his judgment that the Labour Court had erred in law in finding that the applicant’s complaints were well founded. He held that the complainants as fixed-term employees were treated “differently but in no less favourable a manner to a comparable employee” since their ceasing to work with the company would occur with the passage of time regardless of whether they reached 65.
The appellant submits that similar considerations apply to the facts of this case.
However, the appellant submits that if this Court decides that the Labour Court did not err in law in concluding that the respondents were treated less favourably than comparable permanent employees, there are clear objective grounds justifying the less favourable treatment.
3.3 Appeal of a point of law;
Section.15 (6) of the 2003 Act provides that:-
“(6) A party to proceedings before the Labour Court under this section may appeal to the High Court from a determination of the Labour Court on a point of law and the determination of the High Court shall be final and conclusive.”
The appellant submits that certain information regarding the comparators was not considered by the Labour Court. It is of the view that this Court is not restricted to considering only points of law and may consider mixed issues of fact and law in the appeal before it. It argues therefore that this information should be taken into account by the Court. In this it relies on the Supreme Court decision in Castleisland Cattle Breeding Society Ltd v. Minister for Social and Family Affairs [2004] 4 IR 150, which was a statutory appeal under the Social Welfare (Consolidation) Act where Geoghegan J. held at p.158.
“Clearly, on the authorities the High Court or this court on appeal is entitled to consider whether it was open to the appeals officer to come to the decision which she did arrive at and, if not, whether the evidence conclusively established that Mr. Walsh was an independent contractor. If so, the High Court or this court on appeal can make a declaration to that effect. A statutory appeal on a question of law is not a judicial review and a question of law includes the question of whether the evidence supports only one conclusion.”
The Supreme Court gave further consideration to the nature of such appeals in the case of NUI Cork v. Aherne [2005] IESC 40, McCracken J. under the paragraph “questions of law” stated:-
“The Respondents submit that the matters determined by the Labour Court were largely questions of fact, and that matters of fact as found by the Labour Court must be accepted by the High Court in any appeal from its findings. As a statement of principle, this is certainly correct. However, this is not to say that the High Court or this Court cannot examine the basis upon which the Labour Court found certain facts. The relevance, or indeed admissibility, of the matters relied on by the Labour Court in determining the facts is a question of law. In particular, the question of whether certain matters ought or ought not to have been considered by the Labour Court and ought or ought not to have been taken into account by it in determining the facts, is clearly a question of law, and can be considered on an appeal under s.8(3)”.
Thus in the present case it is submitted that this Court is entitled to examine the question of whether certain matters ought or ought not to have been considered by the Labour Court in determining the facts of this case as well as determining whether there has been an error of law.
Respondents’ Submissions
4.1 Discrimination;
The VS/VER scheme states:-
“All staff are eligible to apply under these schemes provided that they are members of the An Post Main Superannuation Scheme”.
The respondents were members of this scheme. The scheme provides for benefits in respect of voluntary severance for permanent employees depending on the length of reckonable service. The respondents contend had they been permanent employees they would have been eligible for payments under the VS1 scheme but as they were fixed-term workers they were excluded and eligible for statutory payments only. Clause 1 of the framework agreement on fixed-term workers annexed to Directive 99/70/EEC provides that the purpose of the Directive is to improve the quality of fixed term work by ensuring the application of the principles of non-discrimination.
The appellant at para. 4.1 of its outline written legal submissions to the Labour Court stated that:-
“The An Post Voluntary Severance and Voluntary Early Retirement Schemes are only available to permanent staff and where a surplus staff situation exists.”
The Court found in UCC v. Bushin [2012] IEHC 76 that this type of scheme was a condition of employment. In his decision Kearns P. stated at p.11:-
“I am also satisfied that the Labour Court was correct in law in finding that an ex gratia redundancy payment represented a ‘condition of employment’ within the meaning of the Act”.
It appears therefore that it is a condition of employment which is only available to permanent employees and temporary workers are discriminated against as they cannot access it.
Later in his judgment, Kearns P. found that the claimant was denied an ex gratia payment on the basis that she was a fixed-term worker holding at para. 26 of the judgment that :-
“Ex gratia payments were made to valid comparators. There was thus no possibility of her receiving some different, but no less favourable treatment. The contention advanced by the appellants is predicated entirely on the status of the respondent as the fixed term employee and as such is, in my view, precluded by s. 7(1) of the Act.”
The Labour Court found the exclusion to be prima facie less favourable treatment and the respondents submit that this was a correct analysis of the situation. They argue that they are in an analogous situation to UCC and have no possibility of receiving different but no less favourable treatment as they were entirely excluded from consideration under the VS/VER scheme.
The appellant places reliance on Sunday Newspapers Limited (cited above) however the respondents submit that that case differs from this appeal since in that case the respondents did in fact have access to the scheme. The respondents refute the appellant’s assertion that they did not have access, not because of their status as fixed term employees, but because of the need to encourage permanent staff to voluntarily forfeit their positions. It is submitted that a reason based on the fact that they were not permanent staff is fundamentally the same as excluding them because they were fixed-term workers.
4.2 Absence of justification on objective grounds;
In order to justify unfavourable treatment it must be on objective grounds. Although objective grounds are not defined in the Directive, Section 7 (1) of the 2003 Act provides that:-
“(1) A ground shall not be regarded as an objective ground … 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”.
Thus three elements must be established in order to justify less favourable treatment;
(i) The impugned treatment must be for the purpose of achieving a legitimate objective;
(ii) Such treatment must be appropriate and necessary for achieving that objective;
(iii)The treatment cannot be based on considerations of the status of the employer e.g. as fixed-term employees.
In this case the legitimate objective cited is the need to incentivise permanent workers to leave employment. Even if it is accepted that the objective of the appellant is legitimate for the purposes of the 2003 Act, the principle of proportionality must be satisfied and the respondents argue that it has not been by the scheme at issue. It is argued that it was neither appropriate nor necessary to exclude fixed-term employees from the VS/VER scheme because their contracts would end in order to achieve the objective. The exclusion of the respondents from a scheme to which permanent employees were entitled access constitutes less favourable treatment of fixed-term employees. The legislation does not permit this and it cannot be viewed as an objective ground. The Labour Court determined:-
“Section 7 of the Act provides, in effect, that a ground shall not be regarded as an objective ground for the purposes of section 6(1) of the Act unless it is based on considerations other than the status of the employees concerned as a fixed-term employee. The operative consideration relied upon by the [appellant] to justify the different treatment in issue in this case is indissociable from the [respondents’] status as fixed-term employees. Consequently it cannot be relied upon as an objective ground…”
Even if the appellant believed that the scheme could not achieve its objective without excluding fixed-term employees, alternative versions of the scheme could have been devised which would not have excluded fixed-term employees. For example, the respondent submits, the objective could have been achieved by designing payments to reflect remaining potential service. The scheme could have been opened to all with the respondents and those in like situation being compensated for no more than what is left in the term of their contract e.g. in the case of a five year contract where the employee is let go after three years they would be compensated based on the remaining two years of work. It is submitted that permanent workers would have been no less incentivised if such a scheme had been opened to fixed term workers also. No evidence has been given that any consideration was given to such alternative forms of the scheme which could have applied in a non-discriminatory way to all employees. It is not permissible to simply exclude the respondents from the scheme and the negative impact of the scheme on fixed-term workers is therefore entirely disproportionate to its objective and that objective cannot be accepted as legitimate.
It is clear from the relevant jurisprudence that the status of workers as fixed-term workers cannot be a justification for unfavourable treatment.
The ECJ in its judgment in Konstantinos Adeneler and Others v Ellinikos Organismos Galaktos (case c-212/04) stated at paras. 69-70 in respect of objective reasons that:-
“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. 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 the pursuit of a legitimate social policy objective of a member state”.
Yolanda Del Cerro Alonso v Osakidetza-Servicio Vasco de Salud (case-C307/05) concerned retrospective recognition of length of service allowances granted to permanent employees but from which the complainant had been excluded because she was a fixed-term worker. The CJEU again stressed the precise and concrete requirements of “objective reasons” citing Adeler and stating at para.58 that the concept:-
“….requires the unequal treatment at issue to be justified …and is necessary for that purpose.”
In the joined cases of Rosa María Gavieiro(C-444/09) Ana María Iglesias Torres (C-456/09) v Consellería de Educación e Ordenación Universitaria de la Xunta de Galicia (cases C- 444/09 and C-456/09), which concerned the exclusion of fixed-term teachers from pay increments to which permanent teachers were entitled the defendant government argued that the justification for the treatment of the fixed-term workers was that their employment was temporary. The court rejected this circular argument and stated clearly that the temporary nature of fixed-term work is not capable of constituting an objective ground within the meaning of the framework directive. It held at paras. 54-57:-
” 54. As to the question whether the temporary nature of the employment of certain public servants may, in itself, amount to an objective ground within the meaning of clause 4 of the framework agreement, the Court has already held that the concept of objective grounds in point 1 of that clause must be understood as not permitting a difference in treatment between fixed-term workers and permanent workers to be justified on the basis that the difference is provided for by a general, abstract national norm, such as a law or collective agreement (Del Cerro Alonso, paragraph 57).
55. That concept requires the unequal treatment at issue to be justified by the existence of precise and concrete factors, characterising the employment condition to which it relates, in the specific context in which it occurs and on the basis of objective and transparent criteria in order to ensure that that unequal treatment in fact responds to a genuine need, is appropriate for achieving the objective pursued and is necessary for that purpose (Del Cerro Alonso, paragraph 58). Those factors may result, in particular, from the specific nature of the tasks for the performance of which fixed-term 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 (see, as regards clause 4(1) of the framework agreement, Del Cerro Alonso, paragraphs 53 and 58; as regards the concept of ‘objective reasons’ in clause 5(1)(a) of the framework agreement, Adeneler and Others, paragraphs 69 and 70, and the order of 24 April 2009 in Case C-519/08 Koukou, paragraph 45).
56. By contrast, reliance on the mere fact of the temporary nature of the employment of staff of the public authorities does not meet those requirements and is therefore not capable of constituting an ‘objective ground’ within the meaning of clause 4(1) of the framework agreement.
57. A difference in treatment with regard to employment conditions as between fixed term workers and permanent workers cannot be justified on the basis of a criterion which, in a general and abstract manner, refers precisely to the term of the employment. If the mere temporary nature of an employment relationship were held to be sufficient to justify such a difference, the objectives of Directive 1999/70 and the framework agreement, recalled at paragraphs 47 and 48 of this judgment, would be negated. Instead of improving the quality of fixed-term work and promoting the equal treatment to which both Directive 1999/70 and the framework agreement aspire, reliance on such a criterion would amount to perpetuating a situation that is disadvantageous to fixed term workers. “
In the case under appeal different conditions were applied to the fixed-term and permanent employees, the conditions for the former being less favourable -as was the case in Gavieiero. The only objective justification being advanced by the appellant is that the employment of the respondents was not permanent. It is an argument the respondent submits which in a similar vein to Gavieiro incorrectly seeks to rely on the fixed-term nature of the employment of the respondents’ employment as a justification for the treatment at issue.
4.3 The role of High Court on an appeal on a point of law;
It is submitted that there is no identifiable error of law and no unsustainable finding of fact disclosed in the Labour Court determination at issue. The Labour Court based its decision on findings of fact having considered the relevant evidence before it. The respondents submit that all material information was laid before the Labour Court. It notes that no assertion is made by the appellants that the Labour Court’s determination was not supported by evidence nor that its conclusions were irrational. Therefore, the respondents assert there is no legitimate or proper reason for this Court to interfere with the decision of the Labour Court.
Many authorities set out the narrowness of the function of the Court on a point of law and the respondents rely on Horan v. CWS- Bosco Ireland Limited [2012] IEHC 524 where Murphy J. reviewed in detail the law relating to appeals on a point of law stating at para.7.4:-
“The function of the High Court in reviewing the decision of specialist Tribunals is well summarised in Kerr’s Termination of Employment Statutes (January 2012) at pp 1-79:
‘……[i]n considering whether to allow an appeal against a decision of such a Tribunal, the High Court must consider whether the body based its decision on an identifiable error of law or an unsustainable finding of fact’.”
They also rely on Henry Denny and Sons (Ireland) Limited, trading as Kerry Foods v. The Minister for Social Welfare [1998] 1 I R 34 where Hamilton C.J. held at pps. 37-38.:-
“I agree with the judgments about to be delivered but I believe it would be desirable to take this opportunity of expressing the view that the courts should be slow to interfere with the decisions of expert administrative tribunals. Where conclusions are based upon an identifiable error of law or an unsustainable finding of fact by a tribunal such conclusions must be corrected. Otherwise it should be recognised that tribunals which have been given statutory tasks to perform and exercise their functions, as is now usually the case, with a high degree of expertise and provide coherent and balanced judgments on the evidence and arguments heard by them it should not be necessary for the courts to review their decisions by way of appeal or judicial review. “
In Denise Wilton v. Steel Company of Ireland Ltd. [1999] 10 E.L.R. 1 O’Sullivan J. also considered the function of the High Court in hearing an appeal on a point of law and set out the difference between a substantive appeal and an appeal on a point of law, observing at p.5 that:-
“I would make it clear, of course, that it is no part of my function to test the strength or weaknesses of such arguments. This is not a court of appeal, but only a court of appeal on a point of law, which is an entirely different matter. No argument was made on behalf of the plaintiff that the Labour Court was irrational in reaching its decision and therefore it is not for this Court to weigh the strengths or weaknesses of the arguments or evaluate its determination thereon.”
The respondents note that in the case at issue the appellants have introduced new evidence regarding the comparators, Mrs Mooney and Mrs Dredge, wherein they argue that they had applied for a different scheme to the scheme the respondents sought. This information was not presented to the Labour Court. The respondents argue that this Court cannot have regard to new facts in an appeal and if the Labour Court did not (or was not in a position to) determine a matter this Court should not now determine that issue since this case relates to a point of law only. They further contend that since the Labour Court never heard the evidence it cannot be argued that it made an error on a point of law in relation to same.
The principle that arguments should not be advanced in an appeal on a point of law where the Labour Court never heard or considered those arguments was considered by Laffoy J. in The Minister for Finance v. Una Mc Ardle [2007]IEHC 98 where she held at p.7 that :-
“Counsel for the defendant submitted that it is not open to an appellant on an appeal on a point of law from the determination of the Labour Court under s.15 (6) of the Act to present arguments as to the legal position which were not addressed to the Labour Court, citing two authorities on appeals from the Information Commissioner: The decision of this Court (Mc Kechnie J.) delivered on 11th May 2011 in Deely v The Information Commissioner; and the decision of this Court Smyth J.) delivered on 31st May 2005 in South Western Area Health Board v. Information Commissioner. In my view, that submission must be correct in point of principle ,at any rate where the legal issue is whether the first instance decision maker (in this case the Rights Commissioner) or the appellant decision maker (in this case the labour Court) had jurisdiction to make the relevant decision.”
The respondent therefore submits that the decision of the labour Court should be upheld.
Decision
5. This is an appeal on a point of law from a decision of the Labour Court. I will deal first with the role of the Court in such an appeal. It is plainly a limited role. The Court may only intervene where it finds that the Tribunal based its decision on an identifiable error of law or an unsustainable finding of fact. The Court should be slow to interfere with the decisions of the Labour Court because it is an expert administrative Tribunal. See Henry Denny & Sons. v. The Minister for Social Welfare [1998] 1 I R. 539. Unless a claim of irrationality is sustained, the Court cannot weigh the strengths or weaknesses of the arguments or evaluate its determination thereon. See Wilton v. Steel Company of Ireland Ltd. [1999] ELR 1, (O’Sullivan J., p. 5). The Court may, however, examine the basis upon which the Labour Court found certain facts. It can consider whether certain matters ought or ought not to have been considered or taken into account by the Labour Court in determining the facts. See NUI Cork v. Ahern [2005] IESC 40 (McCracken J.).
The law
5.1 Clause 1 of the Framework Agreement on Fixed-Term Work annexed to Council Directive 1999/70/EC of the 28th June, 1999, provides that the purpose of the Directive is, inter alia, to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination. Clause 4.1 of the Agreement provides:
“In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.”
“Objective grounds” are not defined in the Directive.
The Directive is implemented into Irish law by the Protection of Employees (Fixed-Term Work) Act 2003. The relevant provisions of the 2003 Act are as follows:
“Section 6(1) Subject to subsections (2) and (5), a fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee.
(2) If treating a fixed-term employee, in respect of a particular condition of employment, in a less favourable manner than a comparable permanent employee can be justified on objective grounds then that employee may, notwithstanding subsection (1), be so treated.
(3) A period of service qualification relating to a particular condition of employment shall be the same for a fixed-term employee as for a comparable permanent employee except where a different length of service qualification is justified on objective grounds.
(4) For the avoidance of doubt, the reference in this section to a comparable permanent employee is a reference to such an employee either of the opposite sex to the fixed-term employee concerned or of the same sex as him or her.
(5) Subsection (1) shall, in so far, but only in so far, as it relates to any pension scheme or arrangement, not apply to a fixed-term employee whose normal hours of work constitute less than 20 per cent of the normal hours of work of a comparable permanent employee.
(6) The extent to which any condition of employment referred to in subsection (7) is provided to a fixed-term employee for the purpose of complying with subsection (1) shall be related to the proportion which the normal hours of work of that employee bears to the normal hours of work of the comparable permanent employee concerned.
(7) The condition of employment mentioned in subsection (6) is a condition of employment the amount of benefit of which (in case the condition is of a monetary nature) or the scope of the benefit of which (in any other case) is dependent on the number of hours worked by an employee.
(8) For the avoidance of doubt, neither this section nor any other provision of this Act affects the operation of Part III of the Organisation of Working Time Act 1997.”
Section 7 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.”
5.2 The appellant contends that the workers in question were excluded from the scheme not because they were fixed-term workers but because of the need to incentivise permanent staff to leave early positions in which they could remain until 65 years of age. The scheme was to compensate them for the years of service they would forgo. Did this exclusion treat the respondents in a less favourable manner than the permanent staff that are accepted as the true comparators? Clearly it did. The scheme would have resulted in a better payment to them had the scheme applied and the appellant itself makes the case that they were excluded because of their status as fixed-term workers.
5.3 The real question for the Court is whether s. 7 applies. In short, was the exclusion justified by virtue of a legitimate objective and was the exclusion an appropriate and necessary one? See Adeneler & Ors. v. Ellinikos Organismos Galaktos (case c-212/04). It seems to me, and I do not think it was in issue, that the overall objective of trying to voluntarily reduce the number of staff is, in the circumstances, a legitimate one. Consequently, the first question is answered affirmatively. It is a legitimate objective. But was the exclusion appropriate and necessary? This should be examined on a proportionality basis. Thus, the Court must address the second question. Was the exclusion the minimum unfavourable treatment necessary to enable the appellant obtain its objective? In its decision, the Court did not directly address this question. I think this Court can and should do so in order to finally resolve this matter. The objective is to reduce labour costs within An Post. Thus incentivising any workers to leave early is obviously going to move towards that end. Fixed-term workers have, under the Framework Agreement, annexed to Council Directive 1999/70/EC of the 28th June, 1999, a right to benefit from a principle of non-discrimination. To this end, Clause 4.1 thereof states;
“In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.”
Thus, the default position is one of non-discrimination and no less favourable treatment. In paragraph 4.4 to 4.10 of their submissions herein, the appellant sets out its reasons for less favourable treatment. It claims at 4.14 that the scheme chosen was the only means suitable to secure the objective. The respondents argue that there is a less unfavourable means. They point to a rather obvious one. The scheme could have allowed for the application to fixed term workers so as to buy out any remaining years of their contracts. This was argued at the hearing, seems eminently sensible and a fair solution and no argument was raised against it. In my view, this answers the question addressed. The means chosen by An Post was not the minimum unfavourable treatment required in order to achieve the legitimate objective. As it went beyond what was necessary, it failed the applicable test.
Whilst the Labour Court’s grounds are more narrow than this, nonetheless I can find no error in the result it actually produced in its determination. The appeal, therefore, is refused.
MPACT v Minister for Agriculture and Food & Others
Case C-268/06
European Court of Justice
15 April 2008
[2008] 19 E.L.R. 181
The European Court of Justice delivered its judgment on April 15, 2008 as follows:
1. This reference for a preliminary ruling concerns the interpretation of clauses 4 and 5 of the framework agreement on fixed-term work concluded on March 18, 1999 ( ‘the framework agreement’ ), which is annexed to Council Directive 1999/70 of June 28, 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP ([1999] O.J. L175 43), and the *185 scope of the Member States’ procedural autonomy and extent of the obligation on the courts of the Member States to interpret national law in conformity with Community law.
2. The reference was made in proceedings brought by the Irish trade union Impact, acting on behalf of Irish civil servants, against the government departments which employ them concerning, first, the pay and pension conditions applied to those civil servants on the basis of their status as fixed-term workers and, second, the conditions for the renewal of certain fixed-term contracts by one of those government departments.
Legal context
Community legislation
3. Directive 1999/70 is founded on Article 139(2) EC and its purpose, as provided in Article 1, is “to put into effect the framework agreement … concluded … between the general cross-industry organisations (ETUC, UNICE and CEEP) annexed hereto” .
4. According to the first paragraph of Article 2 of the directive:
“Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by July 10, 2001, or shall ensure that, by that date at the latest, management and labour have introduced the necessary measures by agreement, the Member States being required to take any necessary measures to enable them at any time to be in a position to guarantee the results imposed by this Directive. They shall forthwith inform the Commission thereof.”
5. In accordance with Article 3, the directive entered into force on July 10, 1999, the date of its publication in the Official Journal of the European Communities .
6. As provided in clause 1, the purpose of the framework agreement is to:
“(a) improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination;
(b) establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.”
7. Clause 4 of the framework agreement, entitled “Principle of non-discrimination” , provides:
“1. In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely *186 because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.
2. Where appropriate, the principle of pro rata temporis shall apply.
3. The arrangements for the application of this clause shall be defined by the Member States after consultation with the social partners and/or the social partners, having regard to Community law and national law, collective agreements and practice.
4. Period-of-service qualifications relating to particular conditions of employment shall be the same for fixed-term workers as for permanent workers except where different length-of-service qualifications are justified on objective grounds.”
8. Clause 5 of the framework agreement, relating to “[m]easures to prevent abuse” , states:
“1. To prevent abuse arising from the use of successive fixed-term employment contracts or relationships, Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or the social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures:
(a) objective reasons justifying the renewal of such contracts or relationships;
(b) the maximum total duration of successive fixed-term employment contracts or relationships;
(c) the number of renewals of such contracts or relationships.
2. Member States after consultation with the social partners and/or the social partners shall, where appropriate, determine under what conditions fixed-term employment contracts or relationships:
(a) shall be regarded as ‘successive’ ;
(b) shall be deemed to be contracts or relationships of indefinite duration.”
9. The framework agreement also contains a clause relating to “[p]rovisions on implementation” , which provides, in clause 8(5):
“The prevention and settlement of disputes and grievances arising from the application of this agreement shall be dealt with in accordance with national law, collective agreements and practice.”
National legislation
10. Directive 1999/70 was transposed into Irish law by the Protection of Employees (Fixed-Term Work) Act 2003 ( “the 2003 Act” ). The 2003 Act entered into force on July 14, 2003.
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11. Section 6 of the 2003 Act transposes clause 4 of the framework agreement. The combined provisions of ss. 2(1) and 6(1) of the 2003 Act secure pay and pension rights for fixed-term employees that are equal to those of comparable permanent employees.
12. Section 9 of the 2003 Act transposes clause 5 of the framework agreement. Section 9(1) provides that the fixed-term contract of an employee who, on or after the passing of the 2003 Act, has completed his or her third year of continuous employment with his or her employer or associated employer, may be renewed by that employer on only one occasion for a fixed term of no longer than one year. Under s.9(3) of the 2003 Act, any term of a fixed-term employment contract which purports to contravene s.9(1) is to have no effect and the contract in question is to be deemed to be a contract of indefinite duration.
13. An employer may nevertheless derogate from the requirements of ss. 6 and 9 of the 2003 Act if there are objective grounds for doing so. The meaning of “objective grounds” is amplified in s.7 of the 2003 Act.
14. Section 14(1) of the 2003 Act provides that an employee or the trade union of which the employee is a member may present a complaint alleging a breach of the 2003 Act to a Rights Commissioner, who is required to investigate the complaint and give a decision in writing. Where the complaint is upheld, the Rights Commissioner may order redress in the terms provided for by s.14(2) of the 2003 Act, namely, inter alia, compensation of up to two years’ remuneration.
15. Section 15 of the 2003 Act provides that the parties may bring an appeal before the Labour Court against the decision of a Rights Commissioner. An appeal against the decision of the Labour Court may be brought before the High Court.
16. The office of Rights Commissioner and the Labour Court were established by the Industrial Relations Act 1969 and the Industrial Relations Act 1946 respectively. Various Irish statutes, including the 2003 Act, confer jurisdiction upon them to hear and determine disputes between employers and employees. However, according to the order for reference, neither the Rights Commissioners nor the Labour Court have express jurisdiction to determine a claim based on a directly effective provision of Community law unless that provision comes within the scope of the legislation conferring jurisdiction upon them.
The facts of the case in the main proceedings and the questions referred for a preliminary ruling
17. In the main proceedings, Impact is acting on behalf of 91 of its members ( “the complainants in the main proceedings” ) employed in various Irish government departments ( “the respondents in the main proceedings” ) on the basis of successive fixed-term employment contracts for periods which commenced before July 14, 2003, the date on which the 2003 Act entered into force, and which continued beyond that date.
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18. The complainants in the main proceedings are all unestablished civil servants and, under Irish regulations governing employment in the civil service, are subject to a different scheme to that which is applicable to established civil servants. The order for reference states that the complainants in the main proceedings consider the latter scheme to be more favourable than that which is applicable to them.
19. Some of the complainants in the main proceedings had less than three continuous years’ service as fixed-term employees and are claiming employment conditions equal to those of comparable permanent employees; the others had more than three continuous years’ service and are claiming, in addition to equality of employment conditions, a contract of indefinite duration.
20. According to the order for reference, the purpose of the fixed-term contracts at issue was to meet the temporary needs of the respondents in the main proceedings and to cover situations in which permanent funding for the posts involved could not be guaranteed. The general practice of the respondents in the main proceedings was to renew those contracts for periods of between one and two years. However, in the period immediately before the 2003 Act entered into force, one of the respondents in the main proceedings renewed the contracts of a certain number of the complainants in the main proceedings for a fixed term of up to eight years.
21. Taking the view that the respondents in the main proceedings, in their capacity as employers, had contravened the provisions of the 2003 Act and Directive 1999/70 to the detriment of the complainants in the main proceedings, Impact initiated proceedings before a Rights Commissioner on behalf of those complainants. In those proceedings, it alleged, first, infringement of the entitlement of the complainants in the main proceedings to equal treatment in respect of pay and pension rights with established civil servants — the latter being regarded, according to the complainants in the main proceedings, as comparable permanent workers — and, second, that the successive renewals of fixed-term contracts constituted an abuse. The complaints thus presented were based on clauses 4 and 5 of the framework agreement as regards the period between July 10, 2001, the deadline for transposing Directive 1999/70, and July 14, 2003, the date on which the provisions transposing the directive into Irish law entered into force. As regards the period after July 14, 2003, the complaints were based on s.6 of the 2003 Act.
22. The respondents in the main proceedings challenged the jurisdiction of the Rights Commissioner to entertain the complaints in question in so far as they were based on Directive 1999/70. They contended that the Rights Commissioner’s jurisdiction was confined to adjudicating on complaints based on domestic law. They also claimed that clauses 4 and 5 of the framework agreement — which are neither unconditional nor sufficiently precise — could not be relied upon by individuals before national courts. They contended further that a fixed-term *189 worker was not entitled under the terms of clause 4 of the framework agreement to the same pay and pension conditions as a comparable permanent worker.
23. The Rights Commissioner took the view that she had jurisdiction to entertain all of the complaints, including those relating to the period between July 10, 2001 and July 14, 2003. She held that the principle of non-discrimination referred to in clause 4 of the framework agreement encompassed both pay and pension rights and that that clause was directly effective, unlike clause 5.
24. Taking the view that the complaints, other than those based on clause 5 of the framework agreement, were well founded, and that the respondents in the main proceedings had infringed the rights of the complainants in the main proceedings under both national law and Directive 1999/70 by affording them less favourable employment conditions than those afforded to comparable permanent workers, the Rights Commissioner awarded the complainants monetary compensation ranging from €2,000 to €40,000, pursuant to s.14(2) of the 2003 Act. In addition she ordered the respondents in the main proceedings to apply to the complainants in the main proceedings terms and conditions of employment equivalent to those applicable to comparable permanent workers. She also ordered them to grant certain complainants in the main proceedings a contract of indefinite duration on terms no less favourable than those enjoyed by comparable permanent workers.
25. The respondents in the main proceedings appealed to the Labour Court against the Rights Commissioner’s decision. Impact cross-appealed against the decision in so far as it held clause 5 of the framework agreement not to be directly effective.
26. In the light of the arguments exchanged, the referring court is faced with a series of questions which are decisive for the resolution of the dispute in the main proceedings and which turn on the interpretation of Community law.
27. First, while the 2003 Act does not expressly confer jurisdiction upon it to adjudicate on a claim which requires the application of directly effective Community law, the Labour Court nevertheless has doubts as to whether, in the light of Article 10 EC, on the one hand, and the principles of equivalence and effectiveness underpinning the procedural autonomy of the Member States, on the other, it may decline jurisdiction to consider the claims in the main proceedings in so far as they are based on Directive 1999/70 and the framework agreement.
28. Second, on the assumption that it does have jurisdiction to apply Community law, the referring court questions whether clauses 4 and 5 of the framework agreement — on which the claims in the main proceedings are based so far as concerns the period between July 10, 2001 and July 14, 2003 — are unconditional and sufficiently precise so as to be directly effective. It takes the view that this is the case only in respect of clause 4.
29. Third, the referring court questions whether clause 5 of the framework agreement may be relied upon so as to render unlawful the decision taken by *190 one of the respondents in the main proceedings in the period immediately prior to the entry into force of the 2003 Act to retain some of the complainants in the main proceedings on contracts of up to eight years’ duration.
30. The referring court takes the view that, notwithstanding the apparent absence of bad faith on the part of the relevant defendant and its explanation concerning temporary needs and the impossibility of guaranteeing permanent funding for the posts concerned, the specific effect of that decision was to deprive the complainants in the main proceedings of the opportunity to obtain a contract of indefinite duration within a reasonable time after the adoption of the 2003 Act. The referring court considers that, by that decision, Ireland gained an advantage at the expense of those complainants from its own illegality in failing to transpose Directive 1999/70 on time.
31. Fourth, on the assumption that it does not have jurisdiction to apply Community law or that clauses 4 and 5 of the framework agreement are not directly effective, the referring court questions whether its obligation to interpret national law in conformity with Community law means that it must interpret the 2003 Act as having retrospective effect to July 10, 2001.
32. The referring court notes that, while Irish law generally precludes the retrospective application of legislation, there is nothing in s.6 of the 2003 Act to prevent it from being applied retrospectively. The referring court goes on to state that, while the interpretative obligation is indeed limited by the principles of legal certainty and non-retroactivity and cannot, of itself and irrespective of national legislation implementing Directive 1999/70, determine or aggravate the liability in criminal law resulting from an infringement of Community law, the question nevertheless arises in the present case as to whether that obligation means that domestic law can be applied retrospectively so as to impose civil liability on a Member State, in its capacity as an employer, for acts or omissions contrary to the provisions of a directive which occurred at a time when that directive ought to have been transposed by the Member State in question.
33. Fifth, the referring court questions whether employment conditions within the meaning of clause 4 of the framework agreement encompass conditions relating to pay and pension rights.
34. It refers to the broad meaning of “pay” in the context of Article 141 EC in relation to the principle of gender equality, and considers that if the clause in question were to be construed as being inapplicable to pay it would deprive fixed-term workers of protection against discrimination with regard to a number of essential matters covered by pay, which would be contrary to the objective of the framework agreement.
35. Furthermore it takes the view that, having regard to Article 136 EC and the Community Charter of the Fundamental Social Rights of Workers adopted at the European Council’s meeting in Strasbourg on December 9, 1989 (in particular Article 7 of the Charter) — in conjunction with which Article 137 EC must be read *191 — Article 137(5) EC, which excludes pay from the scope of Article 137 EC, must be interpreted as being intended solely to preclude the European Community from having legislative competence to fix a Community minimum wage and that it does not therefore prevent the term “working conditions” within the meaning of Article 137(1) EC from encompassing pay and pension matters.
36. In the light of these various unresolved issues, the Labour Court decided to stay the proceedings and to put the following questions to the Court for a preliminary ruling:
“(1) In deciding a case at first instance under a provision of domestic law or in determining an appeal against such a decision, are the Rights Commissioners and the Labour Court required by any principle of Community law (in particular the principles of equivalence and effectiveness) to apply a directly effective provision of … Directive 1999/70 … in circumstances where:
— the Rights Commissioner and the Labour Court have not been given express jurisdiction to do so under the domestic law of the Member State including the provisions of domestic law transposing the Directive,
— individuals can pursue alternative claims arising out of a failure by their employer to apply the Directive to their individual circumstances before the High Court and
— individuals can pursue alternative claims before an ordinary court of competent jurisdiction against the Member State seeking damages for loss suffered by them arising from the Member State’s failure to transpose the Directive on time?
(2) If the answer to Question 1 is in the affirmative:
(a) Is clause 4(1) of the framework agreement … unconditional and sufficiently precise in its terms as to be capable of being relied upon by individuals before their national courts?
(b) Is clause 5(1) of the framework agreement … unconditional and sufficiently precise in its terms as to be capable of being relied upon by individuals before their national courts?
(3) Having regard to the Court’s answers to Question 1 and Question 2(b), does clause 5(1) of the framework agreement … preclude a Member State, acting in its capacity as an employer, from renewing a fixed-term contract of employment for up to eight years in the period after the said Directive should have been transposed and before the transposing legislation was enacted in domestic law where:
— on all previous occasions the contract had been renewed for shorter periods, and the employer requires the services of the employee for the extended period,
— the renewal for the extended period has the effect of circumventing the application to an individual of the full benefit of clause 5 of the framework agreement when transposed into domestic law, and
— there are no objective reasons unrelated to the employee’s status as a *192 fixed-term worker for such a renewal?
(4) If the answer to Question 1 or Question 2 is in the negative, are the Rights Commissioner and the Labour Court required by any provision of Community law (and in particular the obligation to interpret domestic law in light of the wording and purpose of a Directive so as to produce the result pursued by the Directive) to interpret provisions of domestic law enacted for the purpose of transposing Directive 1999/70 … as having retrospective effect to the date on which the said Directive should have been transposed where:
— the wording of the provision of domestic law does not expressly preclude such an interpretation, but,
— a rule of domestic law governing the construction of statutes precludes such retrospective application unless there is a clear and unambiguous indication to the contrary?
(5) If the answer to Question l or Question 4 is in the affirmative, do the ‘employment conditions’ to which clause 4 of the framework agreement … refers include conditions of an employment contract relating to remuneration and pensions?”
The questions referred for a preliminary ruling
Question 1
37. By its first question, the referring court seeks, in essence, to establish whether, notwithstanding the absence of any express provision to that effect in the relevant national law, a national court or tribunal, such as the Labour Court or a Rights Commissioner, which is called upon to decide a case concerning an infringement of the legislation transposing Directive 1999/70 is required by Community law to hold that it also has jurisdiction to hear and determine claims based directly on that directive itself, where such claims relate to a period after the deadline for transposing the directive concerned, but before the date of entry into force of the transposing legislation giving it jurisdiction to hear and determine claims based on that legislation.
38. The referring court explains in that regard that the parties can bring the Member State concerned before the ordinary courts, either in its capacity as an employer or in order to obtain damages for loss arising from a failure to transpose Directive 1999/70 within the prescribed period.
39. As a preliminary point, it should be noted, as it was by Ireland at the hearing, that neither Directive 1999/70 nor the framework agreement designates the national courts having jurisdiction to ensure that they are applied, nor do they define the detailed procedural rules governing judicial actions for safeguarding their application. On the contrary, clause 8(5) of the framework agreement refers to national law, collective agreements and practice as regards the prevention and settlement of disputes and grievances arising from the application of that agreement.
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40. It must also be observed that the freedom to choose the ways and means of ensuring that a directive is implemented does not affect the obligation imposed on all Member States to which the directive is addressed to adopt all the measures necessary to ensure that the directive concerned is fully effective in accordance with the objective which it pursues (see Von Colson v Land Nordrhein-Westfalen Case 14/83 [1984] E.C.R. 1891, para.15).
41. The Member States’ obligation arising from a directive to achieve the result envisaged by that directive and their duty under Article 10 EC to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation is binding on all the authorities of the Member States including, for matters within their jurisdiction, the courts (Von Colson para.26).
42. It is the responsibility of the national courts in particular to provide the legal protection which individuals derive from the rules of Community law and to ensure that those rules are fully effective (Pfeiffer and Others v Deutsches Rotes Kreuz Joined Cases C-397/01 to C-403/01 [2004] E.C.R. I-8835, para.111).
43. In that regard, it is important to note that the principle of effective judicial protection is a general principle of Community law (see, to that effect, Unibet v Justitiekanslern Case C-432/05 [2007] E.C.R. I-2271, para.37 and the caselaw cited).
44. The Court has consistently held that, in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community law (see, in particular, Rewe-Zentralfinanz and Rewe-Zentral v Landwirtschaftskammer für das Saarland Case 33/76 [1976] E.C.R. 1989, para.5; Comet v Produktschap Case 45/76 [1976] E.C.R. 2043, para.13; Peterbroeck v Belgium Case C-312/93 [1995] E.C.R. I-4599, para.12; Unibet, para.39; and Van der Weerd and Others v Minister van Landbouw, Natuur en Voedselkwaliteit Joined Cases C-222/05 to C-225/05 [2007] E.C.R. I-4233, para.28).
45. The Member States, however, are responsible for ensuring that those rights are effectively protected in each case (see, in particular, Bozzetti v Invernizzi SpA Case 179/84 [1985] E.C.R. 2301, para.17; SEIM v Subdirector-Geral des Alfandegas Case C-446/93 [1996] E.C.R. I-73, para.32; and Dorsch Consult Ingenieurgesellschaft mbH v Bundesbaugesellschaft Berlin mbH Case C-54/96 [1997] E.C.R. I-4961, para.40).
46. On that basis, as is apparent from well-established case-law, the detailed procedural rules governing actions for safeguarding an individual’s rights under Community law must be no less favourable than those governing similar domestic actions (principle of equivalence) and must not render practically impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) (see, in particular, Rewe-Zentralfinanz and Rewe-Zentral, *194 para.5; Comet, paras. 13 to 16; Peterbroeck, para.12; Unibet, para.43; and Van der Weerd and Others, para.28).
47. Those requirements of equivalence and effectiveness, which embody the general obligation on the Member States to ensure judicial protection of an individual’s rights under Community law, apply equally to the designation of the courts and tribunals having jurisdiction to hear and determine actions based on Community law.
48. A failure to comply with those requirements at Community level is — just like a failure to comply with them as regards the definition of detailed procedural rules — liable to undermine the principle of effective judicial protection.
49. It is in the light of those considerations that the referring court’s first question must be answered.
50. It must be observed that, since the 2003 Act constitutes the legislation by which Ireland discharged its obligations under Directive 1999/70, a claim based on an infringement of that legislation and a claim based directly on that directive must, as the referring court itself pointed out, be regarded as being covered by the same form of action (see, to that effect, Levez v T.H. Jennings (Harlow Pools) Ltd Case C-326/96 [1998] E.C.R. I-7835, paras. 46 and 47, and Preston v Wolverhampton Healthcare NHS Trust Case C-78/98 [2000] E.C.R. I-3201, para.51). Notwithstanding formal distinctions as to their legal basis, both claims, as the Advocate General noted at point 58 of her Opinion, seek the protection of the same rights deriving from Community law, namely Directive 1999/70 and the framework agreement.
51. In those circumstances, where the national legislature has chosen to confer on specialised courts jurisdiction to hear and determine actions based on the legislation transposing Directive 1999/70, the obligation which would be placed on individuals in the situation of the complainants — who sought to bring a claim based on an infringement of that legislation before such a specialised court — to bring at the same time a separate action before an ordinary court to assert the rights which they can derive directly from that directive in respect of the period between the deadline for transposing it and the date on which the transposing legislation entered into force, would be contrary to the principle of effectiveness if — which is for the referring court to ascertain — it would result in procedural disadvantages for those individuals, in terms, inter alia, of cost, duration and the rules of representation, such as to render excessively difficult the exercise of rights deriving from that directive.
52. At the hearing, Ireland claimed that the jurisdiction given to the Rights Commissioners and the Labour Court by the 2003 Act is optional and therefore does not prevent individuals from bringing a single action, based partly on national law and partly on Community law, before an ordinary court.
53. Even if that is so, the fact remains that where individuals intended — as the complainants did in the main proceedings — to rely on the, albeit optional, *195 jurisdiction which the national legislature, when transposing Directive 1999/70, conferred on those specialised courts to hear and determine disputes arising from the 2003 Act, the principle of effectiveness requires that those individuals should also be able to seek before the same courts the protection of the rights which they can derive directly from the directive itself, if it should emerge from the checks undertaken by the referring court that the obligation to divide their action into two separate claims and to bring the claim based directly on the directive before an ordinary court leads to procedural complications liable to render excessively difficult the exercise of those rights conferred on the parties by Community law.
54. If the referring court were to find such an infringement of the principle of effectiveness, it would be for that court to interpret the domestic jurisdictional rules in such a way that, wherever possible, they contribute to the attainment of the objective of ensuring effective judicial protection of an individual’s rights under Community law (see, to that effect, Unibet, para.44).
55. Having regard to the foregoing considerations, the answer to the first question must be that Community law, in particular the principle of effectiveness, requires that a specialised court which is called upon, under the, albeit optional, jurisdiction conferred on it by the legislation transposing Directive 1999/70, to hear and determine a claim based on an infringement of that legislation, must also have jurisdiction to hear and determine an applicant’s claims arising directly from the directive itself in respect of the period between the deadline for transposing the directive and the date on which the transposing legislation entered into force if it is established that the obligation on that applicant to bring, at the same time, a separate claim based directly on the directive before an ordinary court would involve procedural disadvantages liable to render excessively difficult the exercise of the rights conferred on him by Community law. It is for the national court to undertake the necessary checks in that regard.
Question 2
56. In the event that, having regard to the answer given to its first question, the referring court must declare that it has jurisdiction to hear and determine the claims of the complainants in the main proceedings based directly on Directive 1999/70, it is necessary to answer the second question, by which the referring court asks, in essence, whether clauses 4(1) and 5(1) of the framework agreement are capable of being relied upon by individuals before their national courts.
57. The Court has consistently held in that regard that, whenever the provisions of a directive appear, so far as their subject-matter is concerned, to be unconditional and sufficiently precise, they may be relied upon by individuals as against the state, particularly in its capacity as an employer (see, in particular, to that effect, Marshall v Southampton and South-West Hampshire Area Health Authority Case 152/84 [1986] E.C.R. 723, paras. 46 and 49, and Kutz-Bauer v Freie und Hansestadt Hamburg Case C-187/00 [2003] E.C.R. I-2741, *196 paras. 69 and 71).
58. As the Advocate General noted at point 87 of her opinion, that case-law can be applied to agreements which, like the framework agreement, are the product of a dialogue, based on Article 139(1) EC, between management and labour at Community level and which have been implemented in accordance with Article 139(2) EC by a directive of the Council of the European Union, of which they are thus an integral component.
Clause 4(1) of the framework agreement
59. Clause 4(1) of the framework agreement prohibits, in respect of employment conditions, the treatment of fixed-term workers in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.
60. That provision prohibits, in a general manner and in unequivocal terms, any difference in treatment of fixed-term workers in respect of employment conditions which is not objectively justified. As Impact maintained, its subject-matter appears therefore to be sufficiently precise to be relied upon by an individual and to be applied by the national court (see, by analogy, Marshall, para.52).
61. Contrary to Ireland’s submission, the fact that there is no definition of ‘employment conditions’ in clause 4(1) does not render that provision incapable of being applied by a national court to the facts of a dispute which it is to hear and determine and, consequently, is unlikely to render the subject-matter of that provision insufficiently precise. Thus, the provisions of a directive have already been deemed to be sufficiently precise notwithstanding the absence of a Community definition of the social-law terms included in those provisions (see, in that respect, Francovich v Italy Joined Cases C-6/90 and C-9/90 [1991] E.C.R. I-5357, paras. 13 and 14).
62. Furthermore, the precise prohibition laid down by clause 4(1) of the framework agreement does not require the adoption of any further measure of the Community institutions (see, by analogy, Van Duyn v Home Office Case 41/74 [1974] E.C.R. 1337, para.6). Besides, the provision under consideration does not in any way confer on Member States the right, when transposing it into domestic law, to limit the scope of the prohibition laid down in respect of employment conditions (see, by analogy, Marshall, para.55).
63. Admittedly, as Ireland submitted, that provision includes, in relation to the principle of non-discrimination there laid down, a qualification concerning justification on objective grounds.
64. However, as the referring court itself pointed out, the application of that qualification is subject to judicial control (for an example of such control in relation to the concept of objective reasons in the context of clause 5(1) of *197 the framework agreement, see Adeneler v Ellinikos Organismos Galaktos Case C-212/04 [2006] E.C.R. I-6057, paras. 58 to 75), although the possibility of relying on it does not preclude the view that the provision at issue confers on individuals rights which they may enforce in the national courts and which the latter must protect (see, by analogy, Van Duyn, para.7; Hansa Fleisch Ernst Mundt v Landrat Des Kreises Schleswig-Flensburg Case C-156/91 [1992] E.C.R. I-5567, para.15; Feyrer v Landkreis Rottal-Inn Case C-374/97 [1999] E.C.R. I-5153, para.24; and also Baumbast and R v Secretary of State for Home Department Case C-413/99 [2002] E.C.R. I-7091, paras. 85 and 86).
65. The precision and unconditionality of clause 4(1) of the framework agreement are not affected by clause 4(2) either. As the Advocate General noted at point 101 of her Opinion, clause 4(2) simply articulates one of the consequences which may be associated, where appropriate, subject to judicial control, with the application of the principle of non-discrimination in favour of fixed-term workers, without in any way undermining the substance of that principle.
66. As regards clause 4(3) of the framework agreement, upon which Ireland also relied in order to deny clause 4(1) direct effect, it must be observed that clause 4(3) entrusts the Member States and/or the social partners with the definition of the arrangements for facilitating the “application” of the principle of non-discrimination laid down by that clause.
67. Such arrangements cannot therefore in any way relate to the actual substance of that principle (see, by analogy, Becker v Finanzamt Münster-Innenstadt Case 8/81 [1982] E.C.R. 53, paras. 32 and 33). As the referring court itself suggested, and as Impact submitted, they cannot therefore limit the existence or restrict the scope of that principle (see, by analogy, Case 2/74 Reyners [1974] E.C.R. 631, paras. 21 and 26, and Becker, para.39).
68. It follows that clause 4(1) of the framework agreement appears, so far as its subject-matter is concerned, to be unconditional and sufficiently precise for individuals to be able to rely upon it before a national court.
Clause 5(1) of the framework agreement
69. Clause 5(1) of the framework agreement requires Member States to adopt one or more of the measures listed where domestic law does not include equivalent legal measures, in order to prevent abuse arising from the use of successive fixed-term employment contracts or relationships. The measures listed, of which there are three, relate, respectively, to objective reasons justifying the renewal of such contracts or relationships, the maximum total duration of successive fixed-term employment contracts or relationships, and the number of renewals of such contracts or relationships.
70. In prescribing the effective and binding adoption of at least one of the measures listed in clause 5(1) of the framework agreement intended to prevent the abusive use of successive fixed-term employment contracts or relationships, *198 where domestic law does not already include equivalent measures (see Adeneler, paras. 65 and 101; Marrosu v Azienda Ospedaliera Case C-53/04 [2006] E.C.R. I-7213, para.44; and also Vassallo v Azienda Ospedaliera Case C-180/04 [2006] E.C.R. I-7251, para.35), clause 5(1) assigns to the Member States the general objective of preventing such abuse, while leaving to them the choice as to how to achieve it.
71. Under clause 5(1), it is effectively left to the discretion of the Member States to rely to that end on one or more of the measures listed in that clause, or even on existing equivalent legal measures, while taking account of the needs of specific sectors and/or categories of workers.
72. Admittedly, as the Commission contended when referring to the judgment in Francovich para.17, the right of the Member States to choose among several possible means of achieving the result required by a directive does not preclude the possibility for individuals of enforcing before the national courts rights the content of which can be determined sufficiently precisely on the basis of the provisions of that directive alone (see also, to that effect, Marshall Case C-271/91, para.37, and Pfeiffer and Others, para.105).
73. However, it must be held that, unlike the provisions at issue in the case giving rise to the judgment in Francovich, clause 5(1) of the framework agreement does not contain any unconditional and sufficiently precise obligation capable of being relied upon, in the absence of transposing measures taken within the requisite period, by an individual before a national court.
74. In Francovich, notwithstanding the freedom of choice given to the Member States by the directive in question to achieve the result required by that directive, the Court of Justice was able to identify in the directive provisions defining, unconditionally and sufficiently precisely, content comprising minimum protection in favour of individuals: in that case, a minimum guarantee for the payment of wage claims in the event of the employer’s insolvency (for other cases of identification of minimum protection, see also Simap v Conselleria de Sanidad y Consumo de la Generalidad Valenciana Case C-303/98 [2000] E.C.R. I-7963, paras. 68 and 69, and Pfeiffer and Others, para.105).
75. In the present case, however, the Court cannot accept the Commission’s suggestion that clause 5(1) of the framework agreement also establishes such minimum material protection in that, in the absence of any other measure intended to combat abuse or at least of any sufficiently effective, objective and transparent measure to that end, it requires objective reasons to justify the renewal of successive fixed-term employment contracts or relationships.
76. First, while it is true, as the Court stated in para.67 of the judgment in Adeneler, that, according to para.7 of the general considerations in the framework agreement, the signatory parties to that agreement took the view that “the use of fixed-term employment contracts founded on objective reasons is a way to prevent abuse” , the fact remains that the construction advocated by the Commission *199 effectively introduces a hierarchy between the various measures referred to in clause 5(1) of the framework agreement, whereas the terms of that provision themselves unequivocally show that the various measures envisaged are intended to be “equivalent” .
77. Second, as the Advocate General also noted at point 116 of her Opinion, the interpretation proposed by the Commission would have the effect of rendering meaningless the choice of means allowed by clause 5(1) of the framework agreement, since it would permit an individual to plead the absence of objective reasons in order to challenge the renewal of his fixed-term contract, even where that renewal did not infringe the rules relating to maximum total duration or number of renewals adopted by the Member State concerned in accordance with the options available under clause 5(1)(b) and (c).
78. Contrary to what was accepted in the cases giving rise to the judgments cited in para.72 of the present judgment, it is therefore not possible, in the present case, to determine sufficiently the minimum protection which should, on any view, be implemented pursuant to clause 5(1) of the framework agreement.
79. It follows that that provision does not appear, so far as its subject-matter is concerned, to be unconditional and sufficiently precise for individuals to be able to rely upon it before a national court.
80. In the light of the foregoing, the answer to the second question must be that clause 4(1) of the framework agreement is unconditional and sufficiently precise for individuals to be able to rely upon it before a national court; that is not the case, however, as regards clause 5(1) of the framework agreement.
Question 3
81. By its third question the referring court asks, in essence, having regard to the answers to the first question and to the second question in so far as it relates to clause 5(1) of the framework agreement, whether clause 5(1) of the framework agreement precludes a Member State, acting in its capacity as an employer, from renewing a fixed-term employment contract for up to eight years in the period between the deadline for transposing Directive 1999/70 and the date on which the legislation transposing that directive enters into force.
82. In relation to that third question the referring court explains that, on previous occasions, the contract in question had always been renewed for shorter periods; that the employer requires the services of the employee for a period exceeding the usual term on renewal; that the renewal for an extended period has the effect of circumventing the application to an employee of clause 5 of the framework agreement when transposed into domestic law; and that there are no objective reasons unrelated to the employee’s status as a fixed-term worker for such a renewal.
83. In the event that, having regard to the answer given to its first question, the referring court must declare that it has jurisdiction to hear and determine the *200 claims of the complainants in the main proceedings based directly on Directive 1999/70, it must be stated that while, in accordance with the answer to the second question, the subject-matter of clause 5(1) of the framework agreement is not unconditional and sufficiently precise for individuals to be able to rely upon it before a national court, the fact none the less remains that, under the third paragraph of Article 249 EC, the directive leaves to the national authorities the choice of form and methods but is binding, as to the result to be achieved, upon each Member State to which it is addressed (see Von Colson, para.15).
84. The first paragraph of Article 2 of Directive 1999/70 thus provides that the Member States are required to take any necessary measures to enable them at any time to be in a position to guarantee the results imposed by the directive.
85. As has already been observed in para.41 of this judgment, the Member States’ obligation to achieve the result envisaged by a directive and, under Article 10 EC, to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of the Member States (see Von Colson, para.26). Such obligations devolve on those authorities, including, where appropriate, in their capacity as a public employer.
86. As regards the objective laid down by Directive 1999/70 and the framework agreement, the latter proceeds — as is apparent from paragraphs 6 and 8 of the general considerations in the framework agreement — 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 Adeneler, para.61).
87. Consequently, the benefit of stable employment is viewed as a major element in the protection of workers (see Mangold v Helm Case C-144/04 [2005] E.C.R. I-9981, para.64), whereas — as is apparent from the second paragraph of the preamble to the framework agreement and para.8 of the general considerations — it is only in certain circumstances that fixed-term employment contracts are liable to respond to the needs of both employers and workers (see Adeneler, para.62).
88. 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 (see Adeneler, para.63).
89. As is apparent from clause 1(b) of the framework agreement, its purpose is to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships. According to its own terms, clause 5(1) of the framework agreement specifically pursues that objective of prevention.
90. It follows that the Member States are required under Article 10 EC and *201 the third paragraph of Article 249 EC, as well as under Directive 1999/70 itself, to take any appropriate measure, whether general or particular, to achieve the objective of that directive and of the framework agreement of preventing the abusive use of fixed-term contracts.
91. However, that obligation would be rendered ineffective if an authority of a Member State, acting in its capacity as a public employer, were authorised to renew contracts for an unusually long term in the period between the deadline for transposing Directive 1999/70 and the date on which the transposing legislation entered into force, thereby depriving the persons concerned for an unreasonable period of time of the benefit of the measures adopted by the national legislature for the purpose of transposing clause 5 of the framework agreement.
92. In the light of the foregoing, the answer to the third question must be that Article 10 EC, the third paragraph of Article 249 EC, and Directive 1999/70 must be interpreted as meaning that an authority of a Member State acting in its capacity as a public employer may not adopt measures contrary to the objective pursued by that directive and the framework agreement as regards prevention of the abusive use of fixed-term contracts, which consist in the renewal of such contracts for an unusually long term in the period between the deadline for transposing Directive 1999/70 and the date on which the transposing legislation entered into force.
Question 4
93. In the event that, having regard to the answer given to its first question, the referring court is not required to declare that it has jurisdiction to hear and determine the claims of the complainants in the main proceedings based directly on Directive 1999/70, it is necessary to answer the fourth question, by which the referring court queries, in essence, whether it is under an obligation, by virtue of its obligation to interpret domestic law in conformity with Community law, to give the 2003 Act retrospective effect to the date by which that directive should have been transposed.
94. As a preliminary point, it must be noted that the fourth question relates only to section 6 of the 2003 Act, which is the measure that transposes clause 4 of the framework agreement.
95. It is indicated in the order for reference that the complainants in the main proceedings have, on the other hand, conceded that the wording used in section 9 of the 2003 Act makes it impossible for retrospective effect to be given to that section (which effectively transposes clause 5 of the framework agreement), and to interpret it in that way would be contra legem.
96. It is thus necessary to consider whether, in the situation referred to in para.93 of this judgment where it would have jurisdiction only to rule on the complaints in the main proceedings in so far as they are based on an infringement of the 2003 Act, the referring court is required — in accordance with the obligation *202 to interpret national law in conformity with Community law — to give section 6 of the 2003 Act retrospective effect to the date by which Directive 1999/70 should have been transposed.
97. The referring court states in that regard that, while it is true that the wording of section 6 of the 2003 Act does not expressly preclude a retrospective construction, a domestic rule of construction does preclude the retrospective application of legislation unless there is a clear and unambiguous indication to the contrary.
98. In that regard, when applying domestic law and, in particular, legislative provisions specifically adopted for the purpose of implementing the requirements of a directive, national courts are bound to interpret that law, so far as possible, in the light of the wording and the purpose of the directive in order to achieve the result sought by it and thus to comply with the third paragraph of Article 249 EC (see, in particular, Pfeiffer and Others, para.113 and the caselaw cited).
99. The requirement that national law be interpreted in conformity with Community law is inherent in the system of the EC Treaty, since it permits national courts, for the matters within their jurisdiction, to ensure the full effectiveness of Community law when they determine the disputes before them (see, inter alia, Pfeiffer and Others, para.114, and Adeneler, para.109).
100. However, the obligation on a national court to refer to the content of a directive when interpreting and applying the relevant rules of domestic law is limited by general principles of law, particularly those of legal certainty and non-retroactivity, and that obligation cannot serve as the basis for an interpretation of national law contra legem (see Kolpinghuis Nijmegen Case 80/86 [1987] E.C.R. 3969, para.13, and Adeneler, para.110; see also, by analogy, Pupino Case C-105/03 [2005] E.C.R. I-5285, paras 44 and 47).
101. The principle that national law must be interpreted in conformity with Community law nonetheless requires national courts to do whatever lies within their jurisdiction, taking the whole body of domestic law into consideration and applying the interpretative methods recognised by domestic law, with a view to ensuring that the directive in question is fully effective and achieving an outcome consistent with the objective pursued by it (see Pfeiffer and Others, paras 115, 116, 118 and 119, and Adeneler, para.111).
102. In the present case, since, according to the information given in the order for reference, domestic law appears to include a rule that precludes the retrospective application of legislation unless there is a clear and unambiguous indication to the contrary, it is for the referring court to ascertain whether there is a provision in that legislation, in particular in the 2003 Act, which contains such an indication capable of giving retrospective effect to s.6 of the 2003 Act.
103. In the absence of such a provision, Community law — in particular the requirement for national law to be interpreted in conformity with Community law — cannot be interpreted as requiring the referring court to give s.6 of the *203 2003 Act retrospective effect to the date by which Directive 1999/70 should have been transposed, as the referring court would otherwise be constrained to interpret national law contra legem.
104. In the light of the foregoing, the answer to the fourth question must be that, in so far as the applicable national law contains a rule that precludes the retrospective application of legislation unless there is a clear and unambiguous indication to the contrary, a national court hearing a claim based on an infringement of a provision of national legislation transposing Directive 1999/70 is required, under Community law, to give that provision retrospective effect to the date by which that directive should have been transposed only if that national legislation includes an indication of that nature capable of giving that provision retrospective effect.
Question 5
105. In the event that, having regard to the answer given to its first question, the referring court must declare that it has jurisdiction to hear and determine a claim based directly on Directive 1999/70, it is necessary to answer the fifth question, by which the referring court asks whether “employment conditions” within the meaning of clause 4 of the framework agreement include conditions of an employment contract relating to remuneration and pensions.
106. In that regard, as the Court has already held, the Council, in adopting Directive 1999/70, in order to implement the framework agreement, relied on Article 139(2) EC, which provides that agreements concluded at a Community level are to be implemented for matters covered by Article 137 EC (Del Cerro Alonso v Osakidetza-Servicio Vasco de Salud Case C-307/05 [2007] E.C.R. I-0000, para.33).
107. Those matters include, in Article 137(1)(b) EC, “working conditions” .
108. It cannot be determined from the wording of Article 137(1)(b) EC alone, any more than from that of clause 4 of the framework agreement, whether or not the working conditions or employment conditions respectively referred to in those two provisions include conditions relating to matters such as the remuneration and pensions at issue in the main proceedings.
109. In that regard, the fact, noted by the United Kingdom Government, that a number of Community law provisions — such as Article 3(1)(c) of Council Directive 76/207 of February 9, 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions ([1976] O.J. L39/40), as amended by Directive 2002/73 of the European Parliament and of the Council of September 23, 2002 ([2002] O.J. L269/15), Article 3(1)(c) of Council Directive 2000/43 of June 29, 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin ([2000] O.J. L180/22), or even Article 3(1)(c) of Council Directive 2000/78 of November 27, 2000 establishing a general *204 framework for equal treatment in employment and occupation ([2000] O.J. L303/16) —expressly state that the term “employment and working conditions” (to which those provisions refer) includes remuneration does not permit the conclusion to be drawn from the absence of a statement to that effect in clause 4 of the framework agreement that, for the purposes of applying that clause, the term “employment conditions” does not cover financial aspects such as those at issue in the main proceedings.
110. Since the question of interpretation raised cannot be resolved by the wording of clause 4 of the framework agreement, it is necessary, in accordance with settled caselaw, to take into consideration the context and the objectives pursued by the rules of which that clause is part (see, in particular, Merck v Hauptzollamt Hamburg-Jonas Case 292/82 [1983] E.C.R. 3781, para.12; St Nikolaus Brennerei und Likörfabrik v Hauptzollamt Krefeld Case 337/82 [1984] E.C.R. 1051, para.10; Adidas AG Case C-223/98 [1999] E.C.R. I-7081, para.23; and Britannia Alloys & Chemicals v Commission Case C-76/06 [2007] E.C.R. I-4405, para.21).
111. In that regard, as the Court has already noted (Del Cerro Alonso, para.36), it is apparent from the wording of clause 1(a) of the framework agreement that one of its objectives is to “improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination” . Similarly, the third paragraph of the preamble to the framework agreement states that this framework agreement “illustrates the willingness of the Social Partners to establish a general framework for ensuring equal treatment for fixed-term workers by protecting them against discrimination” . Recital (14) in the preamble to Directive 1999/70 states that the aim of the framework agreement is, in particular, to improve the quality of fixed-term work by setting out the minimum requirements in order to ensure the application of the principle of non-discrimination.
112. The framework agreement, in particular clause 4, thus follows an aim which is akin to the fundamental objectives enshrined in the first paragraph of Article 136 EC as well as in the third paragraph of the preamble to the EC Treaty and Article 7 and the first paragraph of Article 10 of the Community Charter of the Fundamental Social Rights of Workers to which Article 136 EC refers, and which are associated with the improvement of living and working conditions and the existence of proper social protection for workers, in the present case, for fixed-term workers.
113. Moreover, the first paragraph of Article 136 EC, which defines the objectives with a view to which the Council may, in respect of the matters covered by Article 137 EC, implement in accordance with Article 139(2) EC agreements concluded between social partners at Community level, refers to the European Social Charter signed at Turin on October 18, 1961, which includes at point 4 of Part I the right for all workers to a “fair remuneration sufficient for a decent standard of living for themselves and their families” among the objectives which *205 the contracting parties have undertaken to achieve, in accordance with Article 20 in Part III of the Charter.
114. In the light of those objectives, clause 4 of the framework agreement must be interpreted as articulating a principle of Community social law which cannot be interpreted restrictively (see Del Cerro Alonso, para.38).
115. As submitted by both Impact and the Commission, to interpret clause 4 of the framework agreement as categorically excluding from the term “employment conditions” for the purposes of that clause financial conditions such as those relating to remuneration and pensions, effectively reduces — contrary to the objective attributed to that clause — the scope of the protection against discrimination for the workers concerned by introducing a distinction based on the nature of the employment conditions, which the wording of that clause does not in any way suggest.
116. Moreover, as the Advocate General noted at point 161 of her Opinion, such an interpretation would render the reference in clause 4(2) of the framework agreement to the principle of pro rata temporis meaningless, that principle being intended by definition only to apply to divisible performance, such as that deriving from financial employment conditions linked, for example, to remuneration and pensions.
117. Contrary to the submissions of Ireland and the United Kingdom Government, the foregoing analysis is not called into question by the caselaw which the Court has developed in relation to equal treatment for men and women, according to which working conditions for the purposes of Directive 76/207, prior to its amendment by Directive 2002/73, do not encompass pay (see, in particular, Gillespie v Northern Health and Social Services Board Case C-342/93 [1996] E.C.R. I-475, para.24; Wippel v Peek Cloppenburg GmBH & Co KG Case C-313/02 [2004] E.C.R. I-9483, paragraphs 29 to 33; and North Western Health Board v McKenna Case C-191/03 [2005] E.C.R. I-7631, para.30).
118. That caselaw is accounted for by the existence also of Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty were replaced by Articles 136 EC to 143 EC) and of a directive dedicated to the equal treatment of men and women in relation to pay, namely Council Directive 75/117 of February 10, 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women ([1975] O.J. L45/19).
119. Since there is no such duality of legislation in respect of the principle of non-discrimination of fixed-term workers, it is not possible to draw any lessons from that case-law as regards the interpretation of “employment conditions” within the meaning of clause 4 of the framework agreement.
120. As regards the objection by Ireland and the United Kingdom Government based on Article 137(5) EC, as interpreted by the judgment in Dellas v Premier Ministre Case C-14/04 [2005] E.C.R. I-10253, paras 38 and 39, it must be borne in mind that Directive 1999/70 was adopted on the basis of Article 139(2) EC, *206 which refers to Article 137 EC for the list of matters within the competence of the Council for the purposes, inter alia, of implementing agreements concluded between social partners at Community level.
121. According to Article 137(5) EC, the provisions of Article 137 EC “shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs” .
122. As the Court has already held, as Article 137(5) EC derogates from paragraphs 1 to 4 of that article, the matters reserved by that paragraph must be interpreted strictly so as not to unduly affect the scope of paragraphs 1 to 4, nor to call into question the aims pursued by Article 136 EC (Del Cerro Alonso, para.39).
123. More particularly, the exception relating to “pay” set out in Article 137(5) EC is explained by the fact that fixing the level of pay falls within the contractual freedom of the social partners at a national level and within the relevant competence of Member States. In those circumstances, in the present state of Community law, it was considered appropriate to exclude determination of the level of wages from harmonisation under Article 136 EC et seq. (Del Cerro Alonso, paragraphs 40 and 46).
124. As the Commission contended, that exception must therefore be interpreted as covering measures — such as the equivalence of all or some of the constituent parts of pay and/or the level of pay in the Member States, or the setting of a minimum guaranteed Community wage — which amount to direct interference by Community law in the determination of pay within the Community.
125. It cannot, however, be extended to any question involving any sort of link with pay; otherwise some of the areas referred to in Article 137(1) EC would be deprived of much of their substance (see, to that effect, Del Cerro Alonso, para.41; see also, to the same effect, United Kingdom v Council Case C-84/94 [1996] E.C.R. I-5755, concerning the Council’s competence to adopt, on the basis of Article 118a of the EC Treaty (Articles 117 to 120 of the EC Treaty were replaced by Articles 136 EC to 143 EC), Council Directive 93/104 of November 23, 1993 concerning certain aspects of the organisation of working time ([1973] O.J. L307/18), in particular Article 7 of that directive, relating to the grant of four weeks’ paid annual leave).
126. It follows that the derogation in Article 137(5) EC does not preclude the interpretation of clause 4 of the framework agreement as imposing on the Member States the obligation to ensure that fixed-term workers are also guaranteed the application of the principle of non-discrimination in relation to pay. That derogation cannot therefore prevent workers such as the complainants in the main proceedings from pleading the direct effect of clause 4(1) in contesting the application, in relation to pay, of less favourable treatment than that which is given to comparable permanent workers and for which there is no objective justification (see, to that effect, Del Cerro Alonso, paras 42 and 47).
*207
127. For the reasons set out in paragraphs 43 to 45 of the judgment in Del CerroAlonso, the foregoing interpretation is in no way incompatible with the arguments in paragraphs 38 and 39 of the judgment in Dellas.
128. At the hearing, the United Kingdom Government submitted that it may be inferred from the judgment in Del Cerro Alonso that the principle of non-discrimination laid down by the framework agreement concerns only the constituent parts of pay, excluding the level of pay, which the national competent authorities remain free to set differently for permanent and for fixed-term workers.
129. However, while it is true — as paragraphs 40 and 46 of the judgment in Del Cerro Alonso show and as has been noted in paragraphs 123 and 124 of the present judgment — that the establishment of the level of the various constituent parts of the pay of a worker falls outside the competence of the Community legislature and is unquestionably still a matter for the competent bodies in the various Member States, those bodies must nevertheless exercise their competence consistently with Community law — particularly clause 4 of the framework agreement — in the areas in which the Community does not have competence (see, to that effect, International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP Case C-438/05 judgment of December 11, 2007, para.40, and Laval un Partneri v Svenska Byggnadsarbetareförbundet Case C-341/05 judgment of December 18, 2007, para.87).
130. It follows that, in establishing both the constituent parts of pay and the level of those constituent parts, the national competent bodies must apply to fixed-term workers the principle of non-discrimination as laid down in clause 4 of the framework agreement.
131. With regard to pensions, it must be noted that, according to the settled caselaw of the Court in relation to Article 119 of the Treaty, or, with effect from May 1, 1999, in relation to Article 141 EC, which concern the principle of equal treatment of men and women in relation to pay, the term “pay” within the meaning of the second subparagraph of Article 141(2) EC covers pensions which depend on the employment relationship between worker and employer, excluding those deriving from a statutory scheme, to the financing of which workers, employers and possibly the public authorities contribute in a measure determined less by the employment relationship than by considerations of social policy (see, in particular, Defrenne v Belgium Case 80/70 [1971] E.C.R. 445, paras 7 and 8; Bilka-Kaufhaus v Weber von Hartz Case 170/84 [1986] E.C.R. 1607, paras 16 to 22; Barber v Guardian Royal Exchange Assurance Group Case C-262/88 [1990] E.C.R. I-1889, paragraphs 22 to 28; and Schönheit v Stadt Frankfurt am Main; Becker v Land Hessen Joined Cases C-4/02 and C-5/02 [2003] E.C.R. I-12575, paras 56 to 64).
132. Taking that case-law into account, it must be held that the term “employment conditions” within the meaning of clause 4(1) of the framework *208 agreement covers pensions which depend on an employment relationship between worker and employer, excluding statutory social-security pensions, which are determined less by that relationship than by considerations of social policy.
133. That interpretation is supported by the information in the fifth paragraph of the preamble to the framework agreement, according to which the parties to the agreement “recognis[e] that matters relating to statutory social security are for decision by the Member States” and call on the Member States to give effect to the Employment Declaration of the Dublin European Council in 1996 which emphasised, inter alia, the need to adapt social-security systems to new patterns of work in order to provide appropriate social protection to those engaged in such work.
134. In the light of the foregoing, the answer to the fifth question must be that clause 4 of the framework agreement must be interpreted as meaning that employment conditions within the meaning of that clause encompass conditions relating to pay and to pensions which depend on the employment relationship, to the exclusion of conditions relating to pensions arising under a statutory social-security scheme.
Costs
135. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Grand Chamber) hereby rules:
1. Community law, in particular the principle of effectiveness, requires that a specialised court which is called upon, under the, albeit optional, jurisdiction conferred on it by the legislation transposing Council Directive 1999/70 of June 28, 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP, to hear and determine a claim based on an infringement of that legislation, must also have jurisdiction to hear and determine an applicant’s claims arising directly from the directive itself in respect of the period between the deadline for transposing the directive and the date on which the transposing legislation entered into force if it is established that the obligation on that applicant to bring, at the same time, a separate claim based directly on the directive before an ordinary court would involve procedural disadvantages liable to render excessively difficult the exercise of the rights conferred on him by Community law. It is for the national court to undertake the necessary checks in that regard.
2. Clause 4(1) of the framework agreement on fixed-term work concluded on March 18, 1999, which is annexed to Directive 1999/70, is unconditional and sufficiently precise for individuals to be able to rely upon it before a national court; that is not the case, however, as regards clause 5(1) of the *209 framework agreement.
3. Article 10 EC, the third paragraph of Article 249 EC, and Directive 1999/70 must be interpreted as meaning that an authority of a Member State acting in its capacity as a public employer may not adopt measures contrary to the objective pursued by that directive and the framework agreement on fixed-term work as regards prevention of the abusive use of fixed-term contracts, which consist in the renewal of such contracts for an unusually long term in the period between the deadline for transposing Directive 1999/70 and the date on which the transposing legislation entered into force.
4. In so far as the applicable national law contains a rule that precludes the retrospective application of legislation unless there is a clear and unambiguous indication to the contrary, a national court hearing a claim based on an infringement of a provision of national legislation transposing Directive 1999/70 is required, under Community law, to give that provision retrospective effect to the date by which that directive should have been transposed only if that national legislation includes an indication of that nature capable of giving that provision retrospective effect.
5. Clause 4 of the framework agreement on fixed-term work must be interpreted as meaning that employment conditions within the meaning of that clause encompass conditions relating to pay and to pensions which depend on the employment relationship, to the exclusion of conditions relating to pensions arising under a statutory social-security scheme.
Mc Grath -v- Athlone Institute of Technology
[2011] IEHC 254 (14 June 2011)
JUDGMENT of Mr. Justice Hogan delivered on 14th June, 2011
1. This application for an interlocutory injunction seeks to restrain the termination of the plaintiff’s employment with the defendant Athlone Institute of Technology which is presently scheduled to take effect on 20th June, 2011. The plaintiff is currently employed as an Assistant Lecturer on the bricklaying course provided by the Institute. The defendant contends that by reason of the prevailing economic conditions, there is no longer any demand for the course and it proposes to make the plaintiff redundant. It is important to stress that there is no suggestion but that the plaintiff has not been a perfectly satisfactory and competent employee. There is, accordingly, no question of any disciplinary issues or of any imputations against the good name of the plaintiff. It is nevertheless perfectly clear that such termination would, unfortunately, have considerable financial implications for the plaintiff given that, in light of his age and the prevailing economic circumstances, he will not easily find other employment.
2. The plaintiff claims that by reason of the fact that he was employed pursuant to a series of fixed term contracts he is now a permanent employee by operation of law. Specifically, he contends that he is entitled to the benefit of a contract of indefinite duration by virtue of the provisions of s. 9 of the Protection of Employees (Fixed-Term Work) Act 2003 (“the 2003 Act”) in that it is said that the plaintiff was supplied with fixed term contracts, the aggregate duration of which was greater than four years and in respect of which there was no objective grounds justifying a renewal on a fixed term basis. The Labour Court presently stands seised of the question of whether the plaintiff is entitled to such a contract, an issue to which I will later return.
3. The plaintiff further claims that various contractual representations were made to him on behalf of the Institute that if he, together with the various apprentices on the course, undertook certain significant construction projects on behalf of the Institute on the College campus that he would be given a permanent contract. It is not in dispute but that such works were carried out. The Institute maintains, however, that such work was done as part of the regular practical training of the employees. Thus, as the President on the Institute, Ciaran O’Cathain, explained in his affidavit:-
“…all work undertaken by the plaintiff of a building nature on the campus was undertaken in circumstances where there was a training benefit to the employees and not otherwise. It goes without saying that brick and block laying apprentices will be required to build walls and the like and it seemed eminently sensible that they would build walls on the campus rather than building walls to be knocked down.”
4. Various affidavits have also been filed on behalf of the defendant emphatically denying any suggestions of irregularity or that the plaintiff was promised a permanent contract if he engaged in such construction activities. However, before considering the employment injunction related issues, I must first digress to deal with an issue of privilege.
Privilege
5. An affidavit has been filed by another lecturer, Mr. David Holland, in support of the plaintiff. Mr. Holland maintains that a few months ago he accessed his personnel file with the Institute with a view to taking legal advice. He says that in the course of perusing his own file he came across legal advices obtained by the Institute pertaining to the position of the plaintiff. Mr. Holland contends that these advices were to the effect that the plaintiff was entitled to a contract of indefinite duration. The Institute for its part maintains that these letter of advices was placed on the wrong file in error and that it was later removed when the error came to light. It contends that no privilege has thereby been waived.
6. It is true that legal professional privilege can be waived where documents are handed over in error. In the nature of things, such errors generally arise during the course of the discovery process where privileged documents are handed over in error by one party’s legal advisers to the other. The law on this topic was fully explored by Clarke J. in Byrne v. Shannon Foynes Port Co. [2008] 1 IR 814, [2007] IEHC 315. In this case Clarke J. approved the following statement from Matthews and Malek on Disclosure:-
“Thus where such circumstances occur in the context of an inspection of documents, such as procuring inspection of the relevant document by fraud or realising the mistake on inspection but saying nothing, the court will in effect allow the mistake to be corrected, and refuse to permit the opposing party to use the privileged document. The test is in two stages:
(1) Was it evident to the solicitor seeing privilege documents that a mistake had been made?
(2) If not, would it have been obvious to the hypothetical reasonable solicitor that disclosure had occurred as a result of a mistake? If the answer to either is yes then…the court would normally restrain the solicitor if he did not give the documents back and might restrain him from acting further if he had read the documents and it was impossible for the advantage to be removed in any other way.”
7. It is perfectly clear that such disclosure as there was took place in error. While I appreciate that Mr. Holland is not a solicitor, if one applies the test of whether it would have been obvious to the hypothetical reasonable solicitor that disclosure had occurred as a result of a mistake, then there can be only one answer to that question. The Institute plainly never intended that disclosure of such advices should take place and, hence, there can be absolutely no question of waiver of privilege.
8. In any event, even if the Institute did receive advice along these lines, this would be quite irrelevant to any issue I had to decide. The question of whether the plaintiff is so entitled to a contract of indefinite duration is a matter committed to the adjudicative process and, hence, is a matter for either this Court or – perhaps it would be more correct to say – the Labour Court to decide. As the Supreme Court pointed out in Mannix v. Pluck [1975] I.R. 169 mutuality is a key feature of the admissibility of evidence. In that case O Dalaigh C.J. held that a litigant’s opinion as to the strength of his case were irrelevant, since this was a matter for the court. By a parity of reasoning, the views of a litigant’s legal advisers as to the strength (or otherwise) of their client’s case are equally irrelevant.
9. Having reached this conclusion, it is unnecessary for me to consider at any length the argument advanced by Ms. Walley SC to the effect that the court enjoyed some residual jurisdiction to override the privilege where the interests of justice so required. It is true that there is an exception of long standing to the effect that the privilege cannot be used to mask a crime (R. v. Cox and Railton (1884) 14 QBD 153), but beyond this any further exceptions would gnaw at the core and essence of the right to take legal advice. In a free and democratic society based on the rule of law, the right of the citizen to take such advice is, of course, fundamental. If the court enjoyed a free ranging jurisdiction to override such advice, this would be tantamount, as the US Supreme Court has observed, to “a prohibition upon professional advice and assistance”: see Mutual Insurance Company v. Schaefer 94 U.S. 467 (1877).
10. In any event, as I have just indicated, I take the view that the legal advice in question is irrelevant to any issue which I have to decide. For what it is worth, however, I cannot accept that this Court could carve another wide-ranging exception to the scope of legal professional privilege without undermining the fundamental right to seek legal advice itself.
The appropriate test for an interlocutory injunction in employment matters
11. In the special circumstances of this application, I consider that the fairest thing is to assume in the plaintiff’s favour that he would be able to show at the full hearing that he was a permanent employee, whether by virtue of the operation of the 2003 Act or by reason of contractual representations which were made to him by others who had the power to bind the Institute. Starting from this working hypothesis, we may next examine the circumstances in which this Court might be prepared to grant injunctive relief.
12. So far as the 2003 Act is concerned, the plaintiff commenced a claim (along with three other members of staff) in November 2009, the details of which were submitted to a Rights Commissioner for adjudication under s.14 of the 2003 Act. This claim was rejected in September 2009 and the claimants duly appealed to the Labour Court pursuant to s. 15(1) of the 2003 Act. That Court held a hearing earlier this month and a ruling is awaited. Since the Labour Court stands seised of this dispute, I should make it absolutely clear that nothing in this judgment should be understood as expressing any view whatever on the merits of the claim.
13. The defendant objects that this Court has no jurisdiction whatever in relation to the 2003 Act. It is true that by virtue of ss. 13 and 14, the claimant must first apply to the Rights Commissioner and to the Labour Court and that the only jurisdiction of this Court under the 2003 Act is to entertain an appeal from the Labour Court on a point of law pursuant to s. 15(6). The structure of the 2003 Act necessarily excludes the jurisdiction of this Court at first instance. It is quite clear that if a statutory jurisdiction of this kind is committed in the first instance to an administrative agency such as the Labour Court, then this Court does not enjoy some parallel jurisdiction to grant declaratory relief in respect of the construction of the statute in question: see generally the judgment of Charleton J. in Doherty v. South Dublin County Council (No.2) [2007] IEHC 4, [2007] 2 IR 696 at 707.
14. Contrary to the submissions of the defendant, however, that is not quite the issue here. Insofar as plaintiff in his pleadings seeks declaratory relief from this Court regarding his entitlements under the 2003 Act, he invokes a first instance jurisdiction which, as have just seen, this Court does not enjoy. Rather, the only jurisdiction of this Court under the 2003 Act is simply an appellate one under s. 15(6). But insofar as the injunction is concerned, the plaintiff seeks that order in aid of what he hopes will be a favourable Labour Court decision and because the Labour Court enjoys no jurisdiction to grant him interim or interlocutory relief.
15. Perhaps a better way of looking at the problem is as follows: let us assume that the Labour Court were ultimately to find for the plaintiff and that the practical effect of such a ruling was that his employment could not be terminated at will. If that were indeed the situation, then it would follow that as the Labour Court has no jurisdiction to grant him interim relief, there might be a risk that a favourable decision with the consequence of precluding termination in the manner presently proposed would come too late to be of any practical benefit to the plaintiff, given that the termination is imminent. The real question is whether this Court would enjoy a jurisdiction to grant an injunction in aid of the Labour Court in circumstances where the plaintiff’s right to secure the benefit of that decision would otherwise have been wholly undermined.
16. In my judgment, in that situation this Court would enjoy such a jurisdiction, not least by reason of the inherent full original jurisdiction which this Court enjoys to determine all questions of law and fact by virtue of Article 34.3.1 of the Constitution. It may be recalled that in Pierse v. Dublin Cemeteries Committee (No.1) [2009] IESC 47, [2010] 1 ILRM 349 the Supreme Court held that a plaintiff had standing to pursue a claim for damages for alleged breaches of constitutional rights in respect of the operation of a private Act of the Oireachtas by a statutory body in circumstances where that was the only real remedy open to him. It is (at least) necessarily implicit in the judgment of Macken J. that such a plaintiff must be afforded such a right, as otherwise he would have been left without an effective remedy.
17. I reached the same conclusion with my own judgment in Albion Properties Ltd. v. Moonblast Ltd. [2011] IEHC 107, albeit in a very different context. Here the question was whether this Court had the jurisdiction to grant a mandatory interlocutory injunction to require a commercial tenant – who was manifestly and persistently in default with regard to rental payments – to yield up possession. I rejected the argument that there could be any such jurisdictional bar, saying:-
“Any supposed jurisdictional bar which prevented the court from granting injunctive relief in an appropriate case to require a defaulting tenant to yield up possession of a commercial tenancy would be at odds with duty imposed on the courts by Article 40.3.2 of the Constitution to ensure that the property rights of the plaintiff landlord are appropriately vindicated in the case of injustice done. The courts are under a clear constitutional duty to ensure that the remedies available to protect and vindicate these rights are real and effective: see, e.g., the comments of Kingsmill Moore J. in The State (Vozza) v. O’Floinn [1957] I.R. 227 at 250; those of Murray C.J. in Meadows v. Minister for Justice, Equality and Law Reform [2010] IESC 3 and the authorities set out in my own judgment in S v. Minister for Justice, Equality and Law Reform [2011] IEHC 31.”
18. It must be acknowledged that those cases concerned issues of standing and the jurisdiction to grant relief in respect of substantive civil actions which obviously raised justiciable issues. If, nevertheless, the plaintiff were to be left with the decision of an administrative agency whose efficacy was otherwise wholly undermined if no interim relief could be given by this Court, then in such exceptional cases, this Court must be deemed to enjoy such a jurisdiction, not least by reason of the obligation placed on the judicial organ of the State by the terms of Article 40.3.1 of the Constitution to ensure that legal rights can be appropriately vindicated: see, e.g., the decision of the Supreme Court in Grant v. Roche Products Ltd. [2008] IESC 35, [2008] 4 IR 679.
Is this an appropriate case in which to grant relief?
19. It is at this juncture that we arrive at the critical question, namely, could the Institute terminate the plaintiff’s employment in the manner which is proposed, even if the Labour Court were to hold that the plaintiff had a contract of indefinite duration?
20. The starting point, of course, is that it is clear that at common law, subject to appropriate contractual terms to the contrary, an employer can dismiss for any reason or no reason on giving reasonable notice, even in the case of a permanent employee. Any lingering doubts on this point were dispelled by the Supreme Court’s decisions in both Maha Lingham v. Health Service Executive [2005] IESC 89, [2006] 17 E.L.R. 137 and Sheehy v. Ryan [2008] IESC 14, [2008] 4 IR 258. Some may think that this situation is unsatisfactory, but if so, change in this area is a matter for the Oireachtas. Indeed, it may be observed that the Oireachtas did legislate in this general area via the Unfair Dismissals Acts 1977-2005, but in so doing it was careful to leave unchanged the common law in relation to the termination of employment contracts. It was, moreover, for this very reason that in Nolan v. Emo Oil Services Ltd. [2009] IEHC 15 Laffoy J. expressed her unwillingness to extend the common law “in parallel to the statutory code in relation to unfair dismissal and redundancy [as this would] und up supplanting part of the code”.
21. Thus, therefore, even if the various agents of the Institute did make representations to the plaintiff of the kind alleged in respect of the building work and even if it were held that he was thereby entitled to a permanent position as a result of such representations, the Supreme Court’s decision in Sheehy v. Ryan confirms that such employment can be terminated by the employer absent an express clause to the contrary in the actual contract. In the present case, therefore, Sheehy v. Ryan, therefore, rules out any possibility of an injunction insofar as it concerns a contractual claim, not least given that no issue has been taken regarding the adequacy of the notice.
22. By a parity of reasoning, therefore, it follows that this Court has no jurisdiction to restrain the termination of employment in a case such as the present, unless the plaintiff can point to something in the 2003 Act which impliedly precludes termination for redundancy in the event that he is deemed to have a contract of indefinite duration and where the plaintiff would otherwise suffer irremediable loss. While the remedial provisions of the 2003 Act are, perhaps, somewhat obscure in places, the Rights Commissioner (and, on appeal, the Labour Court) could in principle order re-instatement in the same manner as if the employee had been unfairly dismissed for the purposes of the Unfair Dismissals Acts 1977-2005: see s. 14(2)(c) of the 2003 Act.
23. The object of this provision would appear to be to give the Labour Court the power to place the employee who had previously simply been given a fixed term contract in the same position as if he were now or, indeed, always had been on a permanent contract since the relevant date: see, e.g., the comments of Fennelly J. to this effect in Maha Lingham. But, as we have seen from Sheehy v. Ryan, so far as the common law is concerned, that in itself is no impediment to termination and there is nothing in the 2003 Act to suggest that the employment of such a re-instated employee could not be terminated in the future. If that were to happen, then such an employee must then elect as between pursuing the common law remedy of wrongful dismissal and relief under the Unfair Dismissals Acts.
24. If, therefore, the Labour Court were to decide in the plaintiff’s favour and hold that he did enjoy a contract of indefinite duration, this would simply place him in the same situation as if he were a permanent employee. But absent an express contractual stipulation to the contrary, Sheehy v. Ryan makes it plain that such an employee’s contract of employment can be terminated at will in a case such as the present one. If the fairness of that dismissal is to be adjudicated, this can only be done through the mechanism of the Unfair Dismissals Acts.
Conclusions
25. I am, accordingly, coerced to the conclusion that even if the Labour Court’s decision were favourable to the plaintiff, this would not in practice significantly ameliorate his position so far as right to seek an injunction is concerned. Even if the Labour Court had already declared that the plaintiff enjoyed permanent employee status, this would not entitle him to an injunction in present circumstances. Of course, if the termination goes ahead the plaintiff may well be entitled to relief under the Unfair Dismissals Acts, but should this occur, that will be a matter for the Employment Appeals Tribunal and not for this Court.
26. It follows, therefore, that for the reasons stated, I must decline to grant the interlocutory injunction sought.
Eircom v Orla McDermott
FTC/04/1 Determination No. 055
Labour Court
16 February 2005
[2005] 16 E.L.R. 211
Background
On July 14, 2003, on the implementation of the Act, Eircom had in place two types of pension schemes—
— a DB scheme, which applied to graded staff, whose terms and conditions are subject to collective bargaining agreements and who are permanent staff (this scheme had applied to non-graded staff before July 14, 2003). This scheme is based on the public service superannuation model. It accrues one eightieth of final pensionable salary for each year of service, with provision for a lump sum of up to one and half times final pensionable salary and indexation of pension benefit in retirement by reference to salaries of serving staff. It has a vesting period of two years; employees leaving before that receive a refund of their own contributions only. At present the employer contribution is 8.2% and the employees contribution is 6.8%, of which 1.5% is for a spouses and children’s pension.
— a DC scheme, which applied to non graded staff, whose terms and conditions are negotiated on a personal contract basis and who are on fixed-term contracts or contracts of indefinite duration. Employees contributed at the rate of 5.3% of basic pay and the group contributed at the rate of 9.7% of basic pay.
Prior to December 2002 the DB scheme had applied to permanent staff and the DC scheme had applied to fixed-term contracts and others. After that date new recruits to permanent non-graded positions would join the DC scheme. All positions in the company are categorized as “graded” or “non-graded” posts. *214 In the period since December 1, 2002 graded employees have joined the DB scheme and non-graded employees have joined the DC scheme.
The complainant was employed as a project manager on a three-year fixed-term contract. On November 24, 2003 Ms McDermott accepted an offer from Eircom of permanent employment. On appointment to her permanent position on January 4, 2004 Ms McDermott’s job title changed to network deployment engineer. Neither the project manager nor the network deployment engineer positions are graded positions. Her fixed-term contract provided for membership of the DC scheme; her permanent contract provided for her to remain in the DC scheme.
The comparators
Three comparators were cited in this case:
A. Ms O’C was initially employed in a non-graded position for a fixed-term commencing on September 18, 2000 when she became a member of the DC scheme. On February 15, 2001 she became permanently employed in a non-graded position. She remained a member of the DC scheme.
B. Mr O’D was employed on November 6, 2000 in the non-graded position as a graduate executive engineer. His contract provided for membership of the DB scheme, as was the policy at the time.
C. Mr T commenced employment in October 2000 in a permanent non-graded position. His contract provided for membership of the DB scheme, as was the policy at the time.
It was subsequently agreed between the parties that comparator A was not suitable and that comparators B and C were comparable permanent employees.
The complainant’s case
During the period for consideration, July 14, 2003 to January 3, 2004, the complainant was a member of the DC scheme, which was less advantageous to her than the DB scheme of which her comparators were members. In support of this contention evidence was given on her behalf by Mr B Lenehan an expert on pensions and superannuation schemes retained by the complainants union.
Mr Lenehan submitted that had Ms McDermott been in the DB scheme in the period under consideration, she would have earned .48 pension benefit years which would have earned her an annual pension of €926 per annum and that this amount would have been guaranteed (based on the complainant progressing through the salary progression scales in the company). Under the DC scheme the approximate value of her pension annuity for the period under consideration would be €437 per annum. As there are no guarantees in DC schemes, this figure is an approximate figure. He stated that the company were limiting their perception of the issue to the state of affairs as at January 3, *215 2004. He maintained that it was not appropriate to do so. Instead he submitted that the appropriate means of considering the benefit would be what she would receive at the date of her retirement taking account of her full employment history, not the value of the six months benefit (July 14, 2003 to January 3, 2004).
He stated that the company’s contention that the complainant’s membership of the DC scheme was more advantageous than the DB scheme rested on the premise that the current value of the benefits accrued on January 3, 2004, when the complainant became a permanent employee, is greater than the current value of the DB scheme. To use the “current” transfer values as a means of comparing the schemes is flawed. Pension purchase is a long-term investment and should be judged on the likely value at fruition rather than the “current” surrender value. With the DC scheme there are no guarantees into the future. Therefore, the benefits of the DB scheme must be more favourable.
The complainant further contended that the “transfer value” of the DC scheme versus the transfer value of the DB scheme has little relevance as the complainant continues to be employed by Eircom. The complainant accepted that if Ms McDermott had no promotion between now and retirement, it would make little difference whether she was in the DC scheme or the DB scheme as returns on equity are likely to be similar to salary increases.
Since the statutory reduction in the vesting period down from five years to two years, it was no longer sustainable for the company to maintain that DC schemes are more appropriate for fixed-term contract staff due to their short tenure in the position. The complainant maintained that the fundamental reason for the company’s decision to put fixed-term employees on the DC scheme was to transfer the risk from the company to the fixed-term employee. Following the enactment of the Act, when the unions pursued the entitlement of the DB scheme for fixed-term staff, the company altered its position and redrew the distinction between fixed-term workers and permanent workers to a distinction between staff on “personal contracts” and staff on “graded contracts”.
The union maintains that it is company policy to oblige fixed-term workers to be members of the defined contribution scheme.
It maintains that due to the number of variables potentially involved it is not possible to say that one pension scheme will always be better than another in all circumstances and for all members, this is acknowledged by the company in the appendix to their submission.
The union challenged the respondent’s contention that the real purpose of this claim is to have all employees, both graded and non-graded on the DB scheme.
The complainant contended that what was generated under the DC scheme was the value of the employer and employee contributions, and this will not be revisited. In contrast, under the DB scheme, the complainant would benefit *216 according to her service in the scheme. If the complainant were to leave her employment in five to six years time, the six months at issue here would grow in value until she reaches age 60.
The respondent’s case
During the period of consideration, July 14, 2003 to January 3, 2004, the complainant was employed initially as a project manager and subsequently as network deployment engineer; neither position are graded positions within the Eircom staffing structure. Therefore, as her post was a non-graded post, she continued in the DC scheme, which she had first joined when she was employed as a fixed-term employee and which at the time, was the only scheme available to her.
In the DB scheme the value is calculated by reference to the accrued benefit earned in respect of completed pensionable service, whereas with the DC scheme the value is the full amount of the individual retirement account. All other things being equal (level of benefits/contributions) the DC formula tends to be more favourable for early leavers, and it offers flexibility, visibility and portability.
If the complainant had been permitted to join the DB scheme for the period under consideration, it would not have been of benefit to her when compared to the DC scheme. The transfer payment out of the DB scheme would have been less beneficial.
— The transfer value of the DC fund was €2,167 (Ms McDermott contributed €718).
— The transfer value out of the DB scheme would have been €827 (her contribution would have been €428), this transfer value only becomes “real” if she has two years service in the DB scheme.
The transfer value is the only certain figure. Accordingly, by being in the DC scheme the complainant received more favourable treatment, not less favourable treatment.
The benefits of the DB scheme during her fixed-term employment would not have been superior to the benefits of the DC scheme. The respondent disputes the union’s contention regarding the conventional wisdom in relation to the respective benefits of the DB and the DC schemes—while it may be held that most DB schemes are superior to DC schemes, Eircom’s DC scheme is not a conventional scheme. The average employer contribution to DC schemes is 6%, whereas Eircom’s contribution is 9.7%. Furthermore, the DC scheme allows the member significant benefits for those with less than two years service. In contrast, the DB scheme applies only to the excess of actual salary over twice the social welfare pension. Post-retirement increases in the DB scheme are at the discretion of the company.
*217
Benefit does not vest in a DB scheme, until the member has two years service, it is only then that it becomes portable or preserved. An employee, who ceases to be a member of a DB scheme within two years of joining has only one option — to withdraw in cash the value of his or her own contributions, without any employer contribution or investment return. If the person does not leave Eircom but instead transfers into the DC scheme, he/she will be entitled to a transfer payment of the value of both the company’s and their own contributions. Whereas, the employee on a DC scheme who chooses to leave Eircom within or after two years will be entitled to retain both the employers and their own contributions plus the return on those contributions or hold full value until retirement; or transfer full value to another scheme. Accordingly, the DC scheme is more transparent and more tailored for early leavers.
Eircom has had a tradition of having very large numbers of fixed-term staff working in the call centre who resign before they have two years’ service; this high level of turnover is reflected in the fact that as at March 31, 2003, the DC scheme has approximately 650 active members along with 610 deferred members.
The respondent’s pension advisers stated “it is not always possible to say that scheme A will always be better than scheme B in all circumstances and for all members no matter what happens. This is even more pronounced when attempting to compare defined benefit schemes with defined contribution schemes”. It is dependent on many variables:
— definition of salary and salary integration,
— member contributions,
— lump sum death in service benefit,
— post-retirement increases,
— gender difference, dependent’s pensions,
— investment risk,
— benefit guarantee,
— visibility, transferability and cross subsidisation.
Their overall conclusion was that there is no conclusive argument in favour of either DB or DC schemes in principle. The point is made that whatever the common perception, a DB scheme is not always and in every circumstances preferable to a DC scheme. A better than average DC scheme could be far more beneficial for some people.
An analysis of a comparison of the two schemes for the period under consideration, giving details for the complainant vis-à-vis the comparators B and C, complied by the company’s pension administrators, shows the following: *218
DB transfer value DC transfer value
Ms Mc Dermott [€827]
€2.167
Comparator B
€1,004
Comparator C
€977
Therefore, allowing for the differences in the employee contributions, the DC transfer value is €1050 higher in value than the DB transfer value.
The respondent submits that it would be a fundamental legal flaw to take into account any period other than the period July 14, 2003 to January 3, 2004, as it would be taking retrospection prior to Act into account and therefore submits that the court must ignore the fact that Ms Mc Dermott had more than two years’ service on the date of implementation of the Act.
The respondent maintains that it is not possible to predict with certainty the value of the DC scheme at retirement; the only hard facts are the transfer value at date of the period under consideration.
Objective grounds
The respondent contends that if the treatment of the complainant was “less favourable” then it was justified on objective grounds, as the DC scheme is more appropriate to the needs of the fixed-term employee. It pursues legitimate objectives and is appropriate and necessary for that purpose as has been conceded by IMPACT. At a meeting of the JCC on March 20, 2003 the union acknowledged that the DC scheme was the more appropriate and suitable scheme for fixed-term employees.
At the time the fixed-term contract is entered into, it is the intention of both parties that its duration is for the purposes of the fixed-term only. As the DC scheme is more individualised, it offers greater flexibility and portability, it is a more appropriate and suitable scheme for the fixed-term employee.
The law
Section 2 of the Protection of Employees (Fixed-Term Work) Act 2003 defines “conditions of employment” and “remuneration” as:
“ ‘conditions of employment’ includes conditions in respect of remuneration and matters relating thereto (and, in relation to any pension scheme or arrangement, includes conditions for membership of the scheme or arrangement and entitlement to rights thereunder and conditions related to the making of contributions to the scheme or arrangement);
‘remuneration’, in relation to an employee, means—
(a) any consideration, whether in cash or in kind, which the employee receives, directly or indirectly, from the employer in respect of the employment, and
(b) any amounts the employee will be entitled to receive on foot of any pension scheme or arrangement.
Section 6 of the Act defines “conditions of employment for fixed-term employees” as: *219
“6.—(1) Subject to subsections (2) and (5), a fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee.
(2) If treating a fixed-term employee, in respect of a particular condition of employment, in a less favourable manner than a comparable permanent employee can be justified on objective grounds then that employee may, notwithstanding subsection (1), be so treated.”
Section 7 of the Act defines “objective grounds for less favourable treatment” as:
“7.—(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.”
Court findings
Certain facts are not in dispute between the parties:
— the complainant is a fixed-term worker within the meaning of the Act, her fixed-term contract expired on January 3, 2004,
— the comparators are valid comparators within the meaning of the Act (the union subsequently dropped comparator A),
— the period under consideration by the court is July 14, 2003 to January 3, 2004.
The question the court must address is whether the complainant was treated less favourably than the comparators during the period under consideration, in terms of her conditions of employment, specifically the pension scheme assigned to her.
The Act defines [pension] “remuneration” as— any amounts the employee will be entitled to receive on foot of any pension scheme or arrangement .
It is common case between the parties that if one examined the position in *220 January 2004 on the basis that the complainants fixed-term contract had ended, the transfer value in the DC scheme was greater than those in the DB scheme. In addition the respondent gave evidence to the effect that, if the complainant had been in a DB scheme and left the benefits to accumulate but not continued employment with Eircom, the pension received would have been less than that received under the DC scheme. The complainant in essence was stating is that if she got the normal promotions and remained with Eircom until she was 60, then the effect of being in the DC scheme between July 2003 and January 2004 would be to lessen her pension by approximately €500 per annum.
In order to address that issue, the court must take a speculative approach to the issue. When all contingencies are examined for both the complainant and the comparators, is pension benefit at retirement for the period under consideration likely to be greater from the DB scheme or the DC scheme?
Both sides provided actuarial predictions. However, both sides also agreed that it would be impossible to say with certainty whether her treatment under the DC scheme would have been more or less favourable that under the DB scheme. Therefore, the information provided does not assist the court in reaching a decision.
The court accepts that there is a difference in the treatment of the fixed-term complainant and the named comparators; the former is on a DC scheme while the latter are on a DB scheme. When the complainant was first employed by Eircom, if she had been offered a permanent contract she would have been placed on the DB scheme. Therefore, the decision to place her on the DC scheme arose solely on the basis of her status as a fixed-term employee and this remained the position during the period complained of.
However, in order to demonstrate that placing her on the DC scheme constituted unfavourable treatment, the complainant has had to rely on a series of assumptions none of which may come to pass. Accordingly, it is impossible for this court to predict whether her treatment during the period July 14, 2003 to January 3, 2004 was less favourable than that which applied to the named comparators in terms of their membership of the pension schemes. Any potential loss of benefit will only crystallise when her employment terminates or she retires, therefore, any contingent detriment can only be measured when benefit become payable at retirement. In reaching its conclusion, the court accepts that it is generally accepted that membership of a DB scheme is more beneficial than membership of a DC scheme. The contribution level into DB scheme is usually much greater than the contribution level of DC schemes. However, the level of both employer and employee contributions under Eircom’s DC scheme is more beneficial that the norm and indeed equals the levels of contributions under Eircom’s DB scheme.
Consequently, at this point in time, the court finds that, on the balance of probabilities, the complainant has not proved that placing her in the DC scheme *221 constituted unfavourable treatment contrary to s.6 of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act).
Determination
The complainant’s appeal is not well founded. Accordingly, the court upholds the Rights Commissioner’s decision and disallows the appeal.
The court so determines.
Division of the Labour Court: Ms C Jenkinson (Chairperson), Mr Carberry, Ms Ní Mhurchú
Valerie Coyle v Labour Court and Blackrock College
(notice party):
2018 No. 291 MCA
High Court
11 February 2020
[2020] 31 E.L.R. 225
(Meenan J.)
W
MEENAN J.
delivered his judgment on 11 February 2020 saying:
Background
1. The appellant has been employed as the art teacher at the notice party (the college) since 1984. For much of that period she was the only art teacher working in the college and, thus, had the responsibility of preparing students for the Junior Certificate and Leaving Certificate examinations.
2. These proceedings concern the legal status of the appellant’s employment. Over the 34 years, the appellant was employed on a series of fixed-term contracts, which were renewed at the start of the academic year and continued for the duration of that year for a period of some nine months. For the remaining three months, June, July and August, the appellant had to sign on for social welfare payments.
3. At the end of August 2016, following discussions with the school principal of the college, the appellant consulted her solicitor in relation to her employment status. The appellant maintained that, arising from her fixed-term employment status, she was entitled to redress pursuant to the terms of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act of 2003). The appellant maintained that she was entitled to a contract of indefinite duration.
4. The appellant’s claim was resisted by the college, who maintained that she was a permanent employee notwithstanding the fact that she was not paid during the period of the school summer holidays. The position of the college was that the appellant was on a period of “lay off” during these months. It was common case between the parties that the appellant had to sign on for Job Seeker’s Benefit for each summer for the months of June, July, and August.
5. If the appellant is successful in establishing that she is entitled to a contract of indefinite duration, under the Act of 2003, this would result in significant benefits for her in the form of salary and working conditions.
6. The appellant’s claim, in the first instance, was heard by an adjudication *228 officer of the Workplace Relation Commission (WRC). The adjudication officer held that the appellant was a “fixed-term employee” for the purposes of the Act of 2003. It was further found that the appellant had been treated in a less favourable manner than other teachers employed by the college. The adjudication officer directed that the college place the appellant on an annual salary covering the 12 months of the year, to be paid monthly. The appellant was also awarded compensation of €5,000 as the college was found to be in breach of s.8 of the Act of 2003 in that it had failed to inform the appellant in writing of objective reasons governing the renewal of her fixed-term contract and the reasons why she was not being offered a contract of indefinite duration.
7. The college appealed the decision of the adjudication officer to the respondent. The respondent determined that the appeal should be conducted by way of preliminary hearing as to whether the appellant was or was not a “fixed-term employee” for the purposes of the Act of 2003. A “fixed-term employee” means “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 …”.
8. In its decision of 5 June 2018, the respondent made a finding that at all times the appellant was a permanent employee of the college, did not come within the definition of a “fixed-term employee” and so was not entitled to rely on the provisions of the Act of 2003.
9. In the course of the proceedings, both before the respondent and before this court, the appellant placed much reliance on the terms of a letter, dated 2 November 2017, written by the solicitors instructed by the college during the hearing before the adjudication officer. This letter states, inter alia, the following:
“… our client acknowledges that your client is not employed by it during the summer months. It regards her as a permanent employee, however, as she has always had an expectation of returning to the school year after the summer holidays and, in fact, has always returned to the school …”
10. What is before this court is an appeal against the determination of the respondent. This appeal is provided for in s.46 of the Workplace Relations Act 2015, which provides:
“A party to proceedings before the Labour Court under this Part may, not later than 42 days from the service on that party of notice of the decision of the Labour Court in those proceedings, appeal that decision to the High Court on a point of law, and the decision of the High Court in relation thereto shall be final and conclusive.”
Jurisdiction of the High Court
11. As the appeal is on a point of law, this necessarily limits the jurisdiction of this court. It is not a full appeal and this court, if it was minded to do so, could *229 not substitute its own decision for that of the respondent. However, the court is entitled to look at the procedures and processes followed by the respondent in making findings of fact. If these are legally infirm then the appellant is entitled to succeed. I refer to the recent decision of the Supreme Court in Nano Nagle School v Daly [2019] IESC 63; [2019] E.L.R. 221, where MacMenamin J. stated:
“109. But in the Attorney General v. Davis [2018] IESC 27, (O’Donnell J., McKechnie J., MacMenamin J., Dunne J., O’Malley J.), there is to be found a convenient summary of the present law, which is somewhat more nuanced than the judgment in Henry Denny. In a detailed judgment, McKechnie J., speaking for the court, identified what may be regarded as issues of law which may be considered on a case stated. These included: (i) findings of primary fact where there is no evidence to support them; (ii) findings of primary fact which no reasonable decision-making body could make; (iii) inferences or conclusions which are unsustainable by reason of any one or more of the matters listed above, or which could not follow or be deducible from the primary findings as made, or which were based on an incorrect interpretation of documents. (See para.54). If not included in that category, I would add a determination which is ultra vires, where there is a failure of statutory duty. Undoubtedly, deference is due to an administrative tribunal acting within the scope of its duty. But, when there is a substantial failure of compliance with that statutory duty, a court must intervene. The determination did not comply with the statutory duty laid down in the Act.”
Notice of appeal
12. The notice of appeal in this matter lists some 14 grounds. I will not set them out in full, but the central grounds appear to me to be as follows:
(i) The respondent erred in law in determining that the appellant herein was a permanent employee and was not a fixed-term worker pursuant to the provisions of the Act of 2003;
(ii) The respondent erred in law in failing to determine the applicant’s employment status on the basis of the actual contractual documents and the agreement that existed between the parties, which determined the applicant’s employment status;
(iii) The respondent erred in law in incorrectly finding that the appellant had been placed on lay-off during the months of June, July and August for the period of this claim, when it was the case that the appellant was signing on for Job Seeker’s Allowance with no guarantee of being reemployed when the school holidays came to an end; and
(iv) The respondent erred in law in refusing to allow the appellant to give direct evidence in the course of the Labour Court hearing in relation to the nature of her employment relationship with the college and, specifically, in relation to the college’s involvement in her application for social welfare and Job Seeker’s Allowance at the conclusion of each academic year during the period of the claim.
*230
The determination of the respondent
13. The respondent determined whether or not the appellant met the definition of a “fixed-term employee” under the Act of 2003. The respondent in its decision states:
“The Court [the respondent] has given careful consideration to the evidence adduced in the written submissions and in the extensive oral submissions in the course of the hearing into this matter.
Based on the evidence before it the court finds as follows:
(1) The complainant (the appellant) was initially employed on a series of fixed-term contracts of employment until she was employed on a permanent contract of employment in 2004-05.
(2) She was subsequently employed on a further fixed-term contract of employment in 2005-06. Thereafter she received no further written contracts of employment of any type.
(3) …
(4) The court attaches no significance to the arrangement that was in place whereby the complainant signed on for unemployment benefits each summer. There are many permanent seasonal contracts of employment in place in the economy. The fact that they are seasonal does not detract from the fact that they are permanent contracts of employment.
(5) The court finds that the complainant (the appellant) is employed on a permanent annual 39-week contract of employment. She is laid off in June of each year and resumes work in September. …”
14. The respondent decided that the appellant is not a fixed-term worker within the meaning of the Act of 2003 and, thus, cannot maintain a complaint or receive redress under the Act. The appeal was allowed and the decision of the adjudication officer was set aside.
Consideration of grounds of appeal
15. In reaching its decision, the respondent made a finding of fact that the appellant’s contract of employment did not end at the end of each academic year. On this, it would follow that there was a finding by the respondent that the appellant had a legal entitlement to continue her employment with the college at the beginning of each school year.
16. As a matter of law, to make such a finding the respondent would have had to have been satisfied that during the summer months, June, July and August, each year that the appellant continued to be employed under contract. This, in turn, necessitated a finding that there was “mutuality of obligation” between the appellant and the college during the summer months. However, the appellant was on a 39-week contract of employment and the matter was confirmed by her P35, which shows 39 weeks’ insurable employment. The appellant was never *231 paid for the summer months.
17. In reaching its finding that the appellant was employed on a permanent contract, the respondent does not appear to have had any regard to the letter from the college’s solicitor, the relevant part of which is quoted at para. 9 above. Two matters are unambiguously stated in this letter:
“(i) Our client acknowledges that your client is not employed by it during the summer months; and
(ii) It regards her as a permanent employee, however, as she has always had an expectation of returning to the school each year after the summer holidays … .”
18. It cannot be doubted but that an “expectation” of returning to work falls short of a legal entitlement, as would be the case for a permanent employee. I cannot see how the respondent could have made the finding of fact it did in light of this clear admission in open correspondence from the solicitors to the college. The contents of this letter are confirmed by the P35s already referred to. From this, it follows that the finding of primary fact, that the appellant was a permanent employee of the college, was one “which no reasonable decision-making body could make”.
19. There is another issue concerning the appellant’s hearing before the respondent which is unsatisfactory. In her appeal and the affidavit grounding it, sworn by her solicitor, it is stated:
“On two occasions counsel on the appellant’s behalf requested that she be allowed to address the court (the respondent) in respect of disputed matters which had arisen in the course of the hearing, however the court refused to hear evidence from the appellant. On the second occasion counsel, on the appellant’s behalf, informed the court that these matters were particularly serious from her point of view as any preliminary finding could be dispositive of the case and therefore could potentially result in her losing a very significant award had been made to her by the WRC adjudicator. However, again the Labour Court refused to allow the appellant to give direct evidence …”
20. This is contradicted in an affidavit sworn by the solicitor for the college. She deposes:
“… there was no application for the appellant to give evidence and rather it was merely suggested that she was available should the Labour Court require to hear evidence from her …”
21. In turn, in a further affidavit from the solicitor for the appellant, it is deposed: *232
“21. . where counsel proposed that the appellant be heard. It was at least partly the failure of the Labour Court (the respondent) to allow her to give evidence to clarify the circumstances of the determination of her employment each June that contributed to it falling into the errors …”
22. The conflict on the affidavits on a fundamental point, as to whether or not the appellant was denied an opportunity to give evidence, can only be resolved by either a transcript of the hearing before the respondent, which is not available, or by cross-examination of the deponents. Clearly, if the appellant was refused an opportunity to give evidence, this would amount to a departure from fair procedures and legally undermine the determination of the respondent.
Conclusion
23. Referring, once again, to the decision of the Supreme Court in Nano Nagle School v Daly, I refer to another passage from the judgment of MacMenamin J., where he states:
“111. The question of remedy is constrained by the fact that the approach adopted in each earlier legal forum was erroneous. The court is faced with a series of invidious choices. But this does not mean that the situation is entirely beyond remedy. While the Labour Court determination did not comply with the statute, what occurred can, in fact, and in law, be addressed. But, to my mind, it can only be remedied by remitting the appeal to the legal forum charged under the statute with evaluating the evidence in accordance with law – and applying the law to the facts. …”
24. I also have to take into account that the decision of this court, in relation to an appeal on a point of law, “shall be final and conclusive”. I therefore will allow the appeal and remit the matter back to the respondent for rehearing.
Power v Health Service Executive
(Approved) [2021] IEHC 346 (15 June 2021)
JUDGMENT of Mr. Justice Garrett Simons delivered on 15 June 2021
INTRODUCTION
1. This judgment concerns the scope of the Protection of Employees (Fixed-Term Work) Act 2003. One of the objectives of the Act is to prevent abuse arising from the use of successive fixed-term contracts of employment. The legislation provides that a person who has been employed, without objective justification, on successive fixed-term contracts with an aggregate duration of in excess of four years shall be deemed to be employed under a contract of indefinite duration. The issue for determination in this judgment is whether an existing employee of an organisation, who fulfils a more senior role within the organisation on a temporary basis, is excluded from the benefit of the legislation.
2. The issue arises in the following way. An existing employee of the Health Service Executive (“ the Employer”) had been appointed to a more senior post as an interim measure, pending the post being filled on a permanent basis following a formal recruitment process. In the event, this interim measure remained in place for more than four years. Were the legislation to be applicable, the Employee would, in principle, be entitled to assert a right to remain in the more senior post pursuant to a contract of indefinite duration. It would be open to the Employer to resist this asserted right by establishing that there were objective grounds justifying the use of fixed-term contracts for an aggregate duration in excess of four years.
3. The Employer submits that the legislation is never applicable in the case of an existing employee, who fulfils a more senior role on a temporary basis, precisely because such an employee already has the benefit of permanent employment within the organisation. Such an existing employee has a contractual entitlement, on the conclusion of the temporary appointment, to revert to their original permanent position on the terms and conditions of employment applicable to that position.
4. In response, the Employee submits that the objective of the legislation would be subverted were a public sector employer to be permitted to utilise successive fixed-term contracts merely because a worker had permanency in respect of a lesser role within the organisation.
5. The dispute between the parties ultimately came before the Labour Court. In its determination of 5 August 2020, the Labour Court dealt with the question of the applicability of the Protection of Employees (Fixed-Term Work) Act 2003 as a threshold issue. The Labour Court concluded that the Employee did not have standing ( locus standi) to pursue his claim in circumstances where he is a permanent employee, employed on a contract of employment of indefinite duration by the Employer.
6. It became unnecessary, therefore, for the Labour Court to consider the Employee’s claim any further. In particular, the Labour Court’s determination does not address the question of whether there were objective grounds justifying the use of fixed-term contracts for an aggregate duration in excess of four years.
7. The matter now comes before the High Court by way of a statutory appeal against the determination of the Labour Court. The appeal is an appeal on a point of law pursuant to section 46 of the Workplace Relations Act 2015. The procedure for such appeals is prescribed under Order 105 of the Rules of the Superior Courts.
LEGISLATIVE REGIME
Overvi ew
8. The Protection of Employees (Fixed-Term Work) Act 2003 (“ the Act”) regulates the use of fixed-term contracts of employment. The Act gives effect to Council Directive 1999/70/EC on fixed-term work (“ the Fixed-Term Work Directive”). As discussed presently, there is an obligation on this court, as a national court of a Member State, to interpret the domestic legislation, to the fullest extent possible, in light of the wording and the purpose of the Fixed-Term Work Directive.
9. The Fixed-Term Work Directive, in turn, gives effect to the Framework Agreement on Fixed-Term Contracts concluded on 18 March 1999 between the General Cross-Industry Organisations (“ the Framework Agreement”). The Framework Agreement has been annexed to the Directive.
10. The stated purpose of the Framework Agreement is:
(a) to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination; and
(b) to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.
11. These twin purposes are reflected under the Protection of Employees (Fixed-Term Work) Act 2003 as follows. First, the principle of non-discrimination is given effect to under section 6 of the Act. This section provides that a fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a “comparable permanent employee” (as defined). Section 10 provides that an employer shall inform a fixed-term employee in relation to vacancies which become available to ensure that he or she shall have the same opportunity to secure a permanent position as other employees.
12. Second, safeguards against the abuse of successive fixed-term contracts of employment have been introduced under section 9. This section provides, in relevant part, that where a fixed-term employee is employed on two or more continuous fixed-term contracts, then the aggregate duration of such contracts shall not exceed four years. This prohibition does not apply, however, where there are “objective grounds” justifying the renewal of a contract of employment for a fixed term.
13. The combined effect of sections 9(2) and 9(3) is that a person who has been employed on successive fixed-term contracts with an aggregate duration of in excess of four years, without objective justification, shall be deemed to be employed under a contract of indefinite duration. (The parties were agreed that section 9(1) is in the form of a transitional provision, regulating circumstances where a person had already been employed on a fixed-term contract as of the date of the commencement of the Act on 14 July 2003).
14. The nature of a “contract of indefinite duration” is not expressly described under the Act. Section 9(3) simply provides that any contractual term which purports to contravene the four-year threshold shall have no effect, and the contract concerned shall be deemed to be a contract of indefinite duration. This implies that the terms and conditions of the contract of indefinite duration will be the same as those of the fixed-term contract which it replaces, save for the obvious difference that the offending condition defining the fixed-term of the contract will have been invalidated.
15. This understanding of the nature of a contract of indefinite duration is consistent with the approach of the Court of Justice. The Fixed-Term Work Directive does not lay down a general obligation on the Member States to provide for the conversion of fixed-term contracts of employment into contracts of indefinite duration. Where, however, a Member State has chosen to do so, then the conversion of fixed-term employment contracts into an employment contract of indefinite duration must not be accompanied by material amendments to the clauses of the previous contract in a way that is, overall, unfavourable to the person concerned when the subject‑matter of that person’s tasks and the nature of his functions remain unchanged. (Case C-251/11, Huet at paragraph 46).
16. The concept of a contract of indefinite duration does not imply that the employee’s contract of employment cannot ever be terminated. Rather, the same principles as applicable to any contract of employment apply. At common law, a contract of employment is subject to termination at will. An employer can dismiss an employee, even a permanent employee, for any or no reason, by giving reasonable notice. The common law position is ameliorated by legislation. An employee may seek to challenge the fairness of their dismissal by bringing a statutory claim pursuant to the Unfair Dismissals Act 1977 (as amended). However, the principles governing such a statutory claim would be the same irrespective of whether the employee had the benefit of a deemed contract of indefinite duration or not. ( Power v. Health Service Executive [2019] IEHC 462, at paragraph 76).
17. Put otherwise, an employee who has transitioned from a succession of fixed-term contracts to a contract of indefinite duration is in no stronger a position vis-à-vis dismissal or redundancy than an employee who had been employed from the outset on a conventional contract of employment with no end date. The significance of deeming a fixed-term contract to be a contract of indefinite duration is simply that an employer can no longer lawfully terminate the contract of employment by dint of the occurrence of the specified contingency. A claim for unfair dismissal is no longer excluded under section 2(2) of the Unfair Dismissals Act 1977 (as amended) once the objective condition specifying the fixed-term is invalidated.
Scope of the legislative protections
18. The dispute between the parties in the present case centres on the scope of the Protection of Employees (Fixed-Term Work) Act 2003. The scope of the Act is constrained by the statutory concept of a “fixed-term employee”. Unless a complainant can establish that they come within this concept, they cannot benefit from the Act.
19. Before turning to consider the provisions of the domestic legislation in detail, it should be explained that the scope of the Framework Agreement itself is described, under clause 2(1), as applying to fixed-term workers who have an employment contract or employment relationship as defined in law, collective agreements or practice in each Member State. The Framework Agreement thus allows each individual Member State to define the terms “employment contract” or “employment relationship” in accordance with its own national law and practice. This discretion is preserved under recital 17 of the Fixed-Term Work Directive. Nevertheless, the discretion granted to the Member States in order to define such concepts is not unlimited. Such terms may be defined in accordance with national law and practices on condition that they respect the effectiveness of the Fixed-Term Work Directive and the general principles of EU law. (Case C-103/18, Sánchez Ruiz, paragraph 109).
20. The Irish State has chosen to implement the Fixed-Term Work Directive as follows. The entitlement to the benefit of the protections under the Protection of Employees (Fixed-Term Work) Act 2003 is predicated on the complainant qualifying as a “fixed-term employee”. A “fixed-term employee” is defined as follows.
“‘fixed-term employee’ means 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 but does not include—
(a) employees in initial vocational training relationships or apprenticeship schemes, or
(b) employees with a contract of employment which has been concluded within the framework of a specific public or publicly-supported training, integration or vocational retraining programme;”
21. The term “contract of employment” is, in turn, defined as follows.
“‘contract of employment” means a contract of service whether express or implied and, if express, whether oral or in writing but shall not include a contract whereby an individual agrees with another person, who is carrying on the business of an employment agency within the meaning of the Employment Agency Act 1971 and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract);”
22. The term “permanent employee” is defined as meaning an employee who is not a “fixed-term employee”.
23. The statutory protections afforded under the Protection of Employees (Fixed-Term Work) Act 2003 cannot be waived by an employee. Section 12 states that a provision in an agreement shall be void insofar as it purports to exclude or limit the application of, or is inconsistent with, any provision of the Act. It does not matter, therefore, that some of the contracts of employment entered into between the parties in the present proceedings purport to exclude the application of the Act.
24. This anti-avoidance provision ensures that the domestic legislation complies with the requirements of the Fixed-Term Work Directive. The Court of Justice has held that to deprive fixed-term workers of the protection of the Framework Agreement on the sole ground that they freely consented to the conclusion of successive fixed-term employment relationships would completely deprive clause 5 of the Framework Agreement of all effectiveness. This is because the objective of the Framework Agreement is based implicitly, but necessarily, on the premiss that workers, as a result of their position of weakness vis-à-vis employers, are likely to be victims of an abusive use, by employers, of successive fixed-term employment relationships, even though they freely consented to the establishment and renewal of those relationships. (Case C 103/18, Sánchez Ruiz, paragraphs 110 to 114).
Procedure for claiming redress
25. The procedure prescribed for claiming redress under the Protection of Employees (Fixed-Term Work) Act 2003 is to present a complaint to the Director General of the Workplace Relations Commission. The complaint will be determined in accordance with Part 4 of the Workplace Relations Act 2015, with the nature of the redress prescribed under section 14 of the Act of 2003. The complaint is heard initially by an adjudication officer. An adjudication officer may do any of the following:
(a) declare whether the complaint was or was not well founded;
(b) require the employer to comply with the relevant provision of the Protection of Employees (Fixed-Term Work) Act 2003;
(c) require the employer to reinstate or reengage the employee (including on a contract of indefinite duration); or
(d) require the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding two years’ remuneration in respect of the employee’s employment.
26. There is a right of appeal against the adjudication officer’s decision to the Labour Court. The Labour Court may affirm, vary or set aside the decision of the adjudication officer.
27. Thereafter, there is a right of appeal to the High Court on a point of law against the determination of the Labour Court, pursuant to section 46 of the Workplace Relations Act 2015. There is no appeal to the Court of Appeal, but a dissatisfied party may petition the Supreme Court for leave to appeal in accordance with Article 34.5.4° of the Constitution of Ireland.
FACTUAL BACKGROUND
28. There is no disagreement between the parties as to the factual background leading up to the present proceedings. Indeed, it had not been necessary for the Labour Court to hear any oral evidence.
29. The agreed facts are recited in the Labour Court’s determination as follows (at page 2 thereof).
“The Appellant is employed by the Respondent as a permanent pensionable employee since July 1999. He was appointed as the Chief Financial Officer of the Saolta University Healthcare Group, a unit of the Respondent, in January 2012 and occupied that role at the date of the hearing of the Court.
It is common case that the Appellant, at the invitation of the Respondent, took up the role of Interim Group Chief Executive, Saolta University Healthcare Group on 5th October 2014. On 20th November 2014 the Respondent wrote to the Appellant confirming his appointment on a temporary basis until 31st March 2015 or until the role was filled on a permanent basis whichever occurred sooner. He was also advised in that letter that when his temporary role as Group Chief Executive ceased, he would revert to his ‘ substantive terms and conditions as a permanent employee of the Health Service Executive’.
The Appellant was advised by letter dated 7th May 2015 that his appointment was extended until 31st December 2016. He was subsequently advised in December 2016 that his appointment as interim Group Chief Executive was being extended until 31st December 2017. He was advised again in January 2018 by the Respondent that his appointment was extended to the end of 2018.
In September 2018 the post of Group Chief Executive for a five-year term was advertised in a competition administered by the Public Appointments Service on behalf of the Respondent. The Appellant was an unsuccessful candidate in that competition
The Appellant resumed his position as Chief Financial Officer of the Saolta Group in September 2019.”
30. The Employee’s complaint is that he became entitled to remain in the post of group chief executive, pursuant to a contract of indefinite duration, by virtue of his having been employed in that post under successive fixed-term contracts with an aggregate duration of in excess of four years. On his analysis, the right to a contract of indefinite duration would have arisen in October or November 2018. (This is so notwithstanding that the Employee did not formally assert this entitlement until 14 January 2019).
31. It is instructive, therefore, to consider the attitude of the Employer at the time. The National Director of Human Resources of the Health Service Executive wrote to the Employee on 14 November 2018. The letter, in relevant part, reads as follows.
“As you are aware, the Public Appointments Service (PAS) is currently undertaking a recruitment competition to fill a number of Hospital Group Chief Executive Office (CEO) positions, including the CEO position which you currently hold in the Saolta University Health Care Group. Your fixed-term appointment in this role is due to expire on the 30th December 2018, which is prior to the expected completion date of the fore-mentioned PAS competition.
I am therefore writing to you to extend your employment with the Health Service Executive as CEO of Saolta University Health Care Group. Your employment under the terms of this appointment commences on the 31st December 2018 on a fixed-term whole-time basis for the purpose of providing cover for the duration of time that it takes PAS to complete the selection process and the successful candidate taking up the CEO position in Saolta University Health Care Group. Your employment under the terms of this contract will terminate when the successful PAS appointees take up the CEO post.
Upon the termination of this contract, you shall revert to your substantive permanent position on the terms and conditions of employment applicable to that position or an alternative permanent position at the same grade.
The Unfair Dismissals Act 1977 – 2005 shall not apply to the termination of this appointment, consisting only of the fulfilment of the said purpose.”
32. It is evident from this letter that, at this point in time at least, the Employer understood the Employee to be employed under successive contracts of employment. The Employer also understood that these contracts of employment would terminate, and that the Employee’s employment under the terms of these contracts of employment would terminate upon his reverting to his substantive permanent position.
33. The stance adopted by the Employer for the purposes of these proceedings is entirely different. It is now said that there was only ever one ongoing contract of employment between the parties. No proper explanation has ever been provided for this volte face.
34. Finally, for the sake of completeness, it should be explained that the Employee is pursuing parallel plenary proceedings against the Employer ( Power v. Health Service Executive High Court 2019 No. 1637 P) (“ the plenary proceedings”). The statement of claim in the plenary proceedings was delivered on 4 December 2019. A variety of reliefs are claimed including, inter alia, damages for breach of contract of employment; a declaration that the Employer has acted contrary to its obligations of trust and confidence arising from the parties’ employment relationship; and a declaration that the Employer has acted and is acting contrary to the requirements of the Fixed-Term Work Directive.
35. The High Court (Allen J.) refused an earlier interlocutory application, made in the context of the plenary proceedings, for orders restraining the Employer from appointing a replacement group chief executive. The reserved judgment was delivered on 26 June 2019, Power v. Health Service Executive [2019] IEHC 462. The outcome of the interlocutory application turned on an analysis of the interaction between the respective jurisdictions of the Workplace Relations Commission/Labour Court and the High Court, and, in particular, the jurisdiction, if any, of the High Court to make interim orders in aid of the statutory process. The judgment is not, therefore, immediately relevant to the issues which arise in the present proceedings.
LABOUR COURT’S DETERMINATION
36. The Labour Court delivered its written determination on 5 August 2020 (“ the decision under appeal”). The Labour Court held that the scope of the Protection of Employees (Fixed-Term Work) Act 2003 is confined to those employees whose relationship with their employer is coterminous with the fixed-term contract under which they are employed. An existing employee, who reverts to their substantive grade and whose employment continues at the end of a fixed-term assignment, does not enjoy the protection of the Act.
37. The Labour Court further held that an employee could not be both a “permanent employee” and a “fixed-term employee”. See page 8 of the decision under appeal as follows.
“The Appellant in the within Appeal accepts that at all material times he was employed by the Respondent as a permanent employee and consequently employed on a contract of employment of indefinite duration. However, he also maintains that he was for a time during the same period a fixed term worker employed on a succession of fixed term contracts of employment by the Respondent. These contentions are irreconcilable. This is not a case of the Appellant being employed in two different capacities at the same time by the same employer. The appellant in the within appeal was employed by the Respondent in only one capacity at any one time. At no material time was his employment with the Respondent at risk or under threat.”
38. The Labour Court summarised its conclusions as follows (at page 9).
“In the within matter the Appellant’s link with his employer is, self-evidently, the permanent employment relationship created and maintained by the contract of employment entered into by him and the Respondent prior to his taking up an appointment on a fixed term basis as interim Group Chief Executive and under the terms of which contract he returned to the role of Chief Financial Officer in 2019. That conclusion is all the more inescapable having regard to the fact that the Appellant’s employment was at no time at risk arising from the termination of his fixed term appointment to the role of interim Group Chief Executive.
The Court concludes that at all material times the Appellant was employed as a permanent employee, employed on a contract of employment of indefinite duration by the Respondent. The Court consequently concludes that the Appellant does not have locus-standi to maintain the within appeal. The Court’s conclusion in this matter accords with the jurisprudence of this Court on the scope of the Act as regards its application to employees who hold permanent contracts of employment with employers against whom they seek the protection of the Act as fixed term employees.”
APPEAL TO THE HIGH COURT
39. The Employee brought an appeal against the Labour Court’s determination pursuant to section 46 of the Workplace Relations Act 2015. The appeal came on for hearing before me on 8 June 2021.
40. The parties were agreed that the issues arising on this appeal are not ones in respect of which the High Court is required to show any deference to the findings of the Labour Court. No contested issue of fact arises, and, indeed, the Labour Court had not been required to hear any oral evidence. The issues arising comprise questions of law, concerning the interpretation of the relevant provisions of the Protection of Employees (Fixed-Term Work) Act 2003, and the correct characterisation of the employment relationship between the parties. For the reasons explained in cases such as Health Service Executive v. Sallam [2014] IEHC 298 (at paragraphs 18 and 21), these are matters of law and do not attract deference.
41. More generally, and as counsel for the Employee correctly observes, the recent ruling of the Supreme Court in Zalewski v. An Adjudication Officer [2021] IESC 24 may have implications for the extent of curial deference to be shown to the Labour Court. The Supreme Court in Zalewski held that decision-making under the Workplace Relations Act 2015 represents the exercise of limited functions and powers of a judicial nature in accordance with Article 37 of the Constitution of Ireland. The rationale for curial deference is that the relevant decision-maker has a specialist expertise which the court does not possess. This rationale does not apply to the same extent, if at all, where the decision-maker is itself exercising functions and powers of a judicial nature.
DETAILED DISCUSSION
ORDINARY AND NATURAL MEANING OF DOMESTIC LEGISLATION
42. The resolution of the dispute between the parties turns largely on a question of statutory interpretation, namely what is meant by the concept of a “fixed-term employee”. The starting point for the consideration of this question must be the domestic legislation itself, i.e. the Protection of Employees (Fixed-Term Work) Act 2003. It will, of course, also be necessary to consider the provisions of the Fixed-Term Work Directive. Nevertheless, the first matter to be addressed is the ordinary and natural meaning of the domestic legislation.
43. The concept of a “fixed-term employee” is defined as follows under section 2 of the Act. (The exclusions are not immediately relevant, and have been omitted).
“‘fixed-term employee’ means 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 […]”
44. The parties are in disagreement as to the meaning to be attributed to the phrase “the end of the contract of employment concerned”. On the Employer’s analysis, the contract of employment is synonymous with an enduring employment relationship. It follows, on this analysis, that it is only where the employment relationship itself will be brought to an end on the occurrence of the relevant contingency that a fixed-term contract can be said to exist.
45. This reflects the approach taken by the Labour Court. The Labour Court held that a complainant’s employment must be coterminous with the expiry of a fixed-term or fixed-purpose contract of employment. An existing employee, who reverts to their substantive grade and whose employment within the same organisation continues at the end of a fixed-term assignment, is said not to qualify as a “fixed-term employee”.
46. With respect, I cannot agree with the foregoing analysis. It does not accord with the ordinary and natural meaning of the statutory language. The term “contract of employment” is defined under section 2 of the Act as meaning a contract of service whether express or implied, and, if express, whether oral or in writing. It is thus directed to the agreement between an employer and employee, i.e. the terms and conditions which govern the employment relationship at any particular time. When the definition under section 2 speaks of the end of “the contract of employment concerned”, it is referring to the end of a contract of service. This reference occurs in the context of legislation the very purpose of which is to regulate successive contracts of service between the same employer and employee. It is inherent in the scheme of the legislation that an ongoing employment relationship can be regulated by a series of consecutive contracts of service. Section 9 of the Act expressly envisages that an employee may provide continuous service under successive contracts of employment, i.e. successive contracts of service.
47. It is incorrect, therefore, to say that a “contract of employment” (as defined) should be interpreted as meaning an enduring employment relationship. The two things are not necessarily coterminous. An individual may be employed by the same organisation in a series of different posts, each subject to its own terms and conditions as specified in a consecutive series of contracts of employment. Such an individual will nevertheless have had continuous service with the employer throughout the overall period, albeit under a number of contracts.
48. The rules governing the ascertainment of the period of service of an employee, and whether that service has been continuous, are set out under the Minimum Notice and Terms of Employment Acts 1973 to 2001 (as applied by section 9(5) of the Protection of Employees (Fixed-Term Work) Act 2003). It is expressly provided that service of an employee in his employment shall be deemed to be continuous unless that service is terminated by (a) the dismissal of the employee by his employer, or (b) the employee voluntarily leaving his employment. Put otherwise, the termination of one contract of employment and the commencement of another does not affect continuity of service. An employment relationship is not synonymous with any particular contract of employment.
49. On the agreed facts of the present case, for example, a further contract of employment was entered into between the parties in January 2012 upon the Employee’s promotion to the position of chief financial officer. This is so notwithstanding that there was already a longstanding employment relationship between the parties, with the Employee having been employed by the organisation in other roles since as long ago as 1999.
50. In summary, therefore, on its ordinary and natural meaning, the definition of “fixed-term employee” merely requires that the end of the contract of employment concerned is determined by an objective condition. It does not require that this must also have the consequence that the employment relationship is brought to an end. A contract of employment may qualify as a fixed-term contract notwithstanding that the relevant employee continues in the employment of the organisation thereafter, whether by transitioning to a further contract or reverting to an earlier one.
51. Finally, for the sake of completeness, it is necessary to refer briefly to an argument advanced on behalf of the Employer by reference to section 14 of the Act. (The relevant provisions have been summarised at paragraph 25 above). As I understood the argument, it is said that the language used to frame the statutory remedies indicates that there can never be a right to restoration of employment under a specific contract or in a specific post. An employer is only ever required to “reinstate” or to “reengage” the employee (including on a contract of indefinite duration). It is said that these words imply that the complainant is no longer employed within an organisation. Such remedies can have no application to an employee, such as Mr. Power, who remained in employment within the relevant organisation at all times.
52. With respect, this argument necessitates attaching an artificial meaning to the word “reinstate”. On its ordinary and natural meaning, this word signifies the restoration of a person to their former position or privileges. The word “reinstate” is apt to describe the restoration of an existing employee to a more senior position which they had formally occupied. This is precisely the nature of the remedy which Mr. Power seeks, i.e. to be restored to the position of group chief executive. Unlike the word “reengage”, the notion of reinstatement is not necessarily confined to a person who has previously been dismissed from an organisation and is now being re-employed or re-hired.
53. It is not legitimate to “read across” the definitions from the Unfair Dismissals Act 1977 (as amended) to the Protection of Employees (Fixed-Term Work) Act 2003 in circumstances where the two Acts do not fall to be construed together. It is entirely unsurprising that the terms as used under the former legislation contemplate re-employment or re-hiring, given that that legislation is concerned exclusively with dismissal from employment. It does not follow that the word “reinstate” should not be given its ordinary and natural meaning under the latter legislation.
54. Moreover, the Employer’s argument is also inconsistent with the nature of a “contract of indefinite duration” as discussed in detail at paragraphs 14 to 17 above.
55. At all events, this argument as to the implications of section 14 of the Act is not one which features in the Labour Court’s decision under appeal, and was only advanced for the first time in oral submission in this court.
FIXED-TERM WORK DIRECTIVE
56. Having considered the ordinary and natural meaning of the domestic legislation, it is next necessary to have regard to the provisions of the Fixed-Term Work Directive. This court, as with any other national court of a Member State, is under a general obligation to interpret domestic legislation, to the fullest extent possible, in the light of the wording and the purpose of European Law including, relevantly, Directives.
57. The application of this interpretative obligation to the Fixed-Term Work Directive is somewhat nuanced. This is because the Directive allows Member States themselves to define terms—which have not been defined under the Framework Agreement—in conformity with national law or practice. This is subject to the proviso that the definitions in question must respect the content of the Framework Agreement.
58. Crucially, the terms “employment contract” or “employment relationship” are not defined under the Framework Agreement. Indeed, clause 2(1) of the Framework Agreement itself expressly envisages that those terms fall to be defined in law, collective agreements or practice in each Member State.
59. As properly acknowledged by the Employer in its written legal submissions (at §57), it is a matter for the domestic legislature to define the category of workers which qualify for protection.
“Thus, the definition of ‘fixed term employee’ is a matter for the Oireachtas. The meaning of who is a ‘fixed-term worker’ for the purpose of the Directive is itself dependent on whether a domestically defined employment relationship exists. Absent an arbitrary exclusion of a category of workers from the scope of protection of the Directive national law will apply.”
60. The Court of Justice has held that the Framework Agreement applies to all workers providing remunerated services in the context of a fixed-term employment relationship linking them with their employer, provided that they are linked by an employment contract or relationship within the meaning of national law. (Case C 103/18, Sánchez Ruiz, paragraph 108).
61. The Member States thus have discretion to define the concepts of “employment contract” or “employment relationship” in accordance with national law and practice. Nevertheless, the discretion granted to the Member States in order to define such concepts is not unlimited. Such concepts may be defined in accordance with national law and practices on condition that they respect the effectiveness of the Fixed-Term Work Directive and the general principles of EU law (Case C-103/18, Sánchez Ruiz, paragraph 109). The concepts must not be defined in a manner that results in the arbitrary exclusion of a category of persons from the benefit of the protection provided by the Framework Agreement (Case C 157/11, Sibilio, paragraphs 42 and 51).
62. The Court of Justice has delivered a number of judgments finding that Member States have purported to define these terms too narrowly, so as to exclude categories of workers arbitrarily. By contrast, the contention advanced by the Employer in the present proceedings is that an interpretation which would include workers who have a right to revert to their original permanent post would be too broad. It is further contended that the objective of the Fixed-Term Work Directive is to provide minimum protections to promote stability in employment status as a whole, not to confer specific (or enhanced) contractual benefits on persons who are already permanent employees. (See Employer’s written submissions at §75).
63. With respect, this contention misunderstands the nature of the constraint placed upon the Member States. The constraint upon a Member State’s discretion is that it may not prescribe an overly exclusive definition. There is nothing in either the Fixed-Term Work Directive or the Framework Agreement which precludes a more inclusive definition. Indeed, the Framework Agreement expressly states, at clause 8(1) thereof, that Member States and/or the social partners can maintain or introduce more favourable provisions for workers than set out in the Agreement.
64. It follows, therefore, that even if the Employer is correct in saying that the objective of the Fixed-Term Work Directive is merely to promote stable employment with an employer, irrespective of the terms and conditions of that employment, a Member State would nevertheless be entitled to define an employment contract in such a way as to include an employee who has a right to revert to their original post upon the ending of their fixed-term contract of employment. This is something which is well within the discretion afforded to a Member State under the Fixed-Term Work Directive.
65. For the sake of completeness, however, I should record that I do not accept that the objectives of the Fixed-Term Work Directive are as narrow as contended for by the Employer. It should be recalled that the Framework Agreement has two stated purposes, as follows:
(a) to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination; and
(b) to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.
66. It is necessary to consider both of these objectives in assessing the implications of a bright-line rule which would exclude an employee, who has a right to revert to their original post, from the protections of the Fixed-Term Work Directive. This is because the same qualifying criteria applies to both sets of protections afforded under the Directive. If an employee does not qualify as a fixed-term worker, then they are denied all of the benefits of the Directive.
67. Put otherwise, the logic of the Labour Court’s approach is that an employee, with a right to revert, is to be denied not only the possibility of claiming a contract of indefinite duration, they are also to be precluded from relying on the principle of non-discrimination. One consequence of this would be that an employee, who has a right to revert to their original post, would not be legally entitled to be informed about vacancies which become available within the organisation. This would mean that an employee, who might have been acting up in the more senior role for many years, would not have a legal entitlement to be notified of a recruitment process in respect of the very post which he or she has been occupying on an interim basis. This would be inconsistent with the objective of the Fixed-Term Work Directive that all workers have the same opportunity to secure permanent positions.
68. Another consequence is that an employee who is acting up could be discriminated against in respect of terms and conditions such as, for example, pension entitlements. Such an employee would have no redress were their pension entitlements to be calculated by reference to the (lower) salary applicable to their basic post, rather than that applicable to the senior post in which they are employed. Again, such an outcome would not be consistent with the objectives of the Fixed-Term Work Directive, nor more generally with the principle of non-discrimination in EU law.
69. Turning now to the second stated purpose of the Framework Agreement, it is difficult to reconcile the contention that the objective is merely to promote stable employment simpliciter, irrespective of the terms and conditions of that employment, with the case law in respect of the obligation to provide effective measures to prevent and, where relevant, penalise the abuse of successive fixed-term employment contracts. This is illustrated by the case law in respect of contracts of indefinite duration. The Court of Justice held in Case C-251/11, Huet that where domestic law provides for the conversion of fixed-term employment contracts into an employment contract of indefinite duration, the conversion must not be accompanied by material amendments to the clauses of the previous contract in a way that is, overall, unfavourable to the person concerned. The rationale for this approach is explained as follows at paragraph 44 of the judgment.
“[…] if a Member State were to permit the conversion of a fixed-term employment contract into an employment contract of indefinite duration to be accompanied by material amendments to the principal clauses of the previous contract in a way that is, overall, unfavourable to the employee under contract, when the subject-matter of that employee’s tasks and the nature of his functions remain unchanged, it is not inconceivable that that employee might be deterred from entering into the new contract offered to him, thereby losing the benefit of stable employment, viewed as a major element in the protection of workers.”
70. This passage makes a direct connection between the clauses, i.e. the terms and conditions, of the previous contract, and the benefit of stable employment. This indicates that the objectives of the Fixed-Term Work Directive go beyond simply ensuring that an employee is entitled to be employed within an organisation irrespective of the role, but is also concerned with the nature and quality of that employment.
71. Finally, the logic of the Employer’s position, reductio ad absurdum, is that an employee could be employed in the more senior post under an infinite number of successive fixed-term contracts, provided only that the employee has the right to revert to their original, more junior post. This would be so irrespective of how great the disparity is between the two posts in respect of salary and other terms and conditions. It would not matter, for example, that the terms and conditions of the more junior post were so unattractive that there is no likelihood that the employee would actually revert to that post on the cessation of the more senior post. It would also be irrelevant that the employee might only have previously occupied the more junior post for a matter of weeks. The bright-line rule is so blunt that it would apply even where the supposedly permanent post is illusory.
72. It also follows, on this logic, that it would be permissible to use fixed-term contracts indefinitely to meet the permanent staffing needs of an employer. This is difficult to reconcile with the judgment in Case C-103/18, Sánchez Ruiz, at paragraphs 75 to 80.
73. Having regard to these considerations, the bright-line rule contended for on behalf of the Employer would undermine the effectiveness of the Fixed-Term Work Directive. The Directive envisages that there be a measured assessment of whether the use of successive fixed-term employment contracts gives rise to abuse. This requires consideration not only of the aggregate duration of such contracts, but also an examination of whether their use is objectively justified. The approach adopted by the Labour Court—and endorsed by the Employer—is too crude. This approach applies, without distinction, to a spectrum of scenarios. As counsel for the Employee correctly observed, the shutting out of claimants at the threshold precludes potential abuses being brought to light.
74. On the correct interpretation of the Fixed-Term Work Directive, the existence of a contractual right to revert to one’s original post in an organisation, on the terms and conditions of employment applicable to that post, is no more than a factor to be considered in deciding whether the successive use of fixed-term contracts is objectively justified. It is not a bar to pursuing a complaint that there has been a breach, and having that claim adjudicated upon.
75. In summary, there is nothing under the Fixed-Term Work Directive which requires an interpretation of the domestic legislation different from that arising on the ordinary and natural meaning of the words.
ARTICLE 267 REFERENCE NOT NECESSARY
76. For the sake of completeness, it should be explained that there was some discussion at the hearing before me as to whether it is necessary to make a reference to the Court of Justice for a preliminary ruling. For the reasons which follow, I am satisfied that a reference pursuant to Article 267 of the Treaty on the Functioning of the European Union (“ TFEU”) is unnecessary.
77. It is correct to say that the Court of Justice does not appear to have addressed, in explicit terms, the question of whether an employee, who has a contractual right to revert to a permanent post, is excluded from the definition of a “fixed-term worker”. The Court of Justice has, however, considered the scenario where a fixed-term worker has become permanent. In Joined Cases C‑302/11 to C‑305/11, Valenza, the Court of Justice held that an employee, who has since become permanent, is entitled to rely on the principle of non-discrimination. On the facts, the applicants had complained that periods of their service as fixed-term workers were not taken into account in order to determine seniority and thus to determine their level of remuneration in their permanent posts.
78. (The Employer in the present case has sought to distinguish this judgment on the basis that it is concerned with the principle of non-discrimination, not the abuse of successive fixed-term contracts. This overlooks the fact that, as discussed at paragraphs 66 to 68 above, the same qualifying criteria applies to both sets of protections afforded under the Directive).
79. The Court of Justice has also held that a worker in a permanent post who merely proposes to move to a fixed-term post—but has not yet done so—does not come within the scope of the Fixed-Term Work Directive. Neither the Directive nor the Framework Agreement are applicable to a situation in which a public administration refuses to grant a leave of absence to a worker employed under a permanent contract on the ground that the purpose of that leave is to take up a fixed-term employment relationship. This is because the worker had not, at the relevant time, been providing remunerated services in the context of a fixed-term employment contract. (Case C 942/19, Servicio Aragonés de Salud).
80. The absence of case law on the specific issue which arises in these proceedings is, presumably, explicable by the fact that the definition of “employment contract” is a matter for domestic law. It is only where a Member State has purported to define the scope too narrowly that a referable issue will arise as to whether the limits of the Member State’s discretion have been exceeded. As explained at paragraphs 61 to 64 above, no such referable issue arises where the complaint is that the definition is too generous. An Article 267 reference is unnecessary in that the issue between the parties in this case falls to be resolved as a matter of domestic law.
DECISION OF THE HIGH COURT
81. The proper interpretation of the relevant provisions of the Protection of Employees (Fixed-Term Work) Act 2003 has been set out earlier (in particular, at paragraphs 42 to 50 above).
82. The Labour Court misconstrued the statutory definition of “fixed-term employee” by interpreting a “contract of employment” as being synonymous with an enduring employment relationship. The Labour Court mistakenly decided that, in order to qualify as a “fixed-term employee”, a complainant’s employment relationship must be coterminous with the expiry of a fixed-term or fixed-purpose contract of employment. The Labour Court mistakenly concluded that the fact that each of the successive contracts entered into between Mr. Power and the Health Service Executive from October 2014 onwards envisaged that he would revert to his role of chief financial officer was fatal to his claim for redress under the Protection of Employees (Fixed-Term Work) Act 2003.
83. The Labour Court erred in law in its analysis of the shifting contractual relationship between the Employer and Employee. The Labour Court appears to have thought—mistakenly—that the contract of employment remained unchanged throughout. The employment relationship between the parties is, instead, properly characterised as involving a consecutive series of contracts of employment. This was so even before Mr. Power was employed as interim group chief executive. For example, notwithstanding that Mr. Power had been employed by the Health Service Executive in various roles since as long ago as 1999, a further contract of employment had been entered into between the parties in January 2012 upon the Employee’s promotion to the position of chief financial officer. The existence of this contract undermines the argument that there was only ever one contract of employment between the parties.
84. The terms and conditions upon which the Employee was employed from October 2014 onwards were very different. The capacity in which the Employee was employed, and the terms and conditions of his employment, undeniably changed upon his being appointed, on an interim basis, to the post of group chief executive. It is true that one of the terms of the changed terms and conditions expressly provided for the Employee to revert to his substantive, permanent position on the terms and conditions of employment applicable to that position. This does not alter the fact that, for the duration of his employment as interim group chief executive, the Employee was subject to a different set of terms and conditions under a distinct contract of employment. These included, most obviously, a higher rate of remuneration.
85. The Employee’s employment during this period was pursuant to five successive contracts of employment as follows.
5 October 2014 to 31 March 2015
1 April 2015 to 31 December 2016
1 January 2017 to 31 December 2017
1 January 2018 to 30 December 2018
31 December 2018 to September 2019*
(*Date of appointment of new CEO)
86. In each instance, the end of the contract of employment concerned was determined by an objective condition, i.e. the arrival of a specified end date and/or the occurrence of a specific event, namely the appointment of a group chief executive on a permanent basis.
87. The position adopted by the Health Service Executive for the purpose of these proceedings is that there was only ever one ongoing contract of employment between the parties. This is incorrect as a matter of law for the reasons set out earlier. It is also inconsistent with the understanding of the Health Service Executive itself, as evinced in its contemporaneous correspondence. In particular, the letter of 14 November 2018 from the National Director of Human Resources expressly refers to the termination of the fixed-term contract, and the termination of Mr. Power’s employment under the terms of this contract. (The relevant extract from the letter has been set out at paragraph 31 above).
88. It is correct to say, as counsel for the Employer does, that the “label” used by the parties is not necessarily conclusive of the correct legal characterisation of an employment relationship. That is, ultimately, a matter for this court. It is, nevertheless, telling that the National Director of Human Resources understood there to be separate contracts of employment involved. It will be recalled that the letter of 14 November 2018 coincides with the time at which the Employee says a contract of indefinite duration is deemed to have arisen by operation of law. The aggregate duration of the fixed-term contracts of employment exceeded the four-year threshold at this time.
89. The decision of the Labour Court does not engage meaningfully with the question of the characterisation of the five contracts of employment entered into between the parties for the period October 2014 to September 2019. Instead, the decision under appeal places great emphasis on the definition of “permanent employee” under section 2 of the Protection of Employees (Fixed-Term Work) Act 2003. It is said that the contention that the Employee is a “fixed-term employee” is irreconcilable with his having accepted, for the purpose of the appeal to the Labour Court, that he had been employed as chief financial officer as “a permanent employee and consequently employed on a contract of employment of indefinite duration”. It is further said that the Employee was employed in only one capacity at any one time, and that at no material time was his employment with the Employer at risk or under threat.
90. With respect, the reliance placed by the Labour Court upon the definition of “permanent employee” is entirely misplaced. The scope of the Protection of Employees (Fixed-Term Work) Act 2003 is delimited by the definition of “fixed-term employee”. The term “permanent employee” is defined exclusively by reference to the definition of “fixed-term employee”. A “permanent employee” is defined negatively as an employee who is not a fixed-term employee. The term is defined for the purpose of identifying a comparator for the application of the principle of non-discrimination under sections 5 and 6 of the Act. The term “permanent employee” is thus a term of art, i.e. it bears a specific meaning for the purposes of the Act. This meaning is not the same as its everyday meaning. For example, the statutory definition includes employees in initial vocational training relationships or apprenticeship schemes. These are not categories of workers which would be described colloquially as being permanent employees.
91. The Labour Court approached the matter the wrong way round by seeking to circumscribe the definition of “fixed-term employee” by reference to the subsidiary term “permanent employee”. The Labour Court appears to have started from the premise that because Mr. Power was in a permanent employment relationship with the Health Service Executive, he should be regarded as a “permanent employee”, and, as such, could not be a “fixed-term employee”. This reasoning is erroneous in that it not only ignores the primacy of the definition of “fixed-term employee”, it also purports to apply a colloquial meaning to the term of art “permanent employee”.
92. The correct approach is to apply the definition of “fixed-term employee” to the circumstances of the Employee’s employment as interim group chief executive. For the reasons outlined earlier, the employment was as a “fixed-term employee”.
SUMMARY OF CONCLUSIONS AND FORM OF ORDER
93. The proper interpretation of the relevant provisions of the Protection of Employees (Fixed-Term Work) Act 2003 has been set out earlier (in particular, at paragraphs 42 to 50 above).
94. The Labour Court erred in law in its interpretation of the definitions of “fixed-term employee” and “contract of employment”. The Labour Court also erred in law in its analysis of the shifting contractual relationship between the Employer and Employee. (See paragraphs 82 to 92 above).
95. These errors resulted in the Labour Court dismissing the claim in limine, without engaging in a proper assessment of whether the continued use of fixed-term contracts was objectively justified.
96. Accordingly, I propose to make an order, pursuant to section 46 of the Workplace Relations Act 2015, setting aside the Labour Court’s determination of 5 August 2020. Subject to hearing further from the parties, my provisional view is that a consequential order should be made remitting the matter to the Labour Court for reconsideration having regard to the findings in this judgment. This would allow the Labour Court to consider whether the use of successive fixed-term contracts may have been objectively justified.
97. As an aside, it should be noted that the Labour Court’s characterisation of the threshold issue as one of locus standi is inaccurate. Whereas it is correct to say that only a complainant who can establish that they meet the definition of a “fixed-term employee” is entitled to relief under the Protection of Employees (Fixed-Term Work) Act 2003, this goes to the substantive merits of the claim and not to the procedural issue of standing. A complainant has the right to pursue the question of his or her employment status and the Labour Court has jurisdiction to rule on the matter. The fact that the complaint might ultimately be rejected on the merits does not mean that the complainant did not have standing to bring the matter before the Labour Court. See, by analogy, Health Service Executive v. Sallam [2014] IEHC 298 (at paragraph 53).
98. Insofar as legal costs are concerned, Order 105 of the Rules of the Superior Courts (as substituted on 7 August 2020) provides that no costs shall be allowed in respect of an appeal under section 46 of the Workplace Relations Act 2015 unless the court shall by special order allow such costs. If either party wishes to agitate for a costs order in this case, then written legal submissions should be filed within fourteen days of today’s date. The proceedings are to be listed for final orders on 2 July 2021 at 10.30 am.
99. Finally, it should be reiterated that the point of law which arises for determination on this appeal is a narrow one. The point is whether the Labour Court erred in law in dismissing the Employee’s claim on the threshold issue. For the reasons outlined, I have concluded that the approach adopted by the Labour Court was erroneous. This judgment does not address the broader question of whether the use of successive fixed-term contracts might have been objectively justified in this case. This is something which the Labour Court will have to consider if and when the matter is remitted to it.
100. This judgment does not stand as authority for any wider proposition. It does not, for example, find that an existing employee who has been acting up in a more senior role for in excess of four years is automatically entitled to remain in that post. It is perfectly possible, within the confines of the Protection of Employees (Fixed-Term Work) Act 2003, for an employer, such as the Health Service Executive, to fill a vacant post on an interim basis pending the carrying out of a formal recruitment process. This judgment goes no further than holding that where a vacant post has been filled by an individual pursuant to successive fixed-term contracts with an aggregate duration of in excess of four years, an employer cannot avoid the Act merely by dint of the fact that that individual is an existing employee with a right to revert to their original post. Rather, once the four-year threshold has expired, objective grounds of justification are required. The existence of a contractual right to revert to one’s original post in an organisation, on the terms and conditions of employment applicable to that post, is no more than a factor to be considered in deciding whether the successive use of fixed-term contracts is objectively justified. It is not a bar to pursuing a complaint that there has been a breach of the Act, and having that claim adjudicated upon.
Result: Existing employee can qualify as “fixed-term employee”. Appeal against Labour Court determination allowed.