High Court: Labour Court erred in dismissing HSE employee’s claim under fixed-term contracts legislation
The High Court has held that the Labour Court was incorrect in law when it refused a claim by a HSE employee under the Protection of Employees (Fixed-Term Work) Act 2003 on the basis that he was not a fixed-term employee.
About this case:
Citation: IEHC 346
Judge:Mr Justice Garrett Simons
The court said that the Labour Court had mistakenly decided that a person could only qualify as a fixed-term employee if the entire employment relationship was based on a fixed-term contract.
The appellant claimed that he had been in a temporary role for more than four years and was therefore an employee under “a contract of indefinite duration” in that position. However, the Labour Court had found that he was already a permanent employee in a lesser role, and as such the 2003 Act did not apply.
The employee, Mr Maurice Power, was the CFO of Saolta University Healthcare Group. In 2014, he was employed as the Interim Group Chief Executive on the basis of a fixed-term contract for one year. However, Mr Power stayed in the Chief Executive role until September 2019 due to further one-year contracts provided by the Health Service Executive.
The employee subsequently claimed that he had an entitlement under the 2003 Act to be employed in the Chief Executive role under a contract of indefinite duration. Under section 9 of the 2003 Act, a person who was employed on successive fixed-term contracts for a duration in excess of four years without objective justification was deemed to be employed under a contract of indefinite duration.
As such, Mr Power argued that the HSE was not entitled to remove him from the Chief Executive position simply due to the expiry of his fixed-term contract. A claim for unfair dismissal would also not be precluded by the Unfair Dismissals Act 1977 if he was a permanent employee in the role.
The employee brought a complaint in the Workplace Relations Commission and appealed that decision to the Labour Court. In a written decision, the Labour Court determined that an employee who reverted to their original position in a company after the expiry of a fixed-term contract was not protected by the 2003 Act. It was held that Mr Power could not be both a permanent employee and a fixed-term employee for the purposes of the 2003 Act.
Based on these findings, the Labour Court determined that the case should be dismissed. The appellant appealed to the High Court.
Delivering judgment in the case, Mr Justice Garrett Simons held that the primary issue was the proper interpretation of “fixed-term employee” in the 2003 Act. The court began by assessing the ordinary and natural meaning of the domestic legislation. He found that 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.”
The court then considered Council Directive 1999/70/EC on fixed-term work. It was held that “employment contract” and “employment relationship” were not defined in the Directive. It was for the national legislature to determine these definitions, the court said.
The court noted that, whatever definition was applied, it could not result in the arbitrary exclusion of certain categories of workers (Case C-103/18 Sánchez Ruiz; Case C-157/11, Sibilio). The court did not accept that an interpretation which included workers who have a right to revert to their original permanent post would be too broad.
The court stated that there was nothing in the Directive which precluded a more inclusive definition of these employment terms. The court also held that the purposes of the Framework Agreement would be infringed if the more inclusive definition was not upheld.
The court held that, on the Labour Court’s analysis, an employee with a right to revert would be precluded from relying on the principle of non-discrimination. As such, that employee would not have certain rights regarding pension entitlements or information about vacancies. This would be incompatible with the aim of the Framework Agreement, which was designed to eliminate discrimination for fixed-term workers.
The court also held that the Labour Court’s interpretation was difficult to reconcile with the Framework Agreement’s aim of preventing abuse of fixed-term contracts. The court applied Case C-251/11 Huet and held that a conversion from fixed-term to indefinite duration employment could not be accompanied by unfavourable clauses to the contract of employment.
Further, applying the argument to its absurd conclusion, you could have a situation where a worker could be employed under an infinite number of fixed-term contracts, provided that worker could return to their original post. As such, an employer could technically fulfil its permanent staffing needs on the basis of fixed-term contracts. On this analysis, “the bright-line rule contended for on behalf of the [HSE] would undermine the effectiveness of the Fixed-Term Work Directive,” the court said.
The correct interpretation of the Directive was that a right of reversion to a previous post following the conclusion of a fixed-term contract was only a factor to determine whether successive fixed-term contracts were objectively justified by the employer.
The court held that the Labour Court had erred in its interpretation of the 2003 Act. The employee was clearly subject to changed terms and conditions of employment under the fixed-term contracts and it was incorrect to say that there was only ever one ongoing contract between the parties. The reliance placed on Mr Power being a permanent employee was entirely misplaced. The appellant was a fixed-term employee while in the Interim Chief Executive role.
Accordingly, the court set aside the Labour Court’s decision. The court outlined its provisional view that the matter should be remitted for fresh consideration. The court emphasised that the judgment did not decide the broader question of whether the fixed-term contracts were objectively justifiable in the case. The decision was not to be taken as authority that an existing employee acting in a temporary role for four years would automatically be entitled to remain in that post. This was for the Labour Court to decide in a rehearing.