Full Recommendation
FTC/12/7
Determinationno.FTD138 (R-106992-FT-11 JOC)
Industrial Relations Acts, 1946 to 1990
Section 15(1), Protection of Employees (Fixed-Term Work) Act, 2003
Parties:
Teagasc
And
Mr Kevin Mc Namara (Represented By Services Industrial Professional Technical Union)
Division:
Chairman: Mr Duffy
Employer Member: Ms Doyle
Worker Member: Mr Shanahan
Subject
Appeal of Rights Commissioner Decision r-106992-ft-11JOC.
Background
The Respondent appealed the Rights Commissioner's Decision to the Labour Court on the 28th February 2012. A
Labour Court hearing took place on the 13th March 2013. The following is the Labour Court's Decision:
Determination
This is an appeal by Teagasc against the decision of a Rights Commissioner in a claim by Kevin McNamara under
the Protection of Employees (Fixed-Term Work) Act 2003. The Claimant contended before the Rights
Commissioner that his fixed-term contract became one of indefinite duration by operation of law. The Rights
Commissioner held with the Claimant in that contention. The Claimant’s employment had been terminated on the
expiry without renewal of his second fixed-term contract. The Rights Commissioner directed that he be reinstated
with effect from the date on which his employment ended. The Respondent appealed against that decision.
In this determination McNamara is referred to as the Claimant and Teagasc is referred to as the Respondent.
Background
The material background facts of the case are not in dispute and can be summarised as follows:
The Respondent is a non-commercial State Body. It was established by statute to provide integrated research,
advisory and training services to the agriculture and food industry and rural communities. The Claimant was
employed by the Respondent in his capacity as a field technician on two successive fixed-term contracts between
3rdJuly 2006 and 28thFebruary 2011. Both contracts were expressed on their face to be for a fixed-purpose the
duration of which was incapable of precise ascertainment. Both were expressed to relate to particular projects for
which external funding were available.
The first contract, which was concluded on 3rdJuly 2006, contained the following statement of its purpose: “Your appointment with Teagasc derives from the assignment of Dr Deirdre Hennessy to duties on a Teagasc /
Stimulus project entitled ‘Effects of Stocking Rate and Grazing Season length on Nitrate Leaching from Vulnerable
Soil Type’ and you will be allocated duties by Dr Deirdre Hennessy. The duration of your employment with
Teagasc is incapable of precise ascertainment and you agree that the Unfair Dismissals Act shall not apply to a
dismissal consisting only of the cessor of the said purpose. Moreover, you should note that it is not possible to
offer you a permanent contract since the exact duration and the amount of the funding of the said Teagasc /
Stimulus Joint Project is incapable of precise ascertainment. In summary your employment with Teagasc is for the
purpose referred to aforesaid which is a legitimate objective within the meaning of the Protection of Employees
(Fixed-Term Work) Act 2003.”
The purpose of the second contract which commenced on 7thJuly 2008 was expressed as follows:
“[To] support a Research Stimulus Project (Department of Agriculture, Fisheries & Food Reference No. T/B 22
(169) Sanction No. DAF 27/2008). Given the nature of this project and the fact that the funding for this project is
in itself limited and only available for a limited period, the duration of your employment with Teagasc is incapable
of precise ascertainment. Moreover, it is not possible to offer you a contract of indefinite duration for the same
reason. You therefore agree that the Unfair Dismissals Act shall not apply to a dismissal consisting only of the
cessation of the said purpose which is a legitimate objective within the meaning of the Protection of Employees
(Fixed-Term Work) Act 2003. In summary, your employment with Teagasc is for the purpose referred to aforesaid
which is a legitimate objective within the meaning of the Protection of Employment (Fixed-Term Work) Act 2003.”
The Claimant’s employment pursuant to that contract ended on 28thFebruary 2011. The Court was told that after
a period of about five months the Claimant was re-employed by the Respondent in another location on a fixedterm contract which is due to run until 2014.
Position of the Parties
The Respondent
The Respondent contends that the Claimant’s employment was at all times related to specific projects for which
external funding became available. The Respondent contends that it employs approximately 120 technicians who
are engaged in core work and that number is augmented from time to time by temporary employees who are
engaged in project work of the type in which the Claimant was employed. It is the Respondent’s case that the use
of fixed-term contracts for this latter category of work is objectively justified by reason of the temporary nature of
the work involved. The Respondent further relies on the limited nature of the funding which supports this type of
work. The Court was told that if it could not use fixed-term contracts in these circumstances it could not
undertake project work of this nature because it could potentially result in it having employment levels that it
could not sustain within the funding provided to it by its parent Government Department.
The Respondent further relies on the moratorium on recruitment in place throughout the public service by which
it is prohibited from increasing its staff numbers. The moratorium does not apply to those employed on fixedterm contracts to undertake project work which is fully funded externally. Thus, the Respondent submitted, the
only means available to it by which it can undertake project work is by the use of fixed-term contracts.
The Respondent accepts that it has a recurring need for project work of the type in issue in this case. It contends,
however, that the skills requirement varies considerably from project to project and that individuals may not be
transferable between projects.
The Complainant
It was submitted by SIPTU, on behalf of the Claimant, that he had completed four years successive fixed-term
employment with the Respondent and he therefore accrued a prima facia entitlement to a contract of indefinite
duration. According to SIPTU some 40% of the Respondent’s budget is devoted to research. It employs 120
research scientists, 30 research specialists and 120 research technicians. Consequently, it was submitted, research
is a core activity of the Respondent.
The Court was told that the Claimant’s performance was assessed by the Respondent under its Performance
Management Development System (PMDS) and the documents created as part of this process were opened to
the Court. According to the Union these documents reveal that the Claimant undertook a variety of work for the
Respondent apart from the work relating to the specific projects to which his fixed-term contracts related. In that
regard the Claimant contends that his range of duties were no different in substance than those performed by
comparable permanent employees of the Respondent.
It is the Claimant’s case that the Respondent is not entitled to rely on matters relating to funding as objective
justification for not offering him a contract of indefinite duration. In advancing that argument SIPTU relies on a
numbers of previous Determinations of this Court.
The Law
The relevant statutory provisions applicable in this case are to be found in s.9 and s.7 of the Act.
Section 9(2) provides: 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) provides: -(3) Where any term of a fixed term contract purports to contravene subsection (1) or (2)
that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.
Section 9 (4) provides that subs. (1), (2) and (3) of s.9 are not applicable to the renewal of a fixed-term contract
where there are objective grounds justifying such a renewal. In this case the Claimant was employed on two
continuous fixed-term contracts the aggregate duration of which exceeded four years. Consequently, his second
fixed term contract would have been transmuted to one of indefinite duration by operation of law unless there
were objective grounds justifying that renewal.
Section 7 (1) of the Act deals with what constitutes objective grounds for this purpose and provides:“(1) A ground
shall not be regarded as an objective ground for the purposes of any provision of this Part unless it is based on
considerations other than the status of the employee concerned as a fixed-term employee and the less
favourable treatment which it involves for that employee (which treatment may include the renewal of a fixedterm 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.
There is a wealth of authority in the jurisprudence of the Court of Justice of the European Union (formally the ECJ)
on how the concept of objective justification should be applied. In case C-212/04Adeneler and Ors. V Ellinikos
Organismos GalaktosIRLR 716 the CJEU made it clear that the grounds relied upon must be objectively justified by
reference to the work actually performed and the circumstances under which it is performed. The Court said, at
pars 69-70 of its judgment: “[T]he 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 pursuit of a legitimate social-policy objective of a Member State.”
That dicta was restated and further developed by the Court of Justice in case C-307/05,Del Cerro Alonso v.
Osakidetza-Servicio Vasco de Salud[2007] IRLR 911. This was a case in which the objective justification for a
difference in employment conditions are in issue. However, the Court made it clear that the interpretation of
what constitutes objective grounds is the same whether it arises in relation to the renewal of successive fixedterm contracts, as inAdeneler,or in relation to the principle of equal treatment, as in the instant case under
consideration inAlonso. In giving judgment in the latter case the Court of Justice said, in relation to objective
grounds, at par 58: “....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.”
InAdenelerand again in C-380/07Kiriaki Angelidaki and Others v Organismos Nomarkhiaki Aftodiikisi Rethimnis
and Dimos Geropotamou[2009] ECR 1-3071, the CJEU drew a distinction between work undertaken for the
purpose of meeting the fixed and permanent needs of the employer and work for the purpose of meeting some
temporary or transient need. While work in the former category should normally be undertaken on permanent
contracts of employment, temporary or fixed-term contracts would normally be suitable for work in the latter
category.
In this case the net question that falls for determination is whether the work for which the Claimant was
employed should properly be classified as coming within the fixed and permanent needs of the Respondent or
whether it was part of a purely temporary or transient need.
Conclusion
Objective Grounds
The carrying out of research is a core activity of the Respondent. Research is normally undertaken on specific
projects. While each particular project is always of a finite duration, undertaking research is a continuing function
of the Respondent which is properly classified as part of its fixed and permanent needs. Consequently, having
regard to the purpose for which the Respondent was established, the undertaking of research could not be
regarded as work for which the conclusion of a fixed-term contract of employment is justifiable per se.
The Respondent submitted that funding is provided on a project by project basis. In consequence, it contends,
there is no certainty that on the completion of one project funding will become available for replacement work.
The question of whether the requirement for external funding can give rise to objective justification for the
continued use of fixed-term contracts presents difficulties of principle. There are many forms of economic activity
in which the viability of employment is dependent on funding generated by individual contracts or projects. That
is the case in practically all employments providing professional services and in such industries as construction
and civil engineering. That type of activity is dependent on a continuing supply of separate once-off contracts or
projects in order to maintain employment. If it were to be held that the use of successive fixed-term contracts
could be used indefinitely in such employments so as to protect the employer against the possibility of an
insufficient supply of work at some point in the future the effectiveness of the Directive and the Act would be
seriously subverted. If, due to economic circumstances or fall-off in demand, there is no longer sufficient work in
order to maintain a worker in employment the employer’s remedy lies in making surplus staff redundant. It
follows that while the requirement to balance staff levels with available funding is a legitimate objective the
continuing use of fixed-term contracts is not always a proportionate and necessary means of achieving that
objective.
The Court is satisfied that the carrying out of funded research is a continuing function of the Respondent rather
than a once off activity. The Claimant commenced working for the Respondent on such projects in July 2006. He
continued in employment on two continuous contracts until 28thFebruary 2011. Following a break of some five
months he was re-employed and the Court was told that his current employment will last up to 2014. While his
current employment is in a different location, the Court noted that the Claimant’s contracts require him to work
at any location to which he is directed by the Respondent.
By 2014 the Claimant will have been in successive fixed-term employment for a period of eight years. In these
circumstances the possibility that his job may at some stage become redundant due to a fall-off in funded
projects does not constitute an objectively justified ground, within the meaning of s.7 and s.9(4) of the Act, for
the continuation of his employment on fixed-term contracts beyond the period normally permitted by s.9(2) of
the Act.
In a letter to the Court, dated 21stMarch 2013, the Respondent furnished details of the number of temporary
employees which it employed on project work in the years from 2006 until 2012. These figures show that in 2006,
the year in which the Claimant commenced his employment, the Respondent employed eight technicians on
funded projects. This number increased to ten in 2007. In 2008 twelve temporary technicians were employed, in
2010 seven were employed, in 2011 it increased to twelve and the same number were employed in 2012. Thus,
with the exception of 2010 (when it fell by one) these figures indicate an increasing requirement on the part of
the Respondent for technicians on project work. Thus, these statistics support the conclusion that undertaking of
project work is a continuing and fixed need of the Respondent.
The Respondent further relies on the moratorium on recruitment in the public service in justification for not
issuing the Claimant with a contract of indefinite duration. The Court was told that the Respondent is precluded
from increasing its staffing levels except in cases of fixed-term employees on fully funded projects. In effect the
Respondent contends that it is precluded by a Government decision from offering the Claimant a contract of
indefinite duration.
In a line of decisions, starting with that in Adeneler, the CJEU made it clear that objective grounds justifying the
successive use of fixed-term contracts must relate to precise and concrete circumstances characterising the
activity to which the fixed-term contract relates. A provision, such as the moratorium relied upon, is of general
application and does not relate to the circumstances of the particular work at issue in this case. Accordingly, in
accordance with the dicta of the CJEU in the Adenelerline of authorities, it could not be accepted as a ground on
which the successive use of fixed-term contracts could be objectively justified for the purpose of s.9(4) of the Act.
Furthermore, a somewhat similar defence was considered and rejected by Leffoy J. inIbrahim Ahmed v Health
Service Executive[2006] IEHC 245. In that case the HSE sought to argue that in seeking a contract of indefinite
duration Dr Ahmed was attempting to circumvent the provisions of the Local Authorities (Officers and Employees)
Act 1926 which stipulated that appointment to permanent posts, such as that in issue in the case, could only be
made following open competition. In rejecting that argument the Judge pointed out that Dr Ahmed was not
seeking to be appointed to a permanent post but was seeking recognition that he had already acquired such a
post by operation of law. At page 21 of the judgment Leffoy J. said the following: There is inherent in the
defendant's submission the proposition that, by seeking to enforce his rights under s.9 of the Act of 2003, the
plaintiff is seeking to compel the defendant to circumvent the provisions of the Act of 1926, as amended by the
Act of 2004, or, alternatively, the proposition that it is a necessary corollary to the enforcement of the plaintiff's
right that such circumvention would occur and that such circumvention would be ultra vires the powers of the
defendant. In my view, neither proposition is correct. The plaintiff is not seeking to be appointed to an office the
filling of which is governed by the Act of 1926. The defendant must comply with the provisions of the Act of 2003
and such compliance falls outside the ambit of the Act of 1926. That, it seems to me, is a sufficient answer to this
point without having to go into the minutiae of the provisions of the Act of 1926, as amended.
Likewise, in this case the Claimant is not seeking to be appointed to a permanent post. Rather, he is seeking a
declaration from the Court that his fixed-term contract of employment was transmuted to one of indefinite
duration by operation of s.9 (3) of the Act.
Finally, the Respondent contends that different projects require a different range of skills and it is not possible to
transfer an employee from one project to the next. In considering this point of defense it is noteworthy that the
objective grounds relied upon by the Respondent in both of the fixed-term contracts under which the Claimant
was employed nowhere mentioned the limitation of the Claimant’s skills as a ground for not offering him a
contract of indefinite duration. This defence is raised by way of a general assertion unrelated to the
circumstances of the Claimant. In Case 171/88Rinner-Kuhn v FWW Spezial-Gebaudereinigung GmbH & Co.
KG[1989] ECR 2743 the CJEU pointed out that reliance on mere generalisations cannot be sufficient to make out a
defence of objective justification. Accordingly, this ground cannot be accepted as providing objective justification
within the statutory meaning.
Result
For all of the reasons set out in this Determination the Court has come to the conclusion that the Claimant’s fixedterm contract was transmuted to one of indefinite duration by operation of law. The Rights Commissioner
concluded that the Claimant became so employed with effect from the fourth anniversary of the commencement
of his first contract. That is not a correct application of the Act.
In Minister for Finance v Una McArdle[2007] 18 ELR 165 Laffoy J quoted with approval the following passage from
this Court’s Determination in the case in which the effect of s.9(3) was considered: “That section applies to a
situation where an employee is given a renewed fixed-term contract in contravention of subss. (1) or (2). In such a
case subsection (3) would operate so as to render void, ab initio, the term of the contract which purports to
provide for its expiry by effluxion of time, or the occurrence of an event. Hence, by operation of law the offending
term would be severed from the contract thus altering its character from one of definite duration, or fixed term,
to one of indefinite duration. However, the remaining terms and conditions of the contract would be unaffected
including terms as to pensionability and termination, which, as already observed, would have had to be aligned
with those of a comparable permanent employee in accordance with section.
It is also clear that s.9 (4), and by extension s.9 (3), takes effect at the commencement of the impugned contract.
This point was made by Hanna J. in Russell v Mount Temple Comprehensive School IEHC 533. This can have the
practical effect of transmuting a fixed-term contract to one of indefinite duration before the expiry of the
duration referred to in either subs (1) or (2) of s.9 of the Act. Where, as in the instant case, a fixed-term contract
is entered into before the expiry of the four year period referred to in s.9(2), and its duration extends beyond that
period, s.9(3) operates so as to sever the term in that contract providing for its expiry by effluxion of time or the
completion of a task. The contract is thus converted to one of indefinite duration from the date of its
commencement. This construction of s.9 (3) of the Act is supported by the plain and ordinary meaning of the
language used in the subsection, which provides that the ‘contract concerned’ shall be deemed to be a contract of
indefinite duration.
The Claimant’s second contract took effect from 7th July 2008. While it was expressed to be for a fixed purpose it
extended until 28thFebruary 2011. At the time of its conclusion the Respondent must have known that it would
extend the Claimant’s aggregate duration of fixed-term employment beyond the four years permitted by s.9(2) of
the Act. Consequently it was the conclusion of that contract that required objective justification and in the
absence of objective justification (which the Court has held to be the case) it was that contract that transmuted to
one of indefinite duration. Accordingly the Court holds that the Claimant became employed on a contract of
indefinite duration with effect from 7thJuly 2008.
Effect of the Court’s Conclusion
The Court was informed that the Claimant was re-employed by the Respondent and is now working in a different
location to that at which he performed his earlier contracts. As previously noted in this Determination the earlier
contracts allowed the Respondent to relocate the Claimant to other locations. Hence, his present employment is
consistent with the contract of indefinite duration that came into being by operation of law on 7thJuly 2008 in all
respects other than that the terms in relation to its expiry on completion of the purpose to which it was
expressed to relate.
With regard to the period between the Complainant’s dismissal on 28thFebruary 2011 and the date on which he
was re-employed, the Court is satisfied that had his status as a permanent employee been recognised by the
Respondent he would not have been dismissed at that time. Accordingly he is entitled to recover from the
Respondent arrears of remuneration for the period from 28thFebruary 2011 to the date on which his present
employment commenced. This period should also be disregarded for the purposes of measuring the Claimant’s
continuous employment.
Determination
It is the Determination of the Court that the Claimant became employed by the Respondent, by operation of s.9
(3) of the Act; on a contract of indefinite duration on 7thJuly 2008 and that he continues to be employed pursuant
to that contract. The appeal is disallowed. The decision of the Rights Commissioner is varied and substituted with
the terms of this Determination.
Signed on behalf of the Labour Court
Kevin Duffy
15th April, 2013.Chairman