Abuse of fixed-term workers ruled out by 2003 Act
LEGAL OPINION:AS WORK becomes more prized at a time of high unemployment and employers are able to set more favourable terms when recruiting employees, it is important to restate the principles behind the Protection of Employees (Fixed-Term Work) Act 2003, writes PETER LEONARD
This is especially so as the fixed-term contract is increasingly becoming the mechanism of choice for employers when it comes to hiring staff. In the public sector, the situation is even more critical as the recruitment moratorium imposed by the Croke Park agreement directly sets out to target fixed-term employees.
The importance of job creation at this or any time is clearly acknowledged but employers should not be allowed to hold all the aces and it cannot be a case of jobs at any price. Employers may well wish to be able to say “goodbye and good luck” at the end of a fixed-term contract (as was recently advanced in this newspaper calling for reform of the Act). However, it goes without saying that an employer’s entitlement to say “cheerio” in such a cavalier fashion is not in society’s best interests and there is a social imperative that employees entering the workforce have reasons to believe there is potential for establishing long-term careers in their areas.
The 2003 Act was introduced into Irish law to give effect to the requirements of EU directive 99/70. Premised on the fact that the full-time job is the normal working relationship, the Act acknowledged that fixed-term contracts were an important feature of modern employment relationships in Ireland and were the most appropriate contracts of employment in certain circumstances.
Thereafter, the Act set out to offer protection to those employees who, by virtue of their fixed-term status, were not in a position to avail of the statutory protections offered to full-time or permanent workers.
In interpreting the Act, the Labour Court has repeatedly taken a “purposive approach”, which involves looking to the objectives set out in the framework document behind the directive. The framework document contained two fundamental principles:
first, fixed-term workers were not to be discriminated against when compared with similar full-time workers; and second, the abuse of offering successive fixed-term contracts rather than a permanent job was to be outlawed.
Discrimination was tackled in the Act by ensuring that fixed-term workers were not to be treated “less favourably” than their full-time counterparts. The Act applies this principle generally and, more specifically, goes on to ensure training opportunities are made available on an equal basis and that fixed-term workers are fully advised of job vacancies or promotions.
Prior to the introduction of the Act, employers were entitled to keep “rolling over” fixed-term contracts for as long as it suited them. The directive found that such practices were an “abuse” and so the Act provides that if an employee has had successive fixed-term contracts with an aggregate duration of four years, that employee is entitled to a full-time job.
However, the Act is inherently fair to employers in this regard and reaffirms the principle that a fixed-term contract may still be appropriate going forward. If that is the case, the employer has to show in good faith that there is “objective justification” for maintaining a fixed-term contract and the law will be satisfied.
In the early years after the Act was introduced, the High Court reflected the purposive approach to interpreting the Act and in Diageo Global Supply v Mary Rooney (2004) effectively stated that an employer is required to have exhausted all possibilities of giving that employee a full-time job before a defence of “objective justification” for the renewal of a fixed-term contract can apply. However, the recent decision in HSE Dublin North East v Ali Umar (2010) may suggest a change in the purposive approach by the High Court.
The legal rights of public-sector fixed-term workers under the act have come under attack in a significant way of late as the recruitment ban introduced by the Government has been advanced on behalf of various State agencies as objective justification for letting such fixed-term workers go. However, this Government policy has been challenged successfully in a number of cases with the Rights Commission Service and the Labour Court finding that advancing objective justification in this way in a breach of the Act.
The employment climate is very different nowadays from the way it was in 2003 when the law was first entered in the Irish Statute books. However, the guiding principles behind the 2003 Act remain as solid as ever.
The Oireachtas is obliged to keep faith with the requirements and purpose of the directive. As it stands, the Act provides a good deal for both the employers and the fixed-term workers and that is how it should continue into the future.