Law on fixed-term contracts needs to be reformed
In this jurisdiction, employees have successfully sought redundancy payments, including ex gratia payments, on termination of their fixed-term contracts, writes MARY REDMOND
THE CURRENT reform project for employment rights and industrial relations structures needs to bring individual employment rights into a consolidated statute, especially with regard to fixed-term contracts (FTCs).
There are several well-established circumstances scattered through the unconsolidated sea of Ireland’s employment law statutes that could disappoint an employer who thought that an FTC meant what it said, namely time’s up, goodbye and good luck. But in this jurisdiction employees have successfully sought redundancy payments, including ex gratia payments, on termination of their FTCs, citing the right to equal treatment with full-time comparators within their own place of work or in the same industry or sector. This relatively recent line of authority not only attacks the intentions of the parties to FTCs but is also, I believe, wrong in law.
It is having a devastating financial effect in many sectors, where research projects are part of the life blood of competitiveness and economic recovery. Engagements for the estimated duration of the research or of the funding are commonplace, and often would not happen at all unless through the medium of an FTC.
A further adverse consequence of this arguably erroneous line of authority arises for public sector employers since the Croke Park Agreement forbids compulsory redundancies in the public sector.
About 20 years ago, the Employment Appeals Tribunal in St Ledger v Frontline Distribution Ireland Ltd, emphasised that the statutory definition of “redundancy” had two important characteristics: namely “impersonality” and “change,” the latter running through all five paragraphs defining “redundancy” in the Redundancy Payments Act 1967. This meant change in the workplace, a complete closedown being the most extreme.
A job is not redundant when it ceases for reasons related to the employee concerned. The Irish statute in 2003 echoed St Ledger by prefacing the five paragraphs with a reminder that a dismissal for redundancy is “for one or more reasons not related to the employee concerned”. I shall refer to this as “the amendment”.
The UK statute on collective redundancies defines redundancy as referring to dismissal “for a reason not related to the individual concerned”, the language of the amendment therefore. Last year the UK Employment Appeals Tribunal in a case involving the University of Stirling was asked if the non-renewal of an FTC triggers collective redundancy obligations. It recognised that the words just cited had not been the subject of discussion in any prior authority.
Although collective consultation is not required in this particular context under Irish law, the case highlights the meaning of the Amendment for our redundancy law. The UK tribunal noted that the fixed-term employees, mostly researchers, had agreed at the outset that their employment would be for finite periods defined by dates or tasks. This, it said, was something they had done: it related to them, as opposed to a reason relating to the employer such as its or its creditors’ need to effect business changes. Accordingly, the fixed-term employees were held not to have been dismissed as redundant.
Contrast the recent decision of the Labour Court, where despite it being clear that certain appointments in TCD were contingent upon the continued availability of external funding which had now ceased, the Labour Court nonetheless made a ruling which rendered mutually agreed termination provisions ineffective because of the Croke Park Agreement’s outlawing “compulsory redundancy”.
But were the claimants actually “redundant” in terms of the amendment? That question does not appear to have been addressed. The court said that the claimants’ “individual employment history, for reasons specific to each of them individually” entitled each of them to rely on the commitment in the Croke Park Agreement. If the law had been applied to this finding, the claimants would have come directly within the amendment and would not have qualified as redundant.
The fact that redundancy legislation is amended here, there, and everywhere, as other employment rights law, may be why provisions like the amendment are deprived of due consideration.
Putting a new institutional structure on to what is “a thing of shreds and patches” is self-evidently unwise. One hopes the current reform project for employment rights and industrial relations structures and procedures will progress from structure to substance, bringing together individual employment rights into a consolidated statute.
Dr Mary Redmond is consultant to the Employment Law Group in Arthur Cox and author of the Arthur Cox Employment Law Yearbook 2011, published by Bloomsbury Professional