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The Dublin Institute of Technology v Stephen Nealon, Determination of the Labour Court No FTD 126

Although the determination was issued on 17th February 2012, it is always useful to look at judgements in this complex (but seemingly straightforward) piece of legislation, namely the Protection of Employees (Fixed Term Work) Act 2003.

This case concerned an appeal by the employee against a Rights Commissioner decision R-100953-Ft-10/Jt in respect of his employer the Dublin Institute of Technology (“DIT”). In summary the Rights Commissioner decision was set aside and the contract became one of indefinite durations with effect from the date of its commencement, namely, 21st September, 2009.

Background

In this case the complainant was an hourly paid, part-time, assistant lecturer in plumbing (attached to the school of construction) at DIT. His employment began on 19th September 2005 and was renewed annually until 30th June 2011. In total the claimant was employed on six fixed term contracts of employment, his last contract running from 21st September 2009 to 30th June 2011.

In accordance with Section 8 of the Act, each of the fixed term contracts contained a statement of the objective grounds relied upon for renewing of the contract for a fixed term and the failure to provide the claimant with a contract of indefinite duration.

The Section 8 statement for 2007 and 2008 said “The Institute is offering you a renewal for a fixed term rather than a contract of employment of indefinite duration because the nature of the position is dependent on teaching hours being available and the continuation of the programme on which you teach”.

The statement contained in the contracts concluded in September, 2007 and September, 2008, was in common form as follows: – “The Institute is offering you a renewal for a fixed-term rather than a contract of employment of indefinite duration because the nature of the position is dependent on teaching hours being available and the continuation of the programme on which you teach”.

The Section 8 statement contained in the contracts concluded in September 2009 and September 2010 contained differently formulated grounds namely that “The Institute is not in a position to offer you a permanent position as it is subject to State control as set out in the Moratorium on Recruitment in the Public Service.”

The Claimant contended that the fixed term contract with which he was furnished in September 2009 contravened Section 9(2) of the Act and in consequence of which that contract became one of indefinite duration by operation of Section 9(3) of the Act.

DIT tried to argue that contrary to what was said the Section 8 statement in 2009 and 2010 the real reason for the renewal was a fall off in demand for the courses which the claimant was employed to teach. The Rights Commissioner accepted the Respondent’s arguments.

Determination of the Labour Court (summarised in bullet points for ease of reference)

  • In Determination FTD1117, Athlone Institute of Technology v Hannify & Ors, this Circular, and the collective agreement to which it gave effect, provides a useful indication of the intention of the parties to the agreement on what can constitute objective grounds for the purposes of the Act. However, neither the circular nor the collective agreement can offset or supplant the clear provisions of the Act. Accordingly this case must be determined by application of the legal principles derived from the Act itself.
  • The applicable legal principles are contained at Sections 7, 8 and 9 of the 2003 Act.
  • By September 2009 the Claimant has been employed on a succession of fixed-term contracts the aggregate duration of which exceeded four years. Hence, the fixed-term contract issued to him on 21st September 2009, covering the period up to 30th June 2010, contravened s.9(2) of the Act unless it was saved by s.9(4).
  • If the fixed-term nature of that contract was not saved by s.9(4) it became one of indefinite duration by operation of s.9(3) from the date of its commencement, namely 21st September, 2009, and the Claimant was, thereafter, employed on a contract of indefinite duration as a matter of law.
  • It follows that the determinative point in this case is whether or not the renewal of the Claimant’s fixed-term employment, on 21st September, 2009, was justified on objective grounds within the meaning of s.7 of the Act and thus saved by s.9(4) of the Act.
  • The Respondent now contends that, contrary to what was contained in the statement given to the Claimant pursuant to s. 8 of the Act, the real reason for the impugned renewal was a fall-off in demand for the courses that he was employed to teach.
  • In Determination FTD064, HSE North Eastern Area v Khan this Court considered the purpose serves in the overall legislative scheme by the obligation to inform a fixed-term of the objective grounds for the renewal of his or her fixed-term contract. The Court concluded as follows: –

“It seems to the Court that the purpose of Section 8 is not just to ensure that a fixed-term employee is informed of the reason why his or her contract is being renewed. On a reading of the Section as a whole it is clear that it is intended to ensure that the employer definitively commits itself, at the point at which the contract is being renewed, to the grounds upon which it will rely if subsequently pleading a defence under Section 9(4). Thus where an employer fails to provide a fixed-term employee with a statement in writing, in accordance with Section 8(2), it is apt to infer, in accordance with Section 8(4) of the Act, that the grounds subsequently relied upon were not the operative grounds for the impugned decision and it would be for the employer to prove the contrary”.

  • In this case the Respondent did provide the Claimant with a statement of objective grounds at the material time. It now seeks to rely on alternative grounds which were never stated in writing.
  • It is clear that s.9(4), and by extension s.9(3), takes effect at the commencement of the impugned contract. This was pointed out by Hanna J in Russell v Mount Temple Comprehensive School IEHC 533. It follows that the reasons relied upon as constituting objective grounds for the purposes of the Act must have been the reasons operating on the mind of the relevant decision-maker at the time the impugned decision was made.
  • The decision of the CJEU in Case 476/99 Lommers v Minister van Landbouw, Natuurbeheer en Visseri [2002] IRLR 430, is authority for the proposition that a plea of objective justification in defence of a claim grounded on a social right derived from the law of the European Union equates to reliance on a derogation from that right. Like all derogations it must be strictly construed against the person by whom it is invoked.
  • In this case the grounds now relied upon by the Respondent were not referred to in the notice provided to the Claimant pursuant to s.8 of the Act. These grounds were only mentioned verbally to the Claimant after his fixed-term employment was renewed beyond the four years period normally permitted by s.9(2) of the Act.
  • In these circumstances, and on the balance of probabilities, the Court has come to the conclusion that the reasons now relied upon by the Respondent to justify the renewal of the Claimant’s fixed-term employment beyond that four-year period were not the actual or operative reasons for the impugned renewal. As the Respondent has conceded that those stated reasons do not amount to objective grounds within the meaning of s.7 of the Act its plea of objective justification cannot succeed.
  • By operation of s.9(3) that contract became one of indefinite durations with effect from the date of its commencement, namely, 21st September, 2009.
  • The Decision of the Rights Commissioner is set aside and is substituted with this Determination.

In summary the grounds relied on by DIT to justify the renewal of the Claimant’s fixed term employment beyone four years did not amount to objective grounds and the Claiman’s contract became one of indefinite duration with effect from 21st September 2009.

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