Section 9 of the Protection of Employees (Fixed Term Workers Act) 2003 (hereinafter FTWA) provides inter alia that an employer cannot have two or more fixed term contracts where the aggregate duration is greater than four years unless there are objective grounds for the renewal. Otherwise it will be read as a contract of indefinite duration (CID). In order to constitute objective grounds it must be “based on considerations other than the status of the employee concerned as a fixed-term employee and the less favourable treatment… is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose”.
It has been accepted that financial cost does not amount to objective grounds CUS v. Dooley (Unreported High Court 20/7/10). Also the objective grounds relied upon at hearing must be the operative grounds relied on at renewal and ideally should be notified to the claimant on renewal to ensure compliance with s. 8 FTWA (Khan v. HSE  ELR 313).
This article addresses how specific grounds have been dealt with by the Rights Commissioner, the Labour Court and the High Court.
Many of the cases involve employees of the health service executive (HSE) simply because the HSE uses fixed term contracts more frequently than most other employers.
To provide workers for a short term project
In Corri v. RPA FTD 097 (2009) the Labour Court gave guidance saying:-
“[Where] the completion of the specific task is the determining event, it would have to be a clearly identified and specific task, which will eventually come to an end, such as a task or project which is not part of the fixed and permanent needs of the employer.”
In National Gallery of Ireland v. Cleary 2013 ELR 1 the claimant succeeded in getting a CID. The employer argued a CID was not offered because refurbishment works were due to commence which would mean the claimant would have no job. The Labour Court found this was not objective justification – the works were not imminent with no commencement in clear sight, the claimant had for 4 years met a need for the employer.
To cover staff absence such as maternity, parental or adoptive leave, sick leave, secondment or career break
Implicit approval was given for this in Russell v. Mount Temple Comprehensive School  ELR 81 where a teacher was hired to replace another teacher on career break.
In UCD v. Worker FTD 1129 (2009) the employer argued that the claimant had been employed on fixed term contracts to cover maternity leave to named employees. The Labour Court held there was no objective grounds and found that the claimant undertook work that had no relationship to that which had been carried out by the two staff members whom she was allegedly replacing. Instead she had carried out substantially the same work before they went on maternity leave as she did after.
By contrast, in Scoil Dara v. McCarthy FTD1211(2012) the claimant failed in her claim for a CID. She was employed to cover a permanent music teacher. The Labour Court found that the claimant had been primarily employed to teach those music classes even though the respondent had allocated other classes to make up the balance of the contracted hours of the claimant. Also in NUI v. Woods FTD/1511 the employer was found to have valid objective grounds for the renewal. The work carried out by Dr Wood included duties and responsibilities entirely unconnected with the other worker’s role.
There was non compliance with a statutory provision or a procedure designated by a body other than the employer
In University College Hospital Galway v Awan  ELR 64 the claimant was held to be entitled to a CID from January 2004. The reason relied on by the employer for renewal of the fixed-term contract was that there were procedures in the Local Authority Act 1926 and Health Act 1970 which had to be gone through before an employee was employed on a permanent basis by the appellant. The Labour Court applied Adenelar v. Ellinikos Organismos Galaktos  IRLR 717 and held this did not amount to objective justification.
In Health Service Executive v Prasad FTD 062 (2006) the Labour Court rejected the employers argument that objective grounds arose from the fact that it was mandatory for it to follow the provisions of the Local Authority Act 1926 and Health Act 1970 and the requirements of Comhairle na nOspidéal, the Local Appointments Commission and the Department of Health and Children to advertise the post and that it would be acting contrary to the law if it did not do so.
In contrast, in Ghulam v. HSE  ELR 325 the claimant failed in a s. 9 claim. The claimant had been employed on successive fixed term contracts as a consultant The Labour Court found that there were objective of grounds justifying the renewal as opposed giving a CID. It was a requirement of the permanent post that the appointee should be on the specialist register of the Medical Council of the RCSI in order for the hospital to retain its training recognition with the RCSI. The claimant was not on the specialist register. In order for inclusion on the register, the claimant would have had to complete a course in emergency medicine or apply for inclusion to the Medical Council, neither of which the claimant had done.
The post was a training post and giving a CID would inhibit the rotation of further trainees
In Khan v. HSE the claimant worked under fixed-term as a Non-Consultant Hospital Doctor (NCHD) under a scheme known as the Mater/UCD Rotational Training Scheme. He was a senior house officer in psychiatry.
The respondent argued that the nature of the post held by the claimant as a training post justified his continued employment on fixed-term contracts. Specifically, the respondent submitted that it is essential that hospitals have dedicated training posts available and that NCHDs rotate through those posts. According to the respondent, to continue NCHDs in training posts indefinitely would block other doctors from having the opportunity to avail of higher specialist training.
The Labour Court held it was not a contract for training since the predominant benefit which the respondent derived was the professional clinical services of the claimant in the treatment of patients under the respondent’s care, even though the contract enabled the claimant to attain further qualifications.
“There is no evidence before the Court by which it could conclude that there are no means by which the provision of training places for NCHDs could be provided other than by the use of successive short-term contracts…Moreover, it could not be seriously contended that granting the claimant a contract of indefinite duration in circumstances where he met the criterion prescribed at s. 9(1) of the Act would prevent the future training of other NCHDs.”
Related to this issue, there is an outright exclusion from the FTWA for employees in initial vocational training relationships or apprenticeship schemes or employees with a contract of employment which has been concluded within the framework of a specific public or publicly-supported training, integration or vocational retraining programme.
The post was dependent on external funding which was not renewed
In UCD v. O’Riordan  ELR 187 the claimant was employed under a series of fixed term contracts to write a series of textbooks on Irish history. The project was externally funded and the project was discontinued when the private donor ceased funding. The respondent argued that the objective ground was to encourage postgraduate research which is dependent on funding. The claimant succeeded in his claim for a CID. The Labour Court held there was no objective grounds justifying the renewal of the fixed term contract. The Labour Court found that the claimant was not doing the work normally involved in postgraduate research and also, since the private donor only became involved after the claimant first commenced employment, that could not have been an objective ground contemplated at the time of renewal. However the Labour Court ordered €20,000 in compensation rather than reinstatement as it was likely he could have been dismissed for redundancy if he had the benefit of a CID.
The public sector moratorium on making permanent appointments
In the public sector there has been a moratorium which meant that fixed term contracts would not renewed and employees would not be given a CID unless there were exceptional circumstances and only if sanctioned by the Department of Finance.
In Kirwan v. Teaching Council 2012 ELR 301 this was effectively ruled out as objective grounds:-
“The respondent contends that it acted on the instructions of the government departments but that does not overcome the possibility that the underlying and operative reason for the dismissal was the avoidance of the claimant’s fixed-term contract becoming one of indefinite duration by operation of s.9(3) of the Act…
The respondent says that the dismissal was for the purpose of facilitating the redeployment of staff from elsewhere in the public service. This was not given as the reason for the dismissal at the time of its occurrence. Moreover, it is clear that following the dismissal the claimant was not replaced with redeployed staff and that she was, in fact, replaced with staff engaged through an employment agency.”
In Arts Council v. Harte 2013 ELR 85 there is a further indication that the moratorium will not amount to objective grounds.
in order to argue that an employee is only needed in the short-term, the employer needs to be able to identify a point in time when the need will expire. A vague apprehension that the work may not last will not suffice.
In order to argue that an employee is there simply to replace an employee on leave, it is important when and why that the former employee is doing the work of the latter and not some other position.
It is generally not permissible to rely on a statutory provision or a procedure designated by a party other than the employer. European law is supreme, allowing for a limited exceptions set out in the legislation. It might be permissible to offer a CID where the claimant does not have the qualifications set by the disciplinary body for that profession.
To argue that the post is merely a training post, an employer might need to establish that the predominant purpose of the contract was training and not merely to gain the services of the employee.
To argue that the post was dependent on funding, this would need to make clear from the date of the first contract.
The public sector moratorium seems now to not amount to objective grounds although arguably no court has yet met the defence head on in a case where the moratorium was used as the only defence, the moratorium was given as the reason for renewal at each stage and the moratorium procedure was exhausted ie. where the employer applied for special permission from the Minister and was refused and following the non renewal another civil servant was deployed into that position.
A further caveat to employers is that even if a fixed term contract has the benefit of s.9.4 of the FTWA, the employee may have the benefit of the Unfair Dismissal Act 1977 (UDA) if the contract does not comply with s.2.2 of the UDA. In particular the contract should be in writing, signed by both parties and exclude the operation of the UDA.
The content of this article is intended to provide a general guide to the subject matter and is not intended to be a substitute for legal advice. Specialist advice should be sought about your specific circumstances.
Stephen O’Sullivan BL