John is a caretaker in a primary school where he has worked for the past 6 years on 6 continuous fixed term contracts. These contracts were issued instead of a single permanent contract on the basis that funding was received on a year to year basis and the school did not wish to commit to permanency in an era of uncertain funding. John received his original 12 month contract on 1st December 2007 for a period of 12 months which expired on 30th November 2008. He then had five other successive 12 month fixed term contracts, the last expiring on 30th November 2013. John was receiving an incremental rate which increased year on year.
In the summer of 2013, the school was informed by the Department of Education that funding for ancillary services was to be reduced. The Board of Management, in their wisdom, decided that they would say goodbye to John on the expiry of the present contract because he was costing too much. They planned to hire a caretaker on a lower basic rate as well as putting an end to incremental increases. In a letter to John in late October 2013, the school informed him that his contract would expire on 30th November and that they would no longer be in a position to renew it. He would receive any outstanding holiday pay and the school wished him well for the future. Was the school correct in what it did and what recourse would a typical John have in such a situation?
On the face of it, the school’s actions might seem to be lawful in that they fulfilled their contractual obligations to John. John agreed the terms and conditions and signed each year in the knowledge that there was a fixed expiry date at the end of that year.
In employment law terms, however, the actions of the school would more than likely amount to an abuse of successive fixed term contracts which is deemed unlawful under the Fixed Term Work, Act 2009. This Act transposed a European Directive on equal treatment for fixed term workers, into Irish law.
How is abuse of successive contracts defined?
Basically, if an employee has received two or more continuous fixed term contracts with an aggregate duration of more than 4 years he/she is entitled to a contract of indefinite duration (CID) i.e. terms of the last contract minus the expiry date. A defence for an employer is that there are objective grounds for not issuing a CID.
John has ticked the box on the first two in that he has near six years’ service with six different fixed term contracts. But what are objective grounds and are they applicable here?
“Objective Grounds” are basically grounds other than the fixed term status of the employee and ideally should involve a balancing exercise between weighing up the value of the benefit to the employer versus the discrimination to the employee. The grounds must be capable of independent audit and should be backed up by solid evidence. Case law suggests that pure money saving reasons, as is the case here, will not satisfy the test and the fact that the job remains and will still be carried on by someone else, albeit with lower funding, militates against the defence by the employer for not granting a CID. Crucially, there was still a fixed and permanent need of the employer which needed to be fulfilled.
If the contract had included the term “subject to funding” and the role was supressed as a result of a reduction in funding then there might well be objective grounds for not granting a CID. Every case in this area will be decided on its merits but SIPTU has specialist advocates who give further advice and representation to members in this area of law. Decisions of the Labour Court have helped to significantly develop the law in recent years.
What can John do?
He can contact his union who will make representations to the Management Board and onward to the Rights Commissioner Service if the matter remains unresolved at local level. The numerous remedies available from the Rights Commissioner Service include a granting of a CID, a re-instatement or re-engagement order, or the granting of compensation up to a maximum of 2 years’ salary. Furthermore, John cannot be penalised by the employer for taking such a case under the Act. If for instance, the school in this case decided to issue another fixed term contract and John wished for a CID to ensure more certainty of employment, then the employer cannot punish John in in any way for taking such a claim under the Act. The above scenario is fictitious, and the facts do not correspond to any present or past case, but the issues discussed are very much part of the employment law discourse in the area of Fixed Term Contracts.