The Minister for Finance (plaintiff) v. Una McArdle (defendant). Employment - Appeal from a determination of the Labour Court on a point of law - Fixed-term contract - Declarations sought that the Labour Court erred in law - Whether an established civil servant was an appropriate comparator under the Act - Whether there was less favourable treatment of a fixed-term employee - Compensation in relation to actual loss of opportunity - Definition of a contract of indefinite duration - Protection of Employees (Fixed Term Work) Act, 2003 ss 6,7,8,9,10,14 and 15(6)
The High Court (Ms Justice Laffoy); judgment delivered on March 22nd , 2007.
As a matter of law, evidence cannot be adduced in the High Court on appeal on a question of law which was not before the Employment Appeals Tribunal.
For the purposes of the 2003 Act an employee is entitled to choose his or her comparator. The expression "conditions of employment" covers matters relating to pension arrangements and access to career break. S.6(1) of the Act only outlaws discrimination in relation to a fixed-term employee's conditions of employment but does not cover the duration of the contract. Where an employee completes or has completed his or her third year of continuous employment with his or her employer, then his or her fixed term contract may be renewed on only one more occasion for no longer than a year. An employer should inform a fixed-term employee in relation to vacancies that become available in a permanent capacity.
The court so held in refusing the relief sought.
Anthony M.Collins, SC, and Anthony Kerr, BL, for the plaintiff; Brian O'Moore, SC, and Marcus Dowling, BL, for the defendant.
Miss Justice Laffoy commenced her judgment by stating that the plaintiff employer sought an order setting aside the determination of the Labour Court dated April 4th, 2006, disallowing the appeal of the State Laboratory and affirming the decision of the Rights Commissioner of a complaint by the employee under the 2003 Act. Miss Justice Laffoy said that the proceedings were essentially brought under section 15(6) of the Act, which allowed for a party to appeal the determination of the Labour Court to the High Court on a point of law.
Miss Justice Laffoy stated that at the hearing before the court there was a dispute as to what matters were properly before the court. Counsel for the defendant referred the court to the judgement of Finlay C.J. in Bates v Model Bakery Ltd 1 IR 359, where it was held that evidence being adduced before the High Court on appeal which had not been before the Employment Appeals Tribunal as the first instance decision maker, was not the correct procedure on an appeal based on a question of law to the High Court. The former Chief Justice in that case, stated that the appropriate procedure was that the summons produced by the Rules of the Superior Courts 1986 should state the decision being appealed, the question of law which it is suggested is in error and the grounds of appeal and it should be supported only by an affidavit or affidavits exhibiting the determination of the Employment Appeals Tribunal, including any findings of fact or recital of evidence made by it, and, in effect, identifying the parties and the grounds on which the aggrieved party seeks a determination of the question of law.
Miss Justice Laffoy said that the format of the special endorsement of claim in the instant case contained a prayer for relief only followed by paragraphs in which declarations were sought that the Labour Court erred in law in making or failing to make certain conclusions. The only evidence before the court was an affidavit of Pat McBride, a civil servant in the plaintiff's department, who proved that the State Laboratory is under the aegis of the Department of Finance and exhibited the decision of the Rights Commissioner referred to in the special summons, the notice of appeal against that decision to the Labour Court, the determination of the Labour Court and the written submissions on behalf of the plaintiff put before the Labour Court, including supplemental submissions submitted after the hearing in the Labour Court. In reply there was a short affidavit from the defendant's solicitor where merely asserted that the Labour Court did not err in law.
Miss Justice Laffoy stated that the 2003 Act came into force on July 14th, 2003 and gives effect in this jurisdiction to Council Directive 99/77/EC of June 28th, 1999, on the Framework Agreement on Fixed Term Work (the Directive). Section 6 provides that a fixed term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee. The definition of "employee" specifically provides that, for the purpose of the Act, a person holding office under, or in the service of, the State shall be deemed to be an employee employed by the State or government as the case may be. "Fixed-term employee" is defined as meaning a person having a contract of employment where the end of the contract of employment concerned is determined by an objective condition such as arriving at a specific date, completing a specific task or the occurrence of a specific event. Miss Justice Laffoy said that the expression "a permanent employee" is defined as meaning an employee who is not a fixed-term employee. The expression "comparable permanent employee" is to be read in accordance with s. 5 which provides inter alia that an employee is a comparable permanent employee in relation to a fixed-term employee if
"the permanent employee and the relevant fixed-term employee are employed by the same employer or associated employers and one of the conditions referred to in subs.(2) is satisfied in respect of those employees . . . "
Miss Justice Laffoy said that one of the conditions stipulated in subs.(2) is that
"both of the employees concerned perform the same work under the same or similar conditions or each is interchangeable with the other in relation to the work . . . "
Miss Justice Laffoy said that s.7 which deals with objective grounds for less favourable treatment, provides in subs.(1)that a ground shall not be regarded as an objective ground for the purposes of any provision of Part (section 5-13) unless it is based on considerations other than the status of the employee concerned as a fixed-term employee and the less favourable treatment which it involves for that employee (which treatment may include the renewal of a fixed-term employee's contract for a further fixed-term) is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose. Miss Justice Laffoy said that in essence, subs.(2) provides that what would otherwise be a discriminatory contractual term shall be regarded as justified on objective grounds if the overall "package" of terms of the fixed-term employee is at least as favourable as the overall "package" of the comparable permanent employee. Section 8 requires that a fixed-term employee be furnished with a written statement of the objective condition determining the contract both at the commencement of the employment and on renewal of the fixed-term contract. In the case of the latter, the employee must be informed of the objective grounds justifying the renewal and the failure to offer a contract of indefinite duration at the latest by the date of the renewal. Section 9 provides that where a fixed-term employee completes or has completed his or her third year of continuous employment with his or her employer or associated employer, his or her fixed-term contract may be renewed by that employer on only one occasion and any such renewal shall be for a fixed-term of no longer than one year. Subsection 3 provides that where any term of a fixed-term contract purports to contravene subs. (1), the term shall have no effect and the contract shall be deemed to be a contract of indefinite duration. Section 10 deals with information on employment and training opportunities and subs. (1) provides that an employer shall inform a fixed-term employee in relation to vacancies which become available to ensure that he or she shall have the same opportunity to secure a permanent position. Section 14 provides for complaints to a rights commissioner, who may, inter alia, declare whether the complaint was or was not well founded, require the employer to comply with the relevant provision and require the employer to pay compensation to the employee not exceeding two years remuneration. Section 15 provides for an appeal from a decision of a rights commissioner to the Labour Court.
Miss Justice Laffoy said that the defendant was employed as a lab technician with the State Laboratory in March, 2000, on a fixed-term contract of one year. The contract was renewed on an annual basis until March 21st, 2004. At that point, as was accepted before the Rights Commissioner, her contract was not managed appropriately. It was not until May 31st, 2005, that she was furnished with a renewed contract, which, in the language of the Labour Court, purported to be in respect of the period from March 22nd, 2004, until March 21st, 2005. As was recorded in the determination of the Labour Court, the plaintiff accepted that the contract furnished on May 21st, 2004, did not comply with the requirements of the 2003 Act and the defendant became entitled to a contract of indefinite duration with effect from March 22nd, 2004.
Miss Justice Laffoy said that the defendant's terms of employment which remained in issue and were the subject of the complaint to the Rights Commissioner were pension, access to career breaks and tenure. Miss Justice Laffoy stated that an issue also arose in relation to a permanent vacancy as a chemist, for which the defendant had the qualifications and service. The defendant was informed that due to her "unestablished" status, her application was deemed inadmissible. The defendant made her complaints to the Rights Commissioner on January 10th, 2005, alleging contraventions of ss. 6,8,9 and 10 of the Act. The plaintiff contended that the issues which arose under ss. 8 and 9 were not before the court. The complaint was heard by the Rights Commissioner on April 24th, 2005, and a decision was given on September 20th, 2005. That decision was appealed to the Labour Court on November 4th, 2005, the hearing taking place on February 23rd, 2006, and a determination given on April 4th, 2006.
Miss Justice Laffoy said the issues before the court were whether the Labour Court, in reaching its conclusions on the following questions, took an erroneous view of the law: as regards s. 6 whether the defendant was entitled to rely on an established civil servant with whom she was engaged in like work as an appropriate comparator and whether the defendant was entitled to the same conditions of employment as an established civil servant which included (i) pension (ii) access to a career break and (iii) tenure, in the sense that she was entitled to rules and procedures for termination of her fixed-term contract not less favourable than those applicable to an established civil servant. Miss Justice Laffoy said that there was also an issue in respect of the meaning of the term "a contract of indefinite duration" for the purposes of s. 9 and whether, as regards tenure, it means that the defendant, as adopted by the Labour Court " . . . has an expectation that subject to the normal date of retirement in the employment, she will be retained in employment and will not be dismissed without there being any good reason such as misconduct or unfitness for her position or other compelling or unavoidable circumstance . . . as may be by reference to an established civil servant". Another issue was as regards s. 10(1) and whether the defendant was subject to less favourable treatment by being precluded from applying for the appointment as chemist and, if so, whether €10,000 represented just and equitable compensation. Finally, an issue arose as to whether in respect of s. 7 any less favourable treatment was found to exist and whether same was justified on objective grounds.
Miss Justice Laffoy when dealing with the issue under s. 6 said that the Labour Court summarised the combined effect of sub-ss (1) and (2) of s. 5 as being that a comparable permanent employee for the purposes of the Act is a permanent employee employed by the same employer as the complainant, who is engaged in like work with the complainant. The Labour Court followed the decision of O'Sullivan J in Wilton v Steel Company of Ireland ELR 1, where it was held that, for the purposes of the Anti Discrimination (Pay) Act, 1974, an employee is entitled to choose his or her comparator. In respect of the position of the defendant, the Labour Court stated that it was accepted that she was engaged at all material times in doing the same job as permanent civil servants who were designated as established, and it was also accepted that there were no other civil servants employed by the plaintiff engaged in like work with her, who were designated unestablished. The Labour Court found that the defendant and a number of established civil servants performed the same work under the same or similar conditions and each was interchangeable with the other in relation to work. Therefore, the Labour Court found that the established civil servants were comparable permanent employees in relation to the defendant within the meaning of s. 5 and on that basis concluded that the defendant, as a fixed-term employee, was entitled to the same conditions of employment as her nominated comparators who were established civil servants (except in relation to the duration of her contract. Counsel for the plaintiff disputed that the defendant had to choose a comparator for the purposes of the Act and submitted that her chosen comparator was not due to her fixed-term status, but to her status as an unestablished civil servant and that therefore, the discrimination was not within the ambit of the Act. However, Miss Justice Laffoy held that there was no error of law in the conclusion of the Labour Court that an established civil servant in the State Laboratory was engaged in like work with the defendant who was a "comparable permanent employee" for the purposes of section 6 because of the unchallenged findings of the Labour Court. Miss Justice Laffoy said that the finding made by the Labour Court was for the purpose of identifying the minimum conditions of employment to which the defendant was entitled as a fixed-term employee in accordance with s.6. Miss Justice Laffoy stated that the Labour Court did not take an incorrect view of the law in reaching its conclusion regarding pension arrangements and career break.
Miss Justice Laffoy stated that the Labour Court considered the topic of tenure in the context of s. 6 and, accordingly, in the context of the conditions governing the termination of the employment of the fixed-term employee during the fixed term. Miss Justice Laffoy found it unnecessary to express any view on the findings of the Labour Court because same were postulated on a situation which was entirely hypothetical and moot. The reality of the situation was that the defendant's last fixed-term contract terminated by effluxion of time on the basis of the plaintiff's concession on March 21st, 2004, following which it was conceded that she was employed on a contract of indefinite duration. The question of the termination of the defendant's fixed-term contract during its tenure did not and could not now arise.
Turning to the issue under s.9 Miss Justice Laffoy stated that it was submitted on behalf of the plaintiff that the jurisdiction of the Rights Commissioner and, presumably, the appellate jurisdiction of the Labour Court, did not extend to determining the content of a contract of indefinite duration to which an employee is entitled. That case was not made before the Labour Court. The case made before it was that the Rights Commissioner had erred in defining a contract of indefinite duration in the manner she did and in determining, in effect, that the defendant enjoyed tenure on the same basis and subject to the same procedure as established civil servants. The plaintiff's contention before the Labour Court was that the contract of indefinite duration to which the plaintiff was entitled was precisely that under which she was employed as a fixed-term employee save that it no longer provided for determination by reference to objective conditions, such as reaching a specific date. In its analysis of the meaning of the expression "contract of indefinite duration" in s.9(3) the Labour Court explained its effect as follows:
"that section applies to a situation where an employee is given a renewed fixed-term contract in contravention of sub-sections (1) or (2). In such a case sub-section (3) would operate so as to render void, ab initio, the term of the contract which purports to provide for its expiry by effusion of time, or the occurrence of an event. Hence, by operation of law the offending term would be severed from the contract thus altering its character from one of definite duration or fixed-term, to one of indefinite duration. However, the remaining terms and conditions of the contract would be unaffected including terms as to pensionability and termination, which, as already observed, would have had to be aligned with those of a comparable permanent employee in accordance with section 6. In other words, the expression 'contract of indefinite duration' should be understood in contradistinction to a contract of definite duration or a fixed-term contract. The terms and conditions of a contract of indefinite duration which comes into being by operation of s.9(3) must therefore be the same as those in the fixed-term contract from which it is derived, as modified by s. 6 , in all respects other than its fixed duration. Obviously, these terms will vary from one employment to another and every case will be decided mainly on its own facts."
Miss Justice Laffoy said that the position adopted by counsel for the plaintiff was that section 9(3) did not come into play in relation to the defendant and that there had been no "deeming" of a contract of employment in relation to her was a contract of indefinite duration. Miss Justice Laffoy understood the reasoning behind this contention was that as of March 22nd, 2004, the State Laboratory could have renewed the defendant's fixed-term contract on that one occasion for a fixed term of no longer than one year under s. 9. However, by virtue of section 8(2), there was a statutory obligation on the State Laboratory to inform the defendant in writing at latest by March 22nd, 2004, of the objective grounds justifying the renewal on a fixed-term basis. This was not done. Although on May 31st, 2004, the defendant was given and accepted a contract which purported to be in respect of the period from March 22nd, 2004, to March 21st, 2005, the legal position, as conceded by the plaintiff was that from March 22nd, 2004, the defendant had, by operation of law, a contract of indefinite duration. That contract of indefinite duration was terminable on reasonable notice. On that basis it was contended that the Labour Court erred in law in adopting the finding of the Rights Commissioner that any dismissal of the defendant as employed under a contract of indefinite duration could be effected in the same manner as the dismissal of her chosen comparator, an established civil servant. In its determination the Labour Court described the meaning to be given to the expression "a contact of indefinite duration" as a central issue in the case before it. Miss Justice Laffoy said that it was clear from the written submissions placed before it that the plaintiff's legal representatives engaged in that issue before the Labour Court. In the circumstances, it seemed to Miss Justice Laffoy, that that being the case, the plaintiff could not be heard to contend that it was not in issue. The only basis on which it could have been in issue was on the basis that s.9(3) operated in relation to the defendant. Whether the Labour Court took an incorrect view of the law in defining the expression must, in the view of Miss Justice Laffoy, be approached on the assumption that when both the Rights Commissioner and the Labour Court were considering the issue the defendant held under a contract of employment of indefinite duration by virtue of s.9(3). Miss Justice Laffoy did not accept that just because the plaintiff made the concession in April, 2005, that the defendant had a contract of indefinite duration with effect from March 22nd, 2004, that such contract existed by operation of law independently of the Act.
Miss Justice Laffoy did not consider the case of Murgitroyd & Co.Ltd. v. Barry Purdy I.E.H.C. 159 as submitted by the plaintiff, to be apposite to the facts of the present case because the finding in that case was based on the inference as to what the implied agreement of the parties was. Taking into account the information before the court there was no basis for inferring that the parties impliedly agreed that from March 22nd, 2004, the defendant would hold under a contract of employment which would be terminable on reasonable notice. On the other hand, Miss Justice Laffoy was not satisfied that it had been established that there was a nexus between a breach of s 8(2) on March 22nd, 2004, and the creation of a contract of indefinite duration by operation of s 9(3) in the absence of evidence as to whether the plaintiff could have complied with the former provision, although admittedly it did not comply. Miss Justice Laffoy was of the view that there had been no proper analysis of the defendant's actual contractual position between March 22nd, 2004, and April 24th, 2005, when the hearing before the Rights Commission took place.
Miss Justice Laffoy stated that assuming that, as of April 24th, 2005, and thereafter the defendant was employed under a contract of indefinite duration by operation of s. 9(3), then the Labour Court did err in law in concluding that the defendant acquired security of tenure similar to security of tenure enjoyed by the comparator who was an established civil servant. The general propositions stated by the Labour Court, as set out above, were correct. Where the Labour Court fell into error was in accepting the underlying assumption of the formulation of the Rights Commissioner that the defendant's condition as to duration or tenure of her employment must not be less favourable than that of her chosen comparator. That assumption appeared to have been predicated on the requirements of section 6(1). However, s.6(1) only outlaws discrimination in relation to the fixed-term employee's "conditions of employment" as defined, which, does not cover duration of employment. Miss Justice Laffoy stated that s.9(3) only impacts on one aspect of a contract of employment when it comes into play; its duration. Miss Justice Laffoy said that the meaning of the expression "contract of indefinite duration" in s.9(3) involves ascertaining its meaning in the Framework Agreement under European Union Law which may mean that it is to be interpreted in accordance with national law. As this was the court of final instance on the issues before it by virtue of s. 15(6) of the Act Miss Justice Laffoy said that the question as to the meaning of the expression was a question which the court must refer to the European Court of Justice if requested to do so.
In relation to section 10(1), Miss Justice Laffoy stated that it was not the plaintiff's case either before the Labour Court or the present Court, that the defendant was not entitled to information in accordance with section 10(1). The plaintiff did accept that the obligation in section 10(1) to inform employees of vacancies carries an obligation on employees to apply for such vacancies. The plaintiff asserted that there was no breach of section 10 in that the section does not prevent the employer from making stipulations for necessary qualifications which the plaintiff stated was in line with established civil service qualifications applicable to all staff, regardless as to whether they were employed on a contract of indefinite duration or a fixed-term contract. Secondly, it was argued that the post advertised was at a higher level and was not a "vacancy". The Labour Court deduced that because of the stance adopted by the plaintiff with regard to the defendant's status, the basis for refusal derived from her status as a fixed-term employee. Miss Justice Laffoy held that the Labour Court did not take an erroneous view of the law in construing section 10 and in applying it to the defendant's complaint and also in finding that there had been a breach of section 10. Further, the court held that the figure of €10,000 did not appear disproportionate to compensate the defendant for the actual loss of opportunity for the vacant position and that there was no basis that the compensation as awarded by the Rights Commissioner was not just and equitable.
Miss Justice Laffoy held that the defendant was treated less favourably than her chosen comparator in relation to eligibility for the position as chemist. Miss Justice Laffoy also concluded that the difference in treatment was not objectively justified in relation to pension, access, career breaks and vacancies arising. Further Ms. Justice Laffoy did not consider it appropriate to express any view on the broad question of objective justification given that submissions made to the Labour Court had not been before the High Court.
Miss Justice Laffoy held that the Labour Court did not err in law in concluding that the defendant was entitled to rely on an established civil servant with whom she was engaged on like work as a comparator; that the defendant was entitled to the same conditions of employment including pension entitlements and access to a career break but excluding tenure as an established civil servant and that the defendant was subjected to less favourable treatment in being denied the opportunity to participate in the competition for appointment as chemist. Miss Justice Laffoy adjourned the matter to allow the parties to consider referring the question as to the meaning of a "contract of indefinite duration" to the European Court of Justice.
Solicitors: Chief State Solicitor (Dublin) (for the plaintiff); Darach Connolly & Co Solicitors (Dublin) (for the defendants).
Emma L. Callanan, barrister