European Court of Justice Ruling on Fixed-Term Contracts Announced – April '08

In 2005, the trade union IMPACT took a case to the Rights Commissioners’ Service on behalf of 91 fixed-term employees, employed across various government departments in technical and professional roles. The union argued that these staff, who were on successive fixed-term contracts, were not being allowed access to the same benefits, terms and conditions of their permanent counterparts in areas such as pay increases, contributory pension schemes, sick pay, training and annual leave entitlements. What made this case particularly interesting was IMPACT’s argument that the government was not only liable for such breaches under the Protection of Employees (Fixed-Term Work) Act 2003, but that the government’s liability extended beyond the introduction of the original Directive in July 2003 in Ireland to when it should have been transposed into Irish legislation two years previously.

In her ruling, the Rights Commissioner found that the 91 staff had been discriminated against on the basis of their fixed-term status when compared to their permanent counterparts and more significantly, agreed with the union’s position that the liability extended back to 2001. Compensation totalling €217,500 was awarded, with the highest individual payment being worth approximately €40,000. Lawyers for the State argued that the Rights Commissioner’s jurisdiction was limited to domestic law and had therefore erred in expanding her ruling to include the EU Directive as well. The Department of Finance appealed the outcome to the Labour Court who, in turn, referred the case to the European Court of Justice (ECJ) for an opinion.

On 15th April 2008, the ECJ announced its ruling that an authority of a Member State, acting as a public employer, may not adopt measures contrary to the objective of the Fixed-Term Workers Directive (i.e. prevention of abuse of fixed-term contracts) for an unusually long period between the deadline for transposing the Directive and the legislation coming into force in Ireland. In effect, this means that any state employer may in future be bound by the fundamental objectives of an EU Directive once the deadline for transposition has expired, regardless of whether the Directive has been brought into effect in Ireland or not.

Of the original compensation awarded by the Rights Commissioner, approximately €110,000 has already been paid out. The case now returns to the Labour Court for a final determination.