European Court ruling upholds applicability of EU law on fixed-term workers at national level

A ruling by the European Court of Justice (ECJ) in mid April 2008 sets out the jurisdiction of national specialised labour courts and their obligations to decide on claims based on EU law. The ECJ ruling also impacts on the definition of ‘employment conditions’, which includes pay and pensions that are dependent on an employment relationship. Both the European Trade Union Confederation and the Irish Municipal Public and Civil Trade Union welcomed the ECJ ruling.

Framework agreement on fixed-term work

Directive 1999/70/EC concerning the framework agreement on fixed-term work (92.4Kb PDF) (EU0701029I) states that workers employed on fixed-term employment contracts have the right to be treated no less favourably than comparable permanent workers, unless different treatment is justified on objective grounds (Clause 4). The framework agreement was concluded on 18 March 1999 by the European Trade Union Confederation (ETUC), BusinessEurope (formally UNICE) and the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP). The EU Member States were obliged to transpose the terms of the directive into national legislation by 10 July 2001. However, the Irish government delayed the process and the relevant law did not come into force in the country until two years later, on 14 July 2003.

Irish case on equal rights for contract workers

The Irish Municipal Public and Civil Trade Union (IMPACT) took a claim against the national Ministry of Agriculture on behalf of its 91 predominantly female members who worked as unestablished civil servants on fixed-term employment contracts. The workers’ contracts had been renewed just before the date of transposition of the directive, in some cases for exceptionally long periods of up to eight years. Therefore, the trade union’s claim was for the same terms and conditions of employment for fixed-term contract workers as for permanent staff. In the case of workers who have given a long service to the ministry, IMPACT demanded a contract of indefinite duration for these workers. The Irish Rights Commissioner Service of the Labour Relations Commission (LRC) upheld the claims put forward by IMPACT, but the employer made an appeal to the Irish Labour Court, which in turn referred a number of questions to the European Court of Justice (ECJ). Particular questions related to:

• the authority of specialised labour courts in relation to directive rights;

• the meaning of ‘employment conditions’ as set out in Clause 4 of Directive 1999/70/EC.

European Court of Justice ruling

On 15 April 2008, the ECJ gave its ruling in the case of IMPACT v Ministry of Agriculture (Ireland) Case C-268-06. The court held that national authorities acting as public employers may not adopt measures that conflict with EU law. It held that specialised labour courts have jurisdiction to hear and determine claims arising from EU law, in addition to their authority to decide on national law matters – particularly where bringing a further claim before the national courts would impose additional disadvantages for the parties to the case, thus making it particularly difficult to exercise Community rights. The ECJ held this view because Clause 4(1) of the framework agreement on fixed-term work was sufficiently precise for individuals to be able to rely on its authority before a national court.

The court noted that the objective of Directive 1999/70/EC was to prevent the potential abuse of fixed-term employment contracts. Against this background, the ECJ ruled that, by renewing the workers’ fixed-term contracts for an unusually long period and with the aim of circumventing the objectives set out by the directive, the employer had adopted measures contrary to the directive.

In relation to the second issue, the ECJ highlighted Clause 4(4) of the framework agreement, stating that ‘Period-of service qualifications relating to particular conditions of employment shall be the same for fixed-term workers as for permanent workers except where different length-of-service qualifications are justified on objective grounds’. For the ECJ, these ‘conditions of employment’ had to be interpreted as including conditions relating to pay and to pensions, dependent on the employment relationship. It held that the exclusion of ‘pay’ from the scope of [Article 137](http://www.europeanfoundation.org/docs/Wednesday 6 February/ARTICLE 137.mht) of the Treaty of Lisbon refers only to Community competence to fix a minimum wage; it did not prevent the term ‘employment conditions’ from including pay and pensions.

Reaction to ECJ ruling

The ECJ ruling represents an important clarification in relation to the rights of workers, where they are based on EU directives. In a press release on 16 April 2008, ETUC’s General Secretary, John Monks, stated that the court ruling acknowledged the aims of the parties in drawing up the framework agreement. He emphasised that ‘fixed-term contracts can only be accepted as a way to respond to specific and temporary needs of both employers and workers, not to create second-class workers who would for long periods of time be denied the benefit of stable employment’. In a press statement issued on the same day as the ECJ ruling, IMPACT’s National Secretary, Louise O’Donnell, called on the Department of Finance (An Roinn Airgeadais) to drop its appeal against the 2005 Rights Commissioner’s ruling and to end the three years of waiting for the trade union’s members to achieve equal rights.

Sonia McKay, Working Lives Research Institute