In Council Directive 1999/70/EC of 28 June 1999 concerning the Framework Agreement on fixed-term work concluded by ETUC, UNICE and CEEP, the definition of ‘fixed-term worker’ is: ‘a person having a contract of employment or relationship entered into directly between an employer and a worker, where the end of the employment contract or relationship is determined by objective conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event’ (Clause 3(1)).
Fixed-term employment has increased continually during the past 20 years in the EU. In 1983, 8.1% of the labour force was employed on a fixed-term contract whereas the figure for 2005 was 14.5%. In most countries women are more likely than men to work on the basis of a fixed-term contract (on average, the female fixed-term employment rate is 15%, while the male fixed-term employment rate is 14%). Gender differences are more evident in Malta, Cyprus and Finland. Between 2000 and 2006 the share of fixed-term employment increased by 2.4% on a EU25 average. However, the proportion of the workforce engaged on a fixed-term contract varies greatly among Member States, generally depending on the employment protection legislation in force for regular contracts. Over this period of time, the fixed-term employment increased strongly in Luxembourg, Italy, Cyprus, the Netherlands, Sweden, Slovenia and Poland. There are still significant gaps in fixed-term employment rates among EU25, with rates ranging from below 5% (Estonia, Malta, Ireland, Lithuania and Slovakia) to more than 15% (in the Netherlands, Sweden, Slovenia, Finland, Portugal, Poland). In Spain, the rate is higher than 30%. The trend towards a greater use of non-permanent employment is particularly evident in the expanding service sector. On average, people with low or medium educational levels are more likely to hold a fixed-term contract. Along with segmentation by education, the Eurostat data (2006) show a segmentation by age: in EU25, the fixed-term employment rate of workers between the ages of 15 and 24 is 42%.
The Framework Agreement on fixed-term work concluded by the European social partners on 18 March 1999 led to a second directive specifically concerned with fixed-term work (Council Directive 1999/70/EC of 28 June 1999 concerning the Framework Agreement on fixed-term work concluded by ETUC, UNICE and CEEP). The first was Council Directive 91/383/EC of 25 June 1991 supplementing the measures to encourage improvements in the safety and health of workers with a fixed-duration employment relationship or a temporary employment relationship.
The stated aims of the fixed-term work directive are to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination, and establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.
The fixed-term work agreement underlines ‘achieving a better balance between flexibility in working time and security for workers’. Flexibility is to be balanced with security for workers. Clause 5 of the Agreement is entitled ‘Measures to prevent abuse’ and obliges Member States and/or the social partners ‘where there are no equivalent legal measures to prevent abuse’ to take measures to prevent abuse. A list of three possible types of limits is specified (Member States may impose one or more of these):
- requiring objective reasons for the renewal of a fixed-term employment relationship;
- imposing a maximum overall duration for the successive fixed-term employment relationships;
- imposing a maximum number of renewals to successive fixed-term employment relationships.
Effective measures are required to ensure observance of the limits chosen by a Member State. However, the framework agreement does not specify the form that these measures must take, nor the specific overall duration nor the number of renewals to permit. For example, many Member States have opted for compulsory conversion into permanent employment without this consequence being explicitly required by the framework agreement.
Member State legislation may not introduce a requirement for the framework agreement only to apply where successive contracts are separated by a very short period of time, if the consequences are to compromise the framework agreement’s objectives or its practical effects (Konstantinos Adeneler and others v Ellinikos Organismos Galaktos Case C-212/04). The directive applies equally to public sector bodies as to the private sector; however, it may permit the preclusion of successive contracts being converted into indeterminate contracts in cases of public sector employment where there is another effective measure to prevent or punish such abuse (Marrousu and Sardino v Azienda Ospedaliera Case C-53/04). The court has also been asked to consider whether the existence of an agreement to exclude temporary workers from entitlement to service-related payments infringes rights established under the framework agreement (Yolanda Del Cerro Alanso v Osakidetza Case C-307/05).
The Framework Agreement on fixed-term work directly balances labour market flexibility and employment security. In the words of the Commission’s Explanatory Memorandum to the proposed draft directive implementing the Agreement, Community-level provisions on fixed-term work are ‘an important factor in seeking to strike the right balance between flexibility and security. The social partners’ contribution is positive in itself in that it guarantees that consideration is given both to business competitiveness and to the interests of workers.’