Facts

In 2006, Italy adopted Law No 296/2006. It provides for the “stabilisation” of non-managerial staff employed by public bodies on the basis of a private-law fixed-term contract. In many cases these contracts were unlawful  and  the  workers  concerned  should  have  been  employed permanently. Law 296/2006 allowed workers who had been employed for no less than three years, to apply to become permanent civil servants. Following their appointment as civil servants, their remuneration was set at the starting rate, no account being taken of the length of service accrued under their previous fixed-term contracts.
The five plaintiffs in this case had worked for the AGCM, a public body, under  successive  fixed-term  contracts.  They  applied  to  become  civil servants. Their applications were accepted and they were placed at the starting level of the pay scale category that applied to them at the time their fixed-term contracts were terminated (with certain compensation for the pay differential). They objected to the fact that their prior service with the AGCM was disregarded.

National proceedings

The  plaintiffs  brought  proceedings  against  the  AGCM  before  an administrative  court  and,  on  appeal,  with  the  Council  of  State.  This judicial body noted three things. First, Law 296/2006 makes it possible to  recruit  certain  fixed-term  workers  directly,  without  them  having to compete with other applicants, as is the normal rule. The national legislature  had  not  intended  retroactively  to  validate  unlawful  fixed-term recruitment by converting a series of fixed-term contracts into a permanent contract. Instead, it had viewed the length of service accrued in  fixed-term  employment  as  a  qualification  justifying  conversion to  a  permanent  employment  relationship  without  the  need  for  the employees to go through the general competitive process for joining the public authority’s permanent staff. The fact that length of service is set at nought is justified by the need to avoid reverse discrimination against workers who are already on the permanent staff and who were recruited based on an open competition.
The  second  point  noted  by  the  Council  of  State  is  that  within  the public administration there is a rule (deemed lawful by the ECJ in its Affatato ruling, case C-3/10) [Editor: see EELC 2010-1], prohibiting the conversion of a fixed-term contract into one of indefinite duration.Thirdly,  the  Council  of  State  noted  that  it  had  previously  held  Law 296/2006 to be compatible with the Framework Agreement annexed to Directive 1999/70 on the ground that the Framework Agreement only prohibits less favourable treatment of a fixed-term worker during the fixed-term employment relationship, not afterwards. The Framework Agreement  does  not  prevent  termination  of  a  fixed-term  contract followed  by  a  new  employment  relationship  in  which  no  account  is taken of previous length of service.
However, the Council of State also noted that the Labour Court of Turin took a different approach. It therefore decided to refer questions to the ECJ.

ECJ’s findings

1.   The  ECJ  summarised  the  questions  as  being  whether  Clause  4 of the Framework Agreement, read in conjunction with Clause 5, precludes  national  legislation  which  prohibits  periods  of  service completed by a fixed-term worker for a public authority being taken into  account  in  order  to  determine  the  length  of  service  of  that worker upon recruitment on a permanent basis by that authority as a civil servant under a “stabilisation” procedure (§ 29).
2.   Clause 4 provides that in respect of employment conditions, fixed-term  workers  shall  not  be  treated  in  a  less  favourable  manner than  comparable  permanent  workers  solely  because  they  have a  fixed-term  contract,  unless  different  treatment  is  justified  on objective  grounds.  Clause  4  also  provides  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. Clause 5 provides that Member States shall introduce  measures  to  combat  abuse  of  successive  fixed-term contracts.
3.    The  Italian  government  disputed  the  applicability  of  Clause  4.  In its  opinion,  the  previous  fixed-term  contracts  merely  constitute a  condition  for  admission  to  the  stabilisation  procedure.  That procedure has the effect not of transforming or converting fixed-term contracts into permanent contracts, but of establishing a new employment relationship which includes an obligation to complete a  period  of  training.  In  other  words,  the  difference  in  treatment invoked  by  the  plaintiffs  is  a  difference  between  two  groups  of permanent employees. The ECJ rejects this line of argument. To exclude application of the Framework Agreement automatically in cases such as at issue in the main proceedings would effectively reduce the scope of the protection against discrimination, contrary to the ECJ’s case law, including Rosado Santana (C-177/10, para § 44) [Editor: see EELC 2011-3] (§ 30-38).
4.   It is, in principle, for the national court to determine whether the plaintiffs,  when  they  were  working  under  fixed-term  contracts, were  in  a  situation  comparable  to  that  of  career  civil  servants employed on a permanent basis by the AGCM, having regard to the nature of the work, training requirements and working conditions (§ 39-43).
5.   The fact that the plaintiffs have not passed the general competition for obtaining a post in the public sector does not mean that they are in a different situation compared to career civil servants, given that the conditions for stabilisation (i.e. minimum duration of fixed-term employment and recruitment through a selection procedure) are specifically intended to enable the stabilisation of only those fixed-term workers whose situation may be viewed in the same way as that of career servants (§ 44-45).
6.   The  duties  performed  by  the  plaintiffs  as  career  civil  servants following  their  stabilisation  seem  to  be  the  same  as  those  they performed  previously  under  their  fixed-term  contracts.  Should, however, the national court find that this is not the case, the alleged difference in treatment would not be contrary to Clause 4, as that difference  in  treatment  would  relate  to  different  situations.  By contrast, if the duties performed before and after the stabilisation correspond, the difference in treatment would need to be justified (§ 44-49).
7.   A  difference  in  treatment  between  fixed-term  and  permanent workers  may  not  be  justified  on  the  basis  that  the  difference  is provided for by a general, abstract national norm such as a law or a collective agreement. Justification requires the existence of precise and  specific  factors,  characterising  the  employment  condition to  which  it  relates,  in  the  particular  context  in  which  it  occurs and on the basis of objective and transparent criteria in order to ensure that the unequal treatment in fact meets a genuine need, is appropriate for achieving the objective pursued and is necessary for that purpose. Those factors may result from the specific nature of the tasks for which fixed-term contracts have been concluded and from the inherent characteristics of those tasks or, alternatively, from the pursuit of a legitimate social-policy objective of a Member State (§ 50-51).
8.   Reliance  on  the  temporary  nature  of  the  employment  of  staff  of the  public  authorities,  does  not  meet  those  requirements  and  is therefore not capable of constituting an objective ground within the meaning of Clause 4(1) and 4(4) (§ 52).
9.   Some  of  the  differences  between  career  civil  servants  and former  fixed-term  workers  recruited  as  civil  servants  under  the stabilisation  programme,  such  as  the  method  of  recruiting  (with or  without  an  open  competition)  and  the  nature  of  their  duties, could, in principle, justify different treatment. The Member States enjoy  discretion  as  regards  the  organisation  of  their  own  public administration and may therefore lay down conditions for people to  become  career  civil  servants,  along  with  conditions  for  their employment, provided such conditions are applied in a transparent way and are open to review (§ 53-61).
10.  Although  preventing  reverse  discrimination  against  career  civil servants  recruited  after  passing  a  general  competition  may constitute an ‘objective ground’, it cannot justify disproportionate national  legislation  which  completely  and  in  all  circumstances prohibits all periods of service completed by workers under fixed-term  employment  contracts  from  being  taken  into  account,  in order to determine their length of service upon their recruitment on a permanent basis and, thus, their level of remuneration. The principle of non-discrimination set out in Clause 4 would be devoid of  all  content  if,  under  national  law,  the  new  nature  alone  of  an employment  relationship  were  able  to  constitute  an  ‘objective ground’. By contrast, it is important to have regard to the specific nature of the duties performed (§ 62-65).
11.  There is no need to interpret Clause 5 (§ 69).
12.  Clause 4 is unconditional and sufficiently precise for individuals to be able to rely on it as against the State.

Ruling

Clause 4 of the framework agreement on fixed-term work […] which is  annexed  to  Council  Directive  1999/70  […]  must  be  understood as precluding national legislation, such as that at issue in the main proceedings, which prohibits periods of service completed by a fixed-term worker for a public authority being taken into account in order to determine the length of service of that worker upon his recruitment as  a  career  civil  servant  on  a  permanent  basis  by  that  same authority under a stabilisation procedure specific to his employment relationship, unless that prohibition is justified on ‘objective grounds’ for the purpose of clause 4(1) and/or (4). The mere fact that the fixed-term worker completed those periods of service on the basis of a fixed-term employment contract or relationship does not constitute such an objective ground.