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2021-05-11
Academic Board Review 2020: Fixed-term work and part-time work
Luca Calcaterra and Francesca Maffei[1]
An analysis of the most recent ECJ judgments or national judgments concerning fixed-term and part-time employment contracts shows very interesting data from a sociological and legal point of view.
National courts more and more frequently assess the compatibility of national law with European law, leading to a decrease in references to the ECJ for preliminary rulings. The legal process of integration between European and national law seems to have reached a satisfactory outcome, since national judges are able to manage European legal principles without any intervention from the ECJ.
There is no doubt that the Court of Justice has played a central role in speeding up this process of integration. Indeed, the large number of ECJ judgments and decisions has given domestic judges a great deal of material to rely on.
The following pages are dedicated to analysing the most interesting recent rulings about fixed-term and part-time work.
Fixed-term work
As far as fixed-term contracts are concerned, it seems that equal treatment is the most weighty issue, followed by some statements concerning the rationality of successive fixed-term contracts and the effectiveness of the national measures in preventing abuses.
The first part of this report will be dedicated to the rulings regarding clause 4 of the framework agreement annexed to Council Directive 1999/70/EC introducing the principle of equal treatment for fixed-term workers, while the second part of it will refer to court judgments which, in accordance with clause 5 of the framework agreement, assess the legitimacy of national measures preventing the successive use of fixed-term contracts.
Principle of equal treatment (clause 4)
The principle of equal treatment (with regard to comparable workers on contracts for indefinite periods of time), as stated in clause 4 of the framework agreement annexed to Council Directive 1999/70, implies (for fixed-term workers) equal pay, equal access to training, and the prospect of obtaining an open-ended contract if the employment relationship continues beyond the previously agreed fixed period of time.
Since Directive 1999/70 does not define the concept of comparable workers, the real application of ‘equal treatment’ depends on the national perspective. And the national legislator has often minimised the meaning of the concept of ‘comparable’ worker. For example, in December 2019 the Danish Supreme Court held that four fixed-term workers employed as surveyor assistants at a government agency were not comparable with the agency’s permanent employees. Under the applicable collective agreement, the claimants were not entitled to, among other things, sick pay and certain holidays as opposed to permanent employees. Nevertheless, the Court refused to acknowledge any form of discrimination against them, because of lack of comparability.
According to the fixed-term workers’ defence they had been discriminated against, as the permanently employed unskilled workers had more favourable conditions simply due to the fact that they were employed on a permanent basis.
However, the Danish Act on Fixed-Term Employment (which implemented Directive 1999/70) defines a comparable permanent employee as a permanent employee in the same establishment who is engaged in the same or similar work or occupation with due regard being given to qualifications and skills. If there is no comparable permanent employee in the same establishment, the comparison must be made on the basis of the collective agreements that usually apply to the industry in question or a similar industry.
Despite this wide definition, the Danish Supreme Court (referring in particular to the preparatory works of this Act) stated that the simple fact that a permanent and fixed-term worker may be covered by the same collective agreement does not in itself sufficiently establish that the two workers perform the same or similar tasks.
Indeed, the assessment of what constitutes the same or similar work must rather be based on a number of factors, including qualifications, skills and the actual work performed by the employee, whereas the job title or – as in the case at hand – the applicable collective agreement cannot generally be the determining factor.
This trend of ‘minimisation’ of the equal treatment principle, especially for what concerns the public sector, is verifiable also in European rulings. Indeed, as is known, differential treatment may be justified on ‘objective’ grounds. An analysis of the recent case law of the ECJ shows that the Court emphasised these objective grounds to justify different treatment provided for in national legislation between fixed-term and permanent workers.
This was the case in Baldonedo Martin (C-177/18), in which the ECJ returned to trace the boundaries of the principle of equal treatment emphasising some objective grounds to justify different treatment provided for in national legislation between fixed-term and permanent workers. The facts of the case can be summarised as follows. The Municipality of Madrid appointed an employee as an interim civil servant with the task of maintaining green spaces. The appointment decision specified that the employee would be employed to cover a vacant post until such time as the post was filled by an established civil servant. After some years of work the employee was informed that her post had been filled, that same day, by an established civil servant and that consequently her employment was terminated. The employee requested payment of compensation equivalent to 20 days’ remuneration per year of service by the Municipality of Madrid for termination of her employment (as provided for in Article 53(1)(b) of the Spanish Workers’ Statute in case of termination of a permanent employment contract). The Municipality of Madrid refused the request, on the grounds that the 20 days’ remuneration are provided only in case of dismissal of a permanent employee and not in case of a fixed-term contract expiring.
The ECJ was so asked to verify whether there is an objective reason justifying the fact that the termination of the employment relationship of an interim civil servant does not give rise to payment of compensation, whereas a contract worker under a contract of indefinite duration is entitled to compensation when dismissed on one of the grounds set out in Article 52 of the Workers’ Statute.[2]
On this point, the Court held that the specific purpose of the compensation for dismissal laid down in the national provision and the particular context in which that compensation is paid constitute an objective reason justifying a difference in treatment.
Indeed, according to the ECJ’s opinion, the termination of a fixed-term employment relationship falls within a significantly different context from that in which the employment contract of a permanent worker is terminated under Article 52 of the Workers’ Statute.
In particular, it follows from the definition of a ‘[fixed-term] employment contract or relationship’ in clause 3(1) of the framework agreement that an employment relationship of that kind ceases to have any future effect on expiry of the term stipulated in the contract, the term identified as a specific date being reached, the completion of a specific task, or, as in the present case, the occurrence of a specific event. Thus, the parties to a fixed-term employment relationship are aware, from the moment that it is entered into, of the date or event which determines its end. That term limits the duration of the employment relationship without the parties having to make their intentions known in that regard after entering into the contract.
By contrast, the termination of a permanent employment contract on one of the grounds set out in Article 52 of the Workers’ Statute, on the initiative of the employer, is the result of circumstances arising that were not foreseen at the date the contract was entered into, and which disrupt the normal continuation of the employment relationship. The compensation provided for in Article 53(1)(b) seeks precisely to compensate for the unforeseen nature of the severance of the employment relationship for such a reason and, accordingly, the disappointment of the legitimate expectations that the worker might then have had as regards the stability of that relationship. Subject to verification by the referring court, it was clear from the case file before the court that the employment contract was terminated on the grounds that an event foreseen for that purpose had occurred, namely that the post that she occupied on a temporary basis was filled definitively by the appointment of an established civil servant. In those circumstances, clause 4(1) of the framework agreement must be interpreted as not precluding a national law that does not provide for the payment of any compensation for termination of employment to fixed-term workers employed as interim civil servants whereas it provides for the payment of such compensation to contract workers employed for an indefinite duration upon the termination of their contract of employment on an objective ground.
On the contrary, in the case Universitatea Lucian Blaga Sibiu and Others (C-644/19) the ECJ did not legitimise a different treatment between fixed-term and permanent comparable workers.
The case concerned members of the teaching staff of a university continuing to work there after reaching the statutory retirement age. In particular, the Court was asked to verify the compliance with the equal treatment principle of a national legislation under which only lecturers with doctoral supervisor status may retain their status as tenured lecturers, while lecturers without doctoral supervisor status may conclude only fixed-term employment contracts, for which lower remuneration was provided.
In other terms, the ECJ had to examine whether employment conditions of the fixed-term employment contracts concluded by a lecturer without doctoral supervisor status, in particular the system of lower remuneration associated with them, amounted to a difference in treatment contrary to clause 4(1) of the framework agreement or if there was an objective justification for the difference in treatment.
According to the Court, the difference was not justified by an objective ground. Indeed, the difference in treatment was only intended to address the worrying increase in the number of teaching posts at the level of professor and lecturer at the University in comparison with the number of teaching posts of assistant lecturers and teaching assistants, and to achieve a financial balance between sustainability and the University’s development in the short- and medium-term. In the Court’s reasoning, such goals, which are related essentially to personnel management and budget considerations, and which, moreover, are not based on objective and transparent criteria, cannot be considered objective reasons justifying a difference in treatment such as that at issue in the main proceedings.
Measures to prevent abuse from the use of successive fixed-term employment contracts (clause 5)
As already noted, the second purpose of Directive 1999/70 is to prevent the use of successive fixed-term contracts or relationships (clause 1). While the principle is generally fixed, the framework agreement (clause 5) assures to the Member States freedom to choose what kind of measure they consider best to prevent abuse from the use of successive fixed-term employment contracts (for example providing for objective reasons justifying the renewal of such contracts or relationships). According to clause 5, Member States can also adopt more than one measure and differentiate one from another depending on the sector and category of workers. What is important is that measures are proportionate, dissuasive and effective.
At the same time, clause 5 leaves Member States free to determine under what conditions fixed-term employment contracts or relationships shall be regarded as ‘successive’ or shall be deemed to be contracts or relationships of indefinite duration.
In the case Sánchez Ruiz and Fernández Álvarez et al. (Joined Cases C-103/18 and C-429/18) the ECJ clarified that the national legislator is not free to exclude from the concept of ‘successive fixed-term employment contracts or relationships’, a situation in which a fixed-term worker occupied, in the context of several appointments, the same post continuously over several years and continuously performed the same functions. Indeed, the continuation of that worker in that vacant post is the result of the employer’s failure to comply with its legal obligation to organise within the relevant deadline a selection procedure seeking to definitively fill that vacant post and, in this way, the employment relationship thereby implicitly extended from year to year has to be considered as an open ended one.
Moreover, the European Court also underlined that successive renewal of fixed-term employment relationships cannot be considered justified for ‘objective reasons’ (within the meaning of paragraph 1(a) of clause 5), on the sole ground that that renewal responds to the reasons for recruitment covered by national legislation. Namely grounds of need, urgency or for the development of programmes of a temporary, auxiliary or extraordinary nature, cannot be a sufficient justification for the renewal in so far as such national legislation and case law does not prevent the employers concerned from responding, in practice, by such renewals, to fixed and permanent staffing needs.
In a recent judgment from Romania the Craiova Court of Appeal – relying on the findings of ECJ case C-614/15 – ruled that continuous extensions of a fixed-term employment based on national provisions was not in accordance with the European jurisprudence. In order to understand the importance of this decision it might be useful to summarise the facts of the claim. Council Directive 1999/70 has been transposed into Romanian law by Law no. 53/2003 – Labour Code. According to it, a fixed-term employment contract may not be concluded for a period exceeding 36 months. The 36-month period may be extended however, subject to certain conditions, and for a limited period, by written agreement of the parties for the period needed to complete a project, programme or specific piece of work.
In the case of establishments dealing with the slaughter of animals, official inspections are carried out by specialised staff employed within the Veterinary Health and Food Safety Directorate under fixed-term employment contracts. Moreover, a specific provision provides that in this sector employment contracts which were concluded for the maximum term provided for by the labour legislation can be extended, if the parties so agree, as long as the circumstances in which they were concluded continue to exist, provided that the financial resources available in that respect are guaranteed, and until a new individual open-ended employment contract is concluded following the organisation of a competition in this respect. In the case at hand, an employee was hired as a veterinary assistant within Gorj Veterinary Health and Food Safety Directorate based on a number of fixed-term employment agreements, for a total period of 14 years. At the end of the last contract the employee instituted proceedings against his former employer claiming all his contracts to be requalified as a ‘contract of indefinite duration’.
The Court of Appeal applied the findings of the ECJ in case C-614/15, Popescu, respectively that the renewal of successive fixed-term employment contracts must aim to cover temporary needs and that a national provision as the one applicable in the case at hand, namely to employees engaged in veterinary health inspections based on fixed-term employment contracts, must not be used to satisfy permanent needs.
The Craiova Court of Appeal also made reference to the Court’s consideration for the need to perform a case-by-case analysis, respectively to take into account, among others, the number of employment contracts concluded with the same person and the scope for which they were concluded.
In the case, given the extended collaboration of the parties for over 14 years, with no interruptions of activity, and in view of performing the same inspection activities, the Court considered that Gorj Veterinary Health and Food Safety Directorate should have concluded an employment agreement for an indefinite time. The national court also rejected the arguments of the national authority which claimed that such renewals were based on the fact that the inspections performed by the staff were non-permanent by nature due to the variations in volume of the activities of the establishments to be inspected, as well by budgetary considerations, respectively of the funds destined for personnel expenses.
The Court also emphasised the failure to objectively justify the need for such renewals by making reference to the ECJ jurisprudence, which determined that an ‘objective reason’ must be understood as referring to precise and concrete circumstances characterising a given activity, which is therefore capable, in that particular context, of justifying the use of successive fixed-term employment contracts.
In the case at hand, the national authority chose to justify its renewals only on financial reasons, thus failing to observe the ECJ requirements.
Another very interesting ruling was the one decided by the Federal Labour Court of Germany (BAG). In this case the influence of the European legislation – that considers indefinite contracts to be the standard model to protect employees – is even more evident than in the rulings mentioned above. Indeed, the national Court decided to consider a certain number of fixed-term contracts as a single indefinite contract even though they concerned a seasonal employment that is normally considered as a legitimate objective reason for fixed-term contracts, according to European law.
The case concerned an employee of a local municipality in the federal state of Niedersachsen who worked almost exclusively in an outdoor public pool and who was employed as a full-time employee for the season from 1 April to 31 October each year.
Despite this clear provision contained in the contract – that restricted the mutual duties to a certain time period for the yearly season – the employee argued that his contract was not terminated by the above-mentioned provision and that the employer had to employ him during the off season.
The BAG rejected the revision. Indeed, the Court found that, even though he did have an indefinite contract (and not an unlimited number of fixed-term agreements), the employer was not obliged to employ and pay him during the off season due to the valid provision of fixed-term employment for the time from April to October during the time of the season.
Part-time work
As far as part-time contracts are concerned, an analysis of recent rulings shows that the ECJ is very strict in ensuring that national legislation on this matter is compliant with the European principle of equal treatment between part-time and full-time workers. This is justified by the fact that differences in treatment of part-time workers often result in discrimination between men and women.
In this regard, the case Schuch-Ghanaddan (C-274/18) is particularly important. The ECJ was asked to verify whether the Austrian legislation concerning fixed-term contracts for employees of Austrian universities (Universities Act 2002 (the ‘UG’)) was compliant with clause 4(1) of the framework agreement on part-time work. Section 109(2) of the UG provides that:
- employees whose employment is linked to either a project financed by third party funds or a research project in general (regardless of its financing),
- university staff that are only active in teaching, and
- persons substituting other employees,
can conclude consecutive fixed-term contracts for a maximum total duration of six years for full time workers or eight years for part-time workers.
Additionally, for the same categories, there can be one more renewal linked to the completion of a project or publication resulting in a maximum total duration of ten years (full-time workers) or twelve years (part-time workers) respectively.
As this regulation provides different maximum total durations for full-time workers as opposed to part-time workers, it is evident that it could violate Directive 97/81/EC by potentially discriminating against part-time workers. Furthermore, in many sectors, women make up a significantly larger part of part-time workers and thus are more likely to be affected by such measures. Consequently, this raises the question whether the provisions of Section 109(2) UG also indirectly discriminate against women, and therefore violate Directive 2006/54 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation.
As for compliance of Section 109(2) UG with the Directive on part-time work, the ECJ followed the opinion of the claimant that this regulation is in fact disadvantageous for part-time workers. It stated that the regulation seems to diminish part-time workers’ prospects for a permanent position compared to full-time workers’ chances. But, given this theoretical premise, the ECJ underlined that the question whether or not the provision is de facto disadvantageous to part-time workers shall be answered by the national court. A disadvantageous unequal treatment could, however, still be compliant with the Directive when it could be justified by objective reasons. This question was left for the national court to decide but the ECJ still elaborated on the requirements for the potential justification brought forward by the Austrian government and the respondent (Medical University of Vienna). This was based on the argument that part-time workers hereby get the chance to reach the same level of knowledge and experience as full-time workers within a shorter working time. The ECJ critically assessed this argument and emphasised that this conclusion is in many cases not true and has to be regarded as a case-by-case decision. The national court therefore has to carry out an individual assessment of the relation between actual hours worked and the acquisition of experience and skills regarding the personal scope of Section 109(2) UG.
Also, the ECJ clarified that the percentage of disadvantaged female employees has to significantly exceed the number of disadvantaged male employees to assume an indirect discrimination of women resulting from the unequal treatment of part-time workers. This assessment shall only cover employees who fall into the personal scope of this very regulation, which is to be carried out by the national courts of the Member States using their national regulations or customs for such discrimination cases. By affirming that point the ECJ allowed for the possibility of any kind of evidence on a national level. This also applies to evidence based on statistics. And if, as in this case, the claimant could not gain access to the statistics needed for the very group affected by the regulation in question, the ECJ can grant the right to use statistics representing part-time workers in Austria in general for prima facie evidence according to Article 19 of Directive 2006/54.
[1] Luca Calcaterra is Full Professor of European Labour Law, Università degli studi Suor Orsola Benincasa di Napoli. Francesca Maffei is a Phd in comparative law and integration process, Università degli studi della Campania Luigi Vanvitelli.
[2] Under Article 52 of the Workers’ Statute, ‘objective grounds’ which may justify the termination of the employment contract are: the worker’s incompetence, which became apparent or developed after the worker actually joined the undertaking; the worker’s failure to adapt to reasonable technical changes made to their job; economic or technical grounds or grounds relating to organisation or production when the number of posts lost is lower than that required in order to classify the termination of employment contracts as a ‘collective dismissal’; and, subject to certain conditions, repeated absence from work, even if justified.