The whole point of the fixed term directive was to stop employers offering workers successive fixed term contracts instead of indefinite contracts. In Mangold -v- Helm (2006, IRLR 143), the European Court of Justice (ECJ) has said that member states cannot generally modify the fixed-term provisions so that workers are treated differently on the ground of age.
What were the basic facts?
In June 2003, Rudiger Helm engaged 56-year-old Werner Mangold on a fixed-term contract from 1 July 2003 to 28 February 2004.
His contract stated in point two of paragraph five that: “the duration of the contract shall be based on the statutory provision which is intended to make it easier to conclude fixed-term contracts of employment with older workers ….”.
It went on to state that “the parties have agreed that there is no reason for the fixed-term of this contract other than that set out in para. 2 above.”
Shortly after he started work, Mr Mangold claimed that paragraph five in his contract did not comply with the European framework agreement on fixed-term contracts. Nor did it comply with the age discrimination provisions in the framework employment directive 2000/78.
What did German law say?
Under the German law implementing the agreement, fixed-term contracts were limited to two years and allowed contracts to be renewed a maximum of three times only, in order to promote employment.
The law also said that employers could not enter into a fixed-term contract if it was closely connected to a previous indefinite contract between them and their employee. This was presumed to exist where the interval between the two contracts was less than six months.
Under paragraph 14(3) of TzBfG, however, German law said these conditions did not apply to anyone over 60. From 1 January 2003, the limit was lowered to 58, but also stated that, until 31 December 2006 (when the age discrimination legislation comes into force), it would be set at 52.
The Munich Labour Court asked the ECJ if these provisions were compatible with European law.
Was it okay to lower the age to 58?
The ECJ said that the German provision lowering the age from 60 to 58 above which fixed-term contracts could be agreed without restrictions, did not contravene the framework agreement. It said that these were justified by the need to encourage the recruitment of older people in Germany.
What about lowering it to 52?
However, the age discrimination provisions did not allow the introduction of a domestic law whereby employers and employees could agree unrestricted fixed-term contracts once the worker had reached the age of 52.
The ECJ said that, although article 6(1) of the legislation allowed member states to treat people differently on grounds of age, they had to be able to justify any differences on the basis of “a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.”
Accepting that the purpose of the legislation was to encourage the employment of older workers – a legitimate public interest objective – the ECJ said that the means used could not be regarded as appropriate and necessary in this case.
The result of the legislation was that anyone over 52, whether or not they had been unemployed, could be offered an indefinite number of fixed-term contracts until they reached retirement age. This put them in danger of being excluded from stable employment on a long-term basis.
As there was no evidence to show that this provision was necessary to achieve the stated policy objective, the ECJ concluded that “it must be considered to go beyond what is appropriate and necessary.”
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