End of term
According to Clause 5(1) of the framework agreement, EC member states have to introduce one or more of the following measures:
(a) objective reasons justifying the renewal of fixed term contracts
(b) the maximum total period for using successive fixed term employment contracts
(c) the number of renewals.
In Adeneler and ors -v- Ellinikos Organismos Galaktos (IRLR 2006, 716; IDS 812), the European Court of Justice (ECJ) has said that an objective reason has to be precise and concrete, and has to characterise a “given activity”.
What were the basic facts?
Eighteen Greek public sector employees were engaged on a series of fixed term contracts (of eight months each) between May 2001 and June 2002.
All the contracts related to the same post, but were separated by gaps ranging from 22 days to 11 months. The contracts came to an end between June and September 2003 and were not renewed.
The employees argued that their contracts should be made indefinite, on the basis that they did regular work corresponding to “fixed and permanent needs” and there was no objective reason to justify their renewal.
What did Greek law state?
The Greek legislation implementing the directive stated that fixed term contracts would only be deemed “successive” if there was less than 20 working days between them.
It also stated that, if a contract was renewed for two years or more (and there was no objective reason to keep on renewing it), it would be deemed to be “covering the fixed and permanent needs of the undertaking or operation”, and should be made permanent.
What questions did the court ask the ECJ?
The Greek court asked the ECJ to answer the following questions:
1. If a directive is transposed late into national law, does the national court have to interpret its domestic law from the time it came into effect; from the time it should have come into effect; or from the time when the national measure implementing it came into effect?
2. Can the requirement of a statute constitute an objective reason for concluding successive fixed term contracts?
3. Is a national provision, which lays down that successive contracts should not be separated by a period of time longer than 20 days, compatible with clause 5(1) of the framework agreement?
4. Can member states have a provision in domestic law that says that fixed term contracts need not be made permanent if the contracts ostensibly cover an employer’s seasonal needs, but are, in fact, covering permanent needs?
What did the ECJ decide?
The ECJ answered as follows:
1. Once the period for transposing the directive has expired, national courts must interpret their law in line with the provisions of the directive.
2. A national law that allows the use of successive fixed term contracts in a “general and abstract manner” does not constitute an “objective reason”, under clause 5(1)(a). It needs “precise and concrete circumstances characterising a given activity” in a particular context to justify successive fixed-term contracts.
3. A national rule stating that fixed term employment contracts could only be successive if there was less than 20 working days between them was contrary to clause 5, as it meant that most fixed term employment relationships would fall outside the directive.
4. Member states cannot have legislation prohibiting a succession of fixed term contracts that covered “fixed and permanent needs” from being converted into indefinite contracts. In this case, the law was being used to conclude fixed term contracts designed to cover “fixed and permanent needs”.
Comment
This case provides useful guidance to the likely attitude of the European Court to objective justification. To meet the test, it will no longer be good enough for employers to have vague, general reasons for needing fixed term contracts.
This is particularly relevant because, since 10 July 2006, employees who have been employed on two or more successive fixed term contracts for a period of four or more years will be deemed to be permanent employees. Advisors should make sure to rely on this case when resisting employers’ weak arguments for continuing to use fixed term contracts.