The use by employers of successive fixed-term contracts in order to cover permanent employment requirements is illegal, the Court of Justice of the European Union (CJEU) recently affirmed.
EU law seeks to safeguard employees engaged on fixed-term contracts from potential abuse by employers who seek to retain such employees on successive fixed-term contracts – rather than employing them on contracts of indefinite duration. In an effort to curtail such abuse, member states are obliged to provide for one or more of the following measures in their national laws: objective reasons which would justify the renewal of fixed-term contracts, the maximum total duration of successive fixed-term employment contracts and/or the permitted number of renewals.
The facts of this case which came before the CJEU were briefly as follows. Spanish law permits the renewal of fixed-term contracts in the healthcare sector without imposing any limitation. A Spanish national was recruited as a nurse from February 5 to July 31, 2009, in order to ‘provide certain services of a temporary, auxiliary or extraordinary nature’.
Her appointment was renewed seven times under identically worded fixed-term contracts. She worked continually under fixed-term contracts for the period February 2009 to June 2013. She was then informed that her services were no longer required and her employment terminated.
The employee filed an appeal against the decision to terminate her employment, arguing that her successive appointments were not intended to meet an auxiliary or extraordinary need of the health services but corresponded to a permanent activity. The Spanish national court seized of the case filed a preliminary reference before the CJEU, requesting guidance as to whether the Spanish law at issue is in breach of EU law regulating fixed-term work.
EU law prohibits national legislation which allows the renewal of fixed-term contracts under the pretence of covering temporary staff needs
The CJEU observed that EU law makes provision for those measures which member states are obliged to adopt in order to curtail abuse by employers through the use of successive fixed-term contracts. It noted that the Spanish law at issue does not provide for limits on the duration or on the number of renewals of fixed-term contracts as required by EU law. The court therefore proceeded to examine whether there was an objective ground on the basis of which such successive appointments of the employee in question could be justified.
The CJEU acknowledged that the temporary replacement of workers in order to satisfy temporary needs may constitute an objective ground. However, such fixed-term contracts cannot be utilised by employers in order to source employees for fixed and permanent tasks. The court noted that, in the case under examination, the successive appointments of the employee in question under fixed-term contracts did not seem to indicate a temporary need of the employer. The CJEU took note in particular of the structural deficit of posts in the healthcare sector in question.
Such renewal of fixed-term contracts was condoning a situation of insecurity for all the staff in the healthcare sector in the region in question. Indeed, in practice, the Spanish administration was under no obligation to create permanent posts and was permitted to fill posts by hiring temporary staff without limitation either as to the duration of the contracts or the number of their renewals. The court concluded that EU law prohibits national legislation such as the Spanish law which allows the renewal of fixed-term contracts under the pretence of covering temporary staff needs when such needs are, in actual fact, permanent.
Maltese law provides for clear limits to the use of successive fixed-term contracts by employers both by imposing a limitation on duration of employment under such a type of contract, as well as by providing for a requirement for the employer to provide objective reasons to justify renewal of a fixed-term contract.
The use of such type of contracts by employers clearly creates insecurity for the recruited employees and hence the necessity for legislators and courts to ensure minimal and appropriate use by employers of such type of contracts.
mariosa@vellacardona.com
Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.