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Labour Court Determines Failure To Terminate Fixed Term Contract Did Not Result In An Open-Ended Contract

Akina Dada Wa Africa v Claudia Horeau UDD216

The Complainant in this matter was employed under a 2-year fixed term contract from 01 January 2015 to 31 December 2016 however by this expiration date the Complainant had gone on maternity leave.

The complainant never returned from work and argued that in October 2017 she had been constructively dismissed. This hearing centred on the Labour Court deciding whether the Complainant was an employee at the time of her alleged constructive dismissal, and as such whether the Labour Court had the ability to hear the case.

 The Respondent Employer in this case had continued to engage with the Complainant past the end date of the expiry of her contract, on the basis that it misinterpreted the Maternity Protection Act. The Respondent incorrectly thought that the Complainant’s fixed-term contract automatically extended until the end of her maternity leave.  

Despite this engagement and communications with the Complainant, the Employer did not clarify a new fixed term and still treated her as employee until she completed her maternity leave in June 2017.

On this basis the Complainant argued that as she had continued to be employed past the end date of her contract and as no new fixed term had been outlined to her that her contract was automatically extended indefinitely. As such when she, in her view, was constructively dismissed in October 2017 she was still an employee.

The Labour Court rejected this argument. The Court outlined that the Maternity Protection Acts do not affect the end date of a fixed term contract and that the Respondent had misunderstood the Act, but in any case had stopped treating the Complainant as an employee from June 2017 when her maternity leave ceased, in line with its misinterpretation.

The Labour Court concluded with the following statement which provides a useful insight into the view of the Court on disputes regarding contract extensions:

 “It is sufficient for the Court to note that nothing done by the Respondent in that period can be interpreted reasonably to mean that the Complainant continued to have an open ended employment contract beyond the end of her maternity leave.”

It is interesting that the Labour Court was willing to look at the whole employment relationship, it’s context and the intentions of the Employer rather than solely focus on the terms of the first contract and the failure of the Employer to outline in writing a new termination date which would normally be required to rely on the expiry of the fixed term.  However, this was a preliminary ruling on whether or not the Labour Court had jurisdiction. It will be interesting to see if this decision is followed in respect of an employee arguing that he/she has a contract of indefinite duration rather than a further fixed term contract.

Key Takeaway for Employers

Employers should be vigilant against employee fixed term contracts running over their term without a new end date being put in place by the employer. However, the Labour Court in this case took the view that the failure to do this did not automatically result in a contract of indefinite duration coming into effect but instead looked at the entire employment relationship and decided what could be reasonably interpreted by employee from the employer’s actions. It is not known at this stage whether this reasoning will be followed by the Court in other disputes about fixed term contracts.

Authors – Anne O’Connell & David Murphy

29th January 2021

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2

www.aocsolicitors.ie

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