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Supreme Court Rules ‘Acting Up’ Scenario Attracts Fixed Term Worker Protections

The Supreme Court held that a permanent senior member of the HSE who was ‘acting up’ in a separate role on a series of fixed-term contracts falls within the definition of a ‘fixed-term worker’ under the Protection of Employees (Fixed-Term Work) Act 2003 (the “Act”). The employee was therefore entitled to claim that he was entitled to a Contract of Indefinite Duration in the ‘acting up’ role under the Act.

Facts: The Supreme Court delivered its judgment on 31st March 2022 in the case of Maurice Power v Health Service Executive which was an appealed from the Labour Court to the High Court and ultimately to the Supreme Court. 

Mr Power had been a permanent pensionable employee of the HSE since 1999 in the role of Chief Financial Officer (‘CFO’).  In 2014 he was invited to assume the role of interim Group CEO (‘CEO’) on a fixed-term contract or until the role was filled permanently.   It was expressly stated that when the contract ended, either by the role being filled or the expiry of the fixed term, Mr Power would return to his original role of CFO. 

The HSE offered Mr Power a series of successive fixed-term contracts up to September 2018, when the permanent role of CEO was advertised. The role was not filled until December 2018 and although Mr Power applied for the permanent position, he was unsuccessful.  He subsequently returned to his previous role in January 2019.

Mr Power lodged a claim was lodged under section 9 of the Act, claiming that he was entitled to a contract of indefinite duration since he had acquired 4 years’ service, over 5 successive contracts in the new role.

The relevant section states:

“9(2) Subject to subsection (4), where after the passing of this Act a fixed-term employee is employed by his or her employer or associated employer on two or more continuous fixed-term contracts and the date of the first such contract is subsequent to the date on which this Act is passed, the aggregate duration of such contracts shall not exceed 4 years,

9(3) Where any term of a fixed term contract purports to contravene subsection (1) or (2) that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.”

The Labour Court interpreted “permanent employee”, defined in the Act as “an employee who is not a fixed-term employee” as precluding Mr Power from the protection of the Act due to his permanent role as CFO.  According to the Labour Court, it therefore followed that he did not have locus standi to bring the claim. 

The High Court disagreed with this view and in his decision, Judge Simons reiterated the purpose of the Fixed-Term Worker legislation, the Directive and the meaning of ‘permanent employee’.  He stated that ‘permanent employee’ should not be given its everyday meaning and that looking at the Act as a whole, its’ purpose is to afford fixed-term workers better protection.  He determined that having a permanent contract previously to a series of fixed-term contracts does not preclude you from availing of the protections under the Act and further that workers ‘acting up’ were not precluded from the definition of a fixed-term worker under the Act.   

During the appeal to the Supreme Court, the HSE claimed that Mr Power’s fixed-term contracts merely varied his previous permanent one.   This argument had not been

presented to either the Labour Court or the High Court and was not accepted by the Supreme Court as the documentary evidence did not support it.

Decision

Justice Woulfe of the Supreme Court affirmed the High Court’s ruling and remitted the matter back to the Labour Court to determine whether there were any objectively justifiable reasons for providing successive fixed-term contracts to Mr Power as opposed to a contract of indefinite duration.

Takeaway for the Employers:

In ‘Acting Up’ scenarios it is essential that you consider the rights of your employee in their new position and not solely those of the original contract.  Successive contracts exceeding 4 years, even where a previous permanent contract subsists may entitle an employee to a contract of indefinite duration in the ‘Acting Up’ role.

Link: https://www.bailii.org/ie/cases/IESC/2022/2022IESC17.html

Authors – Nicola MacCarthy, Anne O’Connell

30th May 2022

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2

www.aocsolicitors.ie

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