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WRC Upholds Unfair Dismissal Complaint – Fixed Term Contract Did Not Contain Appropriate Waiver

A Worker v A Health Service Provider ADJ-00037789 concerned a complaint to the Workplace Relations Commission (“WRC”) under the Unfair Dismissals Acts 1977 –2015 (the “Acts”). The Complainant argued that she was unfairly dismissed after being assured that her post would be made permanent over time.

Facts: The Complainant was employed on two fixed term contracts. The first contract commenced on 24th August 2020 and lasted three months. It was immediately followed by a twelve-month contract from 24th November 2020 to 23rd November 2021. The Complainant’s employment was terminated on 23rd November 2021.

The Complainant gave evidence that her duties were unclear and that she was not provided with a job description despite there being a line in her contract stating that “[t]he main duties of your position are set out in the attached job description”. She claimed that she was told that her fixed term contracts would roll over and that she would be made permanent after four years.

During her employment, the Complainant’s duties included financial support initially and then she was reassigned to Covid-related work on two different occasions. She gave evidence that she had trained other staff on Excel and referred to her probationary report signed by her line manager on  11th August 2021 which confirmed the nature of her role.

The Complainant gave evidence that there were tensions among staff regarding how work was assigned. She felt that despite her degree qualifications and attending several online courses to improve her skills and be familiar with practices and procedures, she was not receiving recognition nor was she progressing like her colleagues.

The Complainant explained that she was informed on 1st October that her contract would not be renewed, despite previous assurances that she would be made permanent after four years.

The Respondent’s position was that there was no unfair dismissal, and that the Complainant’s fixed term contract had simply expired on 23rd November 2021 in line with the terms of her contract of employment. The Respondent’s representative referred to section 2 of the Unfair Dismissals Act which provides for certain exemptions, including the expiry of a fixed term contract.

Evidence was given on behalf of the Respondent that the Complainant’s role was to support the business function and manage the emergency response to Covid. The Respondent referred to a change in how Covid work was being managed and that work was being diverted to a regional office.

Preliminary Issue: As the Respondent raised the exclusion under section 2(2)(b) of the Unfair Dismissals Acts, the Adjudicator, Seamus Clinton, considered this preliminary issue at the outset of his decision.

Section 2(2)(b) provides as follows:

“dismissal where the employment was under a contract of employment for a fixed term or for a specified purpose… and the dismissal consisted only of the expiry of the term without its being renewed under the said contract or the cesser of the purpose and the contract is in writing, was signed by or on behalf of the employer and by the employee and provides that this Act shall not apply to a dismissal consisting only of the expiry or cesser aforesaid.”

The Adjudicator noted that the Complainant had two contracts with clear start and end dates. The first contract was for three months up to 24th November 2020, and the second was from 24th November 2020 until 23rd November 2021 (the date of termination). The Adjudicator referred in detail to the High Court case of Board of Management of Malahide School v Conaty [2019] IEHC 486 in which Simmons J pointed out that as the provisions of section 2(2)(b) “carve out an exception to the general rights under the Unfair Dismissals Act”, they “fall to be interpreted strictly.” Simmons J emphasised in paragraph 62 that the “exclusion” can be characterised as a “waiver”:

 “The contract must record the disapplication of the Unfair Dismissals Act, and the employee’s agreement to same must be confirmed by their signing of the written agreement. The exception is not, therefore, automatic, but rather necessitates an informed decision by the employee.”

The Adjudicator considered the wording used in the Complainant’s second fixed-term contract. He noted that it had been signed by both parties, but that “on a closer examination of the contract, it does not disapply the Unfair Dismissals Act.” He referred to paragraph 68 of the Conaty decision, in which Simmons J emphasised the requirement that the language of a contract of employment must be “unequivocal” in order to fall within the exemption.  The second fixed term contract did not contain the required wording to exempt the application of the Unfair Dismissals Acts. Furthermore, the second contract brought the Complainant over the one-year service requirement, meaning that she was statutorily entitled to pursue a claim for unfair dismissal. The Adjudicator concluded that it was an omission on the part of the Respondent not to include an appropriate waiver clause.

Decision: The Adjudicator proceeded to consider whether or not the Complainant’s dismissal was fair. He referred to the onus on the Respondent to prove that the dismissal was fair. He noted that the Respondent was relying on the end date contained in the Complainant’s second contract of employment as justification for her dismissal, but also the redirection of Covid work to a regional office.

The Adjudicator accepted that an end date in a contract of employment may have “some relevance to ascertain whether a dismissal is fair” but noted that the date should also be consistent with the other terms of the contract and the reasons for employment.

The Adjudicator took the view that the Respondent was in effect claiming that the Complainant’s dismissal was not unfair in that it resulted wholly or mainly by reason of redundancy (section 6(4) of the Acts). For that reason, the Adjudicator undertook a detailed assessment of the Complainant’s contractual terms and also of the work that she was actually carrying out.

The Adjudicator concluded that although the Respondent was seeking to rely on the fixed term nature of the Complainant’s contract of employment to justify termination of her employment, the contract contained “many beneficial commitments to the complainant.” He found that “[i]t is not difficult to see how her expectation was that she would be regularised into the role in due course.”

The Adjudicator noted that there was a continued demand for health services and found that it was “unusual” that the Respondent was claiming that the work had “dried up” or moved to another location.

“As outlined, it has been a difficult task to ascertain the reasons for the complainant’s appointment as they were not provided in the contract nor shortly afterwards. It is only towards the end of her employment that a myriad of reasons began to emerge as to why her contract would not be rolled on. The respondent’s approach to this particular employment lacked clarity from the outset. I do accept that the emergence of Covid challenged all staff who responded courageously with all hands-on deck with the details of staff contracts not the main priority. In the complainant’s case, she was at the mercy of the respondent as to how her career would develop given the lack of clarity to her role.”

The Adjudicator found that her dismissal was unfair as there was “no cogent reasoning” as to why her employment was terminated.

He awarded the Complainant €12,000 representing the equivalent of five months’ pay in compensation.

Takeaway for Employers: Fixed term contracts can be beneficial to employers when used correctly. This case highlights the importance of careful drafting in the case of fixed term contracts. Employers will not simply be able to rely on the existence of an end date and the label of a fixed term contract. It is vital that fixed term contracts contain appropriate and unambiguous waivers to protect employers in the event that an employee’s employment is terminated upon the expiry of a fixed term.

Link  – WRC- https://www.workplacerelations.ie/en/cases/2023/july/adj-00037789.html

Authors – Susan Coyle, Jenny Wakely and Anne O’Connell

25th July 2023

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2


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