Fixed-Term Contracts, at the Light of
EU Law and the ECJ's Case Law
Prof. Dr. Daniel Pérez del Prado
Universidad Carlos III de Madrid
EJTN Seminar
EUROPEAN LABOUR LAW “In times of economic crisis”
Lisbon, May 16th & 17th
Fixed-Term Contracts, at the Light of EU Law and
the ECJ's Case Law
1. The context: from the “Oil Crisis” to the
“Financial Crisis”
2. The legal treatment of the “dualisation” of
European labour markets.
3. Conclusions.
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
1,2 2,1
3,4 3,6 4,5
6,0
7,5 8,1 8,3 8,7 9,0
10,0 10,1 10,4 11,6 12,0
13,4 13,6 14,1 14,2
15,6 16,1 16,5 17,6
18,4
20,2 21,0
22,1
25,7
27,8
0,0
5,0
10,0
15,0
20,0
25,0
30,0
Temporary Rate
Source: onw elaboration based on Eurostat
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
Source: onw elaboration based on Eurostat
0
5
10
15
20
25
30
35
40
European Union (15 countries) Euro area (17 countries) Denmark
Germany Spain France
Portugal Sweden
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
Source: onw elaboration based on Eurostat.
Unemployment
Temporality
Unemployment and Temporality in Spain
Economy
D
S
Y
P
Y
L
Y
LD
D
W
Labour Market
D1
Y1 L1
Y1
Y2
Y2
E
L2
LS
D2
6
Labour Market (Recession)
Fuente: Luis Gómez
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
L
LD
D
W
Labour Market
D1
L1
E
L2
LS
D2
7
Fuente: Luis Gómez
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
D3
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
BUT this strategy to expand the work supply, however, has had multitude
consequences. According to Gomez Abelleira et al, 2014, the high temporality has
the following consequences:
a) On Employment: it affects the “quality” of employment and increases job
rotation.
b) On salaries: temporary workers usually have lower salaries, which affects their
welfare, social conditions and, aggregate demand .
c) On learning and productivity: employees expend less money on temporary
workers, which has an impact on their qualification and productivity.
d) On occupational hazard: temporary workers have a higher risk of accidents
than permanent.
e) Family life and fertility: even some effects have been detected regarding
family decisions, number of children, and age of maternity and paternity.
1. The context: from the “Oil Crisis” to
the “Financial Crisis”
Source: onw elaboration based on Eurostat
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
European Union (15 countries) Euro area (17 countries) Denmark
Germany Spain France
Portugal Sweden
2. The legal treatment of the “dualisation”
of European labour markets
REGULATORY FRAMEWORK
The regulation of fixed-term work is held by Directive 1999/70/EC of 28 June 1999 concerning
the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP and
Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008
on temporary agency work.
Focusing on the first one, its main objectives are:
a)Principle of non-discrimination (clause 4): «1. In respect of employment conditions, fixed-
term workers shall not be treated in a less favourable manner than comparable permanent
workers solely because they have a fixed-term contract or relation unless different treatment is
justified on objective grounds».
b)Measures to prevent abuse (clause 5): «1. To prevent abuse arising from the use of
successive fixed-term employment contracts or relationships, Member States, after
consultation with social partners in accordance with national law, collective agreements or
practice, and/or the social partners, shall, where there are no equivalent legal measures to
prevent abuse, introduce in a manner which takes account of the needs of specific sectors
and/or categories of workers, one or more of the following measures: (a) objective reasons
justifying the renewal of such contracts or relationships; (b) the maximum total duration of
successive fixed-term employment contracts or relationships; and (c) conversion of fixed-term
contracts on open-ended contracts.
c)Other objectives (clause 6 and 7): information to workers and information and consultation
guarantees.
BUT clause 1 underlines the importance of a) and b)
2. The legal treatment of the “dualisation”
of European labour markets
Antidiscrimination Test
Step 1
Comparison test:
(a)It must be referred to working
conditions within the scope of the
Directive;
(b)Those working conditions must be
comparable; and
(c)Comparison is established with the
indefinite worker’s ones
Step 2
Exception test
«unless different treatment is justified
on objective grounds»
The concept “objective ground” has
been interpreted as synonym of
“objective reason” of clause 5 (see
following slides).
The principle of non-discrimination cannot be interpreted restrictively
(Del Cerro Alonso Case).
General Rule: the different treatment of fixed-term workers compared with
permanent workers can only be justified on objective reasons
2. The legal treatment of the “dualisation”
of European labour markets
Anti-abuse Test
In order to prevent the abuse of
successive fixed-term
employment contracts or
relationships, clause 5 requires
Member States, to adopt, one or
more of the following measures:
(a) objective reasons justifying
the renewal of such contracts
or relationships;
(b) the maximum total duration
of successive fixed-term
employment contracts or
relationships; and
(c) conversion of fixed-term
contracts on open-ended
contracts.
Member States enjoys certain
discretion in this regard since
they have the choice of relying on
on or more of the measures
listed.
BUT, the adoption of those
measures are governed by the
principle of equivalence and
the principle of effectiveness.
The Directive DOES NOT lay
down a general obligation on the
Member States to provide for the
conversion of fixed-term
contracts into indefinite contracts.
2. The legal treatment of the “dualisation”
of European labour markets
“objective grounds” or “objective reasons”
The different treatment of fixed-term workers compared
with permanent workers can only be justified on
objective grounds.
The succession of a series of fixed-term contract can be
justified, among others on objective reasons
The concept of ‘objective reasons’ must, as the Court has already held, be understood as
referring to precise and concrete circumstances characterising a given activity, which
are therefore capable, in that particular context, of justifying the use of successive fixed-term
employment contracts. Those circumstances may result:,
a)from the specific nature of the tasks for the performance of which such contracts have
been concluded and from the inherent characteristics of those tasks or
b)from pursuit of a legitimate social-policy objective of a Member State (judgment in
Mascolo and Others, paragraph 87 and the case-law cited)
2. The legal treatment of the “dualisation”
of European labour markets
Directive on fixed-term work has led to an unusually high amount
of litigation on the core issues:
a) Antidiscrimination or equal treatment.
Discrimination in general
Age Discrimination
a)Prevention of abuse of fixed-term contracts.
2. The legal treatment of the “dualisation”
of European labour markets
a) Antidiscrimination or equal treatment: discrimination in general.
The issue of antidiscrimination has been discussed in the literature as the key-
aspect on the Directive. However, the clause is minimalist (it only prohibits
direct discrimination) and not comprehensive. Comprehensive
antidiscrimination would forbid direct, indirect and other forms of discrimination
as is the case in the Directive on Anti-Discrimination (Bell, 2012).
Del Cerro Alonso Case
The main issue addressed was whether the Directive covers financial terms of
employment other than pay (i.e. bonuses).
The case was about Ms. Del Cerro has 12 years in the health care sector on the
basis of fixed-term contracts. She was then granted an open-ended contract,
at which point she claimed in-service benefits retroactively and met with a
refusal.
The solution of the CJEU ruled that there was no objective reason why workers on
open-ended contracts should be entitled to the bonus if workers on fixed-term
workers were denied it. The Court’s judgement was that fixed-term workers
should not be discriminated against with regard to bonuses, so that the notion
of ‘employment conditions’ should include access to extra bonuses.
2. The legal treatment of the “dualisation”
of European labour markets
a) Antidiscrimination or equal treatment: discrimination in gneral.
Del Cerro Alonso case served to enshrine an expansive interpretation on equal
treatment in the CJEU on fixed-term work. In subsequent antidiscrimination
cases, the Court also came up with an expansive interpretation of the principle:
Zentralbetriebsrat der Landeskrankenhäuser Tirols case,
The main issue is whether Directive precludes a national provision which excludes
from the scope of that law workers employed under a fixed-term contract of a
maximum of six months or on a casual basis.
The case was about the plaintiff's argument about a fixed-term contract of six
months should not exclude access to benefits and leave in comparison with a
permanent worker in transition to a part-time contract.
The solution of the CJEU ruled that the mere fact that those workers are denied
the rights granted by that law means that they are treated less favourably than
permanent or part-time workers, without existing an objective reason. More
precisely, rigorous personnel management is not considered an objective
reason, but a budgetary consideration and cannot therefore justify
discrimination.
2. The legal treatment of the “dualisation”
of European labour markets
a) Antidiscrimination or equal treatment: discrimination in general.
Gavieiro and Torres case,
The main issue concerned access to a special benefit (length-of-service
increment) for temporary civil servants who, under the legislation for civil
servants, had been excluded from such a benefit exclusively due to their status
as fixed-term workers.
The case: Mss. Gavieiro and Torres applied for recognition and payment of the
three-yearly length-of-service increments which were not barred by limitation of
time. The request was refused by taking the view that the LEBEP grants the
three-yearly length-of-service increments to interim civil servants (temporary
workers) only with effect from 13 May 2007, the date on which that law entered
into force.
The solution of the CJEU ruled the clause 4(1) of the framework agreement is
unconditional and sufficiently precise for interim civil servants to be able to rely
on it as against the State before a national court in order to obtain recognition
of their entitlement to length-of-service increments. The temporary nature of
the employment relationship of certain public servants is not, in itself, capable
of constituting an objective ground within the meaning of that clause of the
framework agreement.
2. The legal treatment of the “dualisation”
of European labour markets
a) Antidiscrimination or equal treatment: discrimination in general.
Impact case,
The main issue concerned whether temporary civil servants may access to the
same pay and pensions as permanent workers.
The case: Impact is acting on behalf of 91 of its members employed in various
Irish government departments on the basis of successive fixed-term
employment contracts. They are all unestablished civil servants and, under
Irish regulations governing employment in the civil service, are subject to a
different scheme to that which is applicable to established civil servants. This
affects their right to pay and pensions.
The solution of the CJEU held Directive prohibits, in a general manner and in
unequivocal terms, any difference in treatment of fixed-term workers in respect
of employment conditions which is not objectively justified. As Impact
maintained, its subject-matter appears therefore to be sufficiently precise to be
relied upon by an individual and to be applied by the national court.
“Employment conditions” encompass conditions relating to pay and to
pensions which depend on the employment relationship, to the exclusion of
conditions relating to pensions arising under a statutory social-security
scheme.
2. The legal treatment of the “dualisation”
of European labour markets
b) Antidiscrimination or equal treatment: Age discrimination on fixed-term
contracts.
Mangold case,
The main issue concerned subjecting employees aged 52 to fixed-term contract on
sole grounds of age was compatible with Directive.
The case: Mr Mangold, a lawyer aged 56, was hired by Mr Helm on a fixed-term
basis for the very purpose of challenging the Hartz reforms in the courts (Stone
Sweet and Stranz 2012: 100-101), the argument being that the German 2000
Act on part-time and fixed-term work and its 2002 revision were in breach of
the 1999 fixed-term work and the 2000 anti-discrimination directives.
The solution of the CJEU ruled that there should be no differential treatment
between workers on fixed-term and those on open-ended contracts. The CJEU
also ruled that in relying solely on the ‘age’ criterion, German labour law was in
breach of Community law in the area of anti-discrimination. However,
considerable discretion was left to the national judge to examine the particular
situation. The consequence of the judgement was that the national legislation
on fixed-term contracts for workers aged 52 or older had to be altered.
2. The legal treatment of the “dualisation”
of European labour markets
b) Antidiscrimination or equal treatment: Age discrimination on fixed-term
contracts.
Kumpan case,
The main issue concerned subjecting employees aged 52 to fixed-term contract on
sole grounds of age was compatible with Directive.
The case: According to the collective bargaining agreement, an open-ended
contract would end automatically when a worker reached the age of 55.
Thereafter, the collective agreement allowed for fixed-term contracts with such
workers, by mutual agreement and insofar as the worker in question was
considered to be ‘physically and occupationally fit’, up to the age of 60. After
Miss Kumpan was 55, her contract was renewed annually until she was 60.
She claimed that this represented an abuse of recourse to fixed-term contracts
on the exclusive grounds of age.
The solution of the CJEU was that discrimination should not be allowed when the
initial employment relationship continued for the same activity, with the same
employer. The successive use of fixed-term contracts from age 55 to 60 should
not be allowed, i.e. the collective agreement should be altered to ensure that
there was no automatic recourse to fixed-term contracts after 55.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
Most these cases also refer to the abuse of fixed term contracts. For example:
• Zentralbetriebsrat der Landeskrankenhäuser Tirols case, where workers were hired
on the basis of fixed-term contracts, the Court here ruled that they should be
accorded equal treatment and that the form of contract was illegal, the implication
being that open-ended contracts should have been used instead.
• Impact case, where civil servants claimed that their (renewed) fixed-term contracts
were of unreasonably long duration (8 years), the CJEU maintained that there were
no objective reasons for this long duration on a fixed-term contract.
• Mangold case, where the CJEU argued that the directive did not apply because its
provisions limit only the use of successive fixed-term contracts. There have been
many other cases concerning the abuse of fixed-term contracts in which plaintiffs
had only one fixed-term contract, a circumstance which invalidated the claim of
abuse of fixed-term contracts (Mangold, Vasallo, Marrosu/Sardino and Angelidaki et
al.).
• Kumpan case, the Court argued that it was difficult to determine conditions under
which use of fixed-term contracts actually constituted abuse. The CJEU does not
wish to interfere in Germany’s policy of using fixed-term work for ‘older workers’
below the statutory retirement age.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
Adeneler case,
The main issue concerned whether a national provision which defines “successive
contracts” as contracts concluded between the same employer and worker
under the same or similar terms of employment, the contracts not being
separated by a period of time longer than 20 days, is compatible with clause 5
of the Framework Agreement.
The case: Mr. Adeneler (and the rest of the claimants) concluded a legal person
governed by private law which falls within the public sector, a number of
successive fixed-term employment contracts the last of which was not
renewed. Each of those contracts, that is to say both the initial contract and the
following successive contracts, was concluded for a period of eight months and
the various contracts were separated by a period of time ranging from a
minimum of 22 days to a maximum of 10 months and 26 days. They all were
on each occasion reappointed to the same post as that in respect of which the
initial contract had been concluded.
The solution of the CJEU held that so inflexible and restrictive definition would
allow insecure employment of a worker for years since, in practice, the worker
would as often as not have no choice but accept breaks in the order of 20
working days in the course of a series of contracts with his employee.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
Huet case,
The main issue concerned whether clause 5 convers the content of a contract of
indefinite duration in case of transforming from a fixed-term contract.
The case: The applicant in the main proceedings occupied the post of Researcher
(chercheur) at the UBO for six consecutive years. He was employed on the basis of
a number of successive renewed fixed-term employment contracts. When the last
fixed-term contract expired, the UBO offered him an employment contract of
indefinite duration. That contract stated, first, that the applicant in the main
proceedings would occupy the post of Research Officer (ingénieur d’études), that is,
a different post from that of a Researcher, and, second, that his remuneration would
be lower than that previously received by him on the basis of the fixed-term
contracts.
The solution of the CJEU held that whereas the Member State is not obliged to
guarantee the employment contract of indefinite duration reproduces in identical
terms the principal clauses set out in the previous contract, it must ensure that the
conversion of fixed-term employment contracts into an indefinite contract is not
accompanied by material amendments to the clauses of the previous contract in a
way that is, overall, unfavourable to the person concerned when the subject-matter
of that person’s tasks and the nature of his functions remain unchanged.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
Kucuk case,
The main issue concerned whether the renewal of fixed-term employment
contracts or relationships is justified by objective reasons, the account must be
taken of the cumulative duration of the employment contracts or relationships
with the same employer.
The case: Ms Kücük was employed by the Land between 2 July 1996 and 31
December 2007 under a total of 13 fixed-term employment contracts. She was
employed as a clerk in the court office of the civil procedural division of the
Amtsgericht Köln (District Court, Cologne). The fixed-term employment
contracts were always concluded because of temporary leave, including
parental leave and special leave, having been granted to court clerks
employed for an indefinite duration and served in each case to replace them.
The solution of the CJEU was that a temporary need for replacement staff may, in
principle, constitute an objective reason. However, in the assessment of the
issue whether the renewal of fixed-term employment contracts or relationships
is justified by such an objective reason, the authorities of the Member States
must take account of all the circumstances of the case, including the number
and cumulative duration of the fixed-term employment contracts or
relationships concluded in the past with the same employer.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
Mascolo case,
The main issue concerned whether a national provision which lays down a double
channel system in which some of the teachers are temporary necessarily in
order to cover some vacancies is compatible with clause 5.
The case: Ms Mascolo and others were recruited by the Administration under
successive fixed-term employment contracts. According to their opinion, those
successive temporary contracts were unlawful, so they decided to seek the
conversion of their contracts into employment contracts of indefinite duration
The solution of the CJEU was that a temporary need for replacement staff may, in
principle, constitute an objective reason. However, in the assessment of all the
circumstances of the case, including the number and cumulative duration of
the fixed-term employment contracts or relationships concluded in the past
with the same employer, it concludes that the kind of task was stable and no
other measures were adopted in order to prevent misuse of temporary
contracts by Administration, so the legislation could cause a breach of the
clause 5.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
Mascolo case,
The main issue concerned whether a national provision which lays down a double
channel system in which some of the teachers are temporary necessarily in
order to cover some vacancies is compatible with clause 5.
The case: Ms Mascolo and others were recruited by the Administration under
successive fixed-term employment contracts. According to their opinion, those
successive temporary contracts were unlawful, so they decided to seek the
conversion of their contracts into employment contracts of indefinite duration
The solution of the CJEU was that a temporary need for replacement staff may, in
principle, constitute an objective reason. However, in the assessment of all the
circumstances of the case, including the number and cumulative duration of
the fixed-term employment contracts or relationships concluded in the past
with the same employer, it concludes that the kind of task was stable and no
other measures were adopted in order to prevent misuse of temporary
contracts by Administration, so the legislation could cause a breach of the
clause 5.
2. The legal treatment of the “dualisation”
of European labour markets
c) Preventing the abuse of fixed-term contracts.
European Commission vs. Luxembourg,
The main issue concerned whether the Luxembourg’s prevent artists from
misusing fixed-term contracts.
The case: whereas the Commission hold the Great Duchy of Luxemburg did not
transpose the Directive, without previewing measures in the sector of artists,
the Member State argues this sector is characterized by being temporary
activities.
The solution of the CJEU was, whereas nor option b) and c) were chosen by
Luxemburg, nor option a) may be considered. The nature of these activities is
not necessarily temporary, so the Member State fell in its obligation of passing
some measure to prevent the abuse of fixed-term contracts and, more
precisely, the succession of a series of this kind of contracts.
2. The legal treatment of the “dualisation”
of European labour markets
BY THE WAY… AN INTERESTING “MIXED” CASE.
Nisttahuz Poclava CAse,
The main issue if the new “contract on support of entrepreneurs” (Spanish Labour
Market Reform 2012) is, in practice, a temporary contract.
The case: is a preliminary ruling on the legal nature of this new contracts, which
has probationary period of one year. The Spanish judge had some doubts
regarding this contracts fell within the scope of the Directive.
The solution of the CJEU considered that, in spite of that its long probationary
period, this is an indefinite contract. That institution does not affect the duration
of the contract, which can continue over the year. Consequently it is not withn
the scope of Directive.
The Spanish Constitutional Court has considered (Cases 59/2014 and 8/2015) this
contract constitutional because the effects on employees right’s (it means free
dismissal for a long period) are compensated by the fact that it is a temporary
measure (until the unemployment rate falls to 15%) and its objective is
promoting employment.
3. Conclusions
As a preliminary conclusions, it is possible to underline:
The Directive does not content complete and effective solutions for the
problems derived by temporary employment. The high number of preliminary
rulings indicates that a good deal of doubts prevails concerning interpretation
of its provisions (de la Porte & Emmenegger, 2016).
The Court has an expansive interpretation of equal treatment concerning pay,
bonuses, access to training and promotion. Individual rights for fixed-term
workers are therefore strengthened through CJEU judgements in the area of
fixed-term work
With regard to abuse of fixed-term contracts and unreasonable renewals, the
Court does not tend to challenge the use of these kind of practices. In most
instances, the Court argues that there exist sufficient objective grounds – such
as ‘social policy aims’ – to allow the conclusion of successive fixed-term
contracts.
This may be due to the restrictive scope of the directive and the weak legal
base it offers the Court for a re-regulation of fixed-term work, compared to the
area of anti-discrimination.
