Employment Update: Labour Court Awards Academic €112,932 Compensation in Fixed-Term Contract Dispute
16 September 2016
In Dublin Institute of Technology v James Wogan, the Labour Court found that Mr Wogan had been penalised under Section 13(1)(d) of the Protection of Employees (Fixed-Term Work) Act 2003 (the "Act") because of its decision not to renew his final fixed-term contract on its expiry. We examine the facts of the case and the likely implications for employers.
Mr Wogan had been employed as a business development manager in the Digital Media Centre (DMC), which was attached to DIT. He was employed on a series of fixed-term contracts from 2009 until his employment terminated on 31 December 2012, when his final fixed-term contract expired without being renewed.
The core issue in this case was whether the non-renewal of Mr Wogan’s final fixed-term contract amounted to penalisation under the Act. This section provides that an employer shall not penalise an employee by dismissing him/her if the dismissal is wholly or partly for, or connected with, the purpose of the avoidance of a fixed-term contract being deemed to be a contract of indefinite duration under Section 9(3).
The management of DMC told the Court that, at the time that Mr Wogan’s contract was due for renewal, it believed that sufficient funding and work was available to justify the continuation of the business development manager role for a further 27 months. However, his contract was renewed only for a period of a further 15 months from 1 October 2011. As a result, Mr Wogan had continuous service of less than four years on the expiry of his final contract.
It was conceded by DIT that the non-renewal of the complainant’s fixed-term contract on its expiry at the end of 2012 constituted a dismissal. The case then turned to the question of whether the dismissal amounted to penalisation under Section 13(1)(d). The Court noted that the purpose of avoiding a fixed-term contract from becoming a contract of indefinite duration need not be the only reason for the dismissal. It is sufficient if it was an operative consideration in the sense that it was an influential factor operating in the mind of the decision-maker at the time that the decision was made. The Court referred to the decision of Noonan, J in Board of Management of St Joseph’s School for Deaf Boys v Philip Grehan  605, where he noted that “such inferences must be drawn having regard to the factual matrix as a whole and not in the teeth of established facts”.
The Court was satisfied in this case that the evidence disclosed that at the end of 2012, the DMC was fully funded and that the continued employment of Mr Wogan was financially viable up to at least 2014. The Court considered the context in which the decision had been made, noting that it had occurred at a time when DIT was actively trying to ensure that its permanent staffing levels were not unintentionally expanded by temporary fixed-term employees attaining permanent status by operation of the Act. Reference was also made to the Economic Control Framework (ECF), which had imposed funding constraints on all public sector employees during the economic recession, and to the public service agreement which curtailed the capacity of public sector employers, including DIT, to make surplus permanent staff redundant.
The Court went on to note that it was apparent that a central strategy adopted by DIT in was to avoid situations in which fixed-term employees would accrue more than four years’ continuous service and come within scope of Section 9 of the Act. This was evidenced in the documentation before the Court. The Court found it reasonable to infer that DITs’ decision was influenced by the realisation that a 27-month extension would bring the complainant’s aggregate service over four years and thus bring Section 9 of the Act into play. It awarded Mr Wogan €112,932, which amounted to 133% of his final annual remuneration.
Implications for employers
This case underlines the importance to employers of managing fixed-term employees. Before renewing a fixed-term contract, employers should consider whether there are objective grounds justifying the renewal and whether these grounds will stand up if subsequently challenged.
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