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Employment Update: Recent Challenge to Unfair Dismissal Exclusion Clause in Fixed-Term Contracts

26 April 2018

In Dawn Marie Conaty v The Board of Management of Malahide Community School, the case centred on a claim of unfair dismissal which was appealed on a point of law from the Labour Court to the High Court. The Labour Court had decided that Ms Conaty should have been advised by her employer in advance of signing a fixed-term contract of the effect the contract would have on her contractual status as an employee. It held that it was not sufficient for the employer to simply rely on the fact that the contract complied with the Unfair Dismissals Acts.

The employer appealed the decision of the Labour Court on the basis that the Court had not upheld the exclusionary clause in the fixed-term contract. The employer contended that it had, on the face of it, complied with the provisions of the Unfair Dismissals Acts.

Background

Ms Conaty was employed as a teacher by Malahide Community School in August 2013 for the school year. She was again employed in August 2014 for a further school year. Ms Conaty was not furnished with a written contract of employment for these periods. Having recommenced employment on 31 August 2015, she successfully applied for a teaching post in the same school which was on better terms and conditions of employment than she had previously enjoyed. However, the post was a fixed-term appointment. In October 2015, Ms Conaty signed a fixed-term contract which stated that her employment would terminate in August 2016. The position was advertised again for the following school year. She applied for the position, was interviewed, but was unsuccessful. Following this, Ms Conaty submitted a claim for unfair dismissal.

Summary of the school’s case

In acting for The Board of Management of Malahide Community School, Mason Hayes & Curran submitted that Ms Conaty’s dismissal consisted only of the expiry of the fixed-term contract she held during the period from October 2015 to 31 August 2016. The school relied on the fact that Ms Conaty fully entered into a fixed-term contract in October 2015. The school contended that the Unfair Dismissals Acts did not apply to the contract as it complied fully with Section 2(2)(b). Ms Conaty’s employment had, therefore, come to an end as a result of the expiration of the fixed-term contract and she could not make a claim of unfair dismissal.

Labour Court decision

The Labour Court held that Ms Conaty was on a permanent contract prior to signing the fixed-term contract. The Court considered whether there had been any discussion with Ms Conaty regarding her employment status as a permanent employee before she signed the fixed-term contract. The Court found that there had been no such discussion. The Labour Court deemed that the import of the fixed-term contract was not explained to her, nor was she advised to obtain independent legal advice. As a result of those factors “the provision of a fixed-term contract was ineffective”. These types of measures, ie advising an employee to seek independent legal advice, would typically apply to a waiver of claims in, for example, an employment severance agreement. However, the Court stated that this situation related to an exclusionary clause rather than a waiver but yet stated case law, and requirements, applying to the legality of waiver clauses should be applied in these circumstances. The Court held that the exclusionary provision could not be relied upon by the school to prevent the Acts applying to the termination of her employment at the end date of the fixed-term contract. On that basis, it was held that Ms Conaty was unfairly dismissed. Consequently, the Court directed that she be re-engaged by the school.

Employer's successful appeal to the High Court

The High Court upheld the appeal. Ms. Justice O’Regan was not satisfied that the correct principles of law were applied by the Labour Court in reviewing the statutory exclusion of the Acts. The case was remitted to the Labour Court for further consideration. A fresh hearing has been arranged by the Labour Court in June 2018.

Conclusion

While the High Court has directed the Labour Court to reconsider its decision in this case, the concern for employers with employees on fixed-term contracts is that it may no longer be sufficient to simply ask the employee to sign the contract. If the Labour Court upholds its previous decision in this case, it will be necessary for employers to ensure that they have advised their prospective fixed-term employees to take appropriate advice before signing the fixed-term contract.

For more information relating to the proper and lawful issuing of fixed-term contracts, contact a member of our Employment & Benefits team.


The content of this article is provided for information purposes only and does not constitute legal or other advice.

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