According to the provisions of the Employment Contracts Act, an employment contract is in force for indefinitely, unless it has, for a justified reason, been made for a specific fixed period. An employment contract made for a fixed term at the employer’s initiative without a justified reason shall be considered valid indefinitely. The use of successive fixed-term employment contracts is prohibited when the amount or total duration of fixed-term contracts or the totality of such contracts indicates that the employer has a permanent need for labour.
The issue before the Supreme Court was whether there were legal grounds for A’s fixed-term employment contracts, since she did not meet the statutory qualifications required of a social worker. A second issue was whether A’s employment relationship was to be deemed to be in force for an indefinite period on the grounds that there was a permanent need for the services of a social worker in the municipal federation. A further issue to be decided was whether the employer had otherwise acted in accordance with the provisions of the Employment Contracts Act (55/2001) in terminating the successive employment contracts with A.
The Supreme Court held that in the circumstances of the case the use of multiple successive fixed-term contracts was not, in principle, permitted under the Employment Contracts Act. However, A did not meet the statutory qualification requirements for the position as social worker. Although there was in itself a permanent need for a social worker, the employer’s need to employ an unqualified person as a social worker was temporary, lasting only until a qualified employee could be appointed to the position. Taking further into consideration the intent of the Social Welfare Qualifications Act to promote the rights of the client, the Supreme Court held that A’s employment relationship was not to be deemed to be in force indefinitely.
The Supreme Court however ruled that, in respect of the provision in the Employment Contracts Act regarding the employer’s obligation to offer work and training, A’s status under these circumstances was comparable to that of an employee whose employment relationship was in force indefinitely. Accordingly, before the expiry of A’s fixed-term employment contracts, the municipal federation should have ascertained whether she could have been offered other work or the appropriate and reasonable training required for new tasks. The municipal federation should, already on the basis of its duty of loyalty, and on its own initiative, have ascertained whether work could have been offered to A.
The municipal federation had not presented grounds that would have shown that it had fulfilled its obligation to offer work and training. Consequently, the municipal federation was deemed to have terminated A’s employment contract in breach of the criteria laid down in the Employment Contracts Act and was required to pay compensation [an amount equal to 5 month´s salary] for the unjustified termination of the employment contract.