Caught in a fix

The Spanish case Lopez v Servicio Madrileno de Salud [2016] flags up an interesting point about fixed-term contracts.

The claimant was employed from 5 February 2009 to 31 March 2015 as a nurse by the University Hospital of Madrid on a series of fixed-term contracts. During the period between 5 February 2009 and 31 March 2015 the Claimant’s contract of employment with the hospital was renewed seven times.

However, on 8 March, due to a cost cutting exercise, the claimant was told her employment would come to an end with effect from 31 March 2013. However, on 21 March 2013 she was then told of a new vacancy at the hospital, on identical terms to those of the previous appointment.

The claimant started proceedings claiming that, as a result of her successive appointments, her employment relationship with the hospital should be reclassified as permanent (and therefore that the new role should be hers).

The Administrative Court in Madrid referred the case to the European Court of Justice. The ECJ underlined that member states ought to place limits on the use of successive fixed-term employment contracts to prevent abuse (while recognising that there may be good reason in some cases). The ECJ noted that it was in the hands of each member state to implement appropriate measures for preventing and, where necessary, penalising the abusive use of successive fixed-term employment contracts.

Here, the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 serve that purpose. The rules state that unless the continuous use of fixed term contracts can be objectively justified, employees who have been continuously employed for four years or more on a series of successive fixed-term contracts are automatically deemed to be permanent employees.

Employers should take care not to get caught out by these regulations and, in particular, where they believe successive fixed-term contracts are objectively justified, to keep a note of the reasons why (and perhaps even to seek the employee’s assent to that).

Dominic Bonham