ECJ ruling on fixed-term employment contracts

With its decision on 23 April 2009, the European Court of Justice ruled on a controversial issue regarding contract workers in the public sector. More specifically, it decided, contrary to the recent Greek Supreme Court jurisprudence, that the courts have the jurisdiction to decide on the true nature of an employment contract.

On 23 April 2009, the European Court of Justice (Δικαστήριο Ευρωπαϊκών Κοινοτήτων, ECJ) issued judgement on the joined cases C-378/07 to C-380/07 Angelidaki and others. The pre-hearing questions that were addressed to the ECJ by the Rethymnon Court of First Instance concern the interpretation of the Framework Agreement on fixed-term work that was concluded on 18 March 1999 by the European-level social partners and incorporated in Council Directive 1999/70/EC of 28 June 1999 (EU9905170F). The EU-level social partners include the European Trade Union Confederation (ETUC), the Confederation of European Business (BusinessEurope) and the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP). More specifically, the Rethymnon Court of First Instance addressed the question of whether the framework agreement is compatible with Community law in certain circumstances – particularly with regard to a national court’s ability to interpret and apply national law as an absolute prohibition in any circumstance on converting a fixed-term employment contract or relationship in the public sector to an employment contract or relationship of indefinite duration, even if it was wrongfully concluded as a fixed-term contract.

National legislation

Article 8(3) of Law 2112/1920 stipulates that a fixed-term employment contract may be recognised as a contract of indefinite duration if there is no objective reason justifying the specific duration of the contract, which occurs when the contract aims to meet fixed and permanent needs of the employer. This provision also applies even in the case of a first or single fixed-term employment contract.

Article 103 of the Greek Constitution stipulates that:

[…] 8. A law shall specify both the terms and duration of the private law employment relationships in the public and wider public sector, as defined each time, to meet […] temporary or unforeseeable and urgent needs […] It is prohibited by law to turn the workers falling under the first indent into permanent ones or to convert their fixed-term contracts into contracts of indefinite duration. The prohibitions under this paragraph shall also apply to those employed under a works contract.

Contradictory case law of Greek Supreme Court

The ECJ has already issued many judgements with respect to issues of interpretation of provisions of the Framework Agreement of the European social partners on fixed-term work, thus providing national courts with particularly useful criteria of verification and interpretation tools. In Greece, however, great confusion continues to prevail as to how to deal with the abuse arising from the use of fixed-term employment contracts by employers, as imposed by Community Law. This is particularly the case after the plenary session of the Greek Supreme Court (Άρειος Πάγος, Areio Pagus) issued judgements No. 19/2007 and No. 20/2007 of 11 June 2007, which differ from judgement No. 18/2006 issued by the same plenary session only one year previously (GR0702039I).

More specifically, by way of judgement 18/2006, the Supreme Court ruled that the Framework Agreement allows the retrospective conversion of fixed-term employment contracts in both the public and private sectors into employment contracts of indefinite duration. This is also stipulated in Article 8 (3) of Law 2112/1920 notwithstanding the provision of Article 103 of the Greek Constitution which prohibits the conversion of a fixed-term employment contract into a contract of indefinite duration by virtue of law, since such prohibition does not prevent the true nature of the contract being recognised by the courts. On the contrary, by way of judgements 19/2007 and 20/2007, the Supreme Court ruled that the fixed-term employment contracts cannot be converted by court ruling into contracts of indefinite duration precisely due to Article 103 of the Constitution, even if they meet fixed and permanent needs of the employer.

ECJ ruling

The ECJ ruled that ‘all the authorities of the Member States are subject to the obligation to ensure that provisions of Community law take full effect’. This means that Article 103, paragraph 8, of the Greek Constitution must be interpreted so as not to prohibit the courts from deciding the true nature of an employment contract.

Commentary

The issue of contract workers in the public sector is not only of legal concern but is primarily a topic of political and social concern and stresses the persistent flaws of hiring practices in the public sector.

Sofia Lampousaki, Labour Institute of Greek General Confederation of Labour (INE/GSEE)