Court of Justice gives ruling on framework agreement on fixed-term work

The European Court of Justice (ECJ) ruled that the framework agreement on fixed-term work is intended to provide a framework to prevent potential abuse arising from the use of successive fixed-term employment contracts and to reinforce the protection of workers across Europe. In its ruling, the ECJ defined the concepts of ‘successive contracts’ and of ‘objective reasons’ which could justify the renewal of fixed-term contracts.

On 4 July 2006, the European Court of Justice (ECJ) issued a judgement on successive fixed-term employment contracts in Konstantinos Adeneler and Others v Ellinikos Organismos Galaktos (ELOG), Case-212/04. The ruling is based on the ECJ’s interpretation of the clauses of the framework agreement on fixed-term work (92.4Kb PDF) concluded on 18 March 1999 by the cross-sector European social partners and implemented through Council Directive 1999/70/EC. The European social partners involved included the European Trade Union Confederation (ETUC), the Industrial and Employers’ Confederation of Europe (Union des industries des pays de la Communauté Européenne, UNICE) and the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP).

In relation to Case-212/04, 18 employees of the Greek Milk Organisation (Ellinikos Organismos Galaktos, ELOG), who had been repeatedly appointed to the same post, argued that the successive contracts in question should now be regarded as employment contracts of indefinite duration (GR0609059I). However, the transposition of the framework agreement into Greek law was deferred; Greek labour legislation thus far excludes the conversion of successive contracts in the public sector into contracts of indefinite duration.

Main provisions of framework agreement

The objective of the agreement is to provide a framework to prevent the potential abuse of successive fixed-term employment contracts or relationships. The framework agreement sets out the general principles and minimum requirements relating to [fixed-term work](/search/node/areas OR industrialrelations OR dictionary OR definitions OR fixedtermwork?oldIndex). Detailed arrangements for the application of those principles and requirements, as well as the definition of terms used in the framework agreement but not specifically defined, should be set by the Member States and social partners in conformity with national labour legislation or practice.

The framework agreement incorporates a number of protective provisions designed to prevent insecurity of employment status. In Member States where there are no equivalent legal measures in place to prevent abuse of fixed-term employment contracts, the agreement requests the introduction of one or more of the following measures:

• establish objective reasons justifying the renewal of fixed-term employment contracts or relationships;

• set the maximum total duration of successive fixed-term employment contracts or relationships,

• define the maximum number of renewals of such contracts or relationships.

Objective reasons for renewing contracts

The concept of ‘objective reasons’ can justify the successive renewal of fixed-term employment contracts or relationships. The framework agreement does not define this concept. According to the ECJ ruling, the framework agreement builds on the premise that employment contracts of indefinite duration are the most common form of employment relationships. The ECJ in turn recognises that fixed-term employment contracts are a feature of employment in certain sectors or in respect of certain occupations and activities.

The ECJ ruled that the use of successive fixed-term employment contracts is inconsistent with the objective of the European framework agreement as long as only a general provision of statute or secondary legislation of a Member State is given. The concept of ‘objective reasons’ refers to the presence of precise and genuine factors relating in particular to the activity in question and the conditions under which it is carried out.

Defining successive fixed-term employment contracts

Member States are required to introduce at least one protective provision in their national law to prevent abuse of successive fixed-term employment contracts or relationships. Although the framework agreement leaves it up to the Member States to define when contracts are ‘successive’, the discretion is not unlimited. A national provision which only regards fixed-term employment contracts separated by 20 or less working days as successive undermines the objective, aim and practical effect of the framework agreement. Such a provision could in fact exclude a large number of fixed-term employment relationships from the positive benefits of the protection measures sought by the directive and could also provoke abusive use of such employment relationships by employers.

Conversion into indefinite duration contracts

The ECJ ruled that the framework agreement on fixed-term employment covers all workers, not only those in the private sector. National law must include, in the sector under consideration, effective measures to prevent and, where relevant, penalise employers for abusing the possibility of successive fixed-term contracts. Moreover, the framework agreement precludes the application of national legislation which, in the public sector alone, prohibits the conversion of a successive fixed-term contract into an employment contract of indefinite duration.

Delayed transposition of directive into national law

The ECJ underlines that, where the transposition of a directive into a Member State’s national legislation is delayed, the national courts are bound to interpret national law as far as possible – once the period for transposition has expired – in light of the wording and the purpose of the directive concerned.

Anni Weiler, AWWW GmbH ArbeitsWelt – Working World