The European Court of Justice (ECJ), in the case of Kucuk v Land Nordrhein-Westfalen, has considered the validity of a series of fixed-term employment contracts. Mrs Kucuk was employed for 11 years on 13 successive fixed term contracts to cover the temporary absences of permanent employees who were on maternity leave or sick leave. The ECJ was asked to consider whether the need for replacement staff was a valid objective reason for the use of consecutive fixed-term contracts under the European Framework Agreement on Fixed Term Work, including in circumstances where there was a permanent or recurring need for replacement staff, and this need could be met by employing the employee on a permanent contract.
The ECJ held that, in principle, a temporary need for replacement staff may constitute an objective reason under the Framework Agreement. Further, just because an employer may have to employ temporary replacements on a recurring, or even permanent basis, and those replacements may also be covered by the hiring of employees under permanent employment contracts, did not mean that there was no objective reason under the Framework Agreement.
However, the ECJ went on to say that there needs to be an assessment on the facts of each case as to whether the renewal of the fixed term employment contract is justified by such an objective reason. In carrying out this assessment, the courts must take into consideration all the circumstances of the case, including the number and cumulative duration of the previous fixed-term employment contracts or relationships with the same employer. Mrs Kucuk’s case was therefore sent back to her national court to decide whether, in all the circumstances of her case, the continued use of a fixed term contract by her employer was justified, or whether her employer was abusing the use of fixed term contracts to meet what was actually a permanent need.
Impact for employers
- In the UK, employees who are employed on successive fixed term contracts with their employer will gain permanent status when they acquire four years’ continuous service (or when their first fixed term contract is renewed, whichever is the later) unless the employer can objectively justify the continued use of a fixed term contract.
- The ECJ decision in Kucuk is authority for the proposition that the need to replace staff on temporary absences (even where that need is permanent or recurring) may be an objective reason to employ someone on a fixed term contract, even if the absent staff could have been replaced by an employee on a permanent contract.
- However, whether the use of the fixed term contract is justified for this reason will always depend on all the circumstances of the particular case.