SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS ORGANISATION)
- AND -
(REPRESENTED BY AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION)
Chairman: Mr Duffy
Employer Member: Mr Doherty
Worker Member: Mr O'Neill
1. Appeal of Rights Commissioners Decision FT20974/04/TB.
2. The appeal concerns a worker who commenced employment s a temporary fixed-term general worker with the Company on the 11th August, 1997. Thereafter his contract was renewed on a fixed term basis on a number of occasions between 11th August, 1997 and 30th September, 2004. In 1996, as part of the Cost and Competitive Review(CCR) agreement the Unions and the Company agreed the merger of the General Worker. Linesman, and Electrician Grades into a single craft based category of Network Technicians. This agreement made it clear that the ESB and the Unions were moving to a craft based category. The requirement to have a craft apprenticeship to become a Network Technician was an integral part of this agreement. Subsequently a further agreement Programme to Achieve Competitiveness and Transformation (PACT) was agreed and became operative from June, 2001. This Agreement provided inter alia that130 temporary general workers who had been employed by the Company prior to or the year of CCR implementation would be made permanent. The cut off date for appointment was agreed as 14th April, 1997. The claimant had commenced work as a temporary general worker on 11th August, 1997 . The CCR and PACT Agreements together provided that every worker recruited to the new Network Technician Category (with the exception of those workers in employment prior to the agreed cut-off date ) would have to complete a craft apprenticeship. As the claimant's employment with the Company commenced on 11th August, 1997( four months after the agreed cut-off date) he did not qualify for automatic permanency under the relevant provision of the PACT Agreement. In June, 2000 and again in 2001 he was offered the option of participating in an apprenticeship scheme leading to a National Craft Certificate qualification. In 2003 the Company and the Union agreed there would be no future recruitment of temporary general workers, contracts for all these workers would not extend beyond 30th September, 2004. All temporary general workers would either be offered an apprenticeship or be made redundant on 30th September, 2004. The claimant declined the offer of an apprenticeship and pursued an individual personal claim which was referred to the ESB Industrial Council . Its decision isued on the 29th September, 2004 determined " The claimant's Conditions of Employment as a Temporary General Worker must end on the specified date (30th September, 2004) unless he transfers to undertake an apprenticeship for Network Technician as offered in accordance with agreements". The claimant accepted the offer of an apprenticeship which commenced on the 1st October, 2004. The claimant maintained that the Company was in breach of the terms of Protection of Employees (Fixed -Term Work ) Act, 2003 and submitted a complaint under the Act to a Rights Commissioner as follows:
(a) That on the expiry of his fixed term contract on the 30th September, 2004 the respondent failed to offer him a contract of indefinite duration contrary to the provisions of section 9(1) and instead offered him a contract as an Adult Apprentice as an alternative to redundancy.
(b) In moving to the apprenticeship programme he was and is being treated in a less favourable manner than a comparable permanent employee who moves to the programme contrary to Section 6 (1) of the Act.
(c) That from July, 2003 to September, 2004 he was treated in a less favourable manner than a comparable permanent employee in his conditions of employment contrary to section 6(1) of the Act.
On the 16th May, 2005 the Rights Commissioner issued his decision as follows"
- I uphold the complaint that in not offering the claimant a contract of indefinite duration when they transferred him to the adult apprenticeship programme on the expiry of his Fixed Term contract in September, 2004 the respondents were in breach of Section 9(1) of the Protection of Employees (Fixed Term ) Work Act, 2003.
I require them to offer him a contract of indefinite duration with effect from the date of the expiry of his fixed term contract in September, 2004.
On the 17th June, 2005 the Company appealed the decision to the Labour Court. The Court heard the appeal on the 22nd September,2005.
This is an appeal by ESB Networks (the appellant) against the decision of a Rights Commissioner under the Protection of Employees (Fixed-Term Work) Act 2003 (the Act). In his decision the Rights Commissioner found that the appellant contravened section 9(1) of the Act in not offering Mr David Kingham (the respondent) a contract of indefinite duration at the expiry of his fixed term contract of employment on 30th September 2004. The Rights Commissioner also found that the appellant had not contravened the Act by affording the respondent different conditions of employment than those applicable to a comparable permanent employee. The respondent did not appeal against that aspect of the decision.
The material facts as admitted or as found by the Court are as follows:
The appellant is engaged in the construction and maintenance of electricity distribution networks. It had employed three categories of workers, namely electricians, linesmen and general workers. In 1996, the appellant embarked on a restructuring programme known as the Cost and Competitive Review (CCR). As part of this process it concluded a collective agreement with trade unions representing its staff which provided for the merger of all three categories of staff into a single craft-based category to be known as Network Technician.
A further collective agreement (known as the PACT Agreement) was concluded between the appellant and the relevant trade unions as part of the CCR process. This agreement provided, inter alia, that 130 temporary general workers who had been employed by the appellant prior to 14th April 1997 would be appointed to permanent positions as network technicians. It was expressly agreed between the parties to the PACT Agreement that the said appointments would be a once-off arrangement and that no similar accommodation would be sought or considered for those appointed to temporary positions after 14th April 1997. The operative date of this agreement was 1st June 2001. However, temporary workers recruited after the cut-off date of 14th April 1997 were to be offered the opportunity to participate in an apprenticeship scheme through which they could attain a National Craft Certificate.
The respondent commenced employment with the appellant as a temporary general worker on 11th August 1997. His employment was subsequently renewed on a succession of fixed-term contracts as follows:
31/12/2001 6/9/2002 – extended to 25/4/03
During the years 2000 and 2001 the appellant offered the respondent the opportunity to participate in an apprenticeship program. The respondent declined these offers. On renewal of his final fixed-term contract the appellant informed the respondent that on its expiry it would not be further renewed. It appears that this decision was pursuant to an agreement reached between the appellant and its trade unions which provided that the engagement of temporary workers would cease on 30th September 2004 and that those affected would be offered the choice of redundancy payments or participation in an apprenticeship scheme.
The respondent took issue with this decision and pursued an individual claim before the ESB Industrial Council (the appellant’s internal disputes resolution tribunal). In a decision binding on all parties the Industrial Council rejected the respondent’s claim and found that his employment must end on 30th September 2004 unless he accepted an apprenticeship for network technician.
The respondent was thus faced with the choice of either having his employment terminated by reason of redundancy (in respect of which an agreed compensation package was available) or entering the apprenticeship programme on terms applicable to that programme. The respondent chose the latter course. He now complains that in not offering him a contract of indefinite duration on the expiry of his fixed-term contract the appellant contravened the Act.
Issues for Consideration
The appellant raised a number of substantial points in its submission to the Court. The Court is, however, satisfied that the case can be reduced to the net question of whether the appellant contravened Section 9 of the Act by renewing the respondent's fixed-term contract of employment in a manner or on terms proscribed by that section. This, in turn, raises questions as to the legal status of a contract of apprenticeship and whether it is capable of being regarded as a fixed-term contract within the meaning of the Act.
The Law Applicable
T he rights and obligations of the parties for the purposes of the instant case are to be fond at section 9(1)and 9(3) of the Act. Section 9(1) provides as follows:
9.--(1)Subject to subsection (4) where on or after passing of this Act a fixed-term employee completes or has completed his or her third year of continuous employment with his or her employer or associated employer, his or her fixed-term contract may be renewed by that employer on only one occasion and any such renewal shall be for a fixed term of no longer than one year.
Section 9(3) provides as follows:
- (3) Where any term of a fixed-term contract purports to contravene subsection (1) or (2) that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.
The respondent’s penultimate fixed term contract expired on 1st October 2003, which was after the date on which the Act was passed. He was then given a further fixed-term contract for one year to expire on 30th September 2004. That arrangement was compatible with the provisions of Section 9(1). However, at the expiry of the respondent’s final fixed-term contract he entered into a contract of apprenticeship with the appellant. If, as the respondent contends, this constituted a renewal of his fixed term contract, which expired on 30th September 2004, Section 9(1) would have been contravened with the result that the provision of Section 9(3), deeming him to be employed on a contract of indefinite durations, would take effect.
Nature of Apprenticeship
The apprenticeship contract is one of four years duration or such longer period as may be necessary to attain a National Craft Certificate. It is a statutory scheme governed by rules made by FAS pursuant to powers contained in Industrial Training Act 1967 and the Labour Services Act 1987. It is, however, a contract of apprenticeship and not a contract of service.
The essential purpose of a contract of apprentice is to provide the apprentice with the training and skills necessary for him or her to qualify in a trade or profession. The core contractual duty on the employer is to provide the apprentice with training over the period specified or until the necessary qualification is attained. There is a concomitant duty on the apprentice to undertake the training and to remain with the employer until he or she qualifies. It is significantly different from an ordinary contract of service (see the decision of the Court of Appeal for England and Wales inDunk v George Waller & Sons 2 All ER 630. per Widgery LJ (as he then was) and more recently the Judgment of Burton J inFlett v Matheson IRLR 412). A further distinguishing feature of a contract of apprenticeship is that it is discharged by performance when the apprentice attains the qualification for which he or she is trained. Hence the former apprentice cannot maintain proceedings for unfair dismissal under the Unfair Dismissals Acts 1977 – 2001 if he or she is not retained in employment after the expiry of the apprenticeship.
The distinction at common law between a contract of service and a contract of apprenticeship is further exemplified by the practice of the Oireachtas in expressly including both types of contract in the definitions of a “contract of employment” for the purposes of most employment related statutes. Typical of such provisions is that contained at Section 3 of the Protection of Employees (Part-Time Work) Act 2001(which is part of the same legislative scheme as the Act of 2003), which provides: -
- "contract of employment" means—
(a) a contract of service or apprenticeship, and
(b) any other contract whereby an individual agrees with another person, who is carrying on the business of an employment agency within the meaning of theEmployment Agency Act, 1971, and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract),
whether the contract is express or implied and, if express, whether it is oral or in writing;
By contrast Section 2 of the Act provides as follows: -
- "contract of employment" means a contract of service whether express or implied and, if express, whether oral or in writing but shall not include a contract whereby an individual agrees with another person, who is carrying on the business of an employment agency within the meaning of the Employment Agency Act 1971 and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract);
It is thus clear, as a matter of statutory interpretation, that a contract of apprenticeship is not to be regarded as a contract of employment for the purposes of the Act.
Of further significance for present purposes is the definition of the term “fixed-term employee” contained at section 2 of the Act, which provides:-
- "fixed-term employee" means a person having a contract of employment entered into directly with an employer where the end of the contract of employment concerned is determined by an objective condition such as arriving at a specific date, completing a specific task or the occurrence of a specific event but does not include—
The respondent was undoubtedly a fixed-term employee from the commencement of his employment with the appellant up to 30th September 2004. However, he could no longer be so classified thereafter as Section 2 makes it clear that a person engaged on an apprenticeship scheme is not to be regarded as a fixed-term employee for the purposes of the Act.
In light of the foregoing the Court is satisfied that the factual and legal characteristics of the respondent’s contract of apprenticeship are significantly different from those of a normal contract of service. The Court is further satisfied that these differences are such as to make it impossible to hold that the respondent’s entry into apprenticeship constituted a renewal of his prior fixed-term contract within the meaning of section 9(1) of the Act. On this crucial point the Court respectfully disagrees with the contrary conclusion reached by the Rights Commissioner. In consequence the Court must hold that the appellant did not contravene Section 9 of the Act and that the respondent’s complaint is not well founded.
The appeal is allowed and the decision of the Rights Commissioner is set aside.
Signed on behalf of the Labour Court
4th October, 2005______________________
Enquiries concerning this Determination should be addressed to Tom O'Dea, Court Secretary.