Fixed Term Workers: ECJ decision may cause chaos for employers

Thanks to Katherine Apps of Littleton Chambers for writing this case summary

The ECJ has handed down judgment in Impact v Minister for Agriculture and Food (Ireland). The case is important both for its ruling on the substantive law and particularly on how Claimants can protect their EC law rights in national Employment Tribunals. The ECJ holds:-

• Non-discrimination rules in the Fixed Term Workers Directive have direct effect, meaning they can be enforced directly irrespective of the national laws (para 59-68).
• Abuse by use of successive fixed term contract rules do not have direct effect, but national law should be interpreted consistently with the Directive if at all possible (para.80 and para. 104). The ECJ sets out in terms what is 'possible' and holds that retroactive effect must be given to the Irish legislation.
• The principle of non discrimination against fixed term workers extends to pension entitlements: This has the potential to cause chaos for employers which treat fixed term employees differently for pension purposes, or exclude them altogether from their pension scheme. As Article 4(2) has been held to have direct effect this ruling will be of particular concern to public bodies. It should also be noted that the extent of indirect effect through the duty of consistent interpretation could potentially significantly affect private employers as well.
• Employees must be able to bring claims based on EC law in the Employment Tribunal: The ECJ held that where national legislation implementing EC law provides for a specialist court jurisdiction (here the Irish Labour Court, which is similar to the Employment Tribunal system), European law requires that that tribunal have the power to hear and determine disputes arising directly from that European legislation. It is not sufficient for Claimants to have recourse separately to the County Court/ High Court (paras 37-55); the tribunal must have jurisdiction to hear the complaints.