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DOI: 10.5553/EELC/187791072023008003003

European Employment Law CasesAccess_open

Case Reports

2023/22 Limits for determining types of work in a collective agreement that justify the chaining of fixed-term employment (SK)

Trefwoorden Fixed-term employment, Collective agreement, Discrimination
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Radoslava Lichnovská, "2023/22 Limits for determining types of work in a collective agreement that justify the chaining of fixed-term employment (SK)", European Employment Law Cases, 3, (2023):119-122

    The Supreme Court of the Slovak Republic (Najvyšší súd Slovenskej republiky) has ruled that the situations described in a collective agreement which justify a further extension of a fixed-term employment relationship must justify the temporary nature of their performance. The collective agreement must also specify the reasons for the temporary need to carry out those works. It is not allowed that the employer states in the employment contract the reason for the renewal of the fixed-term employment relationship merely by reference to the fact that the employee is performing the works defined in the collective agreement without stating a substantive reason satisfying the justification for doing so.

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    • Summary

      The Supreme Court of the Slovak Republic (Najvyšší súd Slovenskej republiky) has ruled that the situations described in a collective agreement which justify a further extension of a fixed-term employment relationship must justify the temporary nature of their performance. The collective agreement must also specify the reasons for the temporary need to carry out those works. It is not allowed that the employer states in the employment contract the reason for the renewal of the fixed-term employment relationship merely by reference to the fact that the employee is performing the works defined in the collective agreement without stating a substantive reason satisfying the justification for doing so.

    • Background

      The legal regulation of fixed-term employment in the Slovak Labour Code (the ‘LC’) results from the transposition of Council Directive 1999/70/EC concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP. The Directive establishes a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships. For this purpose, clause 5 of the framework agreement specifies the following three measures:

      (a) objective reasons justifying the renewal of fixed-term employment contracts or relationships;
      (b) the maximum total duration of successive fixed-term employment contracts or relationships; and
      (c) the number of renewals of fixed-term employment contracts or relationships.

      Even though the framework agreement imposed a requirement on the Member States to introduce one or more of the above measures, the Slovak Republic has decided to transpose all three in the LC.
      According to Section 48(1) of the LC, an employment relationship is agreed upon for an indefinite period if the duration of the employment relationship has not been expressly determined in the employment contract or if the legal conditions for concluding an employment relationship for a definite period have not been fulfilled in the employment contract or when it is amended.
      Section 48(2) of the LC states that a fixed-term employment relationship may be agreed upon for a maximum period of two years. A fixed-term employment relationship may be extended or renegotiated no more than twice within a period of two years.
      Furthermore, Section 48(4) of the LC specifies the reasons allowing for a further extension or renegotiation of the fixed-term employment relationship for a period of up to two years or beyond two years (based on clause 5 letter (a) of the framework agreement). One of these reasons (relevant for this case) is the performance of works agreed upon in a collective agreement (Section 48(4)(d) of the LC). The reason for extending or renegotiating the employment relationship shall be stated in the employment contract (Section 48(5) of the LC).

    • Facts

      The claimant was an actor, and the defendant a theatre. The actor’s employment contract was amended by an extension for five years under the collective agreement. The collective agreement agreed upon by the theatre as the employer and the trade union defined the possibility of further extension or renegotiation of the employment relationship for a fixed period of up to two years or over two years for the performance of work activities by employees assigned to positions for which an artistic education is required. However, the provision in question in the collective agreement did not reflect the current legal regulation since the further extension or renegotiation of the employment relationship for a fixed period of up to two years or for more than two years due to the performance of work for which artistic education is required had been removed from the LC. After expiry of the fixed-term of employment, the theatre notified the actor that it was terminating her employment on the grounds that the term of employment had expired.
      By the action brought, the actor claimed that her employment relationship, based on the employment contract and the said amendment, changed from a fixed-term period to an indefinite period. Therefore, it could not be terminated based on the expiration of the period for which it was agreed. The actor primarily objected to the procedure of the theatre, who, despite the amendment to the LC, entered into employment relationships with employees – actors for a fixed-term period – without giving any reasons for such a procedure. Furthermore, the actor argued that her employment relationship was established for an indefinite period (as a result of the amendment to the employment contract), as the legal conditions for concluding a fixed-term employment relationship were not met when the employment contract was amended.
      In the dispute, the theatre relied on the statutory possibility of a further extension of the fixed-term employment relationship due to the performance of the work specified in the collective agreement. It argued that the LC does not require that the collective agreement defines the grounds based on which the employer needs the actors to perform the work only temporarily, which would justify a chaining of the employment relationship.
      Due to the extensions of the fixed-term contract, the actor’s employment had lasted almost 11 years at the date of the termination of her employment by the theatre.

    • Judgment

      The court of first instance found in favour of the employer. This judgment was overturned on appeal, and the Court of Appeal determined that the fixed-term employment relationship between the actor and the theatre had converted into an indefinite term employment relationship and continued to exist. The Supreme Court upheld the Court of Appeal’s decision.
      The court of first instance had found that the legal conditions for concluding a fixed-term employment relationship were met. Therefore, it was not possible to conclude that the employment relationship had been converted into an employment relationship for an indefinite period. The court of the first instance also noted that the further extension, or the chaining of employment for a fixed period, was not contrary to good morals.
      However, the Court of Appeal disagreed with this conclusion and considered it to result from an incorrect legal assessment. The Court of Appeal highlighted that Section 48(4)(d) of the LC breaks the prohibition of chaining fixed-term employment by referring to works agreed upon in the collective agreement. Nevertheless, it stated that only work characterised by its temporary nature may be agreed upon in a collective agreement to allow the chain of employment. Thus, a mere reference to the artistic type of work in the collective agreement without implying a temporary need on the employer’s part to employ actors in fixed-term employment is insufficient.
      Although the LC in its previous version allowed further extension or renegotiation of the employment relationship for a fixed-term period of up to two years or more than two years due to the performance of work for which education in the artistic field is required, the amendment to the LC brought about a change that eliminated this reason. This change needed to be taken into account when assessing the possibility of extending the employment relationship by the theatre. Therefore, if the theatre’s collective agreement accepted the repealed provision of the law without reservation, stating that “further extension or renegotiation of a fixed-term employment relationship for up to two years or beyond two years is possible for employees performing work positions requiring education in the artistic field”, without providing any reason for these work activities to be of a temporary nature, it established an exception to the prohibition of fixed-term employment chaining beyond the scope of the law, to the detriment of the employee and in contradiction to the nature of work for which the LC allows exceptions to the prohibition of chaining fixed-term employment. At the same time, reasons for extending the fixed-term employment relationship were absent in the employment contract or its amendment.
      Based on these facts, the Court of Appeal concluded that in the case of the amendment to the employment contract, the legal conditions for concluding an employment relationship for a fixed term were not met. Thus, the employment was concluded for an indefinite period.
      The Supreme Court confirmed the decision of the Court of Appeal, stating that the employment relationship between the actor and the theatre was for an indefinite period. The Supreme Court ruled that the works agreed upon in a collective agreement shall justify the further extension or renegotiation of a fixed-term employment relationship by meeting the requirement of being performed temporarily. Simultaneously, the collective agreement must also specify the reasons for the temporary need to perform these works.

    • Commentary

      An interesting fact in connection with the Supreme Court’s decision is that the LC, in its previous wording, allowed employers to further extend or renegotiate the employment relationship for a definite period of up to two years or for more than two years on the ground of the employee’s performance of work for which education in the artistic field is required.
      However, in its formal notification, the European Commission indicated that the above exception was contrary to the framework agreement. The European Commission called on the Slovak Republic to take the necessary measures to eliminate this discrepancy. These reservations of the European Commission were accepted, and the ground in question has been removed from the LC.
      The Supreme Court’s decision has contributed to the Slovak courts’ future approach to assessing the grounds justifying the employer’s action in further extending or renegotiating a fixed-term employment relationship in the context of the prohibition of chaining of fixed-term employment relationships.
      The ruling clarifies the criteria for extending or renegotiating employment contracts for a specific duration and emphasises the need for a genuine justification based on the temporary nature of the work. Employers can no longer rely solely on the fact that it specifies tasks in a collective agreement allowing for chaining of fixed-term employment without providing substantial reasons that satisfy the reasonableness of such action. This ensures higher employee protection by preventing the abuse of fixed-term contracts following the conditions set by the framework agreement.
      The concept of ‘objective reasons’ has also been the subject of interpretation by the ECJ, which has established that it must be understood as referring to precise and concrete circumstances characterising a given activity, which are therefore capable in that particular context of justifying the use of successive fixed-term employment contracts. Those circumstances may result, in particular, from the specific nature of the tasks for the performance of which such contracts have been concluded and from the inherent characteristics of those tasks or, as the case may be, from pursuit of a legitimate social-policy objective of a Member State (C-212/04 Adeneler and Others, paragraphs 69 and 70; joined cases C-378/07 to C-380/07 Angelidaki, paragraph 96; C-307/05 Del Cerro Alonso, paragraph 53; C-331/17 Sciotto, paragraph 39).
      On the other hand, the Supreme Court has arbitrarily imposed an additional requirement beyond the Slovak legal regulation for further extension of the employee’s fixed-term employment relationship by ruling that the collective agreement must specify the reasons for the temporary need to carry out the work. In this respect, we believe that the agreement of the social partners in the collective agreement should be respected, provided that the works agreed therein warranting a further extension or renegotiation of the fixed-term employment relationship meet the criterion of the reasonableness of the employer’s requirement for the temporary nature of the need for its performance, and therefore do not constitute an abuse of the law. Therefore, the requirement to specify those reasons explicitly in the collective agreement is excessive and, ultimately, does not guarantee that it will be based on legitimate objective reasons.
      Although the Supreme Court did not mention the ECJ ruling C-331/17 Sciotto in its decision, the ruling in question is also relevant to the present case, as it related to the recurrent fixed-term employment of a ballet dancer in the operatic and orchestral foundations sector. The ECJ held that also in this sector national legislation must contain effective measures to prevent and, where relevant, punish the abuse of successive fixed-term contracts.

    • Comments from other jurisdictions

      Germany (Andre Schüttauf, Luther Rechtsanwaltsgesellschaft mbH): In Germany, the Part-Time and Fixed-Term Employment Act (Teilzeitbefristungsgesetz, ‘TzBfG’) governs the admissibility of fixed-term employment contracts. According to Section 14(1) of the TzBfG, the fixed-term nature of an employment contract is permissible if it is justified by an objective reason. The law subsequently lists a range of circumstances in which an objective reason is given, without this list being exhaustive. Accordingly, an objective reason exists, among other things, if the nature of the work performance justifies the fixed term (this is relevant for this case, see below).
      However, the limitation of an employment relationship can also be justified without the existence of an objective reason. A fixed-term employment contract without an objective reason is permissible for a period of up to two years; up to this total period of two years, a fixed-term employment contract may also be extended up to a maximum of three times. The prerequisite is that a fixed-term or unlimited employment relationship has not previously existed with the same employer. The number of extensions or the maximum duration of the fixed term may be determined differently by collective agreement.
      Collective agreement regulations are of particular relevance for the reason of ‘specific nature of the work performance’. The wording ‘specific nature of the work performance’ does not indicate in more detail which characteristics of the work performance justify the fixed term of an employment contract. However, it can be derived from the legislative materials that this reason is primarily intended to take into account constitutional particularities resulting from freedom of broadcasting (Article 5(1) of the German Constitution) and freedom of art (Article 5(3) of the German Constitution). According to the case law of the Federal Labour Court (Bundesarbeitsgericht, ‘BAG’), the fixed-term employment contracts of artistic stage personnel are objectively justified because this enables the employer to realize the artistic ideas of the director with the artistic stage personnel they consider suitable for this purpose and to take into account the audience’s need for variety (see, for example, BAG, judgment of 13 December 2017 – 7 AZR 369/16).
      If the conflicting interests have already been balanced in a collective bargaining agreement applicable to the employment relationship and the employees’ interests have been adequately taken into account, the court shall be bound by this balancing of interests carried out by the parties to the agreement. The parties to the collective bargaining agreement have a prerogative to assess the actual circumstances, the interests affected and the consequences of the regulation. Furthermore, they have a margin of judgment and discretion with regard to the content of the regulation.
      All in all: If the contractually agreed job is one in which the employee is to work predominantly in an artistic capacity and if the parties to the collective bargaining agreement have adequately taken into account the mutual interests in such an agreement, then essentially the regulations of the collective bargaining agreement apply when it comes to fixed-term employment.
      However, the BAG does not see the additional requirement that a specific reason must be given why the specific ‘predominantly artistic’ activity is to be agreed for a fixed term.

      Italy (Ornella Patané, Toffoletto De Luca Tamajo): Based on Italian law, the court would have come to the same conclusion. In Italy, in order to limit the abuse of the use of fixed-term employment contracts, the law provides for very strict rules that leave no room for interpretation. In fact, a fixed-term employment contract can be signed without reasons for a maximum of 12 months; after this period, a fixed-term contract is permitted only for specific reasons provided for by law (moreover, recently amended). On the basis of this, if a fixed-term employment contract is concluded without reasons for a duration of more than 12 months, or if a fixed-term employment contract for specific reasons is longer than 24 months, that contract is automatically converted into an employment contract of indefinite duration.

      Subject: Fixed-term work
      Parties: Unknown – v – Divadlo J. G. Tajovského
      Court: Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic)
      Date: 30 November 2022
      Case number: ECLI:SK:NSSR:2022:6718205009.1
      Internet publication: https://www.nsud.sk/rozhodnutia/9cdo2732020/


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