A decision going against the employer in the Employment Court serves as a reminder about the strict rules when it comes to using fixed-term employment agreements.
The case centred around a furniture company who terminated a newly hired sales staff member under a 90 day trial period after deciding her skills weren't suited or adequate to the role. Apparently they then offered her a fixed-term employment agreement to see her through the Christmas period from December to February to give her income over Xmas and the opportunity to seek new employment.
Following the end of the fixed term the employee then raised a personal grievance suggesting the company didn't have a valid reason to make the employment subject to a fixed term. The Employment Relations Authority (ERA) agreed. As did the Employment Court after the company challenged the ERA decision. The Employer ultimately were required to pay $15,000.00 hurt and humiliation compensation in addition to 3 weeks further pay.
In this particular case the Employment Court concurred with the ERA that the employer had an ongoing need for the role to continue, albeit not with this particular employee, and thus their actions simply serve to limit the company's exposure to ongoing employment of the person and further compromising the staff member's rights. So while the employer’s intentions may have been sincere, the fixed term arrangement was not based on reasonable grounds.
The Employment Relations Act is very clear on fixed-term arrangements. Section 66 allows for such terms provided an employer has genuine reasons based on reasonable grounds, and what those are have been made very clear over the years.
Valid reasons fall into the categories of being;
- Temporary absence cover
- Specific project work
- Seasonal work