Description of the circumstances of the case

MP has worked on a fixed-term contract in the fire prevention service in Spain every summer, since 1994. IP has been working as director of video production since the same year under successive fixed-term contracts. IK has entered into successive fixed-term employment contracts with the Social Services Agency since 1998 (with the exception of the years 1999-2010). What do these three employees have in common? Although the first two have been formally granted the status of “an employee for an indefinite period of time not employed on a permanent basis” by the Spanish courts, all three are in fact in the position of an employee with a repeatedly prolonged fixed-term employment contract.

All of these employees sought a declaration in the national courts that their employment contract was de facto a contract of indefinite duration, but were unsuccessful. Their cases eventually reached the Court of Justice of the European Union, which ruled on several preliminary questions in Joined Cases C-59/22, C-110/22 and C-159/22.

Obligation to sanction abuse of successive fixed-term employment contracts

The framework agreement applies to employees in fixed-term employment. Thus, the Court first addressed the question whether or not employees in a “permanent employment relationship of indefinite duration” under Spanish law (i.e. MP and IP) fall within the scope of the Framework Agreement[1] at all. The CJEU concludes, despite the first impression arising from the language perspective, that the Framework Agreement applies to these cases.

The Framework Agreement[2] requires Member States to take measures to prevent misuse of successive fixed-term employment contracts (or relationships). This measure aims to sanction employers for abusing fixed-term contracts and breaching EU law. Spanish legislation has not introduced any such measure. Under Spanish legislation, although a worker employed for an indefinite period not employed permanently is entitled to a lump-sum severance payment on termination of his employment[3], this does not represent a sufficient sanction according to the CJEU.

Nor, in the view of the CJEU, can a Member State relieve itself of its obligations under the Framework Agreement by consolidating temporary employment through the publication of tenders for such posts, as is the case in Spain. While this procedure allows an employee for an indefinite period of time not employed on a permanent basis to apply for a permanent job, on the other hand, the employee can easily lose his current job if he fails the examinations.

Conversely, the conversion of successive fixed-term contracts into contracts for an indefinite period of time may constitute an appropriate measure to fulfil a Member State’s obligation under the Framework Agreement[4].

Conflict between European law and national constitutions

In the decision in question, the CJEU also dealt with the ageless question of the conflict between constitutional norms and European law. It is settled case law of the Spanish Supreme Court that a procedure under the Framework Agreement could be unconstitutional. The Spanish Constitution requires the application of the principle of equality and merit in access to employment in the public service. Employees who have not been recruited following a selection procedure in compliance with these principles fall into a different category from those who have been recruited following such a procedure (Spanish law uses the term an employee for an indefinite period of time not employed on a permanent basis for this special category). Therefore, if successive employment contracts of an employee for an indefinite period of time not employed on a permanent basis were converted into contracts of indefinite duration, such a procedure would contravene the above-mentioned constitutional principles. It should be noted that the Spanish Constitutional Court considers, on the contrary, that these principles do not apply to contractual employment relationships.

The CJEU stressed that it is primarily the duty of national authorities to adopt proportionate, effective and dissuasive measures under the Framework Agreement. On the other hand, it is the duty of the national courts of the Member States to interpret the applicable legislation in an EU-conform manner. The courts have this obligation even at the cost of changing settled case law that relies on a legal interpretation contrary to the objectives of the Framework Agreement. Thus, if the interpretation of the Constitution long held by the Supreme Court is incompatible with the objectives of the Framework Agreement, the CJEU considers it appropriate for the courts to depart from this case law.

The CJEU concludes that the national courts of the Member States are obliged to interpret and apply national legislation in such a way as to impose appropriate penalties for breaches of the Framework Agreement and to remedy the consequences of breaches of EU law.

In conclusion

This case law is particularly ground-breaking in that it excludes the possibility for Member States to circumvent the Framework Agreement by means of labour law institutions that obscure the true nature of the particular employment relationship. The CJEU has made it clear that any institute, however named, which leads to the abuse of successive fixed-term employment contracts, must be effectively sanctioned by the Member States.

[1] Directive 1999/70/EC – Framework Agreement on fixed-term work made between the UNICE, CEEP and ETUC trade unions

[2] Clause 5(1) of the Framework Agreement

[3] This severance pay is set at twenty times the daily wage for each year of service up to a maximum of one year’s pay.

[4] Clause 5(2) of the Framework Agreement