The Fixed-Term Employees (Prohibition on Discrimination) Law (98(I)/2003) and the EU Fixed-Term Employment Directive (1999/70/EC) apply equally to indefinite and permanent contracts of public and private sector employees and the judicial remedies in the event of illegality on the part of an employer must be fair and equitable.
Applicant 1 and Applicant 2 were employed as actors by the Cyprus Theatre Organisation (CTO) from 1996 to 2001, respectively. Both applicants were hired under one-year fixed-term contracts which were automatically renewed annually before their expiration without interruption until their employment was terminated on September 30 2012. The reason given for the termination of employment was that the CTO had decided not to renew their fixed-term employment contracts for another year.
The applicants filed a claim with the Court of Industrial Disputes, claiming reinstatement under the terms and conditions set out in Law 98(I)/2003 or, alternatively, compensation for unlawful dismissal.
The applicants argued that under Article 7 of Law 98(I)/2003, their employment had become permanent, as they had been employed on fixed-term contracts for over 30 months. As such, their contracts should have for all purposes been regarded as permanent. Further, the applicants argued that any provision in their contracts that limited the duration of their employment was inapplicable, unless the employer could prove that a fixed-term employment contract was justified by objective reasons.
With reference to the recruitment process to employ actors, the CTO rejected the applicants' argument and contended that there were objective grounds associated with the acting profession which justified the limited duration of the applicants' employment contracts.
In making its decision, the court examined whether:
- the applicants' employment was governed by public or private law; and
- Law 98(I)/2003 is applicable to public and private sector employees.
As regards compensation awarded, the court had to decide whether:
- the applicants' period of service ran from their hiring date or from July 25 2003 (ie, the date on which the law came into force); and
- the court was justified in exercising its discretion to award aggregated damages.
With regard to the employment period, the applicants' counsel argued that their period of employment started on the date on which they were first employed, as Law 98(I)/2003 was introduced to supplement rather than abolish the existing legal regime. It was further argued that Law 98(I)/2003's implementation and harmonisation with the EU Fixed-Term Employment Directive was irrelevant to the applicants' employment status, as their employment was deemed to be permanent in accordance with Article 5(d) of the Termination of Employment Law 24/1967, which was applicable before Law 98(I)/2003 came into force.
On this ground, the court was bound to exercise its discretion in awarding increased damages to the applicants by considering the termination of their employment. They had held high-ranking positions in the CTO and the market conditions in the acting profession were not ideal for finding alternative employment.
The opposing side's references to Article 7(3) of Law 98(I)/2003 were limited. It argued that employment before the law's entry into force did not count towards converting a fixed-term employment contract into a permanent contract. Further, referencing the fact that the applicants had worked at the CTO for several years in high-ranking positions with high salaries, the opposing side recommended that the applicants should not be awarded increased damages, as it could not be proven that their employment opportunities would be limited as a result of the termination of their employment.
The court recognised the applicants' employment status by clarifying that although they had been hired by the CTO on fixed-term contracts, the requirements of their roles were permanent. Further, as it is a government organisation, CTO employees are governed by Council of Ministers regulations (ie, they are governed by public law rather than private law).
The decision drew on guidance from the Supreme Court rulings in Avraam v The Republic of Cyprus ((2008) 3 AAD 49)(1) and CTO v Sofokleous (Civ Appeal 512/2012), in which it was established that the applicants' employment before the introduction of Law 98(I)/2003 was governed by public law rather than private law. In both Avraam and CTO, the employment status of fixed-term employees in the public sector, including government organisations such as the CTO, was governed by Law 98 (I)/2003 and the EU Fixed-Term Employment Directive.
Therefore, Law 98(I)/2003 and the EU Fixed-Term Employment Directive are applicable to all permanent employees hired under fixed-term contracts in the private or public sectors. According to Law 98(I)/2003 and the directive, all fixed-term employees whose employment is converted into permanent employment acquire rights guaranteed equally and fairly by the Court of Industrial Disputes. In this case, the rights acquired by the applicants as a result of the termination of their employment were governed by Law 98(I)/2003 and the EU Fixed-Term Employment Directive and no other legislation.
The court clarified that Law 98(I)/2003 has no retroactive effect and that the applicants' fixed-term employment before the law entered into force could not be considered to have converted into permanent employment and thus enable them to benefit from associated rights. As a result, in order to calculate compensation for unlawful dismissal, the court considered July 25 2003 to be the date on which the applicants had been hired.
The court considered that the applicants were permanent employees and that their employment had been terminated unlawfully. In the absence of legitimate grounds of termination, the non-renewal of their contracts was considered to be unlawful.
This ruling is in line with the Supreme Court decisions in Avraam and CTO, which follow EU case law (C-2060/04). The prevention and settlement of disputes and grievances that arise from the application of fixed-term contracts must comply with legislation, collective agreements and practices at a national level.
As confirmed by the court, Law 98(I)/2003 and the EU Fixed-Term Employment Directive apply to all employees on indefinite contracts in the private and public sectors and the remedies provided by the court in the case of illegality on the part of the employer must be complete, fair and equitable. Such remedies cannot be provided by the Supreme Court in the exercise of their authority under Article 146 of the Constitution. The Supreme Court's annulment jurisdiction is exercised only in the public sector. It has no jurisdiction to examine permanent contracts in the private sector. Therefore, the provision in Law 98(I)/2003 which establishes the Court of Industrial Disputes as the appropriate court to enforce equally and equitably the rights of employees whose employment status has changed from fixed term to permanent applies to both public sector and private sector employees.
For further information on this topic please contact Panayiota Papakyriacou at George Z Georgiou & Associates LLC by telephone (+357 22 763 340) or email ([email protected]). The George Z Georgiou & Associates website can be accessed at www.gzg.com.cy.