Judgment of the Court of Appeal of Lisbon of 2014-07-02

Sequence of Fixed-Term Contracts and Limitation Period of Employment Claims

The Court of Appeal of Lisbon was requested to examine the case of the employer of a  handling company who had been hired under successive fixed-term employment  contracts by the same employer, in a total of 3 fixed-term  employment  contracts and,  who, finally, concluded a permanent employment contract.

In the action filed on  19  November  2012,  the employee requested that the  Court  declared his automatic career progression in the professional category of  Operador de  Assistência, ordering the company to pay the salary difference due.

In the 1st instance, the Labour Court of Lisbon discharged the employer from the claim,  recognising the limitation period claimed in respect of the requests and claims made by  the employee in the action. The Labour Court of Lisbon did not accept the argument of  the employee that he was always under a permanent employment contract and that the  employment relation should be considered to be one and the same since 3 June  2005,  date of execution of the first fixed-term contract. Indeed, the Court considered that, for  the purpose of claims arising from the possible invalidity of the contractual relation, the  date of termination of the second contract should be considered.

Being requested to rule on the case, the Court of Appeal of Lisbon began by examining  the sequence of contracts, concluding that between the first and  the  second fixed-term  contract there was no time gap, since one ended on 31 October  2005  and the other  began the following day, on 1 November, and continued until 31 October 2006; the third  fixed-term contract was in force since 1 December 2006 until 30 November 2007, and on  2 February 2008 the parties signed a permanent employment contact.

The Court considered that there had been a chronological sequence between the first and  the second contract and a 1 month gap  (November 2006) and a 2-month and 1 day gap  (December 2007, January 2008 and the 1 st day of February of the same year) between,  respectively, the second and the third and between the third and the fourth contract. The Court of Appeal of Lisbon concluded that the contracts had always been  concluded  between the same employee and employer, and that there had never really been a  situation of autonomy and availability by the employee since 3 June 2005 until the action  had been brought against the employer, as implied by the 1-year limitation period. Indeed, the  Court considered that the situation described in the records never put the  employee in the conditions legally required to entitle him to exercise the rights arising  from fixed-term contracts,  stating that if the limitation period relating to those three  fixed-term contracts were to be counted from 1 November  2006 (it should be reminded  that between the first and the second there was no time gap) the same was suspended with the beginning of the employment relation based on the third fixed-term employment  contract  (that is, only consuming 1 month of the 1-year limitation period),  counting of  the same being resumed on 1 December 2007 and again suspended on 2 February 2008  (summing another two months and 1 day),  and has been finally suspended from the  latter date until then.

It was the opinion of the Court of Appeal of Lisbon that the 1-year term from the end of  any of the three fixed-term employment contracts never fully elapsed, since the same  was suspended.

The Court of Appeal of Lisbon further considered that such suspension,  had it not  occurred pursuant to Article 381(1) of the 2003 Labour Code  (applicable to this case),  could possibly be based on an  event of force majeure, as provided for in Article 321 of  the Civil Code.

The Court sustained that, with several successive fixed-term employment contracts, with  time gaps between them,  the limitation period of claims arising from the contracts  already terminated, which began on the day following termination, must be considered  suspended again from the time the parties execute a new contract, since the rationale  for the legislator choosing the specificity referred to above with regard to the limitation  period of employment claims, subsists.

Therefore the  Court of Appeal of Lisbon decided to uphold the appeal brought by the  employee and dismiss the exception of limitation period raised by the employer.