The European Court understands that compensation for objective dismissal obeys to a circumstance that does not exist in the termination of temporary contracts: the unpredictability of the contractual termination.

Judgement delivered by the Court of Justice of the European Union on 5 June 2018 (C-677/16)

The Judgment analyses the case of Mrs Montero Mateos, employed as an assistant through a temporary contract in 2007 by the Social Care Agency of Madrid. The working relationship ended in 2016, after the position was awarded to another person after the corresponding selection process. 

Mrs Montero Mateos filed a claim for the dismissal of 14 October 2016 -just one month after the publication of the Judgement from the Court of Justice of the European Union (CJEU) on the “de Diego Porras” case- which was transferred to Labour Court no. 33 of Madrid.

In this context, the Court decided to suspend the procedure and request a preliminary ruling from the CJEU. 

Specifically, it asked if, in light of the then recent view on the “de Diego Porras” case, the following should be interpreted: (i) that the fact that the parties knew from the beginning of the working relationship that said relationship would be limited is enough reason to justify the difference in compensation for the end of indefinite and temporary contracts; (ii) or, to the contrary, that said difference would not be justified, as on the one hand, in either of the two cases, the employee suffers actual harm from the loss of their job and, on the other, the final awarding of the temporarily covered position would constitute objective reason linked to the organisation of the company. 

The preliminary issue is essentially, if clause 4, section 1 of the Framework Agreement on fixed-term employment (Framework Agreement) is opposed to a national regulation that does not foresee the payment of a compensation to employees with temporary contracts when the compensation is awarded to indefinite employees due to the termination of their contract for objective causes. 

The CJEU, in line with the conclusions of the General Attorney, understands that a national regulation with regard to the above is not in opposition to the Framework agreement, presenting its argument in three stages:

Firstly, it reiterates that the concept of “work conditions” of clause 4, section 1 of the Framework Agreement includes compensation for contract termination. 

Secondly, it examines if Mrs Montero Mateos was in a situation comparable to an indefinite employee to perform the same functions. The answer is affirmative, as the employee performs the same tasks as the person hired after passing the selection process.

Thirdly, it examines if there is an objective justification for the difference in treatment. The answer is also affirmative, as the compensation of 20 days for objective dismissal corresponds to the unpredictability of the breaking of the indefinite contract, disappointing the employee’s expectations to continue- non-existent expectations in temporary contracts

That said, the CJEU adds that it is up to the court to decide if, in view of the unpredictability of the termination of the contract and of its unusually long length (we highlight that the temporary contract of the employee lasted 9 years), it should be re-classified as indefinite.

In conclusion, the “Montero Mateos” Judgement seems to rectify the famous “de Diego Porras” case, making it difficult to file claims for compensation for objective dismissals of the Worker’s Statute for termination of temporary contracts on their expiry date.