The ECJ has held that employees who had become permanent were able to rely on the principle of non-discrimination contained in the Fixed-term Work Directive, as their complaint arose from the time they had spent working under fixed-term contracts.
The aim of the Fixed-term Work Directive (1999/70/EC) is to promote equal treatment between fixed-term and permanent employees and to prevent any abuse arising from the use of successive fixed-term employment relationships. Under the Directive fixed-term employees cannot be treated less favourably than permanent employees simply because of the nature of their contract, unless of course this can be objectively justified by the employer.
The Fixed-term Work Directive is implemented in the UK through the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the "Fixed Term Employee Regulations"), which provide that employees have the right not to be treated less favourably than permanent employees on the ground that they are in fixed-term employment.
Valenza and others v Autorità Garante della Concorrenza e del Mercato
The case arose out of claims brought by employees of the Italian National Competition Authority (the "AGCM") who had worked for the AGCM under successive fixed-term contracts. They applied to have their posts become permanent under a 'stabilisation procedure' specific to their employment. However, Italian law allowed the AGCM to ignore the periods of service these employees had completed under their fixed-term contracts when calculating their length of service for the purposes of their pay under the permanent posts. As a result, the employees were placed at the bottom of the pay scale relevant to their category. They brought claims in the Italian courts for discrimination and non-compliance with the Framework Agreement. The Italian court sought a preliminary ruling from the ECJ as to whether periods of service accrued under fixed-term contracts could be disregarded in such a scenario.
The ECJ's answer to this question was, essentially, no: periods of service under fixed terms contracts could not be disregarded when the employees became permanent, unless such treatment could be objectively justified and in this case they could not.
The Italian Government tried to argue that the Framework Agreement is restricted in application to employees who are currently in a fixed-term employment relationship, meaning the employees in this situation were not able to bring their claim. The ECJ rejected this argument, stating that the fact an employee has obtained the status of a permanent employee does not mean that, in certain circumstances, they cannot rely on the principle of non-discrimination laid down in the Framework Agreement.
The Fixed Term Employees Regulations provide that employees have the right not to be treated less favourably than permanent employees on the ground that they are in fixed-term employment. On a strict interpretation of these provisions, only employees who are currently employed under a fixed term contract can bring a claim. However, following the ECJ's decision, the UK Tribunal are likely to read the language of the Fixed Term Employees Regulations purposively, allowing employees with permanent status to bring claims for less favourable treatment if their complaint relates to their previous fixed-term status.