Blog: Sciotto case enjoins employers to tread lightly over rights of fixed term employees



John Macmillan

The recent judgment of the Court of Justice of the European Union (CJEU) in the case of Sciotto v Fondazione Teatro dell’Opera di Roma serves as a great reminder to employers in the arts industry of the complexities involved in employing fixed-term employees, write John Macmillan and Conor Whittaker.

Facts

Ms Sciotto was a ballet dancer for the Fondazione Teatro dell’Opera in Rome. She was employed by the opera house under multiple fixed-term contracts for a variety of different performances between 2007 and 2011. Ms Sciotto took the position that she was not a fixed term employee and was a permanent member of the theatre staff since she performed the exact same role as other members of staff who were on indefinite contracts.

The district court dismissed Ms Sciotto’s action on the basis that specific national rules which dealt with the foundation of opera houses excluded the general operation of an open-ended relationship of employment. Ms Sciotto then appealed the decision to the Court of Appeal in Rome. She claimed that national rules relating to operatic and orchestral establishments contravened EU law. The Court of Appeal in Rome referred the issue to the CJEU and asked it whether national laws concerning operatic and orchestral establishments were in contravention of Clause 5 of the Framework Agreement on Fixed-Term Work.

Ruling

The CJEU upheld Ms Sciotto’s argument and said that the specific national legislation which prevented employees in the operatic and orchestral industry from benefiting from permanency (after three years of successive fixed-term contracts) was in contravention of that Framework Agreement. The court refused to accept that the Italian government’s argument that the practice was objectively justified because it protected the development of Italian culture and the safeguarding of Italian historic and artistic heritage. The court held that because the national law prevented operatic workers from a transfer in any circumstances it was likely to lead to discrimination between that sector and other sectors which allowed the automatic transfer of employees after three years.

What about the UK?

Although the case dealt with Italian national law it serves as a useful reminder to employers in the arts industry in the UK to be aware of specific legislation which deals with the rights of fixed-term employees. In the UK, fixed-term employment contracts are largely governed by the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 which codified the EU Directive into our domestic law.

The regulations operate to protect employees who are employed on a fixed term contract from suffering from less favourable treatment. Employees who have been party to successive fixed-term contracts for four years may be automatically transferred to a permanent contract, unless an employer can demonstrate an objective justification to retain them as fixed-term employees, and secondly are protected from suffering from less favourable treatment than their permanent colleagues.

The scope of the protection is extremely wide including protection from less favourable contract terms and them being excluded from certain permanent benefits. Fixed term employees have the right to request a written explanation from the employer if they believe that a term is less favourable. The employer must reply within 21 days. The employer has to give a full explanation. If the response lacks substance, then an employment tribunal can draw a negative inference and may consider that the employer has breached the regulations.

Brexit: Get out of jail free card?

Certainly not, in the imminent future. We have to assume that European law will be with us for a bit yet.

Practical Steps

Employers who employ individuals under fixed-term contracts should consider the following practical steps:
• Keep accurate records of an employee’s length of service and the number of successive fixed-term contracts they have undertaken;
• If an employee achieves permanent status, send him or her written particulars which set out the change of contract.
• Maintain uniform contractual terms and benefits between fixed-term works and employees as far as possible;
• Consider if the implementation of a less favourable term or benefit is a legitimate and proportionate way of achieving a business outcome, if not then keep the terms uniform; and
• Make sure responses to requests for written explanations are accurate, detailed and thorough;

Employers who are unsure about this or are unsure of how they should treat fixed-term employees should seek professional advice to avoid any allegations of unjustified less favourable treatment and/or unwelcome claims.

John Macmillan is a partner and Conor Whittaker a trainee at MacRoberts