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DOI: 10.5553/EELC/187791072022007002005

European Employment Law CasesAccess_open

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2022/15 Alternation of fixed-term contracts and replacement contracts should give rise to a contract of indefinite duration after two years says the Constitutional Court (BE)

Keywords Fixed-Term Work
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Gautier Busschaert, "2022/15 Alternation of fixed-term contracts and replacement contracts should give rise to a contract of indefinite duration after two years says the Constitutional Court (BE)", European Employment Law Cases, 2, (2022):85-87

    Belgian law provides that replacement contracts that exceed two years become contracts of indefinite duration. The same rule applies for fixed-term contracts but not for the case where the employer alternates these two types of contracts. In the case at hand, the Belgian Constitutional Court considered Belgian law to be discriminatory on this point and invited the legislator to put an end to this difference of treatment. Awaiting this legislative change, labour courts and tribunals should consider alternation of fixed-term and replacement contracts for more than two years as a contract of indefinite duration.

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    • Summary

      Belgian law provides that replacement contracts that exceed two years become contracts of indefinite duration. The same rule applies for fixed-term contracts but not for the case where the employer alternates these two types of contracts. In the case at hand, the Belgian Constitutional Court considered Belgian law to be discriminatory on this point and invited the legislator to put an end to this difference of treatment. Awaiting this legislative change, labour courts and tribunals should consider alternation of fixed-term and replacement contracts for more than two years as a contract of indefinite duration.

    • Legal background

      Belgian law makes a distinction between fixed-term contracts and replacement contracts. As seen below, the rules governing those contracts remain quite different despite some commonalities regarding the prohibition of successive contracts over a certain period of time.
      A fixed-term contract under Belgian law presupposes that a specific date or event has been agreed after which both parties are relieved from their obligations. Article 10(1) of the law on employment contracts (hereafter ‘LEC’) provides that after several successive contracts of this type without interruption between them attributable to the worker, the parties are considered to have concluded a contract of indefinite duration, unless the employer proves that this succession is justified by the nature of the work to be performed or by other legitimate reasons.
      This presumption has been created in favour of the worker who can invoke it to guarantee the stability of their employment.
      Nevertheless, Article 10bis LEC specifies that it is possible to conclude up to four successive fixed-term contracts without them becoming a contract of indefinite duration. Each contract must have a duration of at least three months and all contracts together must not exceed two years. A special authorisation by the King may allow a minimum of six months per contract and three years in total.
      On the other hand, a replacement contract is a contract concluded for the purpose of replacing a worker whose performance of the contract is temporarily suspended. Article 11ter LEC allows such a contract to escape the classic rules concerning the duration of the contract and the notice period. But if the contract does not provide otherwise or if the contract ends for another reason than the end of the replacement, the common rules apply.
      It is possible for a replacement contract to be concluded for an indefinite period of time when it is not known precisely when the replacement will end or when it depends on an event that is not fixed in time. However, Article 11ter provides that the duration of a replacement contract cannot exceed two years. Likewise, successive replacement contracts that exceed two years without interruption attributable to the worker will be converted into a contract of indefinite duration.

    • Facts

      The claimant, a worker at the Flemish Community, was first hired on a replacement contract in 2001 then remained in the service of the Flemish Community through successive replacement contracts and fixed-term contracts until his dismissal in 2017.
      The Flemish Community then granted him compensation in lieu of notice of a little more than two months of salary, which corresponded to the remaining time of his last fixed-term contract. The claimant contested this amount and argued that, since he had been employed by the Flemish Community from 2001 until 2017, he was in fact employed under a contract of indefinite duration. He therefore claimed compensation in lieu of notice corresponding to 16 months’ salary.
      In the first instance, the Labour Tribunal of Bruges declared the claim unfounded. On appeal, the Labour Court of Ghent found that there was no fraud or abuse of rights on the part of the Flemish Community. The Court also admitted that the presumptions contained in Articles 10 and 11ter LEC do not apply when fixed-term contracts and replacement contracts follow each other successively. Finally, the Court questioned the compatibility of this strict interpretation of the law with the principle of equal treatment enshrined in Articles 10 and 11 of the Belgian Constitution.
      The Labour Court of Ghent wondered if a succession of fixed-term contracts and replacement contracts should not, like a succession of fixed-term contracts or a succession of replacement contracts, be considered after two years as a contract of indefinite duration. In other words, is there a discrimination between workers who are successively employed via replacement contracts and fixed-term contracts and workers who are employed exclusively either via successive fixed-term contracts or via successive replacement contracts, since only the latter have their contract converted into a contract of indefinite duration after two years?
      This question was referred by the Labour Court of Ghent to the Belgian Constitutional Court.

    • Decision

      The Belgian Constitutional Court first recalled that the principle of equality and non-discrimination allows for a difference in treatment between two categories of persons if this difference in treatment is based on an objective criterion and is also reasonably justified. Moreover, there must be a reasonable relationship of proportionality between the means used and the aim pursued.
      The Court added that even if the replacement contract and the fixed-term contract are different in nature, the legislator’s objective in the context of each of these contracts was to protect workers against the instability of employment inherent in these two contracts while still allowing the employer a certain degree of flexibility. Thus, even though these two types of contracts are different, the two categories of workers concerned are comparable in the eyes of the Belgian Constitutional Court.
      Besides, according to the Constitutional Court, the difference in treatment between workers on replacement contracts or workers on fixed-term contracts and workers on contracts of indefinite duration is based on an objective criterion, namely the type of contract chosen.
      The Court underlined that a succession of fixed-term contracts as well as a succession of replacement contracts lasting more than two years allow both categories of workers to benefit from job stability through a contract of indefinite duration. However, this guarantee of stability does not apply if there is an alternation of fixed-term and replacement contracts.
      The Court considered that the legislator’s objective was to ensure stability of employment and to protect workers against abuse of this type of short-term contract. It was therefore not reasonably justified, according to the Court, that a worker employed for more than two years successively under replacement contracts and fixed-term contracts should not benefit from this stability.
      The Court noted that in the case at hand, the worker concerned had been employed for many years by the Flemish Community under replacement contracts and fixed-term contracts without benefiting from stable employment. The Court added that the fact that the Flemish Community is a public employer whose status did not allow the worker concerned to acquire a permanent position does not alter this finding.
      The Court also rejected the argument that the abuse of right rules were sufficient as a guarantee for a worker in the claimant’s situation. The Court found that there are many cases where the worker will not be able to prove that his or her employer intended to evade the law and that the presumptions provided for in the LEC were intended to address this problem.
      The Court therefore concluded that Articles 10 and 11ter, Section 1, paragraph 5 LEC are not compatible with the principle of equality and non-discrimination contained in Articles 10 and 11 of the Constitution in the sense that they do not apply to a succession of replacement contracts and fixed-term contracts.
      The Belgian legislator was therefore called upon to rectify the situation and, in the meantime, the judges concerned will have to apply the rules relating to contracts of indefinite duration to workers who are in the same situation as the claimant.

    • Commentary

      With this decision the Constitutional Court has put an end to a situation which has given rise to abuse by some employers, who by alternating fixed-term and replacement contracts managed to evade the prohibition of successive fixed-term/replacement contracts for a duration of more than two years.
      The reasoning of the Court is teleological in the sense that the Court has based its conclusion on the objective pursued by the law, i.e. to ensure stability of the work relationship after a certain period spent working under short-term contracts. Once this objective is accepted, it becomes difficult to justify any difference between a succession of fixed-term contracts, a succession of replacement contracts and a succession of both fixed-term and replacement contracts.
      Until this ruling, the only way to challenge this type of arrangement was to invoke the general principle of abuse of right, which allows a claim for the existence of a contract of indefinite duration when the employer tries to avoid the prohibition of successive short-term contracts. This is difficult to do since, as the Constitutional Court noted, the burden of proof lies on the worker to establish abuse.
      Although the Constitutional Court does not refer to Council Directive 1999/70/EC concerning the framework agreement on fixed-term work (FTW) concluded by ETUC, UNICE and CEEP, this Directive remains relevant here, especially in the light of the principle of conforming interpretation. It was rightly invoked by the parties to the proceedings before the Constitutional Court.
      In our opinion, this Directive applies to fixed-term contracts but also to replacement contracts since clause 3 of the FTW agreement provides that the term ‘fixed-term worker’ means a person having an employment contract or relationship entered into directly between an employer and a worker where the end of the employment contract or relationship is determined by objective conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event. The specific event in our case would be the end of the replacement caused by the return to work of the worker whose contract was suspended.
      According to clause 5 of the FTW agreement, one or more of the following measures should be taken by Member States to prevent abuse:

      1. objective reasons justifying the renewal of such contracts or relationships;

      2. the maximum total duration of successive fixed-term employment contracts or relationships;

      3. the number of renewals of such contracts or relationships.

      In view of these provisions, Belgian law was not only in breach of the principle of equality as the Constitutional Court rightly noted but also in breach of European law since it did not effectively prevent abuse for the type of situation arising in the present matter.
      Until a legislative amendment ends this unlawful situation, the Constitutional Court is of the opinion that judges should fill the gap by applying the rules related to contracts of indefinite duration to successive fixed-term and replacement contracts lasting more than two years. This is far reaching as it should not be the role of the judiciary to fill legislative gaps. Considering the current legislative framework by which judges are bound, one cannot exclude that some judges, awaiting legislative intervention, will still require the worker to prove some form of abuse of right, albeit in a mitigated manner.

    • Comment from other jurisdiction

      Germany (Susanne Burkert-Vavilova, Luther Rechtsanwaltsgesellschaft mbH): German law provides for two types of fixed-term contract: those where the limitation is based on a legitimate reason such as the temporary replacement of another employee (hereinafter “justified fixed-term contracts”) and those where no such legitimate reason is required but instead specific legal restrictions apply (hereinafter “limited contracts”).
      For justified fixed-term contracts, a successive chain of limitations is permissible and effective unless, according to the established case law of the Federal Labour Court, this is to be considered an abuse of rights in the specific case. A very long total duration or an extraordinarily high number of successive justified fixed-term contracts with the same employer are indicative of an abuse of rights. The Federal Labour Court has specifically assumed that a total duration of more than 11 years and the number of 13 justified fixed-term contracts speak for an abuse of rights.
      Limited contracts, on the other hand, are only permissible for a total duration of two years. The two-year limit can be reached by extending a limited contract a maximum of three times. Also, a limitation cannot be agreed without a legitimate reason if an employment – limited or not – has already existed earlier between the relevant parties (not necessarily directly preceding the new limited contract).
      The successive alternation in a chain of justified fixed-term contracts and limited contracts does not open up limitless possibilities for abuse under German law. First, once the term of the limited contracts in the chain adds up to a total of two years, no further limitations that are not based on a legitimate reason are permissible. Second, a justified fixed-term contract may not, according to the will of the legislator, be followed by a limited contract between the parties.
      German law provides that a limitation that does not comply with applicable law is void and renders the relevant employment unlimited.
      In the case at hand the following would have applied under German law: the claimant could not have been employed under a limited contract following a justified fixed-term contract. The limitation of the limited contract would have been void with the result of an unlimited employment. Also, when limitations of limited contracts in the alternating chain of contracts exceed the maximum of two years in total, this renders the employment unlimited.

      Subject: Fixed-Term Work
      Parties: Mr. Hommé; Flemish Government; Flemish Community; Council of Ministers
      Court: Belgian Constitutional Court
      Date: 17 June 2021
      Case number: 93/2021
      Internet publication: https://www.const-court.be/public/f/2021/2021-093f.pdf


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