On 14 September, the CJEU delivered a ruling on a case in which it affirms that in principle, nothing justifies any difference in terms of compensation for workers on temporary or on permanent employment contracts. The case calls Spanish law into question, which excludes ‘workers on ‘replacement’ (interinidad) employment contracts from the right to compensation when their contracts are terminated due to the return of the original absentee employee. In contrast, workers on permanent employment contracts receive compensation of 20 days per year of service. However, numerous other national laws may now be called into question in so far as it is quite common to have different regimes depending on the nature of the employment contract.
Directive 1999/70, which retranscribes the framework agreement signed by the European social partners over fixed-term employment sets out the principle of ensuring equal treatment for fixed-term workers in respect of ‘employment conditions’ as compared with permanent workers. The substance of the case lies within Spanish law, which provides for different levels of termination of employment contract compensation depending on the nature of the employment contract itself. Those on permanent employment contracts receive 20 days worth of compensation for each career year. However those on temporary employment contracts receive 12 days worth per year of service. Those employed on replacement’ (interinidad) employment contracts (as with the complainant in this case) receive nothing when their employment contracts are legally terminated.
Following the petition, the Spanish courts turned to the CJEU for it to determine if, in terms of European law, the worker “with a fixed term employment contract or relationship (…) must receive, on termination of the contract, the same compensation as that to which a comparable permanent worker is entitled when his contract is terminated on objective grounds.” The Luxembourg judges said that that was indeed correct and according to their ruling of 14 September:
- “the concept of ‘employment conditions’ covers the compensation that the employer must pay to a worker on account of the termination of a fixed-term contract,”
- for this type of employee to receive equal treatment “the worker must carry out work that is similar or identical to that of a permanent worker,” which was clearly the case in a temporary replacement employment contract and which in principle is often the case.
To justify the difference in treatment the Spanish government cited “the difference in nature and purpose that distinguishes fixed-term employment contracts from employment contracts of indefinite duration, in that the difference between the two types of contracts lies in their duration and in the expectation of stability of the employment relationship.” The judges rejected this argument finding that the temporary nature of the employment relationship did not constitute objective grounds for different treatment.