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Termination of a fixed-term contract during parental leave (TAS 268/2018, issued on 14 January 2019)

Woman A has worked in educational institution X as a teacher for around eight years, first as a part-time teacher and then, after 1 August 2011, as a full-time teacher. Her fixed-term employment relationship was renewed consecutively for several years for single-year terms.

A went on maternal leave in 2017. Her fixed-term employment relationship was not renewed after 31 July 2018. She was on family leave when her employment relationship ended.

Before her fixed-term contract was set to end, A had negotiated on the possibility of signing an annual working hours-based part-time contract. Her employer offered her an hourly-paid contract, but A refused to sign it, as she felt that the terms of the hourly-paid contract were too inadequate. A had previously worked as a teacher on an annual working hours basis.

Assessment of the case

According to section 8(1)(2) of the Act on Equality between Women and Men (hereinafter the Equality Act), the action of an employer shall be deemed to constitute discrimination prohibited under the Act if the employer upon employing a person, selecting someone for a particular task or training, or deciding on the duration or continuation of an employment relationship acts in such a way that the person finds themselves in a less favourable position on the basis of pregnancy or childbirth or for some other gender-related reason. The “other gender-related reason” specified in said legal provision includes family leaves, such as maternity, paternity, parental and childcare leaves.

When a person’s fixed-term employment relationship is to be continued, they should be treated in the same manner as they would be if they were not pregnant or on family leave. They should not be placed in a less favourable position on the basis of their pregnancy or family leave. The non-renewal of an employment relationship constitutes discrimination if the employment relationship would have been continued if the employee had not become pregnant or exercised their right to family leave.

When a person suspecting discrimination has indicated that she is pregnant or that she has family care obligations, the burden of proof is transferred to the employer if the employer has been aware of the employee's pregnancy or family obligations.  It is the employer's duty to prove that the employee has not been discriminated against.

The additional costs to the employer that are caused by the maternal leave or hiring a substitute do not constitute an acceptable justification that is in accordance with the Equality Act for passing over a person due to their pregnancy in a hiring situation. A substitute must usually be selected to replace the fixed-term employee for the duration of their family leave, and only in very exceptional cases can it be considered necessary for the same person to complete their work from start to finish.

The employer’s procedure does not need to be deliberate or negligent in nature to be considered discriminatory and it does not need to have been motivated by any discriminatory intent.

According to chapter 1, section 3(3) of the Employment Contracts Act, it is prohibited to use consecutive fixed-term contracts when the amount or total duration of fixed-term contracts or the totality of such contracts indicates a permanent need of labour.

Chapter 2, section 2 of the Employment Contracts Act contains provisions on the equal treatment of employees and the prohibition of discrimination. An employer must treat all employees equally, unless deviating from this is justified in view of the duties and position of the employees.

According to section 2(2), without proper and justified reason less favourable employment terms than those applicable to other employment relationships must not be applied to fixed-term and part-time employment relationships merely because of the duration of the employment contract or working hours.

In their report to the Ombudsman for Equality, the employer asserted that A’s contract could not be renewed on an annual working hours basis since part-time employees can only be offered an annual working hours-based contract if the work includes some other significant responsibility in addition to the teaching work.

According to A, her employer has not previously enforced this policy and that percentage-based working hours have been offered to employees who, for example, have small children. 

The Ombudsman for Equality issues his statement on the basis of the written accounts, and the Ombudsman for Equality did not have the opportunity to arrange e.g. an oral hearing or receive any other types of extended testimonials. It is usually not possible to evaluate evidence-based questions on the basis of written statements when the parties disagree with one another. The parties have provided contradictory reports on the type of policy that the employer enforced for part-time employment relationships.

In the case of another fixed-term employee, employee B, on 1 August 2018 the employer and B signed an indefinitely valid annual working hours contract on a 60% working time basis that included serving as the supervisor of a teaching group. According to A, this type of employment contract was never offered to her. The employer justified their choice with B’s educational background, interest in developing the institution’s pedagogical practices and active participation in the institution’s communal activities.

The Ombudsman for Equality noted that the Equality Act obligates employers to help both women and men reconcile their working lives with their family lives by paying especially close attention to the work arrangements that they offer. In addition, all employees must be treated in an equal manner when it comes to this obligation. People who are pregnant or on family leave must be subjected to the same criteria as any other persons. If the fixed-term employment relationships in an organisation are usually renewed without an application process and a qualification-oriented comparison between applicants or employees, deviating from this principle in the case of employees who are pregnant or on family leave gives rise to the presumption of discrimination. A qualified and suitable employee cannot be subjected to intra-employee comparisons solely on the basis of their pregnancy or family leave.

The Ombudsman for Equality concluded that the case gives rise to the presumption of discrimination. It would appear that A’s employment relationship was terminated on the basis of her family leave.  A had not received the requested annual working hours-based part-time position, but her employer had simultaneously signed an annual working hours-based part-time contract with B who, like A, had worked under fixed-term contracts for several years but was not on family leave when their employment contract was set to begin. B’s employment contract was also made permanent.

The employer has not presented any justifications for why A could not have been given the task of group supervisor which, according to the employer, was the prerequisite for a part-time annual working hours-based contract. The employer has also not presented any evidence on who A was substituting for and when the person who she had been substituting for returned back to work. When a fixed-term contract is made, the employer must have a justified reason for signing several concurrent fixed-term contracts with the same employee.

However, the review of the evidence and the final resolution of the discrimination matter will usually take place in a district court in a possible compensation claim case against the employer, if the parties are unable to settle the matter by other means.