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ECJ rules that lower termination payments for fixed-term workers under Spanish law is objectively justified

8 June 2018
The European Court of Justice (ECJ) has handed down two judgments in which it held that paying fixed term workers lower termination payments than permanent workers did not breach the Fixed-Term Work Directive (1999/70/EC). It concluded that this discrepancy in payment could be objectively justified on the basis that fixed term workers were aware of the risk of termination from the outset whereas a permanent employee had a legitimate expectation of stable employment. As such, a permanent employee was entitled to receive a higher level of compensation.

Although the ECJ was considering specific Spanish legislation in these cases, it does suggest that protecting a permanent employee’s ‘expectation of stable employment’ could be sufficient for the purpose of establishing objective justification. 

It will be interesting to see whether this argument will now be tested within the UK tribunal system.

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