Mr. Sean Rainbird:

I refer to the matter raised by the Comptroller and Auditor General in Chapter 15 of his report for 2012, entitled Award of Contracts of Indefinite Duration to Gallery Staff.

In 2002, the National Gallery recruited an additional 30 attendant staff to provide security and cleaning services in its new Millennium Wing. In accordance with the sanction obtained by the Department of Finance, all of these staff were employed on fixed-term or special-purpose contracts, related to the then impending commencement of the master development plan, MDP, a major refurbishment of the National Gallery’s historic buildings. By 2011, when the MDP commenced, there were 14 staff on fixed-term or special-purpose contracts, which expired in accordance with their terms and conditions of employment on 30 September 2011. Of those, six staff made claims for contracts of indefinite duration - in effect, permanent contracts. After three claims were lost in the Labour Court in late 2012, it was agreed that the National Gallery should concede the other three cases, as they were almost identical. This decision was approved by the Department of Public Expenditure and Reform.

It is important to note that the National Gallery sought approval for 30 permanent attendant staff in 2002, but was only given approval to recruit on a fixed-term or special-purpose basis because of the impending MDP. At that time, it was anticipated that the MDP would commence within 18 months. In writing the contracts of employment for these staff, the National Gallery sought legal advice to ensure, as far as was possible, that they complied with the Protection of Employees (Fixed-Term Work) Act 2003 and did not confer permanent tenure rights on these employees. The MDP eventually commenced in March 2011 and, in accordance with the special-purpose contracts, their term expired in September 2011 and the staff were let go at that time. Six staff appealed their termination and began the process of appeal to the rights commissioner service of the Labour Relations Commission. Rights commissioner decisions were appealed to the Labour Court.

In late 2012, the Labour Court found in favour of the claimants in the first three cases. The gallery's defence failed because the Labour Court concluded that the grounds used in the contracts did not amount to "objective grounds" within the meaning of the Act, because details of the MDP were "unknown and unknowable" at the time when the contracts would otherwise become CIDs. There was no firm approval, contract, funding or commencement date for the MDP, and the gallery also had a permanent need for these staff at that time.

Following the Labour Court decisions, it was decided not to appeal to the High Court and, therefore, the six staff were reinstated in accordance with the Labour Court decisions made in the first three cases. This decision was approved by the Department of Public Expenditure and Reform. The gallery incurred expenditure of approximately €428,000 on the claims brought by the six staff for contracts of indefinite duration. This includes €281,000 for reinstatement costs, being the gross cost of salary arrears up to reinstatement, €132,000 for legal costs and €15,000 for compensation set by the Labour Court. Redundancy costs previously paid to staff were recouped in full. Due to subsequent staff departures, the employees who were taken back are required by the gallery and are productively employed.

In conclusion, the gallery was aware at all times of the consequences of employing these staff on fixed-term contracts. The contract terms were imposed by the Department of Finance in 2002 and the fact that the MDP was inordinately delayed until 2011, which delay invalidated the specific purpose grounds relied upon in the contracts, was totally outside the control of the gallery. The gallery managed the fixed-term special purpose contracts as competently as possible, and even with the benefit of hindsight, could not have done anything differently in order to protect the integrity of the contracts issued. The gallery will continue to ensure that all contracts issued will stand up to scrutiny in accordance with the legislation, but cannot prevent the possibility of a recurrence of what happened in these cases, because of matters outside its control.