Labour Court Database __________________________________________________________________________________ File Number: AEP909 Case Number: DEP917 Section / Act: S8(1)AD Parties: PACKARD ELECTRIC (IRELAND) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION |
Appeal by the Company against Equality Officers' Recommendation No. EP8/1990 concerning a claim by 300 female twilight shift employees that they are entitled to a lump sum payment of #250.
Recommendation:
5. 1. The Court had first to consider the Company's argument
that the lump sum payment was not remuneration within the
terms of the Act of 1974. The Act defines remuneration
as "any consideraton whether in cash or in kind which an
employee receives directly or indirectly in respect of
his employment from his employer".
The Company argued that as it was a condition of
employment of the twilight shift workers that they be
paid by cheque for an indefinite period no
"consideration" exists in their case in the payment of a
lump sum.
There are two European Community provisions which govern
the interpretation of the Act of 1974 - Art 119 of the
Treaty of Rome and the Council Directive of the 10th
February, 1975 (75/117/EEC) on the application of the
principle of equal pay for men and women.
Art 119 defines pay as "the ordinary basic or minimum
wage or salary and any other consideration whether in
cash or in kind which the worker receives, directly or
indirectly, in respect of his employment from his
employer".
Art 1 of the Equal Pay Directive defines the "principle
of equal pay" as meaning "for the same work or for work
to which equal value is attributed, the elimination of
all discrimination on grounds of sex with regard to all
aspects and conditions of remuneration".
It is accepted by the parties that in this case there is
a "Work of Equal Value" situation.
In the light of the wording of the Directive the Court is
satisfied that the payment of a lump sum in the situation
that pertains in the Company is remuneration within the
meaning of the Act of 1974. The Court accordingly
upholds the Equality Officer's findings on this point and
rejects the Company's appeal.
2. The Court next considered the point of appeal based on
the Bilka Kaufhaus case.
In the Bilka Kaufhaus case the European Court of Justice
held that where there is discrimination which affects a
far greater number of women than men it must be based on
objectively justified factors unrelated to discrimination
on the grounds of sex to avoid infringing Art 119 of the
Treaty of Rome.
The Court accordingly addressed the following questions.
(A) Are there objectively justified factors
unrelated to discrimination in this case which
entitled the Company to pay a lump sum to the
full time workers only.
(B) What was the objective. and
(C) Was it necessary and appropriate to make a lump
sum payment to achieve that objective.
The Court is satisfied that the objective for the Company was
security for its payroll. To achieve security it required
the full-time workers who had been paid in cash to change to
a non-cash system of payment. To achieve this result some
enticement was required; payment of a lump sum to each of the
workers involved in the change was deemed an appropriate
method of persuasion.
The Court further notes that the lump sum payment was applied
to all full-time workers regardless of sex or marital status
and likewise that the non-payment of the lump sum applied to
all part-time workers who had traditionally accepted a
non-cash method of payment.
The Court accordingly determines that the judgement in the
Bilka Kaufhaus case is entirely relevant to this case because
the payment of the lump sum was appropriate and necessary to
achieve a change in the method of payment of full-time
employees from cash to non-cash; the payment would achieve
the Company's objective of improving its security, such
objective being justified and unrelated to the sex of the
employees.
The Court, therefore, has concluded that the Company did not
discriminate against the claimants within the terms of the
Act of 1974 and accordingly upholds the appeal by the Company
on the ground stated at 1st point of appeal in letter dated
26th November, 1990.
In view of the Court's conclusion as set out above the Court
does not deem it necessary to deal with the other points of
appeal.
The Unions referred this dispute under both the 1974 and 1977
Division: Ms Owens Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
AEP909 DETERMINATION NO. DEP791
ANTI-DISCRIMINATION (PAY) ACT, 1974
SECTION 8(1)
PARTIES: PACKARD ELECTRIC (IRELAND) LIMITED
(Represented by the Federation of Irish Employers
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Appeal by the Company against Equality Officers'
Recommendation No. EP8/1990 concerning a claim by 300 female
twilight shift employees that they are entitled to a lump sum
payment of #250.
BACKGROUND:
2. From 1975, when the Company was set up, until February, 1987,
full-time employees were paid by cash. Part-time employees are
employed on the twilight shift, which was introduced in December,
1978. They have always been paid by cheque as a condition of
employment with the Company. As part of an agreement in February,
1987, in return for the introduction of payment by cheque for
full-time employees, the Company agreed to pay #100 in two equal
instalments to employees changing from cash payment. The
agreement was for a period of two years up to February, 1989,
following which the Unions and Company entered into negotiations
on a new agreement. In the negotiations, the Unions initially
claimed time-off for full-time employees to cash cheques. In
April, 1989, the Company indicated it was prepared to offer a
payment of #100 to the full-time employees. This figure was
increased to #250 by Labour Court Recommendation No. 12466, as
clarified by the Court on 29th August, 1990. Following the Labour
Court Recommendation the Union contended that the twilight-shift
employees should be treated equally in relation to full-time
employees so far as the 'lump sum' was concerned. The Company
disagreed on the basis that the twilight-shift employees were paid
by cheque prior to 1987. The Unions reserved the right to proceed
on behalf of the twilight-shift employees under the terms of the
Employment Equality legislation.
3. The Company/Union Agreement was ratified on 24th October,
1989, and it provided for the payment of a lump sum of #250 in two
equal instalments to full-time 40 hour per week employees for
their acceptance of the continuation of payment of wages by cheque
for the duration of their employment with the Company. The first
payment to be made upon acceptance of the agreement and the second
in April, 1990. An additional #50, in voucher form, was to be
made available for those who opted for electronic credit transfer.
The #50 voucher was made available to all employees (including
twilight-shift employees) where those employees opted for an
electronic credit transfer payment. The Company, however,
rejected requests for payment of the #250 lump sum to
twilight-shift employees for acceptance of the continuation of
payment of wages by cheque. On 5th April, 1990, the Unions
referred the claim for the #250 payment to an Equality Officer
under the Anti-Discrimination (Pay) Act, 1974. On the same date
the two Unions also referred the case to the Labour Court under
the Employment Equality Act, 1977. The Court referred the matter
to an Equality Officer for investigation and recommendation under
the Employment Equality Act, 1977. On 19th October, 1990, the
Equality Officer issued her recommendation. (The Equality
Officer's conclusions and recommendation are contained in Appendix
1).
The Company rejected the Equality Officer's recommendation and
appealed it to the Labour Court on 26th November, 1990, under
Section 8(1) of the Anti-Discrimiantion (Pay) Act, 1974. The
Company's grounds of appeal are as follows:-
(i) The Equality Officer erred in law in her
interpretation of the decision of the European
Court of Justice in the Bilka Kaufhaus v Weber von
Hartz case (case 170-84).
(ii) The Equality Officer erred in law in considering
the requirements of the Payment of Wages Act, 1979.
(iii) The Equality Officer erred in fact in the
interpretation of statistical data.
(iv) Such other grounds of appeal as may arise in the
course of the hearing of the Company's appeal.
The Court heard the appeal on 12th April, 1991. The written
submissions made to the Court at this hearing are contained in
Appendices 2 and 3.
In their submission to the Court at the hearing of the 12th April,
1991 the Company elaborated on its points of appeal as follows:
(1) The Equality Officer erred in law in deciding that the
payment of a lump sum for the continued payment by
cheque for the claimants was remuneration as defined by
the Act.
(2) The Equality Officer erred in law in her application of
the decision of the European Court of Justice in the
Bilka Kaufhaus Gmbh v Weber Von Hartz to this case.
(3) The Equality Officer erred in law in considering the
requirements of the Payment of Wages Act, 1979.
(4) The Equality Officer erred in fact in her application of
statistical data.
DETERMINATION:
5. 1. The Court had first to consider the Company's argument
that the lump sum payment was not remuneration within the
terms of the Act of 1974. The Act defines remuneration
as "any consideraton whether in cash or in kind which an
employee receives directly or indirectly in respect of
his employment from his employer".
The Company argued that as it was a condition of
employment of the twilight shift workers that they be
paid by cheque for an indefinite period no
"consideration" exists in their case in the payment of a
lump sum.
There are two European Community provisions which govern
the interpretation of the Act of 1974 - Art 119 of the
Treaty of Rome and the Council Directive of the 10th
February, 1975 (75/117/EEC) on the application of the
principle of equal pay for men and women.
Art 119 defines pay as "the ordinary basic or minimum
wage or salary and any other consideration whether in
cash or in kind which the worker receives, directly or
indirectly, in respect of his employment from his
employer".
Art 1 of the Equal Pay Directive defines the "principle
of equal pay" as meaning "for the same work or for work
to which equal value is attributed, the elimination of
all discrimination on grounds of sex with regard to all
aspects and conditions of remuneration".
It is accepted by the parties that in this case there is
a "Work of Equal Value" situation.
In the light of the wording of the Directive the Court is
satisfied that the payment of a lump sum in the situation
that pertains in the Company is remuneration within the
meaning of the Act of 1974. The Court accordingly
upholds the Equality Officer's findings on this point and
rejects the Company's appeal.
2. The Court next considered the point of appeal based on
the Bilka Kaufhaus case.
In the Bilka Kaufhaus case the European Court of Justice
held that where there is discrimination which affects a
far greater number of women than men it must be based on
objectively justified factors unrelated to discrimination
on the grounds of sex to avoid infringing Art 119 of the
Treaty of Rome.
The Court accordingly addressed the following questions.
(A) Are there objectively justified factors
unrelated to discrimination in this case which
entitled the Company to pay a lump sum to the
full time workers only?
(B) What was the objective? and
(C) Was it necessary and appropriate to make a lump
sum payment to achieve that objective?
The Court is satisfied that the objective for the Company was
security for its payroll. To achieve security it required
the full-time workers who had been paid in cash to change to
a non-cash system of payment. To achieve this result some
enticement was required; payment of a lump sum to each of the
workers involved in the change was deemed an appropriate
method of persuasion.
The Court further notes that the lump sum payment was applied
to all full-time workers regardless of sex or marital status
and likewise that the non-payment of the lump sum applied to
all part-time workers who had traditionally accepted a
non-cash method of payment.
The Court accordingly determines that the judgement in the
Bilka Kaufhaus case is entirely relevant to this case because
the payment of the lump sum was appropriate and necessary to
achieve a change in the method of payment of full-time
employees from cash to non-cash; the payment would achieve
the Company's objective of improving its security, such
objective being justified and unrelated to the sex of the
employees.
The Court, therefore, has concluded that the Company did not
discriminate against the claimants within the terms of the
Act of 1974 and accordingly upholds the appeal by the Company
on the ground stated at 1st point of appeal in letter dated
26th November, 1990.
In view of the Court's conclusion as set out above the Court
does not deem it necessary to deal with the other points of
appeal.
The Unions referred this dispute under both the 1974 and 1977
Acts. The above decision applies to the claim made under the
1974 Act. With reference to the claim under the 1977 Act, as
the Court at Para I above has decided that the payment in
question was "remuneration" the dispute is accordingly
excluded from consideration under the 1977 Act.
~
Signed on behalf of the Labour Court
Evelyn Owens
____________________
2nd December, 1991. Deputy Chairman
B.O'N./J.C.
LIST OF APPENDICES
1. Conclusions and recommendation of the Equality Officer.
2. Company's submission to the Labour Court.
3. Unions' submission to the Labour Court.
APPENDIX 1
Conclusions of Equality Officer:
32. I note that the Unions have referred this dispute under both
the 1974 Act and the 1977 Act. The provisions of the
Anti-Discrimination (Pay) Act, 1974 entitles employees of one sex
to the same rate of remuneration as employees of the other sex in
certain circumstances. The Employment Equality Act, 1977
prohibits discrimination on grounds of sex in relation to
conditions of employment "other than remuneration or any condition
relating to an occupational pension scheme."
Remuneration is defined in the 1974 Act as "any consideration
whether in cash or in kind which an employee receives, directly or
indirectly in respect of his employment from his employer." This
definition of remuneration also applies to the 1977 Act by virtue
of the provisions of Section 56(2) of the 1977 Act.
As this dispute concerns a claim for payment of #250 lump sum to
each of the claimants, I am satisfied that the dispute is in
relation to remuneration and therefore comes within the scope of
the 1974 Act and not the 1977 Act.
33. Section 2(1) of the 1974 Act provides for entitlement to the
same rate of remuneration between men and women employed on like
work in the same place by the same employer. I note that the
Company accepts that the claimants and comparators are employed on
like work in the same place. However, the Company contends that
under Section 2(3) of the Act it is not obliged to pay the lump
sum of #250 to the claimants. Section 2(3) of the Act provides -
"Nothing in this Act shall prevent an employer from paying to
his employees who are employed on like work in the same
place different rates of remuneration on grounds other than
sex."
The only question then to be decided by me in this case is whether
or not there are grounds other than sex within the meaning of
Section 2(3) of the Act for the payment of the #250 to the
full-time workers and not to the twilight workers.
34. The onus of proof under Section 2(3) of the Act rests with
the employer. The Company contends that it was a permanent
condition of the contract of the claimant to accept payment by
cheque. It was not a permanent condition of the contract of the
comparators and in order to get them to continue to accept payment
by cheque on the expiration of the 1987 Agreement, the lump sum of
#250 was paid to them on a personal basis. The Company saw no
justifiable reason to pay any lump sum to the twilight shift
workers for something it already had. The Company contends that
the twilight shift workers had given up their right in their
contract of employment to be paid in cash.
35. In considering this case, I have taken into account that
Section 56(2) of the Employment Equality Act, 1977 states that
"the Act of 1974 and this Act shall be construed together as one
Act." The 1977 Act prohibits both direct and indirect
discrimination on grounds of sex. In my opinion it is necessary
to interpret Section 2(3) of the 1974 Act to ensure that the 1974
Act effectively prohibits an employer from paying to his employees
who are employed on like work different rates of remuneration on
grounds which are either directly or indirectly discriminatory on
the basis of their sex. Having regard to this definition, I
consider it reasonable to disregard as grounds other than sex for
the purpose of Section 2(3) of the 1974 Act any grounds which in
their application as a basis of payment naturally result in
employees of one sex being paid less than employees of the other
sex and which cannot be objectively justified by the employer
irrespective of their sex. I consider this interpretation to be
in keeping with the decision of the European Court of Justice in
Bilka Kaufhaus GmbH v. Weber Von Hartz (Case 170 - 84).
36. In relation to the proportion of people of each sex who were
eligible for payment of this lump sum, I note that approximately
1300 people are employed on both the twilight and full-time
shifts, 778 females and 529 males. 39% of the females are
employed on the twilight shift as against 0.6% of the males.
99.4% of the males employed in the Company were eligible for the
lump sum payment and only 61% of the females were eligible for
this payment. Consequently, I consider that the grounds on which
this lump sum was paid resulted in a substantially higher
proportion of persons of one sex being paid the lump sum and
operated almost exclusively to the detriment of a category of
employees which is comprised almost exclusively of female
employees i.e. the twilight shift.
37. In addressing the question as to whether the grounds for
paying the lump sum to the comparators but not to the claimants
are objectively justifiable irrespective of sex I have considered
the following:
- In accordance with the terms of Section 3 of the Payment of
Wages Act, which allows for the rescinding of an agreement
for the payment of wages by non-cash means by four weeks
notice given by either side, both the full-time workers and
the twilight shift gave notice to revert to payment by cash.
The comparators, all of whom are full-time workers, were
compensated by the payment of the lump sum of #250 to
withdraw this notice and continue to be paid by cheque. The
claimants, all of whom are part-time workers, received no
such compensation and have continued to be paid by cheque. I
note the Company's argument that the terms of the Payment of
Wages Act is not relevant to my considerations. However, I
cannot overlook a factual situation where two sets of workers
gave notice that they wished to be paid in cash, the Company
paid to one set, the full-time workers, a lump sum to
dissuade them from pursuing that action but did not treat the
other set, the twilight workers, equally.
- I note also that new workers recruited to the full-time shift
after February, 1987, although always paid by cheque, also
receive a lump sum of #250 following the Agreement of
October, 1989.
In view of these points, I can find no objectively justifiable
grounds for this differences in treatment between the claimants
and comparators.
38. I find therefore that none of the Company's reasons for
excluding the claimants from the payment of the lump sum for
continuation of payment by cheque constitute grounds other than
sex within the meaning of Section 2(3) of the Act.
RECOMMENDATION:
1974 Act
39. In view of my findings in the above paragraphs I recommend
that each of the claimants be paid the lump sum of #250 for
continuation of payment by cheque.
1977 Act
40. This dispute is excluded from the application of the
Employment Equality Act, 1977 by means of Section 3(1) of that Act
as it concerns the level of remuneration paid to the claimants.