Ms. Mary Brady and 12 Others and Ms. Fionnula McGivern(Represented by Ms. Honan, BL instructed by Ronan Daly Jermyn Solicitors) v TSB ESOP Trustees Limited (Represented by Ms. Kimber, BL instructed by McCann Fitzgerald Solicitors) Irish Life & Permanent plc (Represented by Mr. Gallagher, S.C. and Mr. Barniville, B.L. instructed by Mr. MacCarthy Group Chief Legal Officer) MANDATE, ATGWU and SIPTU (Represented by O'Donnell Sweeney Solicitors)
1.1 The dispute concerns a claim by Ms. Mary P. Brady and 12 Other Named Employees (see Appendix A) who are employed in a part-time capacity by the Irish Life and Permanent plc as Assistant Managers and by Ms. Fionnula McGivern who is employed in a part-time capacity by the Irish Life and Permanent plc as a Deputy Manager that they were indirectly discriminated against by TSB ESOP Trustees Limited, Irish Life and Permanent plc, MANDATE, ATGWU and SIPTU on the grounds of gender when shares were allocated to them on a pro-rata basis proportionate to the hours worked during the twelve months preceding the notional allocation date. The complainants are seeking remuneration in terms of a similar share allocation to named comparators (full-time employees) in accordance with Section 19 of the Employment Equality Act, 1998. The second named respondents accept that the complainants perform 'like work' with the named male comparators but says that there are grounds other than gender in terms of Section 19(5) for the difference in share allocation.
1.2 The complainants referred their claims to the Director of Equality Investigations on 30th April, 2003 under the Employment Equality Act, 1998. In accordance with her powers under Section 75 of that Act the Director then delegated the case to Gerardine Coyle, Equality Officer on 15th October, 2003 for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part VII of the Act. A preliminary joint hearing in these claims took place on 20th November, 2003. Following this hearing submissions were received from the complainants and the first and second named respondents. No submissions were received from the third, fourth and fifth named respondents. A joint hearing of the parties took place on 28th January, 2004. An additional submission was received from the second named respondent on 2nd February, 2004.
2. SUMMARY OF THE COMPLAINANTS' SUBMISSION
2.1 According to the complainants the Employee Share Ownership Plan (ESOP) was established for the benefit of employees of the former TSB Bank arising out of the purchase of the Bank by Irish Life & Permanent plc (hereinafter referred to as ILP). The complainants say that the terms of the ESOP were negotiated and agreed between the group of Unions (namely MANDATE, ATGWU and SIPTU) representing the employees of TSB and the management of TSB Bank now ILP. Under the rules of the Scheme full-time workers are allocated a certain number of shares (a full share allocation) while the complainants, as part-time workers (i.e. part-time and job-sharers) are allocated a proportion of that number of shares on a pro-rata basis, proportionate to the hours worked during the twelve months preceding the notional allocation date. According to the complainants the reduced share allocation will clearly result in considerable financial loss. As most, if not all, part-time employees are female the complainants submit that this raises an inference of gender discrimination contrary to the provisions of the Employment Equality Act, 1998; Article 141 of the EC Treaty and Council Directives 75/117 and 76/207.
2.2 Under the ESOP shares are held by the Trust and are notionally allocated to eligible employees. Ultimately these shares are appropriated to the employees/beneficiaries and become the property to the individual employees/beneficiaries. Eligible beneficiaries who, on the notional allocation date, are contracted to work 35 hours or more per week receive the same share allocation. Eligible beneficiaries who, on the notional allocation date, are contracted to work less than 35 hours per week receive a reduced share allocation, which is calculated on a pro-rata basis with full-time workers in respect of the twelve months preceding the notional allocation date. The complainants state that an employee's entitlement is determined by the number of hours worked during a particular period. The complainants note that the adverse impact of the reduced share allocation for part-time workers continues until the Trust Fund terminates either when all the shares are distributed or 2016, whichever is the earlier. At termination the residue of the Fund will be distributed among the eligible employees/beneficiaries on a pro-rata basis.
2.3 It is the complainants' contention that the basis for determining allocation entitlement is inexplicable given that they understood throughout the negotiation process that part-time and full-time employees would receive equal share allocations. It was only at the final stage of the process that they were informed that part-time employees would receive reduced allocations. The complainants note that it appears to be the norm that such schemes allocate shares on an equal basis to part-time and full-time employees and say that this was the position in ACC, ICC and Eircom all of which were established prior to ESOP and it is also the position in schemes established post ESOP namely ESB ESOP, the Irish Refining ESOP and An Post ESOP. When the complainants' queried the change in the basis for share allocations they were advised by their Union representative that this change was made on the basis of legal advice but when they sought a copy of this legal advice they were then told that no legal advice had been obtained.
2.4 The complainants set out the law relating to pay and conditions of employment as follows:
- Article 141 of the EC Treaty sets out the principle that men and women should receive equal pay for equal work.
- Council Directive 75/117 elaborates on this principle in Article 1 that the principle of equal pay means 'the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration'.
- Council Directive 76/207 provides for the implementation of the principle of equal treatment in employment and Article 5 states that the application of the principle to working conditions 'means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex'.
- Section 19(4) of the Employment Equality Act, 1998 provides for indirect gender discrimination in respect of remuneration.
- The definition of 'remuneration' in Section 2(1) of the 1998 Act is consistent with that in Article 141 and the complainants submit that a share allocation is 'pay' for the purposes of Article 141 and the 1998 Act being consideration received indirectly in respect of employment.
- Section 19(4) of the 1998 Act further provides that where an indirectly discriminatory provision cannot be objectively justified a complainant must be paid the higher remuneration.
- Section 22(1) of the 1998 Act set outs what constitutes indirect gender discrimination in respect of the matters specified in Section 8(1)(a) to (e) and of particular relevance to these claims is Section 8(1)(b) which refers, inter alia, to conditions of employment.
- Section 21 implies an equality clause into a contract of employment which has the effect of modifying a less favourable contract in order to eliminate discriminatory terms.
2.5 In relation to collective agreements the complainants state that Article 4 of Directive 75/117 provides that member states shall take the necessary measures to ensure that provisions, inter alia, in collective agreements which are contrary to the principle of equal pay shall or may be declared null and void or amended. Article 5(2) of Directive 76/207 provides, in the context of working conditions, that member states shall take the measures necessary to ensure that any provisions contrary to the principle of equal treatment which are included, inter alia, in collective agreements, shall be or may be declared null and void or amended. The complainants note that Section 9 of the Employment Equality Act, 1998 contains provisions relating, inter alia, to collective agreements. Section 86 of the 1998 Act provides for the referral of disputes regarding collective agreements to the Director of Equality Investigations and Section 86(2)(c) provides that the appropriate respondents in such circumstances are the 'parties to the agreement'. While the 1998 Act does not contain a definition of a collective agreement the complainants submit that the ESOP is such an agreement being an agreement 'relating to terms and conditions of employment made between parties who are or represent employers and parties who are or represent employees'. The complainants state that this definition was set out in the now repealed Anti-Discrimination (Pay) Acts, 1974 and contend that it is an accurate definition.
2.6 The complainants in their submission set out the grounds on which each of the five respondent is named in these claims as follows:
According to the complainants the Trustee has a duty to the beneficiaries of the ESOP to ensure compliance with the principle of equal treatment. Failure to observe this principle in respect of pay is a breach of Article 141 of the EC Treaty, Directive 75/117 and Section 19(4) of the 1998 Act and of Directive 76/207 and Section 22(1) of the 1998 Act. The complainants note that the European Court of Justice considered the liability of the Trustees in the context of a pension scheme in Coloroll Pension Trustees Ltd. v Russell1 in which the Court ruled that the direct effect of Article 119 (now 141) may be relied on
by employees: "against the trustees of an occupational pension scheme who are bound in the exercise of their powers and performance to their obligations as laid down in the trust, to observe the principle of equal treatment".
The Court also held that insofar as trustees are prohibited by national law from acting beyond the scope of their powers or in disregard of the trust deed, they are bound to use all means available under domestic law in order to eliminate all discrimination in the matter of pay. In respect of the obligations of employers and trustees the Court stated:
"Employers and trustees cannot ...be allowed to rely on the
rules of their pension scheme, or those contained in the trust
deed, in order to evade their obligation to ensure equal
treatment in the matter of pay."
The complainants submit that the principles set out in Coloroll in respect of a pension scheme are equally applicable to the Trustees of the ESOP at issue in the present claims. It is further submitted that the direct effect of Article 141 may be relied upon in respect of alleged discrimination by the Trustee since the Trustee is required to pay benefits which constitute 'pay' within the meaning of Article 141.
Irish Life and Permanent plc
The complainants submit that ILP is in breach of its duties as an employer pursuant to Article 141, Directive 75/117, Directive 76/207 and the Employment Equality Act, 1998 in that they, as part-time workers, are denied access to a full share allocation on the same basis as full-time workers. According to the complainants ILP has discriminated against them in terms of Section 19(4) on the grounds that the pro-rata basis for the share allocation is indirectly discriminatory on the grounds of gender in the circumstances. It is
further submitted that ILP has discriminated against the complainants in terms of Section 22(1) with reference to Section 8(1)(b) on the grounds that they have been subjected to discriminatory conditions of employment which have resulted in them not being fully admitted to the ESOP solely on account of the fact that they have worked part-time or that they have job-shared. The complainants further submit that ILP is an appropriate respondent pursuant to Section 86(2)(c) in that it entered into a collective agreement with the Trade Unions representing employees/beneficiaries in respect of the ESOP and this agreement contained discriminatory pay provisions, which are null and void pursuant to Section 9 of the 1998 Act. The complainants rely on the direct effect of Article 141 in respect of alleged discrimination in the impugned collective agreement2. The complainants note that the Trustee is a subsidiary of ILP and in the Preamble to the APSS Trust Deed it is stated that ILP in effect established both the APSS and the ESOT.
MANDATE, ATGWU and SIPTU
The complainants contend that the above named Unions are proper respondents to these claims pursuant to Section 86(2)(c) in that they entered into a collective agreement with the TSB Bank (now ILP) representing the employees/beneficiaries in respect of the ESOP and this agreement contained discriminatory pay provisions which are null and void pursuant to Section 9 of the 1998 Act. It is further submitted that the direct effect of Article 141 may be relied on in respect of alleged discrimination by the Unions in the impugned collective agreement.
2.7 In terms of indirect discrimination the complainants say that indirect gender discrimination refers to disadvantage (in this case the reduced share allocation differential) resulting from a criterion or requirement which is gender-neutral but which nevertheless impacts adversely and substantially on a particular sex. Once a prima facie case of indirect discrimination is established the onus of proof shifts to the respondent to show objective justification for the measures resulting in the adverse impact. The complainants cite the Supreme Court's consideration of indirect sex discrimination in the case of Nathan v Bailey Gibson3 and submit that the impugned requirement or criterion in these claims is that eligible employees in order to have an entitlement to a full share allocation must be contracted to work 35 hours or more per week during the twelve months preceding the allocation date.
2.8 The complainants (Brady and 12 Others) are in the Assistant Manager grade and as at February, 2001 there were 168 full-time employees and 16 part-time employees (including the complainants). Of the 168 full-time workers 76 (45%) were female and 92 (55%) were male and of the 16 part-time employees all (100%) were female. The complainant (McGivern) is in the Deputy Manager grade and in that grade as at February, 2001 there were 12 full-time employees and 1 part-time employee. Of the 12 full-time employees 7 (58.4%) were female and 5 (41.6%) were male. The complainant was the only part-time employee hence 100% of the part-time employees were female. The complainants contend that these statistics show that the practice complained of bears "significantly more heavily" on women than on men and it is their submission that they have shown that the proportion of employees disadvantaged is substantially higher in respect of women than of men. According to the complainants the predominance of women in part-time work is well known and generally understood to relate primarily to family responsibilities. The complainants submit that the impugned criterion is indirectly discriminatory on grounds of gender and that the onus is on the respondents to justify it pursuant to Section 19(4) (d)/22(1)(c) of the 1998 Act and the principles well established by the Court of Justice. The complainants say that if the criterion cannot be so justified, it is unlawful.
2.9 In terms of test for objective justification the complainants say that it was set out by the European Court of Justice in the case of Bilka-kaufhaus4 which ruled that an indirectly discriminatory pay policy may be justified:
"...where it is found that the measures chosen for achieving that objective correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objectives pursued and are necessary to that end."
The complainants submit that it is settled law that the measures chosen to achieve a particular objective must also be consistent with the principles of proportionality. The complainants find it difficult to see how a requirement to be a full-time worker for entitlement to a full share allocation can be objectively justified. They say that this is more emphatically the case given that the objective of the ESOP is "to provide an incentive to employees for future service and for changes to future working conditions". The complainants state that the purpose of the share allocations is not payment for work performed and even if it was it would be without substance as the differential in working hours between part-time and full-time employees is already taken into account by the differential in basic pay. According to the complainants the justification advanced is further flawed in respect of the criterion of 'service' which is clearly calculated on the basis of actual working hours. The complainants say that the Court of Justice caselaw on part-time workers is clear that the computation of service on the basis of actual working hours is indirectly discriminatory if it adversely impacts disproportionately on women5. The complainants note that the second named respondent has contended that the entitlement to shares is determined by reference to, inter alia, 'incentive ...for future service' and say that if such service were not related to working hours by the provisions of the ESOP then full-time and part-time workers would receive the same share allocations.
2.10 The complainants ask the Equality Officer:
- to rule that the criterion for full share allocation in the ESOP is indirectly discriminatory on the gender ground and is unlawful;
- to declare the relevant provisions (and in particular Paragraph 3(c)(i) and (ii) of the Similar Terms Document) null and void; and
- to order that share allocations be made on an equal basis to part-time and full-time employees.
3. SUMMARY OF THE SUBMISSION FROM THE FIRST NAMED
3.1 The first named respondent states that it is a subsidiary of ILP and that it acts as trustee of two employee benefit trusts namely the TSB Employee Share Ownership Trust (ESOT) and the TSB Approved Profit Sharing Scheme (APSS) and ESOT and APSS are together referred to the Employee Share Ownership Plan (ESOP). The terms of the ESOP were negotiated between management of the TSB Bank and Trade Union Representatives of the employees and were approved by employees in a ballot in November, 2000. The trust deeds governing the ESOP were executed on 20th April, 2001 and a Deed of Amendment for the ESOT executed on 19th April, 2002. The first named respondent states that the purpose of the ESOP is 'to provide an incentive to employees for future service and for changes in working conditions'.
3.2 According to the first named respondent it is a wholly independent subsidiary of ILP in terms of operation and employees of ILP are in the majority on the Board of Directors of the Trustee. The sole function of the Trustee is to act as Trustee for the ESOP and to protect the interests of all beneficiaries of the Plan including full-time and part-time workers. In carrying out that function the first named respondent says that it owes its duties to the beneficiaries of the Plan rather than to its shareholders.
3.3 The first named respondent states that under the general principles of law applicable to trusts, trustees are under a legally binding duty to administer a trust according to the terms laid down in the trust instrument and any deviation will constitute a breach of trust. As a consequence of these legal principles the first name respondent states that it has no power (clause 9 of the Trust Deed and Rules refers) to act contrary to the terms of the trust and unilaterally to amend the ESOP to accommodate the claim by the complainants. The first named respondent submits that the terms of the ESOP require that shares be allocated to eligible employees in proportion to the hours worked in the previous 12 months, up to a maximum of 35 hours, subject (inter alia) to an employee having completed three years of service. According to the first named respondent this payment structure was negotiated between the workers themselves and their staff representatives and was neither imposed by the employer or the Trust. Once negotiated and made legally binding the first named respondent is under a duty to administer the Trust accordingly.
3.4 The first named respondent also notes that it is under a duty to act equitably as between all beneficiaries. However if the ESOT is amended to provide parttime workers and job-sharers with a full-share entitlement then the funds to provide this must come from existing trust funds. According to the first named respondent the Trust Deed of the ESOT does not envisage the payment of any additional money by the Employer. Therefore the allocation to current full-time workers entitled to benefit under the ESOP would have to be reduced by approximately 7.5% or a maximum of about €6,000 per employee entitled to the maximum allocation (at current share value). The first named respondent says that it does not have the power to make a significant reduction in the amount payable to a sizeable number of beneficiaries without court approval.
3.5 According to the first named respondent it is fully aware of its duties to the beneficiaries to ensure compliance with the principle of equal treatment and its duties as set out in the case of Coloroll Pension Trustees Ltd v Russell6. Having said that the first named respondent contends that, in it view, the terms of the ESOP are in compliance with the equal treatment principle and it says that it is settled law that the making of allocations pro-rata to hours worked is not discriminatory on grounds of gender. If, however, it is found that the terms of the ESOP are in fact discriminatory on grounds of gender due to the fact that shares are allocated pro-rata to workers on the basis of hours worked then the first named respondent says that, pursuant to the decision in Coloroll, it will be obliged, as a matter of law, to amend the terms of the ESOP and it will act accordingly.
3.6 The first named respondent submits that the ESOP is clearly pay within the meaning of Article 141 of the EC Treaty, Directive 75/117/EEC and Section 2(1) of the Employment Equality Act, 1998. It is the first named respondent's submission that once a matter is defined as pay and falls squarely within the definition of pay then it cannot be classified as a condition of employment7. The first named respondent contends that it is also clear from the 1998 Act in which Section 8(5) prohibits discrimination, inter alia, in relation to conditions of employment but specifically excludes remuneration from its scope. Equality in remuneration is dealt with in Sections 19, 20 and 21 of the Act and the first named respondent therefore submits that ESOP falls to be dealt with under the law applicable to equal pay rather than that applicable to equality of conditions of employment namely Article 141 of the EC Treaty, Directive 75/117 and Article 18, 19, 20 and 21 of the 1998 Act. 3.7 The first named respondent submits that it is settled law that it is not discriminatory to reduce pay pro-rata to the actual hours worked8. In the cases cited the European Court of Justice held that Community Law did not preclude a retirement pension being calculated pro-rata in relation to time actually worked, as this was an objective criterion unrelated to sex. The first named respondent further submits that it is settled law that these principles are applicable to all payments, including those in the nature of payments which are an incentive for future work or loyalty to the undertaking. In this regard the first named respondent cites the case of Lewen v Denda9 where it says it is clear that a bonus or payment for future service can be allocated proportionately. The first named respondent rejects the caselaw10 cited by the complainants in their submission and says that it solely relates to the taking into account of years of service for the purpose of progression and promotion along the grades within the Civil Service. According to the first named respondent the Court of Justice did not hold that computation of service on the basis of actual working hours was always indirectly discriminatory if it adversely impacted disproportionately on women, only that such a practice was discriminatory if it could not be objectively justified. The first named respondent submits that it is settled law that it is not discriminatory to make payments to an employee pro-rata in relation to the hours worked, that such difference of treatment is justifiable on the basis of the objective criterion of hours worked and that as such the terms of the ESOP are not discriminatory on grounds of gender contrary to Community and to Irish law.
3.8 The first named respondent submits clarification on the following issues in the complainants' submission:
(i) Participation of workers within ESOP is based on a three year period of service (exclusion of sabbatical or other non-statutory leave) being completed at the date of the notional allocation of shares. For the purpose of crediting years of service for the purpose of this rule, no distinction is made between years served full-time or part-time, in line with Gerster11and Hill & Stapleton12.
(ii) An employee's entitlement to share allocation is determined by the number of hours worked during a particular period, subject to a maximum 35 hour week. In other words no increased allocation is made for any hours worked over 35 hours.
4. SUMMARY OF SUBMISSION FROM SECOND NAMED
4.1 It is the second named respondent's contention that the claims by the complainants are not made within the statutory time limit provided for in Section 77(5) of the Employment Equality Act, 1998 and should on that ground alone be rejected. The second named respondent states that the complainants do not establish in their claim or written submission that they have been discriminated against, either indirectly or otherwise. According to the second named respondent the structure of the ESOP is objectively justifiable and responds to the real and objective need on the part of the ILP.
4.2 The second named respondent, in its submission set out in detail the background to the Scheme and it says that the fundamental principle underlying the TSB Bank ESOP was that the shares being allocated to the employees would be earned by them in two ways namely 5% of the shares would be allocated to employees in return for work practice changes, flexibility and productivity agreements. 9.9% of the shares would be purchased by employees in return for foregoing increases under the National Wage Agreement. The second named respondent therefore notes that the shares were being allocated on the basis of benefits or savings to be obtained through an employee's future service which was a fundamental part of Government policy with regard to the sale of the TSB.
4.3 The second named respondent states that the fact that part-time employees will not receive the same share allocation as full-time employees is in itself no evidence whatsoever of any discrimination. Rather it says that the allocation of shares is made on a pro-rata basis intended to reflect the proportionate benefit from the changes in work practice in the future and the foregoing of future wage increases. The second named respondent submits that this pro-rata allocation is not only fair but is clearly not discriminatory in that it makes due allowance for the different benefits to be received from part-time workers on the one hand and full-time workers on the other hand. According to the second named respondent part-time workers have been favoured to the extent that the pro-rata calculation is made, in the case of the part-time workers, on the basis of a 35 hour week whereas in the case of full-time workers it is made on the basis of a 37 hour week.
4.4 The second named respondent submits that the complainants are seeking, without justification, an equal allocation of shares and says that in the context of the ESOT such an allocation would involve an indirect discrimination in favour of the complainants. Shares were granted to employees in return for future benefits and savings. The arrangements put in place by ILP with the agreement of the Unions and a majority of staff were the allocation of shares to each member of staff on a pro-rata basis where a part-time employee's proportionate contribution is calculated by reference to a 35 hour week while a full-time employee's is calculated by reference to a 37 hour week.
4.5 The second named respondent states that the complainants' argument is critically misplaced as every employee is being treated on exactly the same basis as each other. Each employee is receiving shares related to the number of hours he or she works. It is the second named respondent's contention that the onus does not shift to it as the complainants have not shown a difference in treatment. In relation to the decision of the Supreme Court in the case of Nathan v Bailey Gibson13 the second named respondent notes that it was concerned with where there was a requirement imposed upon one class of employees creating a burden which weighed more heavily than on others. But in this case a situation exists where all employees are treated the same and by reference to the hours they work, but part-time employees receive less of the benefits than their full-time colleagues because they work less hours. The second named respondent contends that this is not a circumstance which generates any shifting of the burden of proof. As noted in one authority14 the first question which arises in the context of a case similar to this is whether there is a difference in treatment as between full-time and part-time workers, not merely whether one gets more or less money than the other. Rather it is necessary to consider whether, taking account of the purpose of the payment or benefit and of the contribution of the relevant employees in return for the same, there is a difference in treatment. The second named respondent notes that the complainants suggest that because a difference in working hours is already taken into account in terms of pay, a further difference in connection with the allocation of shares cannot be justified on the same basis and states that as a matter of law this argument is misplaced. According to the second named respondent employers are entitled to calculate severance pay in a manner which results in part-time employees receiving less money than their full-time counterparts15.
4.6 If it is concluded that the pro-rata basis for the share allocation to part-time workers (including job-sharers) under the ESOP is indirectly discriminatory on the grounds of gender then the second named respondent contends that such an alleged difference in treatment is objectively justifiable. The second named respondent accepts the classic formulation of the test for objective justification is that stated by the Court of Justice in Bilka Kaufhaus16 and more recently in R v Secretary of State for Employment ex parte Seymour Smith17. According to the second named respondent it is notable that the terms of the TSB ESOP were approved by the Minister for Finance and the ESOT was approved by the Revenue Commissioners. It was Government policy that shares would be by reference to future service and particularly by reference to future benefits and savings obtained from employees. It was never intended that shares would be allocated on the basis of past service and they were not allocated on that basis. Rather employees were required to furnish consideration (in a legal sense) in respect of shares and this consideration was to be furnished so far as 5% of the shares is concerned by benefits by employees through increased productivity and changes in flexibility and work practices and so far as the remaining 9.9% was concerned by way of foregoing monies which would otherwise have been due to the employees through their entitlement to wage increases pursuant to the National Wage Agreement. Given this underlying rationale for the ESOT the second named respondent states that the share allocation could only be made on a pro-rata basis.
4.7 The second named respondent states that just as part-time employees are not paid the same as full-time employees (but rather are paid on a proportionate basis) part-time employees cannot expect an equal share allocation (as opposed to a proportionate share allocation) in return for benefits to be provided for future services, because they do not provide the same benefit to ILP. According to the second named respondent it is clear from the House of Lords decision in Barry v Midland Bank18 that ILP is entitled to differentiate between full-time and part-time employees in the manner in which is proposing to do and to do otherwise would be to treat full-time employees unfairly. It is the second named respondent's contention that the difference of treatment of part-time and full-time workers and the manner in which shares have been allocated to them is objectively justified by objective factors unrelated to any discrimination on gender grounds having regard to a number of decisions of the Court of Justice19. The second named respondent states that in support of its contention that the measures are objectively justified it also relies on a number of other cases20 before the European Court of Justice.
5. CONCLUSIONS OF THE EQUALITY OFFICER
5.1 The issue for decision in these claims is whether or not the complainants have been indirectly discriminated against on the grounds of gender as a result of allocating shares pro-rata on the basis of hours worked where the complainants work part-time or job-share and where it is alleged that this adversely impacts on women more than on men as a greater proportion of women than men work part-time or job-share. In making my decision in these claims I have taken into account all of the submissions, both written and oral, made to me by the various parties.
5.2 A total of fourteen complainants have referred claims of alleged indirect discrimination on the grounds of gender to the Director of Equality Investigations for investigation and decision. All of the complainants are employees of the second named respondent, one of whom is employed as a Deputy Manager and the remaining are employed as Assistant Managers. They claim that they are entitled to equal pay with named male comparators. Following the purchase of TSB Bank by ILP, ILP undertook to adopt and implement the terms of an agreement ("the ESOT Agreement") entered into between TSB Bank and the Unions providing for the establishment of an employee share ownership trust comprising a flexibility agreement and the foregoing of a salary increase which was due to be paid as and from 21st June, 2001 under the terms of the Programme for Prosperity and Fairness. The ESOT Agreement formed part of the TSB Bank Employee Share Ownership Plan (the TSB Bank ESOP) the terms of which were negotiated between TSB Bank and the Unions and approved by a ballot of employees of TSB Bank. This was then approved by the Minister for Finance and the Revenue Commissioners.
5.3 The fundamental principle underlying the TSB Bank ESOP was that sharesbeing allocated to eligible employees would be earned in two ways as follows:
- 5% of shares would be allocated to employees in return for work practice changes, flexibility and productivity gains to be delivered by employees in the future; and
- 9.9% of shares would be purchased by the employees in return for foregoing increases under the National Wage Agreement.
It was further agreed that shares would be allocated to eligible employees in proportion to the hours worked in the previous 12 months up to a maximum of 35 hours subject to employees having completed 3 years of service. In other words employees working 35 hours or more per week (i.e. full-time employees) were entitled to a full allocation whereas employees working less than 35 hours per week (i.e. part-time employees/employees who job-shared) were entitled to an allocation of shares calculated on a pro-rata basis.
5.4 It is the complainants' contention that the allocation of shares in this way is indirectly discriminatory on the grounds of gender. They say that the requirement, to work 35 hours or more per week during the 12 months preceding the date of allocation in order to receive a full share allocation, adversely impacts on those employees who work part-time, all of whom are female. As at February, 2001 there were 12 full-time employees and 1 parttime employee employed in the grade of Deputy Manager. Of the 12 full-time
employees 7 (58.4%) were female and 5 (41.6%) were male. The only part-time employee in this grade was female. Also at February, 2001 there were 168 full-time and 16 part-time employees employed in the grade of Assistant Manager. Of the 168 full-time employees 76 (45%) were female and 92 (55%) were male and of the 16 part-time employees all (100%) were female. All of the named respondents in these claims deny that the manner in which shares were allocated was discriminatory on the grounds of gender.
5.5 The complainants' withdrew their claim of alleged discrimination on the grounds of family status.
5.6 Section 77(5) of the Employment Equality Act, 1998 provides as follows:
"Subject to subsection (6), a claim for redress in respect of discrimination or victimisation may not be referred under this section after the end of the period of 6 months from the date of the occurrence or, as the case may require, the most recent occurrence of the act of discrimination or victimisation to which the case relates".
Section 77(6) of the 1998 Act states:
"If on an application made by the complainant the Director, ...is satisfied that exceptional circumstances prevented the complainant's case (other than a claim not to
be receiving remuneration in accordance with an equal remuneration term) being referred within the time limit in subsection (5) -
(a) the Director, ...may direct that, in relation to that case, subsection (5) shall have effect as if for the reference to a period of 6 months there were substituted a reference to such period not exceeding 12 months as is specified in the direction, and
(b) where such a direction is given, this Part shall have effect accordingly".
In its written submission the second named respondent contends that these claims are outside the six month time limit imposed by Section 77(5) of the Employment Equality Act, 1998 and consequently I have no jurisdiction to proceed with an investigation of these claims. The complainants referred their claims to the Director on 30th April, 2003. It is the second named respondent's contention that the relevant occurrence was the setting up of the Trust in April, 2001 because as and from that date the entitlement to the shares was defined and part-time employees were aware of their entitlement. Furthermore the entitlement could not be altered as the first named respondents were bound by law to administer the Trust in accordance with its terms.
5.7 At the full hearing of these claims I informed the parties to these claims that the Equality Tribunal had sought and obtained senior counsel's opinion in October, 2000 on the issue of time limits properly applicable under the 1998 Act in respect of claims relating to pay. In accordance with the relevant High Court caselaw21 I gave the parties to these claims a copy of the relevant questions put to counsel on behalf of the Director of Equality Investigations at that time and a copy of counsel's opinion, copy attached at Appendix B to this Decision. I indicated to the parties that I would be taking this opinion into account in deciding the time limit issue in these claims and I invited their submissions on this opinion which I indicated I would take into account. Having considered the opinion the complainants indicated their acceptance of it. The first named respondents did not submit any arguments on the issue of time limits and the second, third, fourth and fifth named respondents indicated that they held a different view to the opinion received by the Equality Tribunal. Set out in Appendix C are the arguments received from the second named respondent. Despite being asked to submit their arguments in writing the legal representatives for the third, fourth and fifth named respondent (hereinafter referred to as the Unions) failed to do so. However at the hearing of these claims the legal representative for the Unions stated that he supported the arguments of the second named respondent and said that had the Oireachtas intended there to be no time limits in relation to equal remuneration claims it could easily have clarified this in the legislation. Furthermore he noted that the imposition of a 6 months time limit is not unique to the Employment Equality Act, 1998 but is also a feature of other legislation e.g. Payment of Wages Act, 1991. The legal representative for the Unions also stated that no time limit or a 6 year time limit in relation to equal remuneration claims is to stretch the interpretation of the 1998 Act.
5.8 In deciding the preliminary issue on time limits in these claims I have carefully considered both the opinion originally provided to the Director and the submissions made by all the parties in relation to it. As they are attached in Appendices B and C, the written arguments and reasoning are not repeated here. It has to be said that the 1998 Act is not perfectly clear or well drafted on this issue and none of the interpretations considered is perfectly consistent with all of its provisions. In trying to decide this issue I have focused on
trying to identify what was the intention of the legislature when the 1998 Act was enacted.
5.9 In relation to time limits the first point worth making is that the Anti-Discrimination (Pay) Act, 1974 (which was repealed by the Employment Equality Act, 1998) did not contain any time limit and it was never the practice to apply one. Hence if the intention was to introduce a six month time limit for equal pay claims in the Employment Equality Act, 1998 one would expect that it would have been done clearly and unambiguously.
5.10 In its submission (see Appendix C) I do not accept the second named respondent assertion that excluding equal pay claims from the power to extend time (Section 77(6)) is a clear indication that equal pay by implication falls within the time limit provision in Section 77(5). It would seem anomalous that equal pay claims would be treated more restrictively than other causes of action under the 1998 Act by imposing a six months time limit and removing the Director's power to extend time. The suggestion that the power to extend is unnecessary as time would begin to run afresh every time pay in breach of the equal remuneration clause was received cannot be regarded as removing every instance where an extension of time may be appropriate for example equal pay claims are often raised in situations where the person has since left the employment.
5.11 In terms of the arguments made by the second named respondent in respect to Statute of Limitation, 1957 I am of the view that the Statute could be applied to proceedings other than court proceedings in appropriate circumstances given that Section 2 of that Act defines an action to which the time limits apply as "includes any proceeding (other than a criminal proceeding) in a Court established by law". The use of the word "includes" suggest that civil proceedings other than those in courts may also be covered. Furthermore the argument that the Statute is not itself applicable to non-Court proceedings does not establish that it is incorrect to apply the six-year time limit. If it is accepted that Section 77(5) of the 1998 Act does not apply then the most reasonable course in the interests of legal certainty would be to analogously apply the six-year time limit where an equal remuneration clause is breached.
5.12 Finally the statutory definition of "discrimination" in Section 6 of the 1998 Act cannot be reconciled with the plain terms of Section 77(1) of that Act which expressly distinguishes between discrimination, failure to provide equal remuneration, failure to provide a benefit under an equality term and victimisation. It is clear from the terms of Section 77(1) that "discrimination" is in practice intended and used within that section in a different and more restrictive meaning to the terms of Section 6 of the 1998 Act.
5.13 While I have considered carefully the arguments made by the respondents in these claims I note that the opinion obtained by the Director in October, 2000 has examined Sections 77(5) and 77(6) of the Act, not in isolation or in the context of one particular claim but, in the context of the manner in which the entire Act has been structured in relation to the prohibition against discrimination and the entitlement to equal remuneration, the different approach of the Act to equal remuneration claims and the differences in the express consequences of situations of indirect discrimination in relation to remuneration and other aspects of employment. Given the distinction between discrimination and entitlement to equal remuneration in relation to the prohibitions set out in Sections 8, 10, 11, 12, 13 and the further distinctions made between discrimination and failing to comply with an equality clause or equal remuneration in terms of Section 62(1), 62(5), 67(1), 74(2) and 76(1) I am satisfied that it is reasonable to conclude that the legislature intended this distinction in relation to the referral of claims and that the six months time limit does not apply to equal pay claims.
5.14 It should be noted that, in terms of redress under Section 82(1) of the 1998 Act, the Director can make an order of compensation in the form of arrears of remuneration "in respect of so much of the period of employment as begins not more than 3 years before the date of referral under Section 77(1) which has led to the decision". I disagree with the second named respondent's contention that an employer would not be free from the risk of an equal pay claim no matter how long the period of time which has elapsed since the alleged discrimination. If a claim was made for equal pay in relation to a disparity which had occurred more than three years previous and which was no longer continuing the Director would not be able to award any compensation prior to the date of the disparity for example if a claim is made for equal pay in relation to a disparity which occurred some four or more years previous then the Director could not award redress under the Act.
5.15 At the commencement of the full hearing of these claims all parties thereto agreed that these claims relate to remuneration i.e. the allocation of shares is in effect the allocation of remuneration in accordance with the relevant provisions of the Employment Equality Act, 1998 and in accordance with Article 141 of the EC Treaty and Directive 75/117/EEC on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women. The entitlement to equal pay is derived from Section 19 of the Employment Equality Act, 1998 which provides:
(2) It shall be a term of a contract under which A is employed that, subject to this Act, A shall at any time be entitled to the same rate of remuneration for the work which A is employed to do as B who, at that or any other relevant time, is employed to do like work
by the same or an associated employer.
The effect of this provision is that the complainants' contracts of employment contain an implied term that their rate of remuneration will be the same as that of the named comparator(s). The complainants state that the reduced share allocation which they will receive will result in considerable financial loss and they submit that the fact that they as part-time employees are all female raises an inference of gender discrimination contrary to the 1998 Act and EU Law and the onus falls on the respondents to objectively justify the decision to allocate shares pro-rata on the basis of hours worked. The first named respondent has argued that it is settled law that it is not discriminatory to make payments to an employee pro-rata in relation to the hours worked. It is the second named respondent's contention that the allocation of shares to employees is based on the number of hours worked and this does not represent a difference in treatment between full-time and part-time employees. The legal representative for the Unions did not make a written submission in these claims but at the full hearing of these claims stated that the fundamental position of its clients was that the pro-rata mechanism achieves equality. To establish whether there is indirect discrimination it is necessary to ascertain whether the share allocation has a more unfavourable impact on women than on men (see, inter alia, on this point Seymour-Smith and Perez22 and Schonheit23).
Entitlement to Equal Pay
5.16 The first issue for consideration is whether, on the facts of this case, the complainants are being denied equal pay with the named comparator(s) within the meaning of Article 141 of the EC Treaty, or the same rate of remuneration which is the corresponding term used in Section 19 of the 1998 Act. The practical application of that principle in cases involving part-time employees has been considered by the ECJ in a number of authorities many of which have been cited by the parties to these claims.
5.17 The ECJ has formulated24 what has become a generally accepted definition of discrimination as follows:
"It is settled law that discrimination can arise only through the application of different rules to comparable situations or the application of the same rules to different situations".
The ECJ has also found that it is not unlawful indirect discrimination to make payments pro-rata in accordance with hours worked in terms of bonus payments in the case of Lewen v Denda25, in terms of retirement pensions in the case of Schönheit v Stadt Frankfurt am Main26 and in terms of overtime pay in the case of Stadt Lengerich v Helmig27.
5.18 It is the complainants' contention that the share allocation has a more unfavourable impact on female than on male employees as more females work part-time than males and this is reflected in the numbers/percentages of employees working full-time and part-time as set out in paragraph 5.4 above. On this basis the complainants state that they have established a prima facie claim of indirect discrimination and the onus now falls on the respondents to objectively justify the manner in which they have decided to allocate the shares. The complainants argue that the purpose of the payment (in the form of a share allocation) is crucial in determining whether the share allocation should be based on the number of hours worked (i.e. pro-rata). In making this argument the complainants note that, in cases before the European Court of Justice, they have related to payments for past activities e.g. overtime, pension, etc and they agree that, in such instances, pro-rata payment to parttime workers is not discriminatory. However in this case the shares are allocated for the achievement of work practice changes, flexibility and productivity. It is the complainants' contention that the concept of pro-rata based on hours worked is not appropriate in determining the contribution of employees to work practice changes, flexibility and productivity. According to the complainants a more appropriate mechanism would be to assess individual performance and to allocate shares accordingly. With the share allocation based on hours worked it means that a part-time Deputy Manager receives shares pro-rata to full-time employees irrespective of their position in the organisation. The complainants ask if the benefit is greater from a junior employee working full-time than it is from a senior employee working part-time. The complainants also cite the case of Barry v Midland Bank plc28 noting that it relates to loss of income and states that it was justified in this case to calculate benefit on the basis of hours worked. However in the current case the complainants say that the purpose of the share allocation was not for hours worked hence the importance of taking account of the purpose of the payment29.
5.19 In this case it is important to focus on the fundamental principle underlying the allocation of shares under the ESOP as set out in paragraph 5.3 above. The greater percentage of the shares (9.9%) was to be purchased by employees in return for foregoing increases under the National Wage Agreement. The wage increases under the National Wage Agreement related to the terms of the Programme for Prosperity and Fairness which was agreed between Government and the Social Partners. As part of this Agreement parties to it were committed to, inter alia, full and ongoing co-operation with change and the need for continued adaptation and flexibility to maintain and improve competitiveness and the increasing of productivity and employment. Payment to employees under this Agreement was pro-rata based on hours worked. Had the complainants and their full-time colleagues not foregone the increases under this Agreement then the second named respondent would have paid the increases pro-rata based on the hours worked and this would not have been challenged by the complainants. In terms of the remaining 5% of shares they were to be allocated to employees in return for work practice changes, flexibility and productivity agreements. It is my opinion that the 9.9% related to productivity and flexibility and if employees had decided not to forego those pay increases then they would have been paid pro-rata on the basis of hours worked. It should be noted in Lewen v Denda30 that the European Court of Justice has held that "for the purposes of Article 119 the reason for which an employer pays a benefit is of little importance provided that the benefit is granted in connection with employment".
5.20 In this case entitlement to shares is based on employees being in the employment of the second named respondent and having completed 3 years service. The stipulation of 3 years service was applied equally to all employees whether part-time or full-time. In view of the foregoing I am satisfied that the respondents can allocate shares pro-rata on the basis of hours worked in this case and by so doing they have applied the same rules in the calculation of the share allocation. In other words the complainants (parttime) and named comparators (full-time) receive the same remuneration relative to hours worked. This approach has been adopted by the Labour Court of the case of Eason and Son Limited and Brown31 where it reviewed a number of cases32 and was satisfied that the complainant's entitlement to the same rate of remuneration as that paid to the comparator can be met if they are both subjected to the rules or criteria in the calculation of their overall pay and in fact receive the same remuneration relative to the hours worked.
5.21 In relation to the statistics cited by the complainants and set out at paragraph 5.3 above I note that the European Court of Justice in Enderby33 held that an inference of indirect discrimination should only be drawn in circumstances where the complainant grade (the part-time employees) is predominantly of one sex and the comparator grade (the full-time employees) is predominantly of the other sex. In this case the complainant grade of Deputy Manager is predominantly female but the comparator grade is not predominantly male. In the case of the complainant grade of Assistant Manager I again note that the complainant grade is predominantly female and a higher proportion of the comparator grade is male (55% as opposed to 45% female). However in determining whether this constitutes a predominance of males in the comparator grade the opinion of the Advocate General in the case of Nolte34 is useful where it is suggested that a figure of 60% imbalance per se, would probably be quite insufficient, whereas based on Rinner-Kuhn35, an imbalance of 89% would be sufficient. Hence in this case the imbalance is insufficient to ground a prima facie claim of indirect discrimination. In the case of Seymour-Smith and Perez36 the European Court of Justice spoke of a situation where "a
considerably smaller percentage of women than of men is able to fulfil the requirement imposed by that measure". Applying this reasoning to this case then at the grade of Deputy Manager a higher percentage of females (58.4%) than males (41.6%) met the requirements to benefit from the full share allocation and at the grade of Assistant Manager a higher percentage of males (55%) than females (45%) met the requirements to benefit from the full share allocation. In terms of the Rinner-Kuhn case cited above I cannot accept 45% of females is considerably smaller in percentage terms than 55% of males who have an entitlement to the full share allocation. Following these authorities I can only conclude that the gender imbalance within the grading structures is not sufficient to establish a prima facie claim of indirect discrimination. Having said that I note the views of the Labour Court more recently in the case of Eason and Brown37 in which it stated as follows:
"It is, however, noteworthy that in none of the cases referred to in this determination did the ECJ require a comparison between the gender composition of part-time workers relative to full-time workers within the employment concerned. Rather, the Court was prepared to take judicial notice of the fact that women are far more likely to be engaged in parttime work than men and consequently, any disadvantage attached to part-time working constitutes, prima facie, indirect discrimination against women".
The Labour Court also refers to the Protection of Employees (Part-Time Work) Act, 2001 and considers that this legislation should provide a more appropriate vehicle for the processing of claims where the complainants and the named comparators are part of a group which is predominantly of the same gender.
5.22 In their submission the complainants have argued that they have been discriminated against contrary to the provisions of Section 8 and specifically Section 8(b) of the Employment Equality Act, 1998. It has been agreed between the parties that these claims relate to remuneration and having regard to the opinion on time limits received by the Director (and set out in Appendix B) I am satisfied that Section 8 does not include remuneration. I consider that this argument was quite correctly made by the first named respondent in its submission.
5.23 At the preliminary hearing of these claims the legal representative for the Unions requested me to withdraw them from the proceedings. I indicated to them that they were named in the proceeding by the complainants and I had no jurisdiction to withdraw them from the proceedings. However I could, in my decision, deal with the issue of whether or not they were properly named in the action. At the full hearing of these claims the legal representative for the Unions again asked that I withdraw them from the case. It was argued before me that these respondents were not party to these claims as the ESOP involved the contractual workings of the collective agreement but is not a collective agreement. Furthermore should I recommend an alternative implementation or restructuring of the ESOP it would not necessitate the involvement of the Unions. At this hearing I again indicated to the legal representative for these respondents that I had no authority to withdraw them from the claim and that this could only be done by the complainants. The complainants indicated that they felt aggrieved by the treatment they received at the hands of the Unions and they considered that it was open to the Equality Officer to make specific action remedies against these respondents. The second named respondent stated that, in its opinion, the Unions were properly named in this action and referring to Appendix 5 Clause 18 of the Trust Deed it noted that the Unions have a continued and ongoing involvement in the operation of the Trust Deed for instance in the event of an amendment, modification, alteration, addition, etc to the Deed the Trustees would have to obtain prior approval of the beneficiaries through their Unions' representatives. I am satisfied that the Unions have been properly named in these claims and that they are party to a collective agreement with the second named respondent and should the first named respondent need to amend, alter, etc. the agreement, for whatever reason, the Unions would be involved in such a task on behalf of the beneficiaries. For clarity I wish to confirm that I do not have the jurisdiction under the Employment Equality Act, 1998 to make specific action remedies against the Unions as suggested by the complainants. If I had found that the complainants had been indirectly discriminated against in relation to the allocation of shares it was open to me to declare those provisions of the collective agreement null and void and the parties to the collective agreement would have to amend it to ensure that it did not indirectly discriminate against any of the beneficiaries. In this regard the ECJ in Kowalask38 stated as follows:
"Where there is indirect discrimination in a clause in a collective agreement the class of persons placed at a disadvantage by reason of that discrimination must be treated in the same way and made subject to the same scheme, proportionately to the number of hours worked, as other workers, such scheme as remaining, for want of correct transposition of Article 119 of the EEC treaty into National law, the only valid point of reference".
5.24 For the benefit of the first named respondent I wish to indicate that if I had found the collective agreement to be indirectly discriminatory in this case then I would have declared, in pursuance of my powers to do so under Section 87 of the Employment Equality Act, 1998, that the relevant provisions of the ESOP were null and void by virtue of Section 9 of the 1998 Act. This would render the entire scheme unworkable and the first named respondent would be obliged to get a valid scheme in operation and they could do this by appealing this Decision to the Labour Court, by applying to the High Court for direction or by getting all of the relevant parties to agree to a new non-discriminatory collective agreement. In relation to the latter option the first named respondent could invoke the Director's powers under Section 87(1) of the 1998 Act to "provide guidance to the parties" on a non-discriminatory alternative.
6.1 On the basis of the foregoing conclusions I find that the Trustees, the Bank and the Unions did not indirectly discriminate against the complainants (see Appendix A) in relation to pay on the grounds of gender when they provided for the allocation of shares to be pro-rata based on the hours worked.
11th February, 2004
LIST OF COMPLAINANTS
Ms. Fionnula McGivern - Deputy Manager
Ms. Mary P. Brady
Ms. Ann Wilkins
Ms. Bernie Ryan
Ms. Virgina Barrett
Ms. Ann Fitzgerald
Ms. Una Burke
Ms. Liz O'Callaghan
Ms. Ellen Kingston
Ms. Marie O'Brien
Ms. Lorraine Murray
Ms. Yvonne McKeown
Ms. Anne Corrigan
Ms. Clare Brennan
Senior Counsel Opinion received by the Equality Tribunal on the issue of Time Limits
RELEVANT EXCERPTS FROM BRIEF TO COUNSEL ON BEHALF OF THE DIRECTOR OF EQUALITY INVESTIGATIONS (August, 2000) [As furnished to the parties in this case]
A. Relevant points made in brief to counsel (August 2000):
The brief set out the provisions of sections 77.1. 77.5 and 77.6 of the Employment Equality Act 1998 in full, and asked counsel to advise:
1) whether "discrimination" in section 77(5) of the Act should be understood to refer to all forms of discrimination, including failure to implement an equal remuneration clause, or as referring only to non-pay discrimination
2) whether the six month time limit under section 77(5) applied to equal remuneration claims under the Act
3) if not, whether any other statutory or common law time limit applied to equal remuneration claims.
The brief set out the following points by way of background:
- that the previous (1974) Act had not imposed any specific time limits in respect of equal pay claims
-that the six year time limit under the Statute of Limitations appeared to have therefore been the only time limit for referring an equal remuneration complaint under the 1974 Act (despite the provisions of section 56(2) of the 1977 Act, as the procedures for claims under the 1974 and 1977 Acts were patently entirely different)
-that, on the one hand, the imposition of a six-month time limit in equal pay cases by the 1998 Act would thus represent a significant change from previous practice and would have implications particularly in cases where employment had been terminated,
-that, on the other hand, the exclusion of equal remuneration cases from the possibility of extending time in section 77(6) might appear inconsistent with their not being covered by the time limit requirement in section 77(5)
- that the Oireachtas debates on the passage of the legislation did not seem to contain any passages which might throw light on the intention of the legislation on this point
The brief also contained the following passage concerning the meaning of the term "discrimination" in the 1998 Act:
"The Act states in section 6 that "discrimination" is taken to occur when, on any of the
discriminatory grounds, "one person is treated less favourably than another is, has or
would be treated." Does this include discrimination concerning remuneration?
Sections such as 7 (like work), and 9(1) (collective agreements providing for discriminatory pay) clearly relate to equal pay and are included in Part II of the Act which is entitled "Discrimination: general provisions", but the term "discrimination" is not applied to unequal remuneration within the text of the sections.
A right to equal remuneration as an implied term of the worker's contract is provided in sections 19.1 and 20.1 (gender discrimination) and section 29 (other grounds). The language used is a variation of the earlier section 2.1 in the 1974 Act, and the term "discrimination" is not used in these sections.
Sections 21 (gender) and 30 (other grounds) then imply into each worker's contract an equality clause, with the effect that s/he is entitled to equal terms of employment to a comparator employed to do work which is not materially different, other than regarding remuneration or pension rights. There are differences in wording between these sections. The "other grounds" section requires a "non-discriminatory equality clause", while the gender section does not use the term "discrimination" except in the marginal subsection 21(4). The concept is a variation of that contained in section 4 of the 1977 Act, though with some rewording.
Then the layout of section 77(1) of the 1998 Act almost seems to imply that discrimination, non-implementation of an equal remuneration clause, non-implementation of an equality clause and victimisation are four distinct categories of conduct which are contrary to the Act. Yet it seems difficult to give any meaning to "discrimination" if it does not include at least non-implementation of an equality clause. And if it includes one of the other sub-categories, should it also include equal remuneration?
"Discrimination", if interpreted in the normal and literal sense, seems to include unequal pay where based on a discriminatory ground. And would not consistency with Article I of the Equal Pay directive require "discrimination" to include unequal pay, at least where based on sex?
The 1974 Act never uses the term "discrimination" in the operative text, but its full title, the Anti-Discrimination (Pay) Act, does seem to suggest that unequal pay was seen even in 1974 as a type of discrimination.
The 1977 Act says at section 2 that for the purposes of the Act discrimination is taken to occur "where by reason of his sex a person is treated less favourably than a person of the other sex", as well as in cases of less favourable treatment based on marital status, imposition of indirectly discriminatory requirements, or victimisation for making a complaint under the 1974 or 1977 Acts. This definition does not seem to clearly exclude pay discrimination. Section 3 sets out a number of concrete instances which may constitute discrimination, which do not specifically include equal pay but which do not appear to be intended as exhaustive. In any event the definition stated in sections 2 and 3 of the 1977 Act must presumably be expanded where Community law so requires, following the Bailey Gibson case?
Sections 3.1 and 3.4 of the 77 Act referred to specific types of discrimination and both specifically excluded remuneration, (adding to the impression that it was otherwise seen as included in "discrimination" for the purposes of the Act as a whole). But the Act nowhere stated that it is generally excluded, for instance from section 3(2)."
Finally, counsel was briefly asked to advise on two distinct but related issues:
.i) whether section 77 was compatible with European Comunity law, in the light of the European Court of Justice's decision in the Levez case, and
.ii) whether the Director of Equality Investigations might proceed to hear a claim where no objection as to apparent time bar was raised by the respondent, in the light of Barrington J.'s comments in Aer Rianta v Labour Court, or should satisfy herself that time limits had been complied with, even absent any objection by the parties.
B. Nature of advice received from counsel (Mary Finlay SC: October 2000):
A full copy of the advice received from counsel is attached. (Ms Justice Finlay-Geogheghan has confirmed that she has no objection to this being done.)
Counsel did not express a view in her Opinion on whether any other time limit applied to equal pay claims: in the absence of specific advice from counsel on the point, ODEI's working assumption is that a six year time limit applies, in accordance with general contract law, since the entitlement to equal pay is implied into the contract of employment under the 1998 Act.
TEXT OF SENIOR COUNSEL OPINION (October, 2000) [As furnished to the parties in this case]
Re/ Time Limit for Equal Remuneration Claims
I have been asked to advise upon a number of questions concerning the interpretation of the Employment Equality Act 1998 ("the Act") and the compatibility of certain of the time limits in the Act with Community Law and the position of the Director in relation thereto. The detailed questions are set out in a statement from Ms. Reid, Legal Advisor to the Director. In this opinion, I propose grouping certain of the questions by reason of my response thereto.
Section 77(5) and Equal Remuneration Claims:
The first question upon which I am asked to advise is whether the six month time limit in section 77(5) applies to equal remuneration claims. Linked to this question, are a number of questions concerning the relationship between the concepts of discrimination and of equal remuneration under the Act.
In my view, the six month time limit in section 77(5) does not apply to a claim for equal remuneration. The reasons for which I have reached this conclusion are as follows.
Section 77(5) applies the six month time limit to "a claim for redress in respect of discrimination or victimisation". The claim for redress being referred to in subsection (5) is a claim for redress referred to in sub -- sections (1) and (2) of section 77. Subsection (1) sets out what on the face of it appears to be four separate situations in which a person may seek redress i.e. a person who claims --
"(a) to have been discriminated against by another in contravention of this Act,
(b) not to be receiving remuneration in accordance with an equal remuneration term,
(c) not to be receiving a benefit under an equality clause, or
(d) to have been penalised in circumstances amounting to victimisation".
The express wording of sub-sections (1) and (5) suggest that whilst sub-section (1) identifies four separate circumstances in which a person may claim redress, sub section (5) only applies the six month time limit to two of such circumstances i.e. paragraphs (a) and (d). The position is however complicated by the words in sub-section (6) and therefore, as Ms. Reid points out, the question must be asked whether or not a "claim for redress in respect of discrimination" in sub-section (5) is intended to include an equal remuneration claim. In my view, notwithstanding the express exclusion of the equal remuneration claim in sub-section (6), a claim for redress in respect of discrimination in sub-section (5) is not intended to include an equal remuneration claim.
The words in sub-section (6) insofar as one can deduce a probable purpose of same would seem intended only to emphasise that subsection (5) does not apply to an equal remuneration claim.
This construction is, in my view, reinforced by the general structure created by the Act in relation to the prohibition against discrimination and the entitlement to equal remuneration.
The first point to be made is that whilst section 6 of the Act defines discrimination for the purposes of the Act, not all acts which would be acts of discrimination within the meaning of section 6 are prohibited by the Act. Similarly a claim for redress in respect of discrimination does not simply relate to an act of discrimination within the meaning of Section 6 but rather may only relate to an act of discrimination in contravention of the Act. Section 77 (l)(a) makes this clear. Therefore, in considering whether or not a claim in. respect of discrimination may include a claim to equal remuneration, it is necessary to consider what forms of discrimination are prohibited as being contrary to the Act to see whether such prohibitions include the payment of remuneration other than in accordance with an equal remuneration term.
Section 8 (1) prohibits discrimination against an employee or prospective employee in five specific areas. There is only one which could potentially include payment terms i.e. (b) condition of employment. However, section 2 (4) expressly provides that references to "conditions of employment" in the Act does not include remuneration or pension rights.
Sub-sections (4) to (8) inclusive of section 8 include further prohibitions against discrimination against employees in certain specific circumstances or deems certain actions to constitute discrimination in one of the specific areas referred to in sub-section (1). In my view, none of these matters could include remuneration.
Sections 10, 11, 12 and 13 all contain express prohibitions against discriminating in certain specific areas and circumstances. Again, upon a consideration of these provisions, none of them in my view, constitute a prohibition against making payments other than in accordance with an equal remuneration term. Sections 21(4) and 22 deem certain actions to constitute discrimination but expressly in relation to the matters specified in section 8 (1). Hence again, they do not apply to remuneration.
The approach of the Act to equal remuneration is quite different. Sections 19 and 20 effectively impose in a contract of employment, a term giving the employee a right to equal remuneration in accordance with the Act. There is nothing in Sections 19 or 20 which deems either the offer of employment with a term which would contravene an equal remuneration term, or the employment of a person on terms contrary to an equal remuneration term, to be an act of discrimination prohibited by the Act. In this connection, section 21(4) emphasises the distinction of approach of the Act insofar as it deems the offering of employment contrary to a gender equality clause (which expressly excludes remuneration and pension terms under sub-section (2)) to be discrimination in relation to conditions of employment and therefore, prohibited by section 8 (1).
The structure of section 29 in relation to equal remuneration is similar to that of section 19 and again, the distinction of approach is to be found in section 30(4).
There are also differences to be found in the express consequences of what might loosely be termed situations of indirect discrimination as they apply to remuneration and other aspects of employment. Section 19(4) in the case of remuneration effectively deems that person affected to be treated as fulfilling the condition which entitles them to the higher remuneration whereas section 22(1) deems the employer to be discriminating contrary to section 8. There is a simi1ar distinction to be made between section 29 (4) and section 31(1).
In the context of the above, I should draw attention to the definition of "equality clause" in section 2(1) which refers to definitions in sections 21 and 30, both of which expressly exclude terms relating to remuneration or pension rights.
Finally, in this connection I would draw attention to distinctions made between discrimination and failing to comply with an equality clause or equal remuneration term in sections 62 (1), 62 (5), 67 (1), 74 (2)(a) and 76 (1).
I have considered the point made by Ms. Reid in her statement that a claim for redress in respect of discrimination in section 77 (5) must seem to include a claim in respect of the non implementation of an equality clause and that therefore, it might also include a claim in respect of the non implementation of an equal remuneration clause. I agree with the view that a claim of non implementation of an equality clause or as stated in section 77(1) that a person is not receiving a benefit under an equality clause, will probably constitute a claim that that person has been discriminated against contrary to the Act. A failure to implement an equality clause will inevitably amount to a discrimination in relation to conditions of employment and hence, it is expressly prohibited under section 8 (1)(b) of the Act and therefore is a claim to have been discriminated against by another in contravention of the Act. For all the reasons set out above, a similar claim in relation to an equal remuneration term is not prohibited by Section 8 of the Act and therefore is not a claim to have been discriminated against by another in contravention of the Act.
In conclusion, it appears to me that whilst a failure by an employer to implement an equal remuneration clause may well be an act of discrimination within the meaning of section 6, it is not discrimination prohibited by any section of the Act and accordingly, is not discrimination in contravention of the Act. Hence, a person who is making a claim for equal remuneration cannot claim to have been discriminated against in contravention of the Act under section 77 (1)(a) of the Act.
Having regard to the conclusion reached above, I do not think it necessary for me to address in detail the questions raised in relation to the prior legislation. In my view, there were two distinct procedures set up under the prior legislation. I have not however relied in any way on that situation in reaching the conclusions reached above. The 1998 Act will always be firstly construed in accordance with its own express terms; it will also have to be construed so as to conform with Ireland's obligations under the various EU provisions and it is only where there is perhaps some ambiguity which might be resolved by reference to the earlier Acts, that they would come into consideration.
Equal Pay Directive:
I am also asked to advise whether Article 1 of the Equal Pay Directive requires "discrimination" as prohibited by the 1998 Act to include unequal pay, at least where based on sex.
It is quite clear that Ireland is obliged to implement the substance of the provisions of the Directives. In my view the fact that Ireland in the implementing legislation, does not use the term "discrimination" in relation to remuneration would not mean that it was fai1ing to implement the provisions of the Directive. Rather it appears to me that the issue which might have to be considered on the facts of any particular case is whether, for example, the provisions of sections 19 and 20 of the Act are sufficiently widely drafted to implement the obligation to eliminate all discrimination on grounds of sex with regard to all aspects and conditions of remuneration for like work or work of equal value. This is not something upon which I could advise upon a theoretical basis.
Compatibility of Time Limits in Section 77 with Community Law:
I am asked to advise upon the compatibility of the time limits in section 77 of the Act with Community law having regard in particular to the judgements of the Court of Justice in. the Levez39 and Preston40 cases. These cases and a number of other judgements of the European Court of Justice ("ECJ") establish the following principles according to which the compatibility of national time limits with Community law is to be decided.
(1) In the absence of community rules governing the matter, it is a matter for the national jurisdictions to establish the detailed procedural rules subject to the principles of effectiveness arid equivalence.
(2) The principle of effectiveness means that the national limitation period must not make the exercise of rights conferred by Community law either virtually impossible or excessively difficult.
(3) It is compatible with Community law for national rules to prescribe in the interest of legal certainty, reasonable limitation periods for bringing proceedings even though the expiry of such limitation periods entails by definition the rejection, wholly or in part of the action41.
(4) The principle of equivalence requires that the national time limit applying to the alleged infringement of a right based on Community law be similar to the time limit applying to an alleged infringement based on a right derived from national law where the actions concerned are similar as regards their purpose, cause of action and essential characteristics.
(5) The principle of equivalence is not to be interpreted as requiring Member States to extend their most favourable rules to all actions brought in the relevant field42
The time limits under sub-section 77(5) and (6) are six months from the most recent occurrence of the act of discrimination or victimisation or where the Director, Labour Court or Circuit Court is satisfied that exceptional circumstances prevented the complainant's case being referred within this time limit, such period as they may specify up to twelve months from the most recent occurrence of the act of discrimination or victimisation.
The application of the principle of effectiveness by the ECJ to particular time limits in Levez and Preston is less than clear. In Preston, the first question related to the compatibility of section 2(4) of the U.K. Equal Pay Act 1970. That section provided that any claim in respect of the operation of an equality clause must be brought within a period of six months following the cessation of employment. The ECJ held that such time limit did not contravene the principle of effectiveness. At par. 34, the Court stated;
"Contrary to the contention of the claimants in the main proceedings, the imposition of a limitation period of six months', as laid down in section 2(4) of the EPA. even if by definition, expiry of that period entails total or partial dismissal of their actions, cannot be regarded as constituting an obstacle to obtaining the payment of sums to which, albeit not yet payable, the claimants are entitled under Article 119 of the Treaty. Such a limitation period does not render impossible or excessively difficult the exercise of rights conferred by the Community legal order and is not therefore liable to strike at the very essence of those rights."
Applying the above statements to the time limits in section 77(5) and (6) would suggest that such time limits do not contravene the Community law principle of effectiveness.
The position is, however, put in doubt by reason of the approach of the ECJ in the earlier case of Levez. In that case at issue was, it must be recognised, not a time limit within which an action had to be brought but rather a time limit on the period during which arrears of remuneration could be awarded i.e. two years prior to the date on which proceedings were instituted. Such time limit is similar to the type of limitations which appear in section 82 of the Act. However, when considering the application of the principle of effectiveness to this time limit, the ECJ suggested initially that a national rule under which entitlement of arrears of remuneration is restricted to two years preceding the date on which the proceedings were instituted is not in itself open to criticism43. However, in the judgement, they then continue to consider the position in relation to the particular facts of the Levez case in which the Court deduced that by reason of inaccurate or misleading information provided by the employer, Mrs. Levez did not realise for a considerable period that she had been the victim of sex discrimination. The Court then held that in such circumstances, the application of an absolute time limit with no possibility of extension, would make it virtually impossible or excessively difficult for a claimant to obtain arrears of remuneration in respect of sex discrimination. It stated in response to the question referred;
"Community law precludes the application of a rule of national law which limits an employee entitlement to arrears of remuneration or damages for breach of the principle of equal pay to a period of two years prior to the date on which the proceedings were instituted, there being no possibility of extending that period, where the delay in bringing a claim is attributable to the fact that the employer deliberately misrepresented to the employee the level of remuneration received by persons of the opposite sex performing like work."
The difficulty I have with the above is that the response given by the ECJ to the question referred appears to suggest that any absolute time limit which does not give a discretion to the person to whom the complaint is being referred to extend the time where the delay has been caused by alleged misrepresentations of the employer is incompatible with Community law. If this were the position, then the absolute time limits in section 77 would appear to contravene the principle. However, in the subsequent Preston case at issue was an absolute time limit with no possibility of extension and the Court has upheld that time limit as not contravening the principle of effectiveness.
My view on balance is that in accordance with the decision in the Preston case, the time limits in sub-sections 77(5) and (6) would not be held to contravene the principle of effectiveness. However, if a claim was made to the Director, Labour Court or Circuit Court outside of twelve months and if the person bringing the claim alleged that he or she was unaware of the fact that the act of discrimination or victimisation had taken place by reason of some alleged wrongdoing of the employer, then I think in accordance with the interpretative principles established by the Court of Justice in Marleasing44, sub-sections 77(5) and (6) would have to be interpreted as giving a discretion to the Director, Labour Court or Circuit Court to extend the time for the bringing of the proceedings.
In my view, the time limits in sub-sections 77(5) arid (6) comply with the principle of equivalence. Firstly, those time limits apply to all claims under the 1998 Act. Those claims include claims where the rights are derived solely from Irish law and are not based on any Community law right. Such claims are clearly the Irish causes of action which are most similar in purpose and essential characteristics to the claims based on Community law rights.
Those time limits are similar to the time limits which apply to unfair dismissals claims under the 1993 Act45. Such claims can I think be characterised as similar in purpose and essential characteristics insofar as they are claims for breach of statutorily imposed duties on employers or statutorily conferred rights on employees.
There are however, longer time limits in respect of certain claims which may be brought by employees and which could be characterised as arising out of statutorily conferred rights relating to their employment e.g. in respect of redundancy payments and under the minumum notice and terms of employment Acts 1973 to 1991. However, having regard to the principle established by the Court of Justice in the Edis case and repeated in Levez that the principle of equivalence is not to be interpreted as requiring Member States to extend their most favourable rules to all actions brought in the relevant field i.e. in the field of employment law, it appears to me that having regard to the existence of the purely domestic law claims under the 1998 Act and the Unfair Dismissals Act that sub-sections 77(5) and (6) insofar as they applied to claims based on rights derived from Community law, complies with the principle of equivalence.
Applying the same principles to the additional twenty eight day time limit in sub-sections 77(8) and (10), it appears to me that such periods are probably compatible with EC Law. The one point which might be of concern is that the twenty eight day period where either a decision is given under sub-section 8(a) or a recommendation is given under section 104(2)(b), the twenty eight days is to run from the date of the decision or recommendation. If a decision or recommendation were made but not notified to the Complainant until after
the twenty eight day period or perhaps some date close to the twenty eight days, the principle of effectiveness might require the referring body to consider in such circumstances that it had a discretion to extend the time or alternatively to consider that the date of the decision or recommendation must be interpreted as meaning the date upon which it was notified to the Complainant.
Role of Director concerning Time Barr:
I am asked to advise whether or not section 77(5) obliges the Director to consider whether an applicant has complied with the time periods specified even if a respondent does not raise any objection.
A plaintiff's right of action to bring an action may be affected in either of two ways by the expiry of a time limit. It may be extinguished or merely barred. In the first case, the plaintiff has no further right of action. In the second, the plaintiff is deprived of a remedy but the right of action remains in existence46.
Statutes of Limitation such as the Irish Statute of Limitation 1957, impose a limitation of time on an existing right of action. Such a statute falls into the second category described above and its effect (save in respect of some very limited causes of action) is to barr the remedy. If, however, a statute confers a new right and also prescribes a limited time within which that right might be enforced, then the limitation period in that statute is not normally considered to be a statute of limitation. In this case, the time limit is regarded as having substantive or jurisdictional effect in that after the expiry of the limited period, the right no longer exists and the Court or body to whom the claim is referred has no jurisdiction to entertain the claim47.
There are a number of Irish statutes which fall into this latter category. Section 117 of the Succession Act 1965 has been held to specify a substantive or jurisdictional limit after the expiry of which the Court cannot entertain an application under the section.
In my view, the time limits in section 77 as a matter of probability fall into the category of substantive or jurisdictional limits. Section 77(1) provides that a person who claims to have suffered one of the matters specified in paragraphs (a) to (d) "may, subject to sub-sections (2) to (8), seek redress by referring the case to the Director". Accordingly, the right conferred by section 77(1) to seek redress by referring the case to the Director is made expressly subject inter alia to the time limits in sub-sections (5) and (6). Accordingly, it appears to me that the Director is herself obliged to consider when a claim is made whether or not the reference is validly made to her in the sense that it has been made within the time limits specified.
I have considered the remarks made obiter by Barrington J. in Aer Rianta v. The Labour Court48. The Judge was of course considering the jurisdiction of the Labour Court under the 1977 Act. His reasoning is founded upon the general role of the Labour Court. He does not consider the law relating to the difference between what are properly called Statutes of Limitation and those statutes in which the time limits may be regarded as substantive or jurisdictional. The remarks were of course obiter and therefore, for the reasons set out above, I do not think that his reasoning would be followed in relation to the time limits established in section 77(1) of the Act.
20th October 2000.
Mary Finlay S.C.
The Law Library,
145-151 Church Street, Dublin 7.
Submission from the Second Named Respondent on the issue of Time Limits
1.1 As submitted at the hearing, Irish Life & Permanent Plc ("IL&P") contend that Section 77 of the Employment Equality Act 1998 ("The 1998 Act") imposes a time limit on the bringing of pay claims.
2. The Legal Argument:
2.1 Section 6 of the Act defines discrimination "for the purposes of this Act". Section 6(1) provides:
"For the purposes of this Act, discrimination shall be taken to occur where, on any of the grounds in subsection (2) (in this act referred to as "the discriminatory grounds"), one person is treated less favourably than another is, has been or would be treated."
2.4 Section 6(2) lists the discriminatory grounds. The relevant portion thereof states:
"As between any two persons, the discriminatory grounds ... are --
(a) that one is a woman and the other is a man (in this Act referred to as "the gender grounds").
2.3 This claim has been presented to the Tribunal as a discrimination claim. It is alleged that part-time employees are discriminated against on the gender ground. Furthermore all of the European Court cases relied upon refer to claims such as the present as discrimination claims. It is in that context that Section 77 of the Act must be construed.
2.4 Section 77 insofar as it is relevant to this issue provides as follows:
"(1) A person who claims --
(a) to have been discriminated against by another in contravention of this Act,
(b) not to be receiving remuneration in accordance with an equal remuneration term,
(c) not to be receiving a benefit under an equality clause, or
(d) to have been penalised in circumstances amounting to victimisation, may, subject to subsections (2) to (8) seek redress by referring the case to the Director.
(2) If a person claims to have been dismissed --
(a) in circumstances amounting to discrimination by an Order in contravention to this Act, or
(b) in circumstances amounting to victimisation, then, subject to subsection (3) a claim for redress for the dismissal may be brought to the Labour Court and shall not be brought to the Director.
(3) If grounds for such claim as is referred to in subsection (1) or (2) arise --
(a) under Part (III) or
(b) in any other circumstances ('including circumstances amounting to victimisation) to which the Equal Pay Directive or the Equal Treatment Directive is relevant, then subject to subsections (4) to (8) the person making the claim may seek redress by referring the case to the Circuit Court, instead of referring it to the Director under subsection (1) or as the case may be, to the Labour Court under subsection (2).
(5) Subject to subsection (6) a claim for redress in respect of discrimination or victimisation may not be referred under this section after the end of the period of six months from the date of the occurrence, or as the case may require, the most recent occurrence of the act of discrimination or victimisation to which the case relates.
(6) If, on an application made by the Complainant, the Director, the Labour Court or, as the case may be, the Circuit Court is satisfied that exceptional circumstances prevented the Complainant's case (other than a claim not to be receiving remuneration in accordance with an equal remuneration term) being referred within the time limit in subsection (5) -
(a) the Director, the Labour Court or the Circuit Court as the case may be direct that, in relation to that case, subsection (5) shall have effect as if for the reference to a period of six months there was substituted a reference to such period not exceeding twelve months as is specified in the Direction ...".
2.5 On its face, subsection (5) applies to all claims in respect of "discrimination" or "victimisation". There is nothing in subsection (5) (or indeed in any part of Section 77) which suggests that the term "discrimination" is to be interpreted other than in accordance with Section (6) of the Act. If the term "discrimination" was to be interpreted differently than mandated by Section (6), then this would have to be made explicit in Section 77(5).
2.6 It is a fundamental principle of statutory interpretation that words in an act must be construed in accordance with the statutory definition. Section 6 is quite explicit. It provides that 'for the purposes of this Act" discrimination shall be taken to occur where on the grounds of gender, any person is treated less favourably than another. The Claimant's claim must therefore be treated as a discrimination claim and is clearly caught by Section 77(5).
2.7 This interpretation is reinforced by the wording of Section 77(6). It confers on the Director an entitlement to extend the lime limit in subsection (5), in exceptional circumstances, to claims "other than a claim not to be receiving remuneration in accordance with an equal remuneration term". If as is contended by the Respondent an equal pay claim is not covered by Section 77(5), then it would be unnecessary for Section 77(6) to make any reference to such claim. Section 77(6) only applies to claims covered by Section 77(5). That is clear from the wording of both subsections. If Section 77(5) did not apply to the discrimination the subject matter of these proceedings, then there would be no need for Section 77(6) to exclude equal pay claims. The only rationale for the exclusion of such claims from 77(6) is that they come within Section 77(5).
2.12 The contention that the exclusion in Section 77(6) might be explained on the basis that the legislature is acting out of an abundance of caution and making the position absolutely clear violates the most fundamental rule of statutory construction. If that were the intention of the legislature, then the exclusion would be contained in subsection (5) not subsection (6). Subsection (6) is clearly ancillary to subsection (5). It applies only to those cases to which subsection (5) applies. If it were intended that the term "discrimination" in subsection (5) should not embrace equal pay claims, then that would have been made clear in subsection (5). The inclusion of this exclusionary wording in subsection (6) merely has the effect of disapplying subsection (6) but not subsection (5) to such claims.
2.9 It is quite clear that the claims referred to in Section 77(1) fall into two categories, namely, discrimination claims and victimisation claims. If it were otherwise, there would not only be no time limit in respect of equal pay claims, but there would also be no time limit in respect of claims for benefits under an equality clause. It has never been suggested that that is the position.
2.10 It has been suggested that if Section 77(5) does not provide a time limit for pay claims, that the appropriate time limit is supplied by the Statute of Limitations. The Statute of Limitations only applies to Court proceedings. It does not apply to proceedings before the Tribunal. It would therefore follow that there is no limitation period for equal pay claims and this is a result that could not have been intended by the legislature. Furthermore it would violate a fundamental principle of European law, namely, the principle of certainty. If there is no limitation period, no employer would ever be free from the risk of an equal pay claim no matter how long the period of time which has elapsed since the alleged discrimination.
2.11 On the other hand it is quite clear why the power to extend the limitation period provided for in Section 77(6) does not apply to equal pay claims. That is because the six months runs from "the most recent occurrence of the act of discrimination". Every time a discriminatory payment is made to an employee, the six-months time limit runs afresh and the employee will have six months from the date of payment to bring a discrimination claim in respect of that payment. There is not the requirement therefore for an extension of the limitation period that exists in other discrimination claims.
2.12 In the present case the date of the relevant occurrence was of course the setting up of the Trust in April 2001. As and from that date, the entitlement to the shares was defined and part-time employees knew what their entitlement was. That entitlement could never alter because the trustees were bound by law to administer the Trust in accordance with its terms. There was never any possibility therefore that the trustees could at some later stage confer a higher allocation of shares on the part-time employees. Once a Trust was established, the part-time employees' entitlement was fixed once and for all. That therefore was the date of discrimination and the date from which the limitation period provided for in Section 77(5) must run. This is different from the situation where the employer continues to pay an employee on discriminatory terms. Each time the employer makes a discriminatory payment, he has the option of regularising the position and paying the appropriate amount. Here there is no case of any further allocations by the employer. All allocations derive from the terms of the Trust and those allocations are fixed for ever as of April 2001.
3.1 In conclusion, therefore, it is respectfully suggested that the wording of the Act makes quite clear that the limitation period provided for in Section 77(5) applies to discrimination in respect of pay.
2 February 2004
1European Court of Justice  C-200/91 IRLR 586; ECR I-4389
2European Court of Justice in Nimz v Freie und Hansestadt Hamburg  C-184/89 RLR 222; ECR I-297
3Supreme Court  2 IR 162
4European Court of Justice - Bilka-Kaufhaus GmbH v Weber von Hartz  Case C-170/84 IRLR 317; ECR 1607
5European Court of Justice in the cases of Gerster v Freistant Bayern  C1/95 IRLR 699 and Hill and Stapleton v Revenue Commissioners and Department of Finance  C-243/95 IRLR 466
6European Court of Justice  IRLR 586
7This is clear from the reasoning of the European Court of Justice in R. Secretary of State for Employment ex parte Seymour-Smith and Perez  Case 167/97 ECR I-623
8This principle was recently confirmed in Schönheit v Stadt Frankfurt am Main  C-4/02
9European Court of Justice - Case C-333/97 of 21st October, 1999 ECR I-7243
10European Court of Justice - Gerster v Freistaat Bayern  C-1/95 IRLR 699; Hill and
Stapleton v Revenue Commissioners and Department of Finance  C-243/95 IRLR 466
11European Court of Justice - Gerster v Freistaat Bayern  C-1/95 ECR I-5253
12European Court of Justice - Hill and Stapleton v Revenue Commissioners andDepartment of Finance  C-243/95 3 CMLR 81
13Supreme Court -  2 IR 162
14UK Trustees of Uppingham School Retirement v Shillcock  IRLR 702
15UK House of Lords - Barry v Midland Bank  1 WLR 1465
16European Court of Justice - Case 170/84  ECR 1607
17European Court of Justice - Case C-167/97  ECR I-623
18UK House of Lords  1 WLR 1465
19European Court of Justice - Rinner-Kuhn C-171/88  ECR 2443; Lewark C-457/93  ECR I-243; Hill and Stapleton C-243/95  ECR I-3739; Jorgenson C-266/98  ECR I-2447
20European Court of Justice - Nolte v Landesversicherungsantalt Hannover Case C-317/93  ECR I 4625; Megner and Scheffel v Innungkrankenkasse Vorderpflaz Case C-444/93  ECR I-4741; Schroder, Vick and Konze v Deutche Bundespost Delekom (Joined cases C-50/96, C-234/96 and C-235/96)
21High Court - Polymark, Georgopoulos v Beaumont Hospital  IRLM 357
22ECJ R Secretary of State ex parte Seymour-Smith v Perez  C-167/97 ECR I-623
23ECJ Schönheit-Stadt Frankfurt am Main  C-4/02
24European Court of Justice Finanzamt Köln-Altstadt v Schumacker  C-279/93 Gillespie and Others v Northern Health and Social Services Board and Others  C-342/93 Boyle and Others v Equal Opportunities Commission  C-411/96 Lewen v Denda  C-333/97
25ECJ Lewen v Denda  C-333/97
26ECJ Schönheit v Stadt Frankfurt am Main  C-4/02
27ECJ Stadt Lengerich v Angelika Helmig  ECR I-5727
28UK House of Lords  1 WLR 1465
29See ECJ Stadt Lengerich v Angelika Helmig  ECR I-5727
30ECJ Lewen v Denda  C-333/97
31Labour Court Determination Number 036 of 3rd March, 2003
32European Court of Justice Finanzamt Köln-Altstadt v Schumacker  ECR I - 225 Lewen v Denda  C-333/97 Hill and Stapleton v Department of Finance and the Revenue Commissioners  IRLR 466 Stadt Lengerich v Angelika Helmig  ECR I - 5727 Kowalska v Freie und Hansestadt Hamburg  ECR I - 2591
33ECJ Enderby v Frenchay Health Authority  C-127/92 IRLR 43
34ECJ Nolte v Landesversicherungsantalt Hannover  C-317/93 ECR I-4625
35ECJ Rinner-Kuhn v FWW Spezial-Gebaudereinigung GmbH & Co  C-171/88 ECR 2743
37Labour Court Determination Number 036 dated 3rd March, 2003
38ECJ Kowalska v Freie und Hansestadt Hamburg  ECR I-2591
39Case C-326/96 Levez v. T'. H Jennings (Harlow Pools) Limited  ECR 1-7835
40Case C-78/98 Preston and others v. Wolverhampton Health Care NHS Trust and others
Judgement of 16th May, 2000 unreported
41Case C-261/95 Palmisani v. IMPS  ECR 1-4025 par. 28.
42Case C-231/96 Edis  ECRI-4951 par. 36
43See par. 20.
44Case C-106/89  ECRI-4135
45Section 8(2) of the Unfair Dismissals Act, 1997 as substituted by section 7 of the Unfair Dismissals (Amendment) Act, 199344
46See Bench, Irish Conflicts of Law, p. 639
47See Brady and Kerri, The Limitation of Actions (2nd Ed) p. 5.
48 ALARM 193.