SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003
SUNDAY WORLD NEWSPAPERS LTD
(REPRESENTED BY KIERAN KELLY SOLICITOR)
- AND -
STEVEN KINSELLA & LUKE BRADLEY
(REPRESENTED BY TECHNICAL, ENGINEERING AND ELECTRICAL UNION)
Chairman: Mr Duffy
Employer Member: Mr Grier
Worker Member: Ms Ni Mhurchu
1. Appeal against Rights Commissioner's Decisions R-035879-FT-05/DI and R-035803-FT-05/DI.
2. The Union on behalf of the workers appealed the Rights Commissioner's Decisions to the Labour Court on the 9th February, 2006, in accordance with Section 15(1) of the Protection of Employees (Fixed-Term Work) Act, 2003. A Labour Court hearing took place on the 24th May, 2006. A further hearing took place on the 10th July 2006 in order to deal with issues concerning discrimination, the selection of appropriate comparators and eventual compensation, if any.
The following is the Court's Determination:-
This is an appeal by Luke Bradley and Stephen Kinsella (the Claimants) against the Decision of a Rights Commissioner given under the Protection of Employees (Fixed-Term Work) Act 2003 in a dispute with Sunday World Newspapers Ltd (the Respondent). The Rights Commissioner concluded that the Claimants had accepted terms in full and final settlement of all claims against the Respondent and on that basis he found that their complaint was not well founded.
The Court heard extensive submissions from the parties on all aspects of the case. The Court also heard evidence from the Claimants and from Mr Kieran Matthews, who was a production director with the Respondent at the time material to this claim. Having considered all of this material the Court is satisfied that the relevant facts are as follows:
The Respondent is the publisher of a newspaper and was also the operator of a printing works at Terenure in Dublin. The Claimants are fitters and were first employed by the Respondent at the aforementioned printing works on a fixed-term contract on 11th November 2002 in the case of Mr Bradley and on 17th May 2003 in the case of Mr Kinsella. In both cases the contract was for an initial period of one year. Both Claimants had their contracts renewed on a number of occasions. The contract on which Mr Bradley was employed at the time material to this case was due to expire on 8th November 2005. Mr Kinsella’s contract was due to expire on 16th November 2005.
On or about June 2005 the Respondent decided to close its printing works. Concurrent with its announcement of the impending closure the Respondent announced what it described as “parting terms” which were, in effect, a redundancy package for staff affected by the closure. The Respondent indicated that the package as announced was non-negotiable. While the Union sought to discuss the package the Respondent maintained its position thereto was unalterable.
The package contained two formulae for the calculation of the monetary terms on offer; one of which was expressed to apply to permanent staff and the other to casual staff. While each formula contained different elements making up the total amount offered, each contained a provision to the effect that the minimum payable would equate to one years basic salary.
The Claimants were apprehensive that they would not be covered by the package on offer because of their employment status. They contacted the Employment Rights Section of the Department of Enterprise, Trade and Employment and enquired as to their statutory entitlements. They were advised as to the provisions of the Protection of Employees (Fixed-Term Work) Act 2003. As a result of the advice which they received they formed the opinion that they were entitled to the same redundancy package as their permanent colleagues.
The Claimants sought a meeting with the production manager in relation to their position. They subsequently met with the manger in the company of a shop-steward (but not the shop steward for their grade). They were told that fixed-term employees would be paid for the unexpired term of their fixed-term contracts but that they would not be covered by the redundancy package applicable to permanent or casual staff. The Claimants told the manager that the Department of Enterprise Trade and Employment had advised that they were entitled to the same package as permanent printers. The manager demurred and insisted that the advice was wrong.
Some further discussion ensued and the manager offered to pay the Claimants €5,000 in addition to the amount due in respect of the unexpired term of their contracts. This was expressed to be a final offer. The Court is satisfied that this extra payment was not expressly stated as being in settlement of any claim which the Claimants might have under the Protection of Employees (Fixed-Term Work) Act 2003 although the Court accepts that Act was mentioned by the Claimants in the course of the meeting. It further appears that the suggestion to pay an additional amount to the Claimants was made by the shop-steward. The Court is satisfied that the Claimants did not accept the offer as a final settlement because they checked back with the Department of Enterprise, Trade and Employment and were reinforced in the belief that they would be entitled to a full years pay.
On 13th July the printing works closed and employees were paid the amounts due to them under the package. The Respondent prepared a standard waiver form which employees were required to sign in order to obtain the payment of the package. The Claimants were called into the office and presented with the waiver and asked to sign it so as to obtain the payment which they had been offered. As a result of the advice which the Claimants had obtained from the Department of Enterprise Trade and Employment, and subsequent advice from their Union, they believed that they could not contract out of their rights and that any document which they signed would not prevent them from pursuing a claim under the Protection of Employees (Fixed-Term Work) Act 2003. The Court is, however, satisfied on the evidence of the Claimant’s that neither the Union Official whom they consulted nor the Officials of the Department of Enterprise, Trade and Employment ever purported to give legal advice.
The Claimants had not previously had sight of the document which they were being asked to sign and were not afforded an opportunity to take it away for consideration. They nonetheless signed the document. On 15th July 2005 the Claimants signed an application for an increased exemption from liability to income tax on the amount due and received a cheque in the amount of €20,541.36 in the case of Mr Kinsella and
€30,103.03 in the case of Mr Bradley
In relevant part the document signed by the Claimants states as follows:
This agreement is based on any/all claims in relation to my employment with Sunday Newspapers Limited and/or Terenure Printers Limited, stated or as yet un-stated, being fully resolved (including but not limited to all claims under the unfair [sic] Dismissals Acts, the Minimum Notice and Terms of Employment Acts, the Protection of Employments Acts and the Redundancy Payments Acts and all or any employment legislation). I have read and understand the above agreement and by my signature below acknowledge and accept the terms in full and final settlement”
The Claimants contend that they signed the purported waiver in the belief that it could not affect their right to pursue a claim under the Act of 2003. They rely on Section 12 of the Act which, they say, renders void any agreement which purports to exclude or limit the application of the Act. The Claimants further contend that they were not afforded an opportunity to obtain legal advice before signing the document in question and that they signed the document under duress as they would not have been paid any of the monies due to them without signing the document. They claim that they are entitled to be paid a minimum of one years pay in line with that paid to comparable permanent employees.
The Respondent contends that the Claimants signed a valid severance agreement in respect of which they had independent advice from their Trade Union. It contends that good consideration passed from the Respondent to the Claimants and that any claims which the Claimants may have had under the Act were resolved by the agreement.
The Respondent further contends that ex-gratia redundancy severance payments are not remuneration within the meaning of Section 2 of the Act of 2003 and therefore the payments contended for are not within the scope of Section 6 of the Act.
Finally, the Respondent contends that under the scheme at issue no employee could receive more that they were likely to earn up to age 65, which is the normal retirement age for permanent staff. It was submitted that, by analogy, the Claimant could not reasonably expect to receive more than they could expect to earn up to the natural end of their contracts.
Jurisdiction of the Court
As a preliminary matter the Court considered if the dispute was settled by agreement between the parties as evidenced by the waiver signed by the Claimants. If the matter was settled the Claimant are estopped from proceeding with their claim and the Rights Commissioner and this Court on appeal could not have jurisdiction in the matter.
The Claimants rely on Section 12 of the Act in asserting that the document which they executed could not result in a forfeiture of their statutory rights. This Section provides as follows:
- Save as expressly provided otherwise in this Act, a provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of the provision concerned of this Act) shall be void insofar as it purports to exclude or limit the application of, or is inconsistent with, any provision of the Act.
Talbot (Ireland) Ltd v Minister for Labour and Others 4 JISLL 87 concerned an appeal from a decision of the Employment Appeals Tribunal under the Redundancy Payments Acts 1967 -1979. The claimants before the EAT were workers who lost their jobs when Talbot ceased car assembly in 1981. Following industrial action by the claimants a settlement was reached. The claimants signed a document by which they accepted that certain payments which they received were in full and final settlement of all claims.
The EAT considered the effect of Section 51 of the Redundancy Payments Act 1967 on the agreement which the claimants executed. This Section provided: -
- “Any provision in an agreement (whether a contract of employment or not) shall be void in so far as it purports to exclude or limit the operation of any provision of this Act”
In finding that the claimed redundancy payments were due to the claimants the Tribunal held,inter alia, that this Section of the Redundancy Payments Act 1967 prevented the agreement at issue from resulting in the forfeiture of the claimants rights. On appeal to the High Court, Barron J held that the Tribunal erred in so holding. Having considered the decision of Kenny J inMinister for Labour v O’Connor 4 JISLL 72 Barron J said the following: -
- “In my view Kenny J is saying no more than that anyone with full knowledge of his or her legal position is fully entitled to enter into any bargain he or she wishes and there is nothing in the Redundancy Payments Act 1967 to the contrary”
The matter was remitted to the Tribunal to decide if the disputed payments were in fact, comprehended by the agreement concluded between the parties.
Similar issues arose for consideration inPMPA Insurance v Keenan & Ors I.R. 330, HC and  ILRM 173, SC. This case concerned a claim by PMPA that outstanding arrears of equal pay due to a number of women employees had been settled by an agreement concluded with their trade Union. The agreement was expressed to be in full and final settlement of all claims. The case arose from an appeal by PMPA against a determination of this Court in which it was held that the Complainants were entitled to pursue their claim for the arrears at issue.
Having considered the relevant law Carroll J. in the High Court concluded that neither public policy nor a non-contracting out provision at Section 5 of the 1974 Act had the effect of preventing parties from compromising a claim under the Act. She said: -
- “If an individual by his/her contract of employment currently receives equal pay and an agreement specifically not to pursue a claim for arrears of equal pay is supported by consideration (e.g. additional benefits to which the individual would not otherwise be entitled), I can see nothing contrary to public policy in allowing the parties to compromise what is a claim for a liquidated sum in such a fashion.
Carroll J was satisfied that as the relevant terms of the agreement emanated from the PMPA it must be construed against them. Construing the phrase “in full and final settlement of all claims”contra proferentumthe Judge held that this could mean all claims on which the Union were negotiating. She went on to say that it was not clear that the Union were negotiating in respect of individual entitlements to arrears of equal pay. She stated the position in the following terms: -
- In my opinion the company did not make it clear that individual claims by the employees for past arrears of equal pay were to be waived.‘All claims’could not mean all claims by employees (e.g. including a claim by an employee for personal injuries against the company). The phrase must be limited by the context of the negotiations. In my opinion it could be construed as meaning all claims connected with the matters on which the Union were negotiating, i.e. current remuneration. It is not clear that the Union were negotiating in respect of individual claims for arrears of equal pay. In fact unders. 7of the Act such claims must be pursued by each individual before an equal pay officer.
The Court held that the Complainants in that case were not estopped from claiming the arrears at issue. The PMPA appealed to the Supreme Court. There, in a Judgement delivered by Henchy J (Griffin and McCarthy JJ concurring), the Court upheld the decision of the High Court. In the course of his Judgement Henchy J indicated that not only must agreements of the type at issue in that case be supported by consideration, but that the consideration must be adequate. He said: -
- Any compromise of the female employees present claim for less than the entitlement under the 1974 Act would of course be unlawful. Counsel for the PMPA concedes that, but he urges the court to conclude that the aggregate of extra financial benefits accruing to an employee under the 1978 settlement would exceed, or at least be not less than, what such employee could recover in respect of pay due for 1976 and 1977 under the 1974 Act. I see no basis for making that conclusion. It involves a matter of fact which has not been established.
InDonal Hurley v Royal Yacht Club ELR 225 Buckley J, in the Circuit Court, considered if an agreement signed by the claimant accepting certain payments in full and final discharge of all claims precluded him from pursuing a claim for unfair dismissal against the Respondent under the Unfair Dismissals Acts 1977 – 2001. Section 13 of that Act provides: -
- “A provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of this Act) shall be void in so far as it purports to exclude or limit the application of, or is inconsistent with, any provision of this Act”
- “In several areas of the law the Supreme Court has held that any consent by a person to waive a legal right which that person has, must be an informed consent. This doctrine must surely apply to contracting out provisions and to section 13 in particular.”
Later in his Judgment Buckley J. summarised the position thus: -
- “I am satisfied that the applicant was entitled to be advised of his entitlements under the employment protection legislation and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that they had been taken into account by the applicant. I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in his case would have been legal advice. In the absence of such advice I find the agreement to be void”
In other decisions of the EAT a different approach was taken. The position of the EAT to this type of case was summarised inFitzgerald v Pat the Baker ELR 227. Here the Tribunal drew a distinction between settlements which were prepared and signed by parties after meaningful negotiations and professional advice having been sought and given, and settlements which were essentially imposed by one party on the other without negotiation or professional advice. The former seeks to exclude or limit the application of the Act whereas the latter not only recognises the Act but is an application of the Act.
It is clear from the authorities that a provision in a statute prohibiting contracting out does not prevent parties from lawfully agreeing to settle or compromise claims based on the statute. There is, however, often a subtle but substantial difference between a genuine bargain to settle or dispose of a claim, which is lawful and enforceable, and an attempt to exclude or limit the Act, which is void and of no effect. The case law indicates that the following considerations are relevant in distinguishing the former from the latter: -
1. The terms of any waiver must be construed strictly against the party from whom it emanated. Where there is doubt the course of negotiations between the parties should be examined so as to ascertain what was intended.
2. An agreement to wave statutory rights must be supported by adequate consideration.
3. The waiver should normally arise from an agreement reached as a result of meaningful negotiations and professional advice having been sought and given.
4. The waiver should list the various Acts being taken into account.
6. It is for the employer to ensure that the worker is capable of giving an informed consent and the employer should normally advise the worker in writing to obtain professional advice before inviting him or her to sign a waiver.
Having applied these principles to the facts of the instant case the Court has reached the following conclusions.
The purported waiver signed by the Claimants is in broad terms and was clearly intended by its drafter to cover all conceivable claims which could be made arising from the proposed redundancies. The relevant clause lists a number of statutes which are stated to have been taken into account but it expressly provides that the list is not exhaustive. Significantly, it does not make express mention of the Protection of Employees (Fixed-Term Work) Act 2003. This would be an extraordinary omission if, as the Respondent contends, the parties had been engaged in negotiations to settle a potential claim under that Act. The Respondent contended that the reference to the Protection of Employment Acts was intended as a reference to the Act of 2003. That cannot be correct. To any person with knowledge of legislation in this field the reference would be understood as being to the Protection of Employment Act 1977, as amended by the Protection of Employment Order 1996.
Furthermore, it was the evidence of Mr Matthews that he took the view that the Claimants were entitled to payment for the unexpired portion of their contract of employment, although he did say that as an alternative the Respondent could have required them to work out this period. The Court does not accept that there was ever any reality in this latter suggestion. The printing works were closing and it would have been highly impractical for to keep it open simply to allow the Claimants to attend there every day with little or no work for them to perform. Moreover, had the Claimants been retained in the employment until their contracts expired they would have then been dismissed by reason of redundancy within the meaning of Section 9 (1)(b) of the Redundancy Payments Act, 1967 to 1993. At that point the Claimants could have claimed the same redundancy settlement as forms the subject matter of this dispute.
If the Claimants were being paid for the unexpired portions of their contract the amount received by them under this head could not have formed part of the consideration for a purported waiver of their rights under the Protection of Employees (Fixed-Term Work) Act 2003. The only consideration for such a waiver could have been the additional sum of €5,000 paid in addition to the amounts contractually due. The value of the Claimants' claims under the Act of 2003 were of the order on €70,000 and
€48,000 respectively (less what they were offered). The Court doubts if the Claimants would have willingly compromised those claims for a payment of €5, 000 each. In the circumstances such an amount could not be regarded as adequate consideration.
However, having regard to the attitude which the Court has taken on other aspects of this case it is unnecessary to reach a concluded view on these points.
The authorities indicate that consent by a person to waive a legal right must be an informed consent and the person giving the consent must have full knowledge of their legal rights. This is accepted by the Respondent and it implicitly acknowledged that the waver upon which it relies is only valid if the Claimants were adequately advised of their legal rights. It was contended on the Respondent’s behalf that the assistance which the Claimants had from a shop-steward was sufficient to fix them with full knowledge of what they were accepting.
The Court cannot accept these submissions. The package put forward by the Respondent was at all times stated to be non-negotiable. While there were some discussions involving the Claimants, the Manager and the Shop Steward, they were brief and could not properly be characterised as negotiations on the Claimants contention that they had an entitlement to equal treatment with their permanent colleagues. Moreover, it is well known and accepted in the field of industrial relations that the function of a shop-steward is largely confined to dealing with day-to day issues within the workplace. A shop-steward could not have been expected to advise the Claimants on the application of the Act of 2003 to their personal circumstances or as to the strength or weakness of any case which they might take. More importantly, the Claimants did not have sight of the document containing the putative waiver before it was presented to them for signature and they were not independently advised on what they were being asked to sign. They were not advised by the Respondent to obtain such advice nor were they given an opportunity to take the document away and consider its content. In these circumstances the Claimants could not be held to have given a free and informed consent to relinquish their legal rights.
For all of these reasons the Court is fully satisfied that the Claimants did not enter into a binding and enforceable agreement to settle their claim under the Protection of Employees (Fixed-Term Work) Act 2003. The Court is similarly satisfied that the document which the Claimants signed was an attempt to exclude or limit the application of the Act. It is accordingly to that extent void and of no legal effect. The Claimants rights under the Act are intact and the within claims are properly before the Court.
The Court considered submissions from the parties on how it should proceed in the event that it decided that the Claimants were entitled to pursue the within claims. The Respondent contended that the Rights Commissioner merely dealt with the case as a preliminary matter and that in the event of the Court deciding that the Rights Commissioner erred on the question of the waiver, the case should be remitted to him for a full investigation. In the alternative the Respondent contends that if the Court determines that the waiver at issue is void the Claimants should be required to return the monies paid on foot of the agreement before the Court investigates the substantive claim.
The Claimants contend that all issues arising in the case were before the Rights Commissioner and not only issues arising under Section 12. They argued that the totality of the case is now before the Court and that it is obliged to make a Determination in accordance with Section 15 on the substantive claim made by them.
Having considered the matter fully the Court is satisfied that it has no authority under the Act of 2003 to remit the case to the Rights Commissioner in the circumstances prevailing. There is nothing in the Decision of the Rights Commissioner to indicate that the matter was dealt with by way of a preliminary application and there is no basis under the Act by which such an application could have been brought. The Decision of the Rights Commissioner was his full and final decision given under Section 14 of the Act of 2003 and he is thusfunctus officio. The matter was appealed to the Court pursuant to Section 15 of the Act and all aspects of the case were put in issue. The appeal to the Court involves a de novo hearing and the Court is required by Section 15 of the Act to make a Determination, affirming, varying or setting aside the decision. There is no provision for the Court to remit the case to the Rights Commissioner.
Moreover, all of the issues arising in the case were fully argued by the parties and the Court is in a position to determine those issues. Accordingly the Court decided that it must deal with the totality of the case.
The Substantive Claim
These claims come within the scope of Section 6(1) of he Act, which provides as follows:
- 6.—(1) Subject to subsections (2) and (5), a fixed-term employee shall not, in respect of his or her conditions of employment, be treated in a less favourable manner than a comparable permanent employee.
- "remuneration", in relation to an employee, means—
The Respondent contends thatex-gratiaseverance payments are not remuneration within the meaning of the Act because they are paid when the employment relationship has ended and not during employment.
The definition of “remuneration” at Section 2 of the Act of 2003 is identical for present purposes with the definition of that term contained at Section 2 of the Employment Equality Acts 1998 and 2004. That latter definition was adopted from Article 141 of the EC Treaty. It is well settled that words and expressions used in one Act should be given the same meaning as was judicially ascribed to them in earlier Acts which are inin pari material(that is their context is similar) (see the Determination 063 –Una McArdle and State Laboratory). By application of this principle the term “remuneration” should be given the same meaning as it has been held to bear in employment equality law.
In a line of authorities the ECJ has ascribed a wide ambit to the concept of remuneration for the purpose of Article 141 of the Treaty and Directive 75/117 (the Equal Pay Directive). These authorities are binding and have been consistently followed in construing the term “remuneration” in cases under the Employment Equality Acts 1998 and 2004, It follows that the term “remuneration” should be similarly construed in cases under the Act of 2003. InGarland v BREL ECR 359, the Court of Justice considered if anex-gratiatravel facility offered as a concession after retirement constituted pay. In answering that question in the affirmative the Court formulated the now familiar definition of the term “pay”, which is largely repeated in the definition of “remuneration” contained at Section 2 of the Act of 2003. The Court said:-
It is important to note in this regard that in paragraph 6 of its judgment of 25 may 1971 in case 80/70 Defrenne ( 1971 ) ECR 445 , at p . 451 , the Court stated that the concept of pay contained in the second paragraph of Article 119 comprises any other consideration , whether in cash or in kind , whether immediate or future , provided that the worker receives it , albeit indirectly , in respect of his employment from his employer .
- It follows that where an employer ( although not bound to do so by contract ) provides special travel facilities for former male employees to enjoy after their retirement this constitutes discrimination within the meaning of Article 119 against former female employees who do not receive the same facilities .
The question of whether redundancy payments come within the definition of pay was directly considered by the Court in Case C 262/88Barber v Guardian Royal Exchange Assurance ECR 1-1889. The Court said the following -
- 12 As the Court has held, the concept of pay, within the meaning of the second paragraph of Article 119, comprises any other consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer ( see, in particular, the judgment of 9 February 1982 in Case 12/81 Garland v British Rail Engineering (( 1982 )) ECR 359, paragraph 5 ). Accordingly, the fact that certain benefits are paid after the termination of the employment relationship does not prevent them from being in the nature of pay, within the meaning of Article 119 of the Treaty .
13 As regards, in particular, the compensation granted to a worker in connection with his redundancy, it must be stated that such compensation constitutes a form of pay to which the worker is entitled in respect of his employment, which is paid to him upon termination of the employment relationship, which makes it possible to facilitate his adjustment to the new circumstances resulting from the loss of his employment and which provides him with a source of income during the period in which he is seeking new employment .
14 It follows that compensation granted to a worker in connection with his redundancy falls in principle within the concept of pay for the purposes of Article 119 of the Treaty.
Comparison with Retiring Employees
The Respondent told the Court that the package applicable to permanent employees expressly provided that the lump sum payable could not exceed their gross expected earnings up to age 65 (retirement age). The Respondent named three permanent employees who were over age 64 at the time of the redundancies and who did not receive the minimum payment claimed by the Claimants. It was submitted on the Respondent’s behalf that the Claimants’ contracts were coming to their conclusion and they were therefore in the same position as an employee approaching retirement and should be treated similarly.
A fixed-term employee is entitled to equality of working conditions with a comparable permanent employee. A permanent employee is comparable in relation to a claimant under the Act if the following conditions, which are set out at Section 5(2) of the Act, are fulfilled: -
(a) both of the employees concerned perform the same work under the same or similar conditions or each is interchangeable with the other in relation to the work,
It is for the Claimant to choose his or her comparator provided they meet the statutory criteria. The only test is whether the Claimant and the comparator are engaged in like work. The purpose of a comparator under the various statutes dealing with discrimination is to demonstrate if a higher value is placed on the same or similar work as that performed by the Claimant when it is performed by another employee having a different gender, characteristic, or status, as the case may be. Hence the determinative considerations are the nature of the work being performed by the two and that one is in a protected category and the other is not. This was made clear by the ECJ in C-129/79Macarthys Ltd v SmithIRLR 210, wherein the Court said:
“[T]he decisive test lies in establishing whether there is a difference in treatment between a man and a woman performing equal work within the meaning of Article 119. That concept is entirely qualitative in character in that it is exclusively concerned with the nature of the service in question.”.
The Court is satisfied that each of the comparators relied upon are comparable permanent employees within the meaning of Section 5 of the Act by reference to whom the Claimants are entitled to ground their claim.The Respondent also advanced the argument that the Claimant’s were not discriminated against within the meaning of the Act. It contended that the provision in the severance package which qualified the entitlement to a minimum of one years pay by reference to potential service applied to all permanent employees just as it did to the Claimants. In the alternative the Respondent argued that the different treatment of the Claimants was justified on objective grounds and was thus saved by Section 6(2) of the Act.
With regard tot the first argument advanced by the Respondent, the actual condition relied upon is set out at Clause 2.5 of the conditions attached to the offer as follows:
- “The combined gross amount of Clauses 1.1, 1.2 & 1.3 may not exceed in any circumstances the normal expected gross amount that otherwise may have been earned to age 65.”
Manifestly this clause can have no application to the Claimants. At the relevant time Mr Kinsella was 26 years of age and Mr Bradley was 24 years of age. In plain language the provision limits the amount relievable to the amount which an affected employee could earn up to age 65. Patently the Claimants are not seeking an amount in excess of their potential earning up to age 65.
It is also the Respondent’s case that the treatment of retiring employees is relevant for the purpose of showing objective reasons justifying the less favourable treatment of the Claimants. This is a defence which expressly provided for a Section 6(2) of the Act as follows: -
- (2) If treating a fixed-term employee, in respect of a particular condition of employment, in a less favourable manner than a comparable permanent employee can be justified on objective grounds then that employee may, notwithstanding subsection (1), be so treated.
This subsection must be read with Section 7 which delimits its scope. Section 7(1) of the Act provides: -
- (1) A ground shall not be regarded as an objective ground for the purposes of any provision of this Part unless it is based on considerations other than the status of the employee concerned as a fixed-term employee and the less favourable treatment which it involves for that employee (which treatment may include the renewal of a fixed-term employee's contract for a further fixed term) is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose.
The Court cannot accept that the position of a fixed-term employee whose contract is due to expire is analogous to that of a person approaching retirement. Those affected by the capping provision could not have had any reasonable expectation of being retained in employment beyond normal retirement age. They become entitled to an occupational pension at age 65 as well as a State pension which would have significantly ameliorated the financial loss attributable the loss of their employment. They would have ceased to be active members of the workforce and would not have been in need of financial support while seeking new employment.
In the case of the Claimants, they had been employed on a succession of fixed-term contracts each of which was renewed. They could normally have expected that for as long as the Respondent required their services they would be retained. The Court is satisfied that there is a high probability that whether by operation of Section 9 of the Act or otherwise, the Claimants could have become entitled to a contract of indefinite duration. The Court was told by the Claimant’s Union representative, and it accepts, that had the fixed-term contracts of the Claimants not been renewed in circumstances where the need for their services continued this would have been resisted by the Union. Further, if they were dismissed for the purpose of the avoidance of their fixed-term contracts becoming contracts of indefinite duration pursuant to Section 9(3) they could seek redress under Section 13 of the Act of 2003.
For all of these reasons the Court’s is satisfied that the circumstances of the Claimants were not analogous to those of retiring employees. Thus the treatment of retiring employees cannot be relied upon as providing objective grounds for the impugned treatment of the Claimants. Moreover, Section 7 of the Act expressly provides that less favourable treatment cannot be justified for the purpose of any provision of the Act by consideration of the employee’s statue as a fixed-term employee. The fact that the Claimants’ contracts would come to an end by effluxion of time is indissociable from their status as fixed-term employees and could not be relied upon as constituting an objective ground. Furthermore it is a matter for the Respondent to establish that the grounds relied upon are for the purpose of achieving a legitimate objective of the employer and that such treatment is appropriate and necessary. The Respondent has adduced no evidence to satisfy that test.
For all of the reasons set out in this determination the Court is satisfied that the complaint herein is well founded. The Claimants are entitled to the same minimum payments under the Respondent’s parting terms as were guaranteed to comparable permanent employees. The minimum of one years gross basic pay applied to all permanent employees regardless of service. In accordance with Section 6(1) of the Act of 2003 the Claimants are entitled to a similar term.
It is noted that the in the case of permanent employees the guaranteed minimum amount was expressly to include all payments including statutory notice. It follows that the application of the same formula means that the amounts which the claimants already received on the termination of their employment must be off-set against the amount equivalent to one years gross basic pay to which they are now entitled.
The Court determines that the Respondent pay to each of the Claimants a sum equal to the difference between one years gross basic salary at the date on which their employment terminated and the total amounts which they received from the Respondent on the termination of their employment.
In the absence of agreement on the amount due to the Claimant of foot of this determination, the Court will hear the parties and make a further order.
Signed on behalf of the Labour Court
18th July, 2006______________________
Enquiries concerning this Determination should be addressed to Madelon Geoghegan, Court Secretary.