FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003 PARTIES : DUBLIN PORT COMPANY (REPRESENTED BY ARTHUR COX SOLICITORS) - AND - STEPHEN MCCRAITH & ROBERT KIERAN (REPRESENTED BY EUGENE F COLLINS SOLICITORS) DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Appeal against Rights Commissioner's Decisions R-048152-Ft-07/Pob & R-048060-Ft-06/Pob
BACKGROUND:
2. The Claimants appealed the Rights Commissioner's Decision to the Labour Court on 30th August, 2007 in accordance with Section 15(1) of the Protection of Employees (Fixed-Term Work) Act, 2003. A Labour Court hearing took place on the 10th April, 2008.
The following is the Court's Determination.
DETERMINATION:
The Claimants are Marine Pilots and are employed in that capacity by Dublin Port
Company (the Respondent). At the time material to the issues arising in this case they
were fixed-term employees within the meaning of the Protection of Employees
(Fixed-Term Work) Act 2003 (the Act). They claim to have been treated less favourably
than comparable permanent employees when the Respondent excluded them from the
benefit of a red-circled pay scale introduced as part of a restructuring agreement
concluded in May / June 2006. The Claimants contend that in so doing the Respondent
contravened S.6 of the Act. They presented a claim to that effect pursuant to S.14 of the
Act. Their complaint was heard by a Rights Commissioner who found that it was not
well founded. The Claimant appealed to this Court.
The Court received extensive written and oral submissions from the parties on the issues of fact and law arising in the case. The Court also received evidence from each of the Claimants and from Captain Dignam who is Harbour Master of the Respondent.
The Facts
The material facts as admitted by the parties or as found by the Court are as follows: -
The Claimants commenced employment with the Respondent in September and October 2004 respectively as fixed-term employees. They were employed to provide cover for two permanent pilots who were on sick leave. The were each furnished with a contract of employment in writing in which their post was classified as “Temporary Pilot Class 2”
The terms and conditions under which Pilots are employed by the Respondent are governed by a collective agreement concluded with two trade unions, namely SIPTU and SUI. When the Claimants commenced their employment in 2004 the relevant agreement was one concluded in 1998. That agreement applied to pilots simpliciter, without reference to any classification. In its original form the agreement prescribed a salary scale for all pilots at €36,433.64 per annum. By June 2006, when the agreement was renegotiated, a salary scale had come into being which provided as follows: -
- 1st Year €70,095 per annum
2nd Year €70,230 per annum
3rd Year €70,309 per annum
4th Year €70,406 per annum
Pilots also received an on-call or call-back allowance and a food allowance. They were also provided with sleeping accommodation at a pilot station situated in Dublin Port. These benefits were provided to all pilots regardless of their classification.
While it is not provided for in the agreement, as a matter of practice pilots have always been classified in two categories, namely Class 1 and Class 2. Class 2 is the recruitment category. Pilots entering the service of the Respondent are placed in this category and are restricted as to the ships which they can pilot. The restriction was originally by tonnage and draft. This was subsequently changed to draft and length.
The classification of pilots is provided for in bye-laws made by the Dublin Port and Docks Board, the predecessor of the Respondent. The relevant bye-laws were authorised by the Minister for the Marine on 12th December 1994 and subsequently amended with effect from 1st January 1995. Bye-Laws no 7 and 8 provides as follows: -
- 7. Pilots shall be divided into two classes, namely: -
Pilot Class One, who may pilot all classes of ships.- Pilot Class Two who shall save where provided to the contrary in these Bye-Laws, be confined to the piloting of ships not exceeding 7.3 meters draft or such lesser draft as the Pilot Superintendent may determine.
Pilots were appointed pursuant to a warrant issued by the Harbour Master. The warrant specified the limitations, if any, on the type of vessels which the warrant holder could pilot. Class 1 pilots were unrestricted in the vessels on which they could work. The limitations on a Class 2 pilot were reduced incrementally over a two year period as their confidence and competence developed. While the issuance of an unrestricted warrant was within the discretion of the Harbour Master, the evidence disclosed that it would only be in rare circumstances that a pilot would not attain Class 1 classification after two years service.
In evidence the second named Claimant told the Court that in the period 1st June 2006 to 30th September 2006 1206 ships called to Dublin Port. 120 (or 10%) of these ships were in a category which was outside the scope of the warrants held by the Claimants. The Court was told that approximately 25% of ships using the port would be outside the scope to the warrant held by a Class 2 pilot on initial appointment and having undertaken his or her initial training. The Court was also told that in practice Class 2 pilots would board a ship outside the scope of their warrant in the company of a Class 1 pilot and would often undertake the pilotage work involved under the direction of the Class 1 pilot.
The New Agreement
In 2006 negotiations took place between the Respondent and the trade unions representing pilots (SIPTU and SUI) on the restructuring of the pilotage service. It appears from the evidence that the objective of these negotiations was to put in place a new comprehensive agreement governing the employment of pilots in Dublin Port and to abolish many anachronistic work practices and working conditions. An external facilitator was engaged to assist the parties in their negotiations.
These negotiations resulted in a draft new agreement being produced in May 2006. This proposed agreement provided for the introduction of a new composite rate for Pilots. The callback allowance was to be abolished and the facilities then available to pilots for sleeping and food preparation at the pilot station were being discontinued. The draft agreement also provided, for the first time, the formalisation of the distinction between Class 1 and Class 2 pilots. A separate salary scale was to be provided for each classification and a formal progression schedule was provided for Class 2 pilots to Class 1 classification. The progression period was to be extended from two years to three years. All pilots, including the Claimants, were to receive a lump-sum payment of €5,000 on implementation of the new agreement. The agreement also provided for a reduction in the complement of pilots employed from 12 to 10.
The draft agreement required endorsement by pilots. The negotiators were conscious that the abolition of callback allowance and the withdrawal of other benefits were negative factors which the pilots would not accept without some countervailing concessions. It is clear from the evidence adduced that the overriding concern of the negotiators was to make the package of measures attractive to the majority of existing pilots so as to secure its acceptance in a ballot.
With this objective in view it was decided to set a special red-circled rate for existing pilots at €85,000. This rate was expressly stated to include all or any compensatory or buy-out payments arising from the implementation of the new conditions.
However, the Claimants were excluded from this red-circling arrangement although they too were to lose the callback allowance and the other facilities which were being withdrawn. Instead the draft agreement provided that should the Claimants be subsequently appointed to “permanent” posts they would be assimilated to the penultimate point of the new salary scale being introduced for Class 1 pilots under the new agreement.
The New salary scale is as follows: -
Probation / Training – 3 Months 52,000
Class 2 Point 1 55,000
2 57,000
3 59,000
________________________________________________
Class 1:
All Pilots - all ships 4 63,000
5 66,000
6 69,000
7 72,000
8 75,000
The terms of this agreement which are material for present purposes are at Clauses 1, 2 and 3 of Appendix B. They provide as follows: -
2. It is agreed that the annual Salary rate on a personal to holder, red-circled basis, for the existingPermanentPilots will be €85,000. This salary is accepted as having taken account of and is inclusive of all agreed changes in working practices, and payments and / or allowances formally paid to the Pilots category, and is accepted as having been set so as to include settlement of all / any compensatory or "buy-out" payment(s) arising there from
3. Should the Pilots formally indicate acceptance of this document in its entirety before 31. 05. 2006, the effective date for salary purposes of those Pilots covered by point 2, above will be 01.06.2006. Additionally the 2 ½ % SP2 Phase 3, effective 01.06.2006 will also apply to the Permanent Pilots salary of €85,000 bringing the salary level as of 01.06.2006 to €87,125 per annum.
4. Should either or both of the twoTemporaryPilots, as of date of acceptance of this agreement, be successful in an application for a permanent Pilots position, he will be assimilated on to the New Salary Scale set out in Appendix D by taking the next highest monetary point to their pre-assimilation run of contract average earnings and their place on the New Salary Scale be identified, same will be disposed of by way of a lump-sum payment calculated at 1.75 times such difference.
The first named Claimant told the Court in evidence that he had been peripherally involved in the negotiations of this agreement. He told the Court he expected to be treated the same as all other pilots in the eventual outcome.
The Claimants first became aware of the terms agreed in the negotiation when the first named Claimant received a text message for Mr Declan Fleming, the shop-steward, on 4th May 2006 as follows: -
- “Terms agreed with Company. Meeting next week tbc. 85k for 11 permanent pilots back dated to 1 jan 06. 5k lump sum. Special terms for two temps. Two tier system gone full brief to follow.”
On the day following this meeting the Claimants wrote to the Union putting it on notice that they did not accept the new agreement in so far as it purported to treat them differently to permanent pilots. In this letter the Claimants attributed a statement to the Union official to whom the letter was addressed, to the effect that as temporary employees they were not entitled to the same terms and conditions as other pilots. A copy of this letter was sent to the Harbour Master of Dublin Port, Captain Dignam. Significantly, neither the Union official nor Captain Dignam responded to this letter to deny that the reason for the different treatment of which its authors complained was their temporary status.
The pilots who were on sick leave, and for whom the Claimants were covering, subsequently resigned. The Respondent then advertised for two pilots to fill the vacancies thus created. The Claimants applied for and were appointed to these permanent posts on 27th April 2007.
The Current proceedings
The Claimants referred a complaint to a Rights Commissioner on 30th November 2006 alleging that the Respondent contravened s. 6 of the Protection of Employees (Fixed-Term Work) Act 2003 in not including them in the red-circling arrangement. The Rights Commissioner found against them and they appealed to this Court.
The Position of the parties:
The Claimants
The Claimants say that they had an entitlement to all of the conditions which were surrendered as part of the 2006 agreement and for which the permanent pilots were compensated. They rely on s.6 of the Act in support of their claim which provides, in relevant part, 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.
(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.
The Claimants say that the permanent pilots with whom they work are comparable permanent employees and they are entitled to the same red-circling arrangement as applied to them. The Claimants also contend that the agreement concluded in June 2006 was clearly discriminatory on its face and void by operation of s. 12 of the Act and cannot avail the Respondent in seeking to justify the difference in pay complained of.
The Respondent
The Respondent contends that the Claimants were treated differently in the collective agreement of June 2006 because they were Class 2 pilots and not because they were fixed-term workers. It was submitted that the permanent Class 1 pilots with whom comparison is drawn by the Claimants are not comparable employees within the meaning of s. 5 the Act. The argument was advanced that Class 2 pilots perform work which is qualitatively different to that performed by Class I pilots in that the latter undertake a more responsible function in relation to the pilotage of larger vessels.
The Respondent acknowledged that the provision of the 2006 agreement relied upon by the Claimants is expressed in inappropriate terms. It contends, however, that the words “permanent” and “temporary” where they appear, should not be given their literal meaning. It was submitted that the agreement was intended to refer to the Class 1 and Class 2 pilots respectively. All of the Class 1 pilots were permanent and each of the Class 2 pilots was temporary. The words were thus intended to describe individuals and not to differentiate between classes of individuals by reference to their status as either permanent or temporary workers. In advancing that argument the Respondent pointed out that industrial relations practitioners and not lawyers drafted the agreement. It was submitted that the words used in the agreement should thus be read as having an industrial relations rather than a legal meaning. In support of this argument the Respondent referred to the decision of this Court to that effect inINP&DTG v CK Decorators, Decision REA072.
Conclusions
The net point for consideration in this case is whether the Claimants herein were treated less favourably than comparable permanent employees in not being placed on a red-circled rate of €85,000.
In considering that question the Court must first examine the object pursued by Directive 99/70/EC, which the Act of 2003 transposed into domestic law. The purpose of the Framework Agreement annexed to that Directive is set out at Clause 1 thereof as follows: -
- Purpose (clause 1)
The purpose of this framework agreement is to:
- (b) establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.
The principle of non-discrimination is defined by Clause 4 (1) as follows: -
- 1. In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.
- 5.—(1) For the purposes of this Part, an employee is a comparable
permanent employee in relation to a fixed-term employee if—
(b) in case paragraph (a) does not apply (including a case where the relevant fixed-term employee is the sole employee of the employer), the permanent employee is specified in a collective agreement, being an agreement that for the time being has effect in relation to the relevant fixed term employee, to be a type of employee who is to be regarded for the purposes of this Part as a comparable permanent employee in relation to the relevant fixed term employee, or
(c) in case neither paragraph (a) nor (b) applies, the employee is employed in the same industry or sector of employment as the relevant fixed-term employee and one of the conditions referred to in subsection (2) is satisfied in respect of those employees, and references in this Part to a comparable permanent employee in relation to a fixed-term employee shall be read accordingly.
(2) The following are the conditions mentioned in subsection (1)—
(b) the work performed by one of the employees concerned is of the same or a similar nature to that performed by the other and any differences between the work performed or the conditions under which it is performed by each, either are of small importance in relation to the work as a whole or occur with such irregularity as not to be significant, and
(c) the work performed by the relevant fixed-term employee is equal or greater in value to the work performed by the other employee concerned, having regard to such matters as skill, physical or mental requirements, responsibility and working conditions.In its approach to this case the Court must be conscious that the object of the Directive, and consequently that of the Act, is to eliminate discrimination against fixed-term workers. The provisions of the Act which relate to the identification of a comparator are for the purpose of assisting a Claimant in demonstrating the value placed on a job when it is performed by a permanent employee by comparison to when it is performed by a fixed-term or temporary employee. The identification of a comparator is thus an evidential requirement or proof and should not be seen as a technical obstacle to be overcome by a potential Claimant. This is clear from the decision of the ECJ inMccarthy’s Ltd v Smith[1980] IRC 672.
In the instant case the work performed by the Claimants is not the same in every particular as that performed by Class 1 pilots. Nor were the Claimants interchangeable with Class 1 pilots. Consequently the Court should consider if the work is of a similar nature in terms of s.5(2)(b) of the Act. The evidence disclosed that at the material time (June 2006) the Claimants could pilot all but 10% of vessels entering and leaving the port. In every other respect the work of the Claimants and that of the permanent pilots was the same. The question thus arising is whether the different capacity as between the Claimants and the comparators is of little importance to the work as a whole.
In approaching that question a number of considerations arise. Firstly the law does not require a mathematical exactitude of equality between jobs before they can be regarded as comparable for the purposes of the Act (see dictum of Keane J. (as he then was) to that effect inMurphy v Bord Telecom Eireann[1986] ILRM 483). It is common to find significant gradations in the value of work performed by workers within the same grade. This can frequently arise where more experienced workers are assigned to the more demanding tasks. This would not in itself be considered a basis for a difference in pay other than that which may arise from an incremental service related pay scale.
InToyota Motor Distributors Ireland Limited v Kavanagh(Determination No. 1 of 1986) this Court upheld a finding by an Equality Officer to the effect that a difference in jobs is significant if it is sufficient to warrant a difference in pay. That appears to be an eminently sensible starting point in approaching that question. Accordingly the Court should first consider if the difference in the work which the Claimants performed compared to that which the comparators performed is of practical importance in relation to the determination of pay and conditions of employment.
In the instant case the Claimants and the comparators were on the same salary scale at the time the new agreement was concluded. They were also in receipt of the same range of benefits as the comparators. This indicates that the Respondent did not consider the difference in the work between Class 1 and Class 2 pilots to be such as to warrant a difference in pay before the disputed agreement came into being. While a difference in pay is provided for by the new agreement it arises from the structure of a single salary scale (the first three points of which are classified as being applicable to Class 2 pilots) rather than by establishing a separate grade.
In this context it is also relevant to consider why the Claimants were excluded from the red-circling arrangement at issue. In that regard the Court should ask itself if the real or dominant reason for excluding the Claimants from the disputed arrangement was their classification as Class 2 Pilots or their status as fixed-term workers. On the evidence adduced it is difficult to avoid the conclusion that the latter consideration was the determinative factor in the decision to treat them differently.
In evidence Captain Dignam told the Court that throughout the negotiations the pilots were referred to using the classification temporary or permanent. This indicated that their statues was at least a conscious and significant influence in differentiating between the two groups. Further, the Claimants letter to their union official of 24th May is particularly significant. They asserted that the official had told them that as fixed-term employees they did not have a right to the same treatment as others. They also asserted in unequivocal terms that the difference in treatment to which they were being subjected was grounded in their fixed-term status. This letter was copied to Captain Degnam.
If the Claimants were misrepresenting the situation either the union or the Respondent might reasonably have been expected to contradict what they had to say. Furthermore, in the course of his evidence, Captain Dignam failed to give any cogent explanation as to why the Class 2 pilots should be treated differently to Class 1pilots in respect to compensation for forgoing benefits which they each had in equal measure.
It is also significant that it was only in answer to a question from the Court, after he had given his evidence in chief and had been cross-examined that Captain Dignam attributed the difference in treatment to the Class 2 status of the Claimant. This combined with the language used in the collective agreement points inexorably towards the fixed-term status of the Claimants being the operative reason for their exclusion from the red-circling arrangement. If this is the case it further illustrates that the difference in duties as between the Claimants and the Comparators was not considered to be a basis for differentiating between them in respect to this condition of employment.
In the circumstances the Court has reached the conclusion that the difference in the work performed by the Claimants and the Comparators was, at the material time, of small importance to the work as a whole. Accordingly the conclusion could fairly be drawn that the Claimants and their Comparators are engaged in like work within the meaning of s.5(2)(b) of the Act.
Form and scope of Order
On the basis of the foregoing the Court has concluded that the Claimants are entitled to the same rate of pay as that paid to each of the permanent employees in the period from 1st June 2006 until they ceased to be employed on fixed-term contracts. Their appeal is to that extent allowed.
Whether the Court can direct the continuance of that rate into their current permanent employment is a question of significantly greater complexity which was addressed by Counsel on both sides.
Mr. Mallon B.L., for the Respondent submitted that the Claimant’s fixed-term contracts had expired and they had applied for and accepted a new permanent contract on new terms and conditions. It was submitted that the Act applied in respect to the conditions under which fixed-term employees are employed and it can have no application in respect to permanent employment. Counsel acknowledged that the situation would be different if a fixed-term contract was converted to one of indefinite duration by operation of law. In such circumstances, it was acknowledged, the same contract continues with the term relating to its expiry being severed. This, it was submitted was not the position in the instant case where the Claimant freely entered into a new contract and accepted the conditions relating thereto.
Mr. Crosbie B.L. for the Claimants submitted that if the Court were to hold that they were discriminated against on grounds of their fixed-term status it must restore their pay to what it should have been if that discrimination had not occurred. Counsel submitted that in such circumstances it would be illogical to reduce their pay to the level at which it was set before the relief was granted. Counsel further submitted that the collective agreement of June 2006 was void by operation of s.12 of the Act in so far as it differentiated between permanent and temporary workers. Hence, it was argued, the agreement must be read as providing that all existing pilots, including the Claimants would be red-circled at a rate of €85,000 p.a. On this construction of the agreement the Court was urged to hold that the Claimants had a continuing entitlement to the same rate of pay as their comparators.
DECISION
The Act of 2003 is not a fair wages statute. It is concerned solely with the elimination of discrimination against fixed-term employees. Thus it cannot be used to correct anomalies in pay or treatment which arise for factors other than the workers status as a fixed-term employee.
Situations can arise in which discrimination suffered by a fixed-term employee is carried over into a period of permanent employment. A typical example of this is where a worker obtains a contract of indefinite duration by operation of law on foot of s. 9 of the Act. Here the original contract continues with the terms providing for its termination by effluxion being severed. This was accepted as being the case inMcArdle v Minister for Finance[2007] IEHC 98. Moreover, a fixed-term employee may be denied incremental credit for a period of fixed-term employment and this could affect his or her continuing salary level. In that type of situation it could be said that the relief sought is for the denial of a right accrued while the person was a fixed-term employee.
In the instant case the situation is different. The Claimant’s fixed-term contracts were coming to an end because the purpose for which they existed had been fulfilled. The permanent posts were advertised in the public press and in trade journals. The Claimants applied and were interviewed. They were offered and accepted the posts on the terms of the new agreement. Thus this was not a case of the original fixed-term contract being translated into one of indefinite duration. Rather a wholly new contract was concluded. At that point the Claimants had ceased to be fixed-term workers and there is validity in the argument advanced by Mr. Mallon B.L that the provisions of the Act cannot avail them in seeking to address what they consider to be an unfair or anomalous rate of pay.
However the situation is not without doubt. There is cogency in the agreement advanced by Mr. Crosbie B.L. to the effect that had the Claimants been red-circled it is unlikely that they would have been expected to take up permanent employment at a lower rate than that which they were previously paid. At least from an industrial relations perspective they would have had a good arguable case for the retention of the higher rate. The Respondent implicitly recognized this when it agreed to provide in the new agreement that if the Claimants succeeded in obtaining permanent posts they would be placed on a point in the new salary scale at which their existing rate of pay would be preserved. The Court is nevertheless conscious that what is at issue in this case is the legal entitlements of the Claimants rather than what may be considered fair and reasonable in an industrial relations context.
The Court is fully satisfied that the Claimants are entitled to compensation in an amount equal to the difference between the pay which they received in the period from 1 June 2006 to the date on which they ceased to be fixed-term employees and that paid to permanent pilots in the same period. Before making a final determination on whether the Claimant are entitled under the Act to an Order directing the Respondent to increase their ongoing rate of pay to that of the Comparators, the Court is prepared to receive further written submissions from the parties on this point. In particular the Court would be prepared to consider an Article 234 reference on the point to the European Court of Justice or to ask the Minister to state a case for the opinion of the High Court pursuant to s. 15(5) of the Act. Alternatively the parties might consider it desirable to have further discussions with a view to reaching agreement in light of this determination.
Signed on behalf of the Labour Court
Kevin Duffy
12th May, 2008______________________
JFChairman
NOTE
Enquiries concerning this Determination should be addressed to John Foley, Court Secretary.