THE EQUALITY TRIBUNAL
EMPLOYMENT EQUALITY ACTS 1998-2008
Decision DEC – E2009- 084
Mr. John Hogan and 23 Others
(represented by Ms Mary Honan BL acting on instruction from
Darach Connolly Solicitors)
(represented by Mr. Frank Callanan SC and Ms. Sile O'Kelly BL acting on instruction from
File Reference: EE/2006/461
Date of Issue: 21st September 2009
1.1 The complainants, listed in Appendix 1, referred a claim to the Director of the Equality Tribunal under the Employment Equality Acts contending that they were discriminated against on the age ground when they were paid a severance gratuity of 6 months' salary when those under 60 years of age were paid 18 months' salary.
2.1 The complainants applied for admission to the Early Retirement/Voluntary Parting Scheme (ERVPS), otherwise known as the Coillte Alternatives scheme, when it was advertised in February 2002. The closing date of the scheme was 30th March 2002. As they were over sixty they were not eligible for the Early Retirement element of the package, which attracted a larger severance gratuity as they had reached the age of 60. They annotated their application forms relating to the Voluntary Parting element of the scheme to the effect that their acceptance of the scheme did not preclude them from pursuing the amounts not being paid that they felt were discriminatory.
2.2 The respondent denies that the scheme was discriminatory.
2.3 Twenty two complainants lodged their claim on 14th November 2006. Two other related claims were lodged on September 24th 2008. In accordance with her powers under section 75 of the Acts, the Director delegated the case to me, Bernadette Treanor, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part VII of the Acts. The date of delegation was 11th November 2008 and I began my investigation on that date. Following the granting of an adjournment a hearing of the case was held on 27th April 2009. It was agreed at the hearing that an agreed booklet of correspondence would be submitted in addition to other relevant documents. This correspondence was completed on 22nd June.
3 Summary of the Complainant’s Case
3.1 The complainants allege that the Early Retirement/Voluntary Parting scheme introduced by the respondent on 18th February 2002, closing date 30th March 2002, was discriminatory on the age ground as those over the age of 60 were granted a severance gratuity of six months’ salary while those under the age of 60 received 18 months’ salary, both after 40 years service.
3.2 The complainants assert that the payment is remuneration for the purposes of the Acts and that the six month time limits have no application to equal pay claims.
3.3 They also assert that section 34 (3) was amended in 2004 and the old provision no longer applies.
3.4 Finally complainants also assert that the principles of equivalence and effectiveness require the Tribunal to ignore the three year limitation period mentioned in section 82(1)(a).
3.5 An earlier case relating to this scheme was addressed by the Tribunal and the Labour Court. The complainants assert that as the respondent at all times argued in that earlier case that it would have a liability to all other potential claims it cannot now argue that no such liability exists.
4 Summary of the Respondent’s case
4.1 The respondent argues, in the first instance, that these claims are time barred. It argues that the appropriate legislation for the purposes of these proceedings is the Employment Equality Act 1998 and that the combination of section 77 subsections (1), (5) and (6) means that the six-month time limit applies to equal pay claims.
4.2 The respondent in its submission disputed that the payments were remuneration for the purposes of the Acts. However, at the hearing it was agreed that this was an equal pay case and that ‘like work’ existed.
4.3 The respondent also disputes that the package is discriminatory on the age ground. “If a comparison is made between a 59 year old and a 60 year old, the latter has worked his 59th year and received payment for that year, plus the severance payment of 6 months’ salary. The 59 year old received a payment of one and half years’ salary, equivalent to one year’s salary foregone plus six months. In effect, both employees receive the same or similar aggregate payment.”
4.4 Finally, it argued that section 34 (3), prior to amendment, applies and it is entitled to avail of it because the payment of 18 months’ salary to the complainants would have resulted in significantly increased costs.
5 Conclusions of the Equality Officer
5.1 What must be decided is whether or not
v The six month time limit for the lodgement of claims applies,
v The scheme was discriminatory in its application,
v Section 34(3) of the 1998 Act applies,
v Redress may be awarded in accordance with section 82
5.2 Having considered Ms. Mary Brady and 12 Others v TSB ESOP Trustees Ltd. And Others, DEC-E2004-007 at paragraph 5.13 where the statutory time limit issue was addressed I am satisfied that the six month time limit at section 77 of the Acts does not apply to equal pay claims.
5.3 No objections were raised in respect of the progression of claims relating to complainants who are now deceased.
5.4 This scheme, and its operation in respect of those under and over 60 years of age, was addressed in detail in Labour Court Determination EDA064 Coillte Teoranta and Peter O’Dwyer. The Court stated “The Court is satisfied that such a disparity in severance gratuity is based exclusively on the ages of the employees. Accordingly, the Court finds as a fact that the setting of different ages in respect of the severance gratuity constitutes prima facie evidence of discrimination on the grounds of age.” In this regard the Equality Officer’s Decision, DEC-E2005-039, was upheld. No evidence has been presented to me which is capable of overturning those findings. Therefore, I am satisfied that the scheme was discriminatory on the age ground.
5.5 The Labour Court was also satisfied that in respect of section 34 it is the provisions of the Employment Equality Act 1998 that apply. Since the provisions of the amendment in 2004 were not explicitly retrospective I am also satisfied that the 1998 version of the Act applies in the instant case. The respondent has argued that the cost of paying the extra years’ salary to the complainants amounts to either €934,744 or €1,140,560 depending on whether or not payments are capped by reference to the age of 65 years.
5.6 This capping of payments was raised for the first time by letter dated 14th May 2009. The respondent was required at that time to submit agreed documents and copies of applications made by a selection of the complainants and this was not intended as an opportunity to produce new information. On that basis I shall not consider the capping of payments further.
5.7 In relation to section 34(3) both the Equality Officer and the Labour Court took the view in Coillte Teoranta and Peter O’Dwyer that an appropriate approach is to consider whether the significant increase in costs is significant in relation to profits for the relevant year. The additional cost of €1,140,560 represents less than 5% of profits for 2002 and I am not satisfied that that cost could be considered significant in overall terms to the respondent at that time. In any event, no evidence has been presented to me that would indicate an actuarial study of the potential increase in costs was undertaken prior to the scheme being implemented. Any consideration of a subsequent actuarial study would be to attempt to retrospectively justify decisions taken at the time the scheme was introduced. Overall, I am satisfied that section 34(3) does not provide the respondent with a defence.
5.8 I am satisfied that the complainants have established a prima facie case of discrimination which the respondent has failed to rebut.
5.9 In relation to the arguments in respect of the redress that may be allowed, both parties accept that section 82(1)(a) is the relevant section. That section provides that compensation in the form of arrears of pay may only be awarded in relation to the three years prior to the date of referral. In this case the impugned payments under the scheme were made more than three years before the date of referral. The complainants’ representative argued that this provision drives a "coach and four" through the principle of effectiveness and that the State must provide effective remedies. The complainants argued that while section 82(1)(a) created a bizarre anomaly in this case, they did not feel that 82(1)(c) was relevant. In this regard the respondent argued that 82(1)(c) could not be considered relevant since the effect of such consideration would be to remove any effectiveness of section 82(1)(a).
5.10 However, I note that at all times the complainants were aware that they could bring their complaints to this Tribunal and it is clear from the evidence presented that at all times they considered Mr. O’Dwyer’s complaint as a test case. At no point did the legislation prevent them from lodging complaints to protect their statutory rights.
5.11 In The Minister for Finance v Civil and Public Services Union & Others,  IEHC 145, Laffoy J addressed a similar matter in relation to section 19(5) of the Employment Equality Act 1977 as follows:
“In relation to the core issue which arises in the instant case, it seems to me that, given the jurisprudential backdrop in relation to prescribing time limits generally, which I have outlined, it cannot have been the intention of the Oireachtas that failure to pursue a claim which has crystallised until a legal precedent is in place which clarifies the law and indicates that the claim is likely to be successful, followed by prosecution of the claim when the precedent is publicised, should constitute “reasonable cause” within the meaning of s. 19(5). In short, while the delay on the part of the claimants in referring their claims to the Labour Court has been explained, in my view, a justifiable excuse for the delay has not been established.”
While this relates to whether or not a six month time-limit should apply, I am of the view that no reasonable argument has been presented in this case that would justify the complainants’ delay in lodging their claims to the extent that section 82(1)(a) could be considered an ineffective implementation of the Framework Directive.
5.12 In A Hotel and A Worker, EDA0915 the Labour Court considered, inter alia, an equal pay claim where the complainant had not been employed by the respondent during the three years prior to referral of the claim as in the instant case. The Court had the following comments in respect of redress:
“In an equal pay claim the Court can only award arrears in respect of the three years prior to the date on which the claim was presented. In the three years prior to the presentation of her claim the Complainant was not employed at the Respondent’s hotel and had no earnings. Consequently this aspect of her claim is now moot and was not considered further by the Court.”
I note in that case the Labour Court chose not to consider an award in accordance with section 82(1)(c).
5.13 In short, while I have found that the scheme was discriminatory I find that I am precluded from awarding redress in respect of the impugned payments as they occurred more than three years before the date of referral of the complaints.
6 Decision DEC-E2009-084
6.1 Having investigated the above complaint I hereby make the following decision in accordance with Section 79(6) of the Acts. I find that the complainants were discriminated against in relation to the severance gratuities paid to them in 2002 but that the payment of redress is statute barred.
21st September 2009
List of complainants to the claim (24)
John A Hogan
James N. O'Mahony
John M. Healy
Patrick J. O'Brien
Patrick J. Cotter
John F. Fee
DEC-E2005-039 and EDA064