THE EQUALITY TRIBUNAL
EMPLOYMENT EQUALITY ACTS 1998-2008
Decision on a preliminary issue DEC - E2010-034
(represented by Mary Honan B.L. instructed by Geraldine Hynes, Equality Authority)
(represented by Peter Flood, Irish Business and Employers Confederation)
File reference: EE/2006/482
Date of issue: 19th March 2010
Keywords: Employment Equality Act, Equal Pay, Age, Grounds other than age.
1.1 This dispute concerns a claim by Ms Sharon Brierton against her former employer Calor Teoranta that she is entitled to the same rate of remuneration as that paid to a named older comparator in accordance with the provisions of Section 29 (1) of the Employment Equality Acts 1998-2008 [hereinafter referred to as 'the Acts']. The respondent refutes her assertions.
1.2 Through her representative, the complainant referred her complaint under the Act to the Director of the Equality Tribunal on 21st October 2006. In accordance with her powers under Section 75 of the Act, the Director delegated the case on 16th October 2008 to me, Orlaith Mannion, an Equality Officer, for investigation, decision and for the exercise of other relevant functions under the Part VII of the Act. This is the date I commenced my investigation. An initial enquiry took place on 6th January 2009. At this initial enquiry the respondent rejected the complainant's assertion that she performs 'like work' with the named comparator. Notwithstanding this argument, Calor Teoranta submits that there are grounds other than age witch render the rates of remuneration paid to the complainant and comparator lawful in terms of Section 29 (5) of the Act. I decided to investigate this matter as a preliminary issue in accordance with Section 79 (3) of the Act. Submissions on this issue were exchanged and a Hearing was held on 24th February 2010. In reaching my decision I have taken into account all of the submissions, written and oral, made by the parties.
2. Summary of the respondent's case
2.1 At the time of lodging this complaint Ms Brierton was 28 years of age and Comparator Z was 45 years old. The complainant was on an annual salary of €27,048 and the comparator was on a salary of €34,607. Ms Brierton was employed initially on a temporary basis in 2001 in the credit control section of the Calor Teoranta's Finance Department. She commenced on a salary of £14,000 punts (€17,776). This went up to €20,300 when she was made permanent in July 2002. After 6 months probation as a permanent employee her salary was increased by a further €1,270 to €21,570. She was on a salary of €23,053 when Comparator Z started in December 2003.
2.2 In May 2005 the Finance Director, Mr A, contacted Mary B. Cremin Recruitment Agency for advice on pay of all clerical staff in his department. Following this, Ms. Brierton's pay was increased by 6.8% in addition to the standard pay increases under the national pay agreement. This was applied from the beginning of 2005. Comparator Z received only the national pay award increases. Mr A also informed the complainant that she would received a further €1,250 on successful completion of part 1 of a Finance/Credit Control course. Calor Teoranta both funded and gave study leave for this course.
2.3 The respondent submits that its policy is to pay at the higher end of the market range. At the time that Ms Brierton left the respondent's employment on 21st June 2006 she was on a salary of €27,048.
2.4 Comparator Z commenced employment with the respondent in 2003 on a salary of €30,000. At that time he had over 23 years experience in credit control of which some was at a management level. He was 42 on commencing employment with the respondent. Calor Teoranta submits as written evidence the Curriculum Vitae they received from Comparator Z. On it, he states his required salary was €30,000. His CV outlines his experience which the respondent contends that this justifies his starting salary.
2.5 Calor Teoranta submits the rate of pay was set by Comparator Z and not by the respondent. It reflected what Comparator Z could get in the marketplace at that time. The CV was provided by a recruitment consultancy that, the respondent submits, would have been aware of the market rate for somebody with Comparator Z's level of experience and would have advised the comparator accordingly. Calor Teoranta point out that Ms Brierton's salary increased from €23,053 to €27,049 since January 2004 to her resignation which is an increase of 17.3%. Comparator Z's salary increased in the same period from €30,000 to €34,607 which is an increase of 15.4%.
2.6 The respondent submits another employee (Y) who is just three years older than the complainant started on a salary of €28,500 in August 2005. The complainant was on €26,390 at the time. Therefore, even though she was not much older than Ms Brierton she received a higher salary. than the complainant. The respondent sought advice from a recruitment consultant to determine the level of pay appropriate to Y's 5 years of experience
2.7 Calor Teoranta cites Cadman:
34. The Court acknowledges that rewarding, in particular, experience acquired which enable the worker to perform his duties better constitutes a legitimate objective of pay policy.
35. ....Length of service goes hand in hand with experience, and experience generally enables the worker to perform his duties better.
The respondent states that although this case refers to service-based pay structures the same principles can be applied in this case. According to Calor Teoranta, the European Court of Justice in this decision recognise that the longer one is in a job the better s(he) is at performing it. In this instant case, Comparator Z had more experience and the experience is at a higher level in credit control roles than the complainant. This is reflected in the initial salary for Comparator Z.
2.8 In direct evidence, the respondent had said they had hoped Comparator Z would take over as Credit Control Manager if a vacancy became available. Calor Teoranta expected a vacancy to occur in the short-term. They hoped the initial experience at a junior level would give him an opportunity to become familiar with their accounts.
Summary of the complainant's case
3.1The complainant submits that Comparator Z was employed as a credit control clerk in 2003 on salary of €30,000. At the time the complainant earned €21,750. Both the complainant and comparator Z were employed as at the same level in the organisation and were assigned same or similar tasks and responsibilities.
3.2 Regarding Cadman, the complainant points out that where length of service leads to disparities in pay between men and women the criterion need not be justified by an employer since, as a general rule, the criterion of length of service is appropriate to reward experience. However, the Court also held that justification was required where a worker provided 'evidence capable of raising serious doubts' that this was in fact the case. The complainant submits that there is such evidence in this instant case.
3.3 The complainant notes that in Cadman the service of the complainant and the comparator was acquired while working for the respondent employer. In this instant case the longer service contended for Comparator Z was acquired in employments prior to employment with the respondent. If only the service acquired with the respondent is taken into account, as was the case in Cadman, the complainant has longer service that Comparator Z. The complainant submits that this distinguishes the instant case from Cadman. It is submitted that there is no indication in Cadman that the criterion of length of service to justify a pay differential can be applied beyond the parameters of the particular employment at issue. Therefore, according to the complainant, Cadman cannot be relied on by the respondent.
3.4 Section 34(7) of the Acts provides:
It shall not constitute discrimination on the age ground for an employer to provide for different persons -
(a) different rates of remuneration, or
(b) different terms and conditions of employment
if the difference is base on their relative seniority(or length of service) in a particular post or employment [emphasis added by complainant]
3.5 Without prejudice to the above, the complainant submits she performed more onerous and responsible work than the comparator e.g., she had responsibility for all direct debits and overdue accounts. She maintains there are many facets of the credit control in Calor Teoranta that are unique to it e.g. some of their accounts are hospitals that cannot be switched off even if they are in arrears. The respondent emphasises that the comparator had experience in previous jobs at management level. However, the positions occupied by Ms Brierton and comparator were not management positions. In fact, the respondent initially employed Comparator Z in 2003 as a credit control clerk.
3.6 The complainant submits that Advocate General Poaire Madura observed in his opinion on Cadman that it is arguable that once a certain level of experience and expertise is acquired, length of time in a job becomes less important or indeed irrelevant to the ability of a worker to perform the duties attaching to that job. It is submitted by the complainant that, given the experience of the complainant and the nature of the work at issue, the criterion of service is not justified in the instant case.
3.7 The complainant submits that is also relevant that following a review by Mary B Cremin recruitment consultancy of the complainant's job description in 2005, the complainant's pay was increased by 6.8% in addition to the increases under national pay agreements. The complainant, therefore, maintains that at least part of the pay differential between Ms Brierton and Comparator Z from the comparator's commencement in 2003 until the revision in 2005, even on the respondent's own submissions, was unjustified.
3.8 The complainant submits that no evidence has been identified to suggest that it was necessary as a result of market forces to pay an individual €30,000 as a temporary credit control clerk in the respondent organisation. There is no evidence to suggest that any attempt was made to secure an employee at a lower salary, that such attempts were futile as a result of market forces/competing employment opportunities and that it was therefore necessary to increase the level of pay offered.
3.9 One of the issues before the Court of Justice in Enderby v Frenchay Health Authority and Secretary of State for Health was to what extent market forces could justify a pay differential:
27. If as the question referred seems to suggest, the national court has been able to determine precisely what proportion of the increase in pay is attributable to market forces, it must necessarily accept the pay differential is objectively justified to the extent of that proportion. When national authorities have to apply community law, they must apply the principle of proportionality.
28. If that is not the case, it is for the national court to assess whether the role of market forces is determining the rate of pay was sufficiently significant to provide objective justification for part or all of the difference.
3.10 The complainant maintains that even if the comparator had set his own rate of pay this is not a defence under Section 29(5) and that the respondent is liable for any discrimination established by reference to a resulting pay differential. Even where an employee asks for a particular rate of pay it is nonetheless ultimately a matter for decision by an employer not an employee.
4. Conclusions of the Equality Officer
4.1 The issue for consideration by me is whether there are grounds other than age for paying a different rate of remuneration to Comparator Z than the complainant within the meaning of Section 29 (5) of the Act.
4.2 The respondent submits that there are three reasons that Comparator Z was paid a higher salary than that of Ms Brierton:
(i) in recruiting Comparator Z, Calor Teoranta hoped that he would be able to take over the Credit Control Manager's role as they expected a vacancy at that level to be imminent
(ii) market forces
(iii) the general principle in Section 34 (7) of the Act and Cadman that it does not constitute age discrimination if an employer pays a different rate of remuneration if the difference is based on length of service .
4.3 Turning to (i), that is the respondent employed Comparator Z with a view to him taking over as Credit Control Manager. This role was two levels above both Ms Brierton and Comparator Z in the company hierarchy. From Comparator Z's Curriculum Vitae it appears he had only 16 months of experience as a Manager of a Credit Control Department i.e. where he had responsibility for more than one member of staff. This period of employment with a catering supplies company was followed by two short assignments in more junior roles in smaller companies. I do not find it convincing that a reasonable employer would engage somebody with this work history, with a view to promoting him in the short-term, two levels above what he was initially employed as a Credit Control Clerk.
4.4 In relation to market forces, Calor Teoranta submits that three people were interviewed for this position and that he was the best candidate. Comparator Z sought an annual salary of €30,000. The respondent did not attempt to negotiate a lower salary with him. It is noteworthy that Comparator Z w was unemployed at the time. The complainant is correct in saying that the rate of pay is set by the employer not the employee and the employer must avoid any unlawful discrimination in so doing. When a review of salaries was conducted by the respondent in 2005 (over a year after Ms Brierton first raised the issue), Comparator Z's salary was mid-range (€33,264) in €30,000 to €35,000 range recommended by Mary B. Cremin recruitment consultancy. However, the complainant's salary was significant lower at that time (€24,344) than the range recommended by the recruitment consultant (€27,000 to €28,000). The respondent did increase the complainant's salary to €26,390. This was still lower than the going rate albeit the complainant was offered an other €1,250 on completion of part 1 of a credit control course. No such condition was imposed on Comparator Z to justify paying him at the market rate.
4.5 Following Enderby, (Paragraph 3.9), I find the respondent can use the market forces justification for the proportion of salary differential that is based on the going rate for the respective level of experience of the complainant and Comparator Z. However, it cannot use this justification for the remaining salary differential that is not based on market forces.
4.6 I now turn to (iii) - Cadman and 34 (7) of the Act:
(7) It shall not constitute discrimination on the age ground for an
employer to provide for different persons --
(a) different rates of remuneration, or
(b) different terms and conditions of employment,
if the difference is based on their relative seniority (or length of
service) in a particular post or employment.
4.7 The complainant submits that she was more senior and had longer service with respondent company as she was working there almost three years when Comparator Z started in late 2003. However, Section 34 (7) takes account of experience not just in a particular post but also in employment. Therefore, I consider employment to include both the complainant's and Comparator Z's occupation in the credit control area both when employed by the respondent as well as with previous employers. Therefore, I find Comparator Z is relatively more senior within the meaning of the Acts.
4.8 Regarding the necessity of looking at European Court of Justice Judgments the complainant cites a Court of Appeal of England and Wales case:
Like the foot of Cinderella, the 1970 Act [UK Equal Pay Act] has for some purposes at least to be fitted into a slipper (Community law). However, unlike Cinderella's slipper, the slipper is not made of glass but of some altogether technologically more advanced material that can expand and improve. Neither the foot nor the slipper can, however, be shrunk in the process of applying the slipper. Moreover, Cinderella is not always bound to wear the slipper; on some occasions she can dance perfectly well on her own two feet without any slipper. In the same way, Community law can add to the 1970 Act and it can require that Act to receive (so far as possible) a contemporary interpretation as Community law itself develops and changes. Domestic law and domestic courts cannot take away rights available under Community law. Domestic law cannot be less favourable to employees than Community law or, if follows, impose additional hurdles for their claims, as that would be incapable with Community law.
4.9 In Cadman the European Court of Justice held that, in an equal pay case, as a general rule the criterion of length of service is appropriate to the legitimate objective of rewarding experience acquired which enables the worker to perform his duties better. However, the Court did not exclude the possibility that there may be situations in which recourse to the criterion of length of service must be justified by the employer. Advocate General Pouira Madura in his Opinion on Cadman provides some guidance as to what these situations are:
In view of the foregoing considerations, the standard of proof which the employer must discharge in order to show that recourse to a length-of service criterion does not lead to discrimination can be summarised as follows. First, a degree of transparency as to how the length-of-service criterion is applied in the pay system is necessary, so that judicial scrutiny can take place.
In particular, it should be clear how much weight is placed, in the determination of pay, on length of service - conceived either as a way of measuring experience or as a means of rewarding loyalty - as compared with other criteria such as merit and qualifications.
In addition, the employer should explain why experience will be valuable for a specific job, and why it is rewarded proportionally. In this respect, while an analysis will have to be carried out by the national court, there can be no doubt, for example, that experience will be more valuable - and therefore legitimately rewarded - in the case of posts involving responsibility and management tasks than in the case of repetitive tasks, in respect of which the length of service criterion can account for only a small proportion of pay. This criterion may be of particular relevance in the training phase but become less relevant once the employee has acquired sufficient command of his or her job.
4.10 When Comparator Z started working with the respondent his salary was €30,000 he had 23 years of experience in credit control. At the time of his commencement in the credit control department of Calor Teoranta in December 2003, Ms Brierton had approximately 5 years experience in credit control and therefore was beyond the 'training phase'. Her salary at this time was €23,053. In the case of Comparator Z the difference in salary was not a reward for loyalty as it was his starting salary with the respondent. Without moving into the examination of like work, it is common ground between the respondent and complainant that both roles were clerical in nature involving repetitive tasks. Therefore, following Advocate General Madura experience is less relevant at this level than at a management role. Proportionality was discussed in relation to market forces and it also applies here in relation to the salary differential. In others words, Calor Teoranta is entitled to offer a higher salary to Comparator Z in acknowledgement of his previous experience but the difference in this instant case is disproportionate.
4.11 Regarding Y, the complainant is entitled to pick her comparator although the context in which comparator Z is employed must be considered and taken into account. I am satisfied that Comparator Z is a valid comparator in that he worked full-time at the same level as the complainant in the credit control department of the respondent. As Y is not a named comparator by the complainant, I do not need to draw comparisons between her and the complainant.
4.12 On the balance of probabilities, I am not satisfied that the reasons given for the difference in the rate of remuneration are genuinely attributable to grounds other than age. In the next phase of the investigation, I will proceed to the examination of whether or not there is like work.
Decision on preliminary issue
I have concluded my investigation of this aspect of Ms Brierton's complaint and hereby make the following decision in accordance with Section 79(6) of the Act. I find that Calor Teoranta has failed to demonstrate, to my satisfaction, that the difference in the rates of remuneration paid to Ms Brierton and her named comparator is genuinely attributable to grounds other than age. Consequently, the respondent cannot avail of the defence set out at Section 29 (5) of the Acts.
19th March 2010