Employment Equality Acts 2000 to 2008
DECISION NO: DEC-E2012-086
(Represented by Mr. Cathal Murphy BL on the instructions of Gallagher Shatter Solicitors
ESB International Limited
(Represented by Ms. Cliona Kimber BL on the instructions of in-house legal services)
File No. EE/2008/385
Date of Issue: 27 June 2012
Employment Equality Acts - Discriminatory treatment - Age - Retirement - Prima Facie Case
1. Dispute and delegation
1.1 This dispute concerns a claim by Mr. Paul Doyle (hereafter "the complainant") that he was subjected to discriminatory treatment in relation to a compulsory retirement age in ESBI (hereafter "the respondent") on the grounds of his age. The complainant was compulsorily retired on 22 February 2008 two weeks after his sixty-fifth birthday.
1.2 The complainant referred a claim of discrimination to the Director of the Equality Tribunal on 11 June 2008 under the Employment Equality Acts. On 6 December 2011, in accordance with his powers under section 75 of the Acts, the Director then delegated the case to Tara Coogan- 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 on which date my investigation commenced. As required by Section 79(1) and as part of my investigation, I proceeded to hearing on 27 January 2012. Final materials relevant to the investigation were received by me on 18 February 2012.
2. Case for the complainant
2.1. The complainant is a graphic designer. He worked with the respondent from 1995 to 2008. The complainant, having reached the age of 65, was retired from his role. Shortly before his birthday, on 23 January 2008, an email from a facilities manager was circulated to the complainant's colleagues announcing his retirement and inviting them to drinks to mark his departure.
2.2. The complainant subsequently wrote to the respondent's HR manager stating his belief that the provisions of his contract did not require for him to retire on his 65th birthday. In reply, the complainant was informed that he must retire at the age of 65. He was also informed that in order for the complainant to engage in a contract work with the respondent after reaching 65 years of age a "break of employment would be required post retirement".
2.3. It is the complainant's case that he was forced to retire and dismissed at the age of 65 in breach of both the Employment Equality Acts 1998-2008 and the provisions of Council Directive 2004/78/EC of November 2000 establishing a general framework for equal treatment in employment and occupation.
2.4. It is the complainant's case that he was compulsorily retired on the ground of his age. It was submitted that this constitutes direct discrimination and is contrary to the Acts. The entire reason for the retirement was the complainant's age. The complainant relied on McCarthy v Calor Teoranta in which the Labour Court stated that:
"The Court of Justice appears to have held that a Member State cannot introduce a mandatory retirement age unless there is objective and reasonable justification in so doing. It would appear axiomatic that an individual employer would be similarly circumscribed in applying a contractual retirement age."
2.5. There is no contractual retirement age in the complainant's contract of employment. Ireland does not have a mandatory age for retirement in its national legislation. Therefore, the respondent is in breach of the Community law of non-discrimination on the ground of age. It was submitted that the derogation in the Directive from the right to non-discrimination is directed at Member States as opposed to individuals. It was submitted that in the absence of a written retirement policy, it was impossible for such a policy to be properly policed by the Equality Tribunal. The complainant submitted that none of the documents provided by the respondent to the investigation is evidence of a written retirement policy having been generated by the respondent. Therefore, it is impossible for the Tribunal to satisfy itself that the respondent's retirement policy pursues the aims asserted by the respondent and whether the means adopted to pursue such aims are appropriate and necessary.
2.6. In accordance with section 6(1) of the above Acts, the complainant has clearly suffered less favourable treatment than those of a younger age by being forced to retire at the age of 65.
2.7. The complainant refuted that the respondent had fixed a retirement age in accordance with section 34(4). Instead the respondent is seeking to rely upon the claimant's right to a pension at 65 under the terms of a pension scheme of which he is member. It was submitted that it is well established in both Community and Irish law that a pension entitlement does not necessitate retirement.
2.8. It was submitted that the decision in Case 144/04 Mangold v Rüdiger Helm held non-discrimination on the ground of age to be general principle of Community law. That is, non-discrimination is mandated by the Treaties. Therefore there can be no doubt as to the principle having direct horizontal effect as between private actors. At paragraph 77 of its judgment, the Court stated:
"it is the responsibility of the national court, hearing a dispute involving the principle of non-discrimination in respect of age, to provide, in a case within its jurisdiction, the legal protection which individuals derive from the rules of the community law and to ensure that those rules are fully effective, setting aside any provision of national law which may conflict with that law (see, to that effect, Case 106/77 Simmenthal  ECR 629, paragraph 21, and Case C-347/96 Solred  ECR I-937, paragraph 30)."
2.9. It was submitted that it is therefore necessary for this Tribunal to ensure individual compliance with the principle and with the Directive.
2.10. The derogation within the Directive is directed only at national measures with legitimate aims. In Case 411/05 Felix Palacious de La Villa v Cortefiel Servicios SA, the then European Court of Justice held that a state could set a mandatory retirement age of 65 as it had the legitimate aim as part of national employment policy to promote employment for under 65s. The mandatory retirement age was used to absorb high unemployment and to promote better distribution of work between generations. The measure was found to be less favourable treatment but was objectively and reasonably justified in the context of national law by a legitimate aim relating to employee policy and the labour market. It was submitted that the less favourable treatment that the complainant has experienced cannot be justified as there is no national legislation in place to facilitate it. The justification provided for in the directive is clearly not directed at the respondent. In the recent opinion of Advocate General Mazak in Case-C388/07 Incorporated Trustees of the National Council on Ageing (Age Concern of Ireland) v. Secretary of State for Business, Enterprise and Regulatory Reform, Unreported 23 September 2008:
"targets national measures, which reflect social and employment policy choices and not individual decisions of employers"
3. Case for the respondent
3.1. The respondent is a wholly owned subsidiary of Ireland's Electricity Supply Board (ESB), a vertically integrated utility that has a number of ring fenced divisions operating independently in the Single Electricity Market. The respondent employs over 1200 staff across four distinct businesses.
3.2. The respondent rejects the validity of the complainant's case for the following reasons:
1. It is clear that the respondent has fixed its retirement age. Such a policy has operated since its inception and that the retirement age of 65 is a clear term and condition of the contract of employment of employees and a long-standing custom and practise of the respondent. It was submitted that the complainant by his own actions has demonstrated that he knew of the retirement age of 65. The respondent wishes to rely on McCarthy v HSE that held that an employer can establish that there is a fixed retirement age by reference to custom and practice and to a company pension scheme even in circumstances where a pension age is not set out in a contract of employment. Hedigan J went on to state that Council Directive 2000/78 did not prohibit the State from maintaining a retirement age of 65. A similar conclusion was reached by the EAT in Molloy v Connacht Gold.
2. The complainant had requested the right to remain with the respondent for an additional year. The request was referred to human resources but as there were no exceptional circumstances no offer of a fixed term contract could be made. The complainant was therefore treated in the same manner as any other person seeking to stay on beyond the retirement age.
3. The respondent has never represented to the complainant that he could work past 65 or offered any inducements or warranties to that effect.
4. The respondent operates an award winning pension scheme that allows employees to retire between the ages of 50 and 65. The retirement age is included in the pension scheme of which the complainant is a member.
3.3. As the Employment Equality Acts do not provide for a definition for 'fix' the word must be given its ordinary meaning. The exception in the Acts must therefore be interpreted as applying to arrangements, agreements or decisions on retirement ages. There is no requirement that the arrangement be in writing. It can only be interpreted as meaning that the age must be clearly arranged, agreed or decided upon.
3.4. It was further submitted that while section 34(4) does not require the respondent to show that the fixing of the retirement age is objectively justified, the respondent's reason for fixing a retirement age are justifiable in national and European law. The respondent submitted that it must be able to provide for promotion opportunities and career pathways in order to retain younger employees. It was submitted that the respondent allocates extensive resources (approximately €45000 ) in training its employees. The respondent employees are therefore well trained and very mobile and if these employees cannot progress within the respondent employ they will go elsewhere. Staff retention is therefore a crucial consideration for the viability of the respondent business. Failure to hold to its most valuable resource would deprive the respondent of a valuable skill set and the loss of money spent on training. Such a notion of sharing employment between generations has been found to be objectively justifiable by the Court of Justice .
3.6. Furthermore it was submitted that the majority of the respondent's staff deal with electricity. It was submitted that increasing the retirement age would necessitate - for health and safety reasons- physical examinations that might cause embarrassment and humiliation to employers. The fixed retirement age has the advantage of not requiring the respondent on dismissing employees on the grounds that they are no longer capable of working.
3.7. It was submitted that this Tribunal does not have jurisdiction to set aside a provision of a statute as has been requested by the complainant. The respondent relied on Minister for Justice, Equality and Law Reform and Commissioner of An Garda Siochana v Director of the Equality Tribunal and Ors to this effect.
4. Conclusion of the equality officer
4.1. In evaluating the evidence before me, I must first consider whether the complainant has established a prima facie case pursuant to Section 85A of the Employment Equality Acts 1998 to 2008. The Labour Court has held consistently that the facts from which the occurrence of discrimination may be inferred must be of 'sufficient significance' before a prima facie case is established and the burden of proof shifts to the respondent. The Labour Court elaborated on the interpretation of section 85A in Melbury v. Valpeters EDA0917 where it stated that section 85A: "places the burden of establishing the primary facts fairly and squarely on the Complainant and the language of this provision admits of no exceptions to that evidential rule".
4.2. It is clear that a decision to retire a person at a given is age is a decision that is influenced by that person's age. A number of Court of Justice decisions have identified such decisions as direct discrimination. Such discrimination however can be rebutted by objectively justifying such treatment and the Court has provided a non-exhaustive list of such justifications. It is clear that direct discrimination is also prohibited under the Acts. However, I find that section 34(4) provides for an exemption in circumstances where retirement on the ground of a person's age is 'fixed'.
4.3. Extensive submissions and arguments where put before this Tribunal as to what its jurisdiction is in relation to the interpretation of EU law and whether it is entitled to make decisions concerning European jurisprudence and applicability to Irish law. It was suggested that the case be adjourned to determine whether the Tribunal had jurisdiction to proceed with the complex facts before it. The complainant objected to such an approach on the grounds that the complaint had been with this Tribunal for over three years and that the complainant wished to proceed with this claim without further delay. The complainant was not challenging the provisions of the Employment Equality Acts.
4.4. In relation to my jurisdiction. It is clear that this Tribunal is the court of first instance in matters relating to discrimination in the workplace. I find that this Tribunal must work on a presumption that the legislation governing it has correctly and properly implemented the Council Directives that it purports to give effect to. It is clear that this Tribunal has no jurisdiction to consider whether correct implementation has occurred in the member state. Nor does it have jurisdiction to set aside a provision that is contained in a statute. That said, I am satisfied that I do have an obligation to interpret these Acts in a manner that is harmonious 'in the light of' directives in so far as such an approach does not lead to absurdity or to a interpretation that is contra legem. Approval of such an approach was confirmed by the Supreme Court in Nathan v Bailey Gibson Limited.
4.5. I find that much of the national case law cited to for the purposes of this investigation turn on their facts. I note that cases successful cases for the complainants have included circumstances where a respondent has not been able to establish a retirement age whereas I note that the ability to prove facts supporting a custom and practice have not resulted in a finding of unfair dismissal . Other cases have included an employee's legitimate expectation arising from a contractual situation . None of these cases have considered section 34(4) of the above Acts. Equally, no consideration has been given to Council Directive.
4.6. In McCarthy v Calor Teoranta, the Labour Court went on to hold that the complainant in that case was given a warranty by the respondent that if he took the option of redundancy and re-employment at lower pay he could work until the age of 65. Accordingly, when the respondent terminated the complainant's employment, it did so on the basis of his age and thus treated him differently than a person in a comparable situation who had not attained the age of 60. I find that facts of the current case are clearly distinguishable from those set out in McCarthy. The Labour Court did, however, make an observation that other facts may have supported a case that may have highlighted an incompatibility between section 34(4) of the Acts and the proper transposition of Article 6 of the Directive. While the court did not elaborate what such an incompatibility in its view may be it, it is clear that the Labour Court was speculating that a reliance on a fixed retirement age, based on contract, may not be compatible with test set out in the Council Directive.
4.7. Retirement ages have also been considered by the High Court. It is clear that McKechnie J. in the Donnellan case carefully examined the facts of that case in relation to the Council Directive only. In doing so, he adopted the objective justification test. In McCarthy v HSE , Hedigan J. in an obiter comment suggested that there is nothing in the Council Directive prohibiting the State from maintaining a retirement age of 65 and was satisfied that such a matter could be determined on implied contract term. Citing Palacios de la Villa the learned judge found that a retirement age of 65, resulting in retirement (that is a situation where a person is in receipt of a pension), could not be discriminatory. Neither case considered section 34(4) of the above Acts or the question whether the directive has been properly transposed into national law. It is clear that the learned judge in Donnellan accepted that the objective justification test was required when the plaintiff was asserting his rights under the Directive.
4.8. It is clear that I have no function to make a legally binding decision as to a party's retirement age as per contract per se. In order to address the issue of section 34(4) I must make a finding of fact in relation to the complainant's retirement age. In this case, it a common fact that the respondent has a maximum retirement age of 65 and that the complainant was on notice of this retirement age. While it was argued that the term 'fixed' in section 34(4) ought to be given it ordinary meaning, that being arranged or agreed upon, I am not satisfied that a reliance on an arranged or agreed upon retirement age based on contract terms alone is sufficient to rebut the inference of age discrimination. A harmonious interpretation of section 34(4) in conjunction with Article 6(1) implies that for a retirement age to be 'fixed' by a respondent evidence of a planned and systematic approach to retirement ages is required. Such evidence is set out in the objective justification test.
4.9. I note that it was argued by the complainant that any reliance of Article 6(1) was only available for state bodies. I find that the Employment Equality Acts clearly extends the principle of the derogation to private actors also.
4.10. I note that The Court of Justice in Case C-388/07 The Queen, on the application of: The Incorporated Trustees of the National Council on Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform stated at paragraph 3:
"Article 6(1) of Directive 2000/78 establishing a general framework for equal treatment in employment and occupation gives Member States the option to provide, within the context of national law, for certain kinds of differences in treatment on grounds of age if they are 'objectively and reasonably' justified by a legitimate aim, such as employment policy, or labour market or vocational training objectives, and if the means of achieving that aim are appropriate and necessary".
I am therefore satisfied that any exemption allowing for direct discrimination on the grounds of age must be objectively and reasonably justified by a legitimate aim and that the means of achieving such an aim must be appropriate and necessary. In order to give section 34(4) a harmonious interpretation, it is clear that 'fixed' must be understood in a manner that supports the objective justification test set out in Article 6(1). It is clear that such a justification test cannot be directed at the circumstances of the individual complainant - the respondent was not relying on the personal characteristics or any poor performance of the complainant - but must be based on comprehensive policy grounds.
4.11. I note that the respondent does not have a written employment policy per se. I am however satisfied on the full facts of this case that the respondent has a well established practice of compulsorily retiring its employees to a pension when they reach the age of 65 (employees can also elect to retire earlier). There was no evidence to support that this practice has been varied in any circumstances. It is clear that the respondent will, in certain exceptional circumstances, re-engage over 65s on fixed term contracts for project purposes. I am satisfied that the respondent had considered the availability of such an extension for the complainant on his request. The request was turned down because there were no exceptional circumstances that would have justified such an extension. I find that the fact that the respondent has a policy that enables over 65s to remain in certain circumstances clearly tempers the existence of an absolute retirement age.
4.12. I am also satisfied that the respondent has carefully considered the reasons as to why the retirement age is capped at 65 and that there is a clear employment policy supporting such a cap. The logic for such an exemption in my view is that age is different from other protected grounds. Age is not binary in the sense that a person is a man or a woman, a Traveller or a non-Traveller, a heterosexual or a homosexual, etc. Every person has an age, which as a continuum, changes over time. A young person in the respondent organisation will eventually benefit from the protections that an older person has enjoyed and, in turn, an older person will already have benefitted from a provision that has favoured young people.
4.13. I note that the respondent's main aim is to build and maintain electricity infrastructures domestically and internationally. I accept that work involving electricity is of such nature that legitimate health and safety concerns relating to a genuine occupational requirement with older staff may arise. I also accept that the carrying out of compulsory medical examinations could cause embarrassment to some employees. While I do note that such 'genuine occupational requirement' does not apply to the complainant whose occupation was that of a graphic designer I do find that a legitimate employment policy means that a respondent is entitled to maintain a retirement age that ensures cohesion among all of its employees. Having different rules of retirement for different employees may threaten the respondent employees' cohesion and open up other areas of discrimination that may not be subject to an objective justification test. Furthermore, the size of the respondent organisation also means that carrying out individual assessments may be impractical and I find that a use of an age-proxy (65) in the circumstances of this case is a proportional tool.
4.14. Furthermore, I am satisfied that the respondent spends extensive resources and time in training its new employees. I am satisfied that in order to achieve this aim the respondent must ensure that it can offer career pathways to such employees and ensure vacancies for upward post become available. This is a necessity to ensure retention, motivation and dynamism among the respondent staff. I am satisfied that the respondent wishes to establish an age structure among its younger and older employees in order to encourage the recruitment and promotion of young people and to facilitate good personnel management. I am therefore satisfied that the respondent has an established a legitimate employment policy with a legitimate aim for the reason why, at the latest, employees with the respondent must retire at 65 years of age.
4.15. I find that in the full circumstances of this case that 65 is an appropriate and proportionate measure for the purposes of the legitimate aim of the respondent.
5.1. Having investigated the above complaint, I hereby make the following decision in accordance with section 79(6) of the Employment Equality Acts:
5.2. I find that the complainant has established a prima facie case of discriminatory treatment on the age ground. The respondent has successfully rebutted this inference. Therefore, the complaint fails.
27 June 2012