DECISION NO: DEC-E2012-087
(Represented Solicitors Devaney and Partners)
K&A Accountants and Financial Advisors
(Represented by Doyle Hanlon Solicitors)
Date of Issue: 27 June 2012
File reference: EE/2009/798 - DEC-E2012-087
Employment Equality Acts - Discriminatory Dismissal - Gender - Pregnancy - Selection for redundancy- - Prima Facie Case
1. Dispute and delegation
1.1 This dispute concerns a claim by Ms. Elaine Ryan (hereafter "the complainant") that she was subjected to discriminatory dismissal by K&A Accountants and Financial Advisors (hereafter "the respondent") on the ground of her gender. The complainant claimed that she was discriminatorily selected for redundancy after the respondent was informed that she was pregnant. The date of effective termination was 29 May 2009.
1.2 The complainant referred a claim of discrimination to the Director of the Equality Tribunal on 4 November 2009 under the Employment Equality Acts. On 10 February 2012 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 15 May 2012.
2. Case for the complainant
2.1. The complainant was employed with respondent from 4 September 2006 to 29 May 2009. Her work consisted of the management of client bank reconciliations, control accounts, account preparation, taxes, VAT, PAYE/PRSI and non-trading accounts.
2.2. Then complainant was six months pregnant when she was selected for redundancy. It is the complainant's case that the selection process lacked actual and transparent objectivity.
2.3. The complainant submitted that she was given the cold shoulder by one of the partners after she had informed her employers about her pregnancy.
2.4. The complainant submitted that she had continued to fill in her weekly timesheet and that they reveal that she was working her hours on a pro rota basis up to the end of her employment.
2.5. The complainant and her colleague were called to a meeting with the partners on 28 April 2009. They were informed that it was their section that was not performing efficiently and that while no decision had been reached at that time the partners would be reviewing the situation and would in due course informing the complainant and her colleague of their decision. The complainant received a letter dated 12 May 2009 in which she was informed that due to economic downturn and the loss of key clients her position in the company was now redundant.
2.6. It is the complainant's case that her contract of employment provides for a maternity policy that would have meant that the respondent would have borne costs in relation to same. The policy is operational for employees who have been with the respondent for 18 months or longer. It provides that the complainant would have been entitled to an additional 10% of her gross salary to be paid in addition to the complainant's Social Welfare Entitlements for the 26 weeks. The complainant maintains that it is the cost associated with her pregnancy that was the real determining factor for the complainant's selection for redundancy. The complainant cited Brown v Stockton-on-Tees 91998 I.R.L.R.263, where the House of Lords stated:
"Mrs. Brown was selected for dismissal on the ground of redundancy because she needed maternity leave to give birth, if that is not a reason connected with her pregnancy I do not know what is ... I have no doubt that is often a considerable inconvenience to an employer to have to make the necessary arrangements to keep a woman's job open for her whilst she is absent from work in order to have a baby, but this is the price that has to be paid as part of the social and legal recognition of the equal status of women in the workplace."
The complainant also relied on the reasoning in Intrium Justitia v Kerrie McGarvey (EDA095)
2.7. Furthermore, it was submitted that the respondent had advertised for a fulltime bookkeeper in October 2010.
3. Case for the respondent
3.1. The respondent denied that the complainant's pregnancy was in any way a consideration when the complainant had been selected for redundancy. The respondent submitted that it had carried out an audit of functions and identified the section in which the complainant and another woman worked as the area that was losing money. After careful consideration the complainant was regrettably selected for redundancy.
3.2. The respondent had informed its staff in 06 January 2009 that it aimed to streamline its procedures. Employees were requested to keep time records in their diaries to ensure that clients were being billed correctly and to ensure the respondent was in a position to deal with potential disputes concerning client fees.
3.3. Staff appraisals meetings were held on 27 January 2009. Employees were informed that the respondent had lost an important client and that the respondent was endeavouring to ensure all roles would remain intact but that if the situation did not improve the respondent would have to make someone redundant. No staff received salary increases and this was accepted by all except the complainant who requested an increase.
3.4. The complainant informed one of the partners in or about 13 March 2009 that she was pregnant. It was absolutely denied that the complainant was treated any differently as a result.
3.5. The respondent introduced a time recording system on Excel to facilitate the respondent in forming an accurate picture of all time spent on jobs. This system was used to highlight areas of vulnerability in the respondent processes. A cost benefit analysis was carried out and the complainant's section was identified as the most vulnerable section. The respondent had, inter alia, lost an important client who had been the complainant's sole responsibility.
3.6. The respondent refuted that it gave the complainant a cold shoulder or that it treated her in any way differently after she informed one of the partners that she was pregnant. It was submitted that the respondent is a family friendly company and that the complainant had been kept on despite having been pregnant with her second child during her probationary period. The respondent had paid for the complainant study leave during her maternity leave and facilitated her with part-time work after her maternity leave.
3.7. The respondent stated that it had not taken on any additional employees since the complainant's employment had been terminated. The respondent stated that all applicants were seeking salaries that were not acceptable for the respondent.
3.8 All remaining staff have accepted 10% salary cut since January 2010. Since May 2010 all remaining staff have worked a three day week. The respondent has also lost other staff who have left the company voluntarily.
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. Mere speculation or assertions, unsupported by evidence, cannot be elevated to a factual basis upon which an inference of discrimination can be drawn. 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 the complainant's contract of employment was terminated on 29 May 2009. It is also a common fact that the complainant was selected for redundancy at a time when it was known that she was pregnant. It is well settled EU community and national law that such a dismissal on its face is sufficient to establish a prima facie case of discrimination. A pregnant woman enjoys special protection during her pregnancy and maternity leave. It is therefore for the complainant to rebut this inference and I must be satisfied on their evidence that there were exceptional reasons for the dismissal.
4.3. I accept that the respondent was facing real financial difficulties. I note that after the complainant's dismissal staff numbers have further reduced and the remaining staff work lesser hours. However, I must be satisfied that the complainant's pregnancy was not in any way a consideration when the decision to terminate her employment was made.
4.4. Having considered the full facts of this case I cannot shake the inference of discrimination. I note that the respondent had identified a given section that was not profitable enough. I note that the respondent submitted that it had relied on an Excel sheet to identify a vulnerable section and that the complainant was identified as the least profitable person in that team. It was also submitted that her colleague, who is more qualified, was more capable of carrying out broader duties than the complainant. I find on the facts of this case that the respondent intended to avail of a partner and a non-pregnant employee for some or all of the complainant's duties.
4.5. It is clear that the respondent made a decision in order to cut costs. I am not satisfied that the manner in which the matter was decided was transparent and fair. There is no evidence that other options were explored. It is clear that there was work that the complainant could have continued to do. It is not a matter for the complainant whether the clients who availed of the complainant's services were paying their bills in relation to the respondent services. It is clear that instead of exploring whether the work could have been restructured and hours reduced, the respondent chose to maintain the status quo in relation to the non-pregnant employee. I find that the reason for this was at least partly influenced by the knowledge that the complainant would be on maternity leave in the near future.
4.6. I do wish avail of this opportunity to categorically state that the special protected period is no less so where a pregnant employee is on a probationary period. It is unlawful to dismiss a pregnant person at any stage of her employment for any reason that is linked with her pregnancy. It is for the respondent in all cases to prove that there are exceptional circumstances justifying any such dismissal. Such a burden cannot be met by mere assertion.
5.1. Having investigated the above complaints, 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 dismissal on the gender ground. The respondent has not rebutted this inference.
5.3. Therefore, in accordance with the Acts, I order the respondent to pay the complainant €20000 in compensation for the effects of the unlawful conduct. This amount reflects the seriousness of pregnancy related dismissals and is based on a round figure reflecting the complainant's losses for a year. The figure is based on an approximate six month salary plus the maternity bonus that she would have been entitled to.
27 June 2012