THE EQUALITY TRIBUNAL
EMPLOYMENT EQUALITY ACTS 1998-2011
Decision DEC - E2013 - 084
Mr Jack Furlong (represented by Frank Crean B.L., instructed by Michael O'Neill, Solicitor)
Applus Car Testing Service Ltd (represented by Arthur Cox Solicitors)
File Reference: EE/2010/274
Date of Issue: 1st August 2013
Keywords: Transfer of undertaking - correct respondent - affirmation of decision to retire complainant - age - discriminatory dismissal
1.1. The case concerns a claim by Mr Jack Furlong that the respondent discriminated against him on the ground of age contrary to Section 6(2)(f) of the Employment Equality Acts 1998 to 2008, in terms of discriminatorily dismissing him from his employment.
1.2. The complainant referred two complaints under the Employment Equality Acts 1998 to 2008 to the Director of the Equality Tribunal on 8 February 2010, one against his former employer, from whom the within respondent had taken over the business, and one against the within respondent. The complainant's complaint was outlined on the complaint form, however, his representative submitted additional evidence on 11 November 2010. Submissions were received from the respondent on 16 December 2010 and on 9 October 2012. On 18 June 2012, in accordance with his powers under S. 75 of the Acts, the Director delegated the case to me, Stephen Bonnlander, 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 this date my investigation commenced. As required by Section 79(1) of the Acts and as part of my investigation, I proceeded to hold a joint hearing of the case on 31 October 2012. At this hearing, I also heard evidence from the complainant's former employer, Vicuna Ltd., against whom the complainant had also brought proceedings which I have since dismissed as misconceived. The background to this matter is in the part of the decision below which deals with the correct respondent. I invited additional written submissions from both respondents on this question, which were received on 6 December 2012 and 10 January 2013, respectively. Submissions were then exchanged to give parties an opportunity to comment, but none were received. The last piece of correspondence in relation to the matter was received on 10 April 2013.
2. Summary of the Complainant's Written Submission
2.1. The complainant states that he had been in the employment of the first-named respondent since 1999, first on two fixed-term contracts, and from 2000 in a permanent capacity.
2.2. By letter dated 19 October 2009, the complainant's former employer gave notice to the complainant that he would be dismissed from his employment with effect from 3 January 2010. He was told not to report to work after 23 December 2009. The complainant contends that this dismissal was on grounds of age only. He states that neither his contract of employment with the first-named respondent nor the employment handbook he received set out any retirement age, and therefore contends that his dismissal was discriminatory on the ground of age within the meaning of the Acts.
2.3. Due to the fact that a transfer of undertaking took place between the complainant's former employer and the respondents some time between 24 December 2009 and early January 2010, the complainant has brought the within complaint..
2.4. The documentation submitted by the complainant does not set out any particular retirement date.
3. Summary of the Respondent's Written Submission
3.1. The respondent is in the business of providing the services associated with the National Car Test (NCT) scheme, having won such a contract from the Irish Government. It denies discriminating against the complainant as alleged or at all. It also denies being the correct respondent on the grounds that the complainant was at all times employed by Vicuna Ltd, from whom the respondent took over the business on 23 December 2009. It states that the complainant received his notice from the first-named respondent, was told not to report to work after 23 December 2009, and received all monies due to him in the course of his employment from the first-named respondent and was never on the second-named respondent's payroll.
3.2. Without prejudice to this argument, the second-named respondent further states that all employees of the National Car Testing Service were subject to an express or implied retirement age of 65 years of age. It states that it believes that this has been the case with the employment terms applied by the first-named respondent. It further states that it does apply a retirement age of 65. It cites the provisions of S. 34 of the Employment Equality Acts in defence of operating such a policy.
4. Conclusions of the Equality Officer
4.1. The preliminary issue for decision in this case is to identify the correct respondent. The main issue for decision in this case is whether the complainant was discriminatorily dismissed within the meaning of the Acts on the ground of his age.
Preliminary issue - correct respondent
4.2. The complainant had been told by his former employer, Vicuna Ltd., that he would retire on 3 January 2010, and was told not to report to work after 23 December, as the respondent was closing down premises over the Christmas period. The 3 January 2010 was the complainant's 65th birthday. The complainant protested his pending retirement. However, between the complainant's last day of work and his actual retirement date, the business had a transfer of undertaking to another company. The facts concerning the transfer of undertaking are that the original transfer date was 3 January 2010. The fact that this was the same date as the complainant's 65th birthday is coincidental. However, for various reasons unconnected to the complainant, the transfer of undertaking was brought forward to midnight, 23 December 2009.
4.3. The complainant's former employer argued during the hearing of the complaint, and again in its submission, that while it notified the complainant about his impending retirement, the complainant protested this decision, and discussions were then engaged in with Applus Ltd on this matter. It asserts, and the respondent did not contest this either at the hearing of the complaint or later on, that the respondent confirmed it did not wish to employ the complainant beyond his retirement date. The main point of the complainant's former employer is that the respondent could well have reviewed or rescinded the decision to retire the complainant, had they so wished.
4.4. The complainant's former employer further argued that pursuant to Regulation 4 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. 131/2003), giving effect to Directive No. 2001/23/EC, it is very clear that the complainant's employment transferred to Applus on 23 December 2009, and quotes S.4(1) "The transferor's rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee." For all of these reasons, the respondent argues that it should be Applus who should be fixed with responsibility for the alleged discriminatory conduct.
4.5. The respondent in its submission argued that the act of alleged discrimination took place when the complainant's former employer notified the complainant, on 19 October 2009, that his retirement would take place on 3 January 2010. It set some store in the fact that the complainant's last day at work was the 23 December 2009, where on midnight, the business was transferred. It argues that this means the complainant's employment ceased 6.5 hours before the transfer of undertaking. It also points out that the complainant's outstanding wages continued to be paid by his former employer, i.e. that no consideration passed between the respondent and the complainant.
4.6. I prefer the reasoning of the complainant's former employer in this matter and have, accordingly, dismissed the case against it for misconceived jurisdiction (ND-E2013-021). In particular, I can not accept the respondent's argument that the complainant's employment ceased on 23 December 2009, when it is clear that it did in fact cease with his retirement date on 3 January 2010, by which time the business had been transferred. Likewise, I do not agree that the discriminatory act occurred when the complainant was notified of his impending retirement, since this decision could have been rescinded until the date it took effect on 3 January 2010. There was nothing to stop the respondent from reviewing the decision to retire the complainant after they had taken over the business. The HR manager of the first-named respondent transferred in her role to the second-named respondent. Accordingly, the fact that the respondent affirmed the decision to retire the complainant, which was by then in its gift to reverse, means that the respondent to the within complaint should be the one to answer the complainant's case that his retirement constituted discriminatory dismissal on the ground of age.
The substantive complaint
4.7. In evaluating the evidence before me, I must first consider whether the complainant has established a prima facie case pursuant to S. 85A of the Acts. 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.
4.8. In coming to my decision, I have considered all oral and written evidence presented to me by the parties.
4.9. The main issue for decision in this case is then whether the complainant was discriminatorily dismissed within the meaning of the Acts. In light of the undisputed fact that his dismissal was solely due his retirement, which in turn was directly connected to his age, I am satisfied that he has succeeded in establishing a prima facie case of possible discriminatory treatment which is for the respondent to rebut.
4.10. There is no dispute that the complainant's original contract of employment did not contain a retirement age. The complainant's former employer retired staff at age 65, on the ground that at this age, staff became entitled to the benefits of the pension scheme. However, the former employer accepted that one named staff member, of whom the complainant was aware and whom he cited as a comparator during proceedings, was only retired at 70 years of age, which it claimed was an oversight. It was stated in evidence that the employee handbook contained reference to the retirement age at 65 in relation to the pension scheme. However, neither the handbook from 2000 which the complainant submitted in evidence, nor the updated version from 2001, which the respondent submitted, make any reference to such a retirement age, and simply refer to the separate pension scheme handbook for more information.
4.11. The complainant, when he took up the employment in question in 1999, did so in mid-life after a career in other sectors and declined to join the pension scheme. This, together with the accepted fact that there was an employee known to the complainant who carried on in his employment until age 70, supports the complainant's contention that he was not aware that retiring at age 65 was in any way mandatory.
4.12. The respondent has stated that it continued the complainant's former employer's practice of retiring staff at 65. At the hearing of the complaint, there had been five such retirements since January 2010. It has further argued that "it would be perverse that pension benefits would be paid from the normal retirement date (under the scheme) while an employee continued to draw his or her salary from the employer."
4.13. However, the joining of the pension scheme was not mandatory, and as noted above, the complainant did not do so, which weakens this argument considerably. Furthermore, it is well established in both European and Irish law that a pension entitlement does not necessitate retirement. Relevant cases would be Case 262/84 Vera Mia Beets-Proper v Van Lanschot Bankiers NV  ECR 773; Case 152/84 Marshall v. Southampton and South West Hampshire Area Health Authority  ECR 723; Howell v JJ. McCreery (Case No. UDA654/2007); Donegal County Council v Porter (1993) E.L.R 101; Bannon v Two Way International Freight Services Limited (Case No. UD127/2003).
4.14. Furthermore, in Donnellan v The Minister for Justice, Equality and Law Reform& Others ( IEHC 467) McKechnie J stated, in looking at the regulations governing the application of compulsory retirement ages of senior members of an Garda Síochána, that "national measures relating to retirement ages are not excluded from consideration under Directive 2000/78/EC. Any discrimination with regards to age must, as put by that Directive, serve a legitimate aim or purpose and the means taken to achieve that purpose be appropriate.". I am satisfied that McKechnie J's comments are authority for the proposition that I can construe section 34(4) of the Acts in light of Article 6(1) Directive 2000/78/EC. Consequently, it falls to the respondent to satisfy me that the approach it adopted is "objectively and reasonably justified by a legitimate aim ... and the means of achieving that aim are appropriate and necessary".
4.15. Apart from the pensions benefit, the other justifications put forward by the respondent for retiring staff at age 65 are:
- Efficient planning of departure and recruitment of staff;
- The importance of recruiting and promoting young people, including the importance this has for staff retention;
- The option of avoiding physical examinations of staff across departments including in departments where health and safety issues would arise, like employees engaged in car testing. It avoids embarrassment and potential disputes relating to employee's ability to perform their duties after age 65.
4.16. The respondent did not support these contentions with any kind of evidence. It did not set out, for example, how big a part staff retirements play in terms of overall staff turnover. However, from the evidence of the complainant's former employer, it is clear that over 500 staff transferred to the respondent in January 2010, which would put the five retirements that have since occurred at the respondent operations at around 1% of total staff. The respondent also did not provide any detail as to what the promotion opportunities are either for testing, administrative or customer support staff; why it is specifically necessary to recruit young people instead of persons of all ages; or what role age plays in health and safety concerns for older staff across these three categories. Especially with regard to the second justification advanced by the respondent, it must be kept in mind that the respondent is a private company and that arguments such as the ones advanced in Case C-411/05 Félix Palacios de la Villa v Cortefiel Servicios SA, where the CJEU accepted that a national law fixing a mandatory retirement age was a legitimate public policy measure to address youth unemployment and effect a better distribution of work between the generations, can not avail it. On the contrary, an express policy to recruit only younger staff may make the respondent fall foul of its obligations to avoid age discrimination under the Employment Equality Acts. As for the first and third point, I would be willing to consider that these may be legitimate aims for a private employer. But again, the lack of evidence adduced by the respondent makes it impossible to say how these apply to its particular situation. For the same reason, it is impossible to say whether retiring staff at 65 years of age was an appropriate and necessary means of achieving these goals. For all of these reasons, the complainant is entitled to succeed.
5.1. Based on all of the foregoing, I find, pursuant to S. 79(6) of the Acts, that the respondent discriminatorily dismissed Mr Jack Furlong when it effected his retirement on 3 January 2010, contrary to S. 8(6) of the Acts.
5.2. In accordance with Section 82 of the Acts, I hereby order that the respondent pay the complainant € 20,000. This award is in compensation for the distress suffered by the complainant and is not in the nature of pay and therefore not subject to tax.
1 August 2013