Employment Equality Acts
Decision No: DEC-E/2017/054
2 Named Complainants
(Represented by Lauren Tennyson BL, instructed by Beauchamps Solicitors)
A Catering Company
(Represented by Rosemary Mallon, BL, Instructed by A & L Goodbody Solicitors)
File No’s: et-153823-ee -15/et-153826-ee-15
Date of issue: 18 July 2017
Dispute and delegation
1.1 This dispute concerns claims by Ms. B and Ms. D (“the complainants”) that they were subjected to discriminatory treatment by A Named Catering Company (“the respondent”) on the grounds of age in terms of Sections 6 of the Employment Equality Acts and contrary to the provisions of Section 8 of those Acts in relation to the redundancy terms it offered to them on the termination of their employment.
1.2 The complainants referred claims of discrimination to the Director of the Equality Tribunal on 17 February 2015 under the Employment Equality Acts. They also referred claims of discrimination to the Director of the WRC on 7 July 2016. On 10 November, 2016 in accordance with her powers under section 75 of the Acts, the Director then delegated the case to Valerie Murtagh - 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. As required by section 79(1) of the Acts and as part of my investigation, I proceeded to hearing on 13 December 2016. Extensive supplemental submissions were received following hearing and final documentation was received on 2 June 2017.
2. Summary of the Complainant’s case
2.1 The complainant Ms. B commenced employment for the respondent, a company providing contract food service and support services, on 6 May 1983. Ms. D commenced employment with the respondent in 1987. The complainants worked in the finance department until the date of termination of their employment. The complainants submit that after 31 and 27 years respectively of exemplary service, in August 2014, they were informed that they were being made redundant. The complainants assert that there was no attempt on the part of the respondent to locate alternative employment for them and that there was a complete lack of transparency in the entire redundancy process. The complainants assert that they were treated less favourably than former administrative staff undertaking similar work to them who received higher enhanced redundancy payments of three weeks per year of service (as opposed to two weeks per year of service offered to the complainants) in the past with no cap. The complainants submit that on 1 August 2014, they were informed verbally at a meeting that their positions with the respondent were at “risk” of being made redundant. Subsequently, this was formally confirmed in writing by way of letter to the complainants on 5 August 2014. This letter stated that the respondent, from that date, “intended to engage with the complainants in a period of consultation for a period of 15 days, during which time the respondent endeavoured to “secure suitable alternative employments and review alternative options for employees”. The complainants assert that not only were they formally notified that their positions would be made redundant in and around 16 August 2014, some 11 days after the letter of 5 August but that in the case of Ms. B the letter of 5 August was received while she was on scheduled annual leave. Consequently, the Ms. B submits that the “consultation period” referred to in the letter of 5 August could not possibly have been carried out in any meaningful or constructive manner in circumstances where she was formally informed that her position would be made redundant 4 days prior to the expiration of the alleged period. The complainants state that the respondent did not at any juncture explore any purposeful alternative employment with the complainants and they were actively excluded from the respondent’s “out placement programme” simply as a result of queries raised during the alleged “consultation period” in relation to their ex gratia entitlements.
2.2 The complainants submit that the respondent’s failure to meaningfully explore alternative employment for them and then its subsequent exclusion of the complainants from the “out placement programme” demonstrates that the respondent treated the complainants differently from other staff, in particular other support staff being those previously employed in the payroll department as a result of their age. The complainants assert that the respondent sought to openly exclude the complainants from the said process, citing the complainants conduct in response to the redundancy package offered. The complainants state that in relation to the ex gratia payments, they were informed by way of letter in August 2014 that the redundancy package policy would consist of
2 weeks wages per year of service capped at €600 plus an additional bonus week
2 weeks wages per year of service ex gratia; and
Payment in lieu of notice
The letter also confirmed that the total sum calculable when the three sums were taken into consideration was subject to a payment cap of 1.25 times the complainants’ basic salary which at that time was €40,688 per annum for Ms. B and €39,585 per annum for Ms. D. The complainants submit that the very existence of the payment cap resulted in them being treated unfairly and discriminated against in circumstances where the said cap was clearly designed to ensure an employee with long service and by natural consequence, of more advanced age, could never receive anywhere close to the full ex gratia offer given the ultimate statutory payment calculation. The complainants state that the respondent’s own calculations communicated to Ms. B in its letter to her in August 2014 state that based on the foregoing package, she should have been entitled to circa €93, 844.17 but as a result of the payment cap would only receive €50,860. Similarly, in relation to Ms. D, it was communicated to her that she should have been entitled to circa €82,529 but as a result of the payment cap would only receive €49,481.The complainants submit that this clearly demonstrates that the redundancy package policy when applied to employees with long service and as a consequence more advanced age, who would be entitled to a much higher statutory payment, proportionately, worked out less favourably than when applied to employees with less service and, most probably, who were younger. The complainants assert that in addition to the discriminatory effect of the said policy, an even more favourable redundancy package was afforded to other members of staff who were previously made redundant by the respondent. The complainants state that the said former employees were offered enhanced packages, in addition to statutory payments of 3 weeks per year of service ex gratia with no cap on the total payment. The complainants further submit that they were assured by the former line manager and company finance director that should their positions ever be made redundant, they would be afforded the same redundancy as the aforementioned employees.
2.3 The complainants contend that the respondent in its treatment of them is in breach of Sections 6(2)(f) and 8 of the Employment Equality Acts 1998-2014 on grounds of age as the complainants were less favourably treated than other comparable employees who were younger than the complainants and did not have the cap applied to them and also received an enhanced redundancy payment based on three years per year of service in the past. The complainants argue that the cap is more likely to more adversely affect older employees, being those with longer service, as the cap is (a) more likely to apply to them and (b) fails to take account of their long service and dedicated service. The complainants submit that in respect of the redundancy package policy, the cap placed on the total sum due and owing to the complainants is a clear example of indirect discrimination on the part of the respondent on grounds of age in circumstances where this “apparently neutral provision” puts the complainants at a particular disadvantage compared to other persons who are younger than them. The complainants assert that it is abundantly clear that the manner in which the policy is drafted favoured members of staff with less service than the complainants and given the length of service of the complainants being 31 years and 27 years respectively; it is contended that length of service in this regard is inextricably linked to age. The complainants assert that hypothetically, it would be impossible for a person much younger than the complainants to have accrued such a length of service and as such only persons of the complainants ages could be affected by the impugned pay cap and such discriminatory treatment cannot be justified as it is solely based on cost factors. In this regard, the complainants cite the case of CUS v Dooley  IEHC 496.
2.4 The complainants submit that the respondent has clearly adopted a redundancy payment policy that is less favourable to employees with long service and by natural consequence employees of more advanced age. The complainants state that there can be no claim by the respondent that the payment cap in particular could be justified on grounds of a legitimate aim in circumstances where no such cap was applied in previous rounds of redundancies and is imposed for cost reasons. The complainants assert that their treatment by the respondent was utterly disrespectful and callous in circumstances where having provided 31 years and 27 years respectively of exemplary service, they were subjected to a fundamentally flawed and discriminatory redundancy process that was in the case of Ms. B conducted largely in her absence given the timing of her annual leave. The process was completed within a period of only three weeks from first notification and they were effectively told one day to pack up their desks and not to return to the office.
2.5 The complainants’ comparator, Ms. M was 31 when she was made redundant and had 6.5 years’ service and also worked in the Finance department with the complainants. The complainants submit that the said comparator’s redundancy package has been presented as being on the basis of two weeks per year of service plus 1 week at €600 per week statutory and 2 weeks per year of service ex gratia capped at 1.25 of gross salary (referred to as the 2 plus 2 package capped at 1.25 of salary). The complainants submit that they are not privy to the comparator’s confidential settlement agreement, however they understand that when the above formula was applied to the younger comparator with less service than the complainant that the 1.25 capping did not in fact impact the comparator and therefore the said formula when applied to her had no effect on the said comparator’s redundancy package and her package was not capped. The complainants submit that the comparator in fact received a redundancy payment equating to two weeks per year of service plus 1 week at €600 per week statutory and two weeks per year of service ex gratia uncapped. In this regard, the complainants submit that they were treated less favourably as the comparator received more for her years of service than the complainants and that the respondent withdrew the ex gratia element of the redundancy package as well as the discretionary sum when the complainants refused to execute the respondent’s compromise agreement. Consequently, the complainants were not paid the ex gratia element but the comparator did receive same.
2.6 The complainants take issue with the statistics submitted by the respondent at hearing. They submit that these statistics pertain to the workforce as a whole as opposed to specific statistics relating to Head Office/Administrative staff [hereinafter referred to as ‘head office staff’]. The complainants state that their request for information was specifically in respect of redundancy information relating to head office staff, where the complainants worked. The complainants dispute the respondent’s contention that unit staff were the same and were treated the same as head office staff vis-à-vis redundancies. Having worked in the Finance department for almost three decades, the complainants are aware of different policies in place for the category of workers known as ‘unit’ staff and head office staff. They state that, for example, unit staff had totally different job descriptions, in that, they were in the main in positions such as chefs, cooks, porters, and waiters. Those staff were only contracted to work for the respondent when a client of the respondent awarded their catering contract to the respondent, and in most circumstances unit staff redundancies were paid by the clients and not the respondent. The complainants also submit that regarding the statistics sheet provided by the respondent, it claims 16 redundancies occurred in 2012 and 19 redundancies in 2014. The majority of those redundancies were not head office staff as those figures exceeded the total number of employees based in head office. The complainants reiterate that the only finite pot which the respondent had to budget for was head office staff as invariably unit staff redundancies were paid for by the respondent’s clients.
2.7 The complainants submit that the respondent’s statistics do not adequately deal with their request for information and have subsumed another category of worker (unit staff) into the statistics which bear no relevance to the complainants’ former positions within the respondent company. In relation to the document provided by the respondent on the morning of the hearing which purported to “provide comprehensive information on the redundancies (outside of negotiated exits)”; the complainants submit that all information concerning any redundancies which involved “negotiated exits” has been omitted completely from the information furnished by the respondent. The complainants submit that the respondent has been silent on giving the exact information that was requested by the complainants in the request for information. It is submitted that no names redacted or otherwise nor job titles were provided by the respondent and therefore the complainants are in the dark as to whether the information provided is in fact accurate as it is so lacking in specifics and detail as for anyone to be able to ascertain the facts, nor indeed the factual position relating to head office staff. The complainants submit that the respondent has deliberately provided information relating to all staff in an attempt to eschew the facts vis-à-vis head office staff. It is also submitted that the respondent has sought to blur the true picture even further by leaving out altogether all information concerning redundancies which involved “negotiated exits”. The respondent made the complainants an additional offer of €15,000.00 as a discretionary payment on top of the original redundancy offer, this was rejected by the complainants. The complainants state that they refused to accept the above final offer by the respondent and consequently the ex gratia element (and further discretionary payment) of the redundancy package was withdrawn by the respondent and the complainants were only paid their statutory redundancy entitlements. The complainants are claiming for the 2 plus 2 uncapped package which their younger comparator enjoyed.
Equal treatment claim
2.8 The complainants submit that they were not afforded the same treatment as the comparator in relation to their redundancy. Whilst the respondent has maintained that the same redundancy formula and criteria was applied to the complainants and the comparator, the comparator as a younger colleague with less service was not effected when the said criteria was applied to her and the said treatment relating to redundancy amounts to discrimination on the grounds of age against the complainants. The complainants submit that the respondent cannot rely on Section 34 (3) (d) of the Acts as a defence to this direct discrimination claim as that defence applies to a particular circumstance, that is the provision of "different rates of severance payment for different employees being rates taking into account the period between the age of an employee on leaving the employment and his or her compulsory retirement age.." It is submitted that the respondent did not take into account the period between the age of the complainants on leaving their employment and their compulsory retirement age in providing different rates of severance payment for the complainants and the comparator. The complainants were not near retirement age. The complainants submit that it is accepted by the respondent that the younger comparator received the full 2 weeks plus 2 uncapped package, which is a different severance payment than what the complainants were offered.
2.9 Therefore, the complainants submit that the Hospira v Roper and others' Labour Court decision EDA1315 (April 2013) can be distinguished from and has no application to this matter as the facts of that case are entirely different and the employer in that case could rely on the Section 34 defence. In that case, the facts were that the agreed redundancy terms provided for a payment of five weeks' pay per year of service in addition to statutory redundancy payments, however, in the case of those employees who were close to retirement age, it was agreed that they would receive either the terms of the agreed package or the amount of salary that they would have earned had they remained in employment until the normal retirement age of 65, whichever was the lesser. In that case the Labour Court stated:
"The Oireachtas has made provision for a difference in treatment based on age in respect to severance payments in enacting section 34(3)(d) of the Act. It appears to the Court that the underlying rationale for this provision is that workers close to retirement are in a substantially different position than those who have longer periods in which they could have expected to remain in the active labour force and that, as a matter of social and labour market policy, this difference can be legitimately reflected in constructing redundancy packages.
A worker who is made redundant many years before their expected retirement date loses the expectation of a continuing income up to that date and the redundancy pay that they receive is unlikely to fully compensate them for the loss which they may suffer in consequence of losing their employment "
The complainants submit that in light of the facts of that case whereby there was direct reference in the redundancy scheme to the closeness of the employees to retirement, Section 34 (3) (d) was applied by the Labour Court, but it has no application to this matter. The complainants submit that in accordance with Kerr's commentary in his annotated statutes book in relation to discrimination, Kerr, Employment Equality Legislation, Fourth edition, p 1-170 that:
“There is no requirement that the act in question be done with an intention to discriminate. These provisions are what have been described as ‘result rather than intention directed'”.
Thus, it is submitted that the treatment complained of by the complainants amounts to discrimination as the effect of the respondent's redundancy formula meant that the complainants as older employees with more service were discriminated against by virtue of the fact that the effect of the formula was that they did not receive the 2 plus 2 uncapped package, whilst their comparator, their younger colleague did. Therefore, it is submitted that the complainants were treated less favourably than the comparator on the grounds of age. It is further submitted that the application of such a formula whilst not referring to the complainants' ages, in effect, is inextricably linked to their age as it was not possible for the younger comparator to have 27 years or 31 years' service when she was approximately only 31 years old at the time of her redundancy.
2.10 It is submitted that the respondent indirectly discriminated against the complainants. The complainants submit that the formula/criteria of the 2 plus 2 package capped at 1.25 of salary when applied to them put them at a particular disadvantage with the comparator. This is borne out in the effect which the formula had on the complainants’ redundancy packages. The respondent has sought to rely on the Equality Officer decision DEC-E2014-062 Hanlon and Ors v Lake Communications Ltd. In that case, the redundancy payments of the employees were subject to a cap and the employees claimed indirect discrimination on the ground of age. The complainants submit that there are two distinguishing features of that case to the within matter. The complainants submit that firstly, the employees in that case did not provide a comparator and secondly, the employer maintained that it was in light of their financial circumstances that they applied the cap and it was submitted on their behalf that the cap was imposed as a prudent fiscal measure based on affordability. The complainant submit that the above two features are not present in this matter and it is submitted that therefore that case is distinguished from this matter. The complainants state that they have provided a comparator and the respondent has never sought to rely on financial considerations to justify the cap it imposed. The complainants submit that the decision that the Equality Officer in (Hanlon and Ors v Lake Communications Ltd.) makes some reference to the Section 34 (3) (d) defence (which applies to direct discrimination only), and which the complainants submit was not applicable to that case on its facts, and is not applicable to the matter within. In contrast to the above decision, the complainants rely on the detailed and reasoned decision of the Scottish Employment Tribunal in Wilson v Diageo (Scotland) Ltd. In that case, the Employment Tribunal considered whether a cap on ex gratia redundancy payments, which had an indirectly discriminatory effect on older employees with longer service, could be objectively justified. The Employment Tribunal upheld the employee's claim and held that the employer was unable to demonstrate a real need to introduce the cap. The facts of that case were that the claimant brought a claim of age discrimination on the basis that a change to the employer's redundancy policy to cap service related to ex gratia payments at a maximum of 24 months' pay disadvantaged older employees with longer service. The employer accepted that the cap did have an indirectly discriminatory effect but claimed that same was objectively justified. The employer had decided that ex gratia payments payable to such employees of the claimant's category would be capped at a maximum of 24 months. The policy was to apply to employees of the claimant's category in order to align the level of redundancy payments across the Diageo Group in the UK. The ultimate aim at the time was to subsequently move to full consistency in respect of all employees. In that case, the employer gave evidence that the main driver for the imposition of a cap was a desire to standardise policies across the constituent companies of Diageo plc. It was accepted by the employer that the provision of the redundancy policy indirectly discriminated the category of employees affected and particularly placed those in the age group of 40 plus at a disadvantage. However, the employer submitted that the legitimate aim at the time when the cap was imposed was to have a generous, fair, and consistent scheme and to draw a line for that employee population in Scotland, taking into account all the relevant circumstances. The employer conceded that the decision to introduce the cap was taken in London and it was a decision to cap all employees' redundancy payments regardless of category. Even though the employer could afford it, it was argued that the cap was reasonably necessary as otherwise the legitimate aim of standardisation would have been defeated. In its decision, the Employment Tribunal discussed whether there was a legitimate aim and it accepted that the desire by the employer to simplify the position and bring together all the schemes across the constituent companies into one consistent policy was a legitimate aim.
2.11 The Employment Tribunal proceeded to discuss proportionality and whether the means adopted to achieve this aim was proportionate. The Tribunal found that there was no evidence to demonstrate that the means chosen for achieving the objective corresponded to a real need on the part of the employer to introduce a cap on redundancy levels. There was also no evidence to explain why the imposition of a cap was necessary to achieve a consistent policy, applicable to all employees, which was generous and fair. The Tribunal found that the employer had been unable to demonstrate a real need to introduce the cap. The Tribunal also took into account the fact that there was no evidence to suggest that the employer considered whether the legitimate aim could be achieved by other means. Further, the Tribunal also took into account “the fact that the respondent was endeavouring to justify their actions after the event”. The Employment Tribunal upheld the claim and ordered the employer to pay the sum of £58, 267.00 which was the difference between the capped and the uncapped redundancy payments. The Employment Tribunal found that the indirect discrimination on the ground of age was not justified by the employer:
“We concluded, having had regard to the above balancing exercise that the discriminatory effect of the PCP (provision criteria or practice] outweighed the respondent's reasons for applying it”
The complainants submit that this case is analogous to the facts of the within matter, in that, they both relate to a cap on ex gratia redundancy payments which had an indirectly discriminatory effect on older employees with longer service, and that this was accepted as indirect age discrimination by the Employment Tribunal. It is further submitted that the respondent herein has not put forward their objective justification for doing same and did not assert any justification for doing so during the redundancy process and has not done so thereafter. Therefore, the complainants submit that the respondent has failed to show objective justification to refute the complainants’ claims. The complainants submit that at the hearing on the 13 December 2016, a witness (former HR Director, Mr. C) for the respondent stated that the redundancy policy had been historically inconsistent in Ireland and that in line with the UK, the respondent wished to have a consistent redundancy policy. The complainant states that Mr. C conceded that there had been inconsistencies in approach previously.
2.12 The complainants contend it is notable that there is no reference to any redundancy policy as such contained in the Ireland handbook and certainly no reference to a capping of redundancy payments. The respondent at the hearing has sought to rely on a UK group control manual which allegedly mentions a 1.25 cap. It is contended that the said UK manual has no application to the Irish context, it being a different jurisdiction to Ireland. Furthermore, the respondent's witness has already accepted that there were and have been inconsistencies in the redundancy packages in Ireland and the said document submitted at the hearing shows that there were ex gratia payments in 2007 based on 3 weeks per year of service. It is submitted that this supports the complainants assertion that there were previous redundancy ex gratia payments based on 3 weeks per year of service uncapped (in 2007) and that this was subsequently unilaterally reduced to 2 weeks per year of service uncapped. The complainants submit that in accordance with the respondent’s statistics regarding redundancies, it affirms that very few redundancy packages were in fact capped. In addition, the complainants refers to an email in 2012 to employees from the said witness with a redundancy calculator which is programmed at a 2 plus 2 uncapped redundancy package, which contradicts Mr C’s evidence that all redundancy payments were subject to a cap since 2010. The complainants rely on the High Court judgment in An Post v Monaghan and Wade wherein Mr Justice Hedigan discusses the objective justification test. In that decision, the High Court considered whether the employer had breached the Protection of Employees (Fixed Term Work) Act 2003. The employer sought expressions of interest from staff in availing of a voluntary severance/early retirement scheme, Permanent employees were paid enhanced redundancy payments under the scheme and fixed term employees were not. Hedigan J in the High Court held:
“that the overall objective of trying to voluntarily reduce the number of staff is, in the circumstances, a legitimate one... But was the exclusion appropriate and necessary? This should be examined on a proportionality basis. Thus, the Court must address the second question. Was the exclusion the minimum unfavourable treatment necessary to enable the appellant obtain its objective?”
Hedigan J. held that it was not:
"The objective is to reduce labour costs within An Post. Thus incentivising any workers to leave early is obviously going to move towards that end... The scheme could have allowed for the application to fixed-term workers so as to buy out any remaining years of their contracts... The means chosen by An Post was not the minimum unfavourable treatment required in order to achieve the legitimate objective. As it went beyond what was necessary, it failed the applicable test."
This High Court judgment reiterates the assessment required when considering objective justification and the elements of legitimate justification and whether the means of achieving the aim are appropriate and necessary, which is the same test under the Fixed-Term work legislation and the Equality legislation. The complainants submit that the respondent has not provided objective justification for its indirectly discriminatory redundancy policy which has put them at a particular disadvantage because of their ages when compared with the younger comparator.
The complainants also refer to the leading Irish textbook in this area, that of Bolger, Bruton and Kimber 'Employment Equality Law' and at p, 404, paragraph 8-87 which is a commentary on the objective justification requirement:
“Any provision or practice, such as for example a selection criterion, a contractual provision or company practice which places persons of a particular age at a disadvantage as compared with persons not of that age will therefore result in a finding of discrimination against the employer unless the employer can prove that it has an objective reason for the provisions. Any claim put forward as to objective justification will be subjected to close scrutiny by a court or tribunal to ensure that it is required by a legitimate aim of the employer and, if so, that the means adopted of achieving the aim are appropriate and necessary."
Equal pay claim
2.13 The complainants rely on the same comparator Ms. M for the purposes of their equal pay claim. The complainants submit that the comparator received 2 weeks per year of service ex gratia and that they did not receive any ex gratia element after refusing to execute the settlement agreements accepting same. The complainants were never given a contract of employment and are not privy to whether the comparator has a contract of employment. The complainants and the comparator worked in the Finance department of the Respondent. Ms. B’s title was Credit Controller and Ms. D’s title was Accounts Supervisor. The comparator's title was Commercial Analyst. The complainants submit that the comparator and the complainants performed like work in that they carried out the following duties in their respective roles:
Ms. B’s duties vis a vis comparator
Ms. M carried out monthly reporting on purchases to the financial director. Similarly, Ms. B carried out monthly reporting on debt collection to the financial director and operations.
Ms. M was responsible for analysing and presenting the monthly purchasing spend to the commercial and finance directors. Similarly, Ms. B was responsible for analysing and presenting weekly reports on all debts to the financial director and operations management.
Ms. M attended to the collection of all supplier rebates and following up on monetary collections. Similarly, Ms. B attended to the collection of client debts and also assisted in the collection of purchasing department supplier rebates alongside Ms. M.
Ms. M provided financial support for all proposed commercial deals before implementation. Similarly, Ms. B provided support to clients to resolve any issues and queries regarding debt collection.
Ms. M attended to the management of all supplier price files to ensure correct pricing was charged on all products daily. Similarly, Ms. B attended to the management of all data and ensured correct addresses and contact details were up to date. Ms. B also checked client bills to ensure they were being charged the correct fees.
Ms. M was the sole electronic delivery invoice contact for the purchasing department for all supplier transactions. Similarly, Ms. B was the sole credit control contact in Ireland for all client queries and payments.
Ms. M was responsible for the management of all supplier invoice queries daily. Similarly, Ms. B was responsible for the management of all client queries and issues regarding debt collection daily.
Ms D’s duties vis a vis comparator
Ms. M carried out monthly reporting on purchases to the financial director. Similarly, Ms. D carried out weekly reporting of profit and loss accounts to the financial director.
Ms. M was responsible for analysing and presenting the monthly purchasing spend to the commercial and finance directors. Similarly, Ms. D was responsible for production of monthly balance sheets and accounts to the financial director.
Ms. M attended to the collection of all supplier rebates and following up on monetary collections. Similarly, Ms. Mc looked after all monthly billing for Ireland. Ms. D issued bills ensuring they were correct before they were dispatched.
Ms. M provided financial support for all proposed commercial deals before implementation. Similarly, Ms. D provided financial support for all new contracts and for all existing business.
Ms. M attended to the management of all supplier price files to ensure correct pricing was charged on all products daily. Similarly. Ms. D attended to the management of all contract data for existing and new businesses and ensured the correct fees and charges were applied to all bills. Ms. D also monitored cash purchases, stock levels and sales.
Ms. M was the sole electronic delivery invoice contact for the purchasing department for all supplier transactions. Similarly, Ms. D provided support to all units for day to day IT and finance issues at site level.
Ms. M was responsible for the management of all supplier invoice queries daily. Ms. D was responsible for the management of all signed invoices; checking them; correcting them if necessary and issuing them.
In the case of Ms. B, she submits that the effect of the cap resulted in her being offered only 0.25 weeks per year of service ex gratia compared with the younger comparator who received 2 weeks per year of service ex gratia. In the case of Ms. D, the effect of the cap resulted in her being offered only 0.4 weeks per year of service compared with her younger comparator who received 2 weeks per year of service ex gratia. Therefore, the cap element of the formula did not effect the comparator. Thus, the effect of the cap was to put the complainants at a particular disadvantage when compared to the younger comparator, which is contrary to the Acts. The complainants submit that the respondent at the time of the redundancy did not give any objective justification or otherwise for the imposition of the cap on the complainants nor has the respondent provided objective justification in their defence to the complainants’ claims. The complainants state there is no evidence of a legitimate aim being undertaken by the respondent and none was given to the complainants at the time of the redundancy. If the respondent attempts to assert one now it is submitted that this is the respondent endeavouring to justify its actions after the fact and it is respectfully submitted that in line with the dicta in Wilson that the Adjudication Officer takes this factor into account. Ms. B seeks redress of €49,232.48 and Ms. D seeks redress of €42,157.58 being the 2 weeks uncapped ex gratia payment as well as compensation for the effects of the said discrimination.
3. Summary of the Respondent’s case
3.1 The respondent submits that the complainants commenced employment with the respondent in 1983 and 1987 respectively until their employment was terminated by way of redundancy effective 18 August 2014. At the time of their redundancy, the complainants were 47 and 49 years of age respectively. On Friday 1 August 2014, HR and the Finance Director held a group meeting with four employees, including the complainants to advise those employees that due to a finance organisational review that their roles were potentially at risk of redundancy. The four employees were aged 47 (Ms. D), 49 (Ms. B), 54 and 33. This team were advised that the respondent would be entering into a 15 day consultation period in order to try and secure suitable alternative employment and review options for employees whose roles had been identified as at risk of redundancy. During this meeting the team were advised that due to an organisational review that potentially the Finance structure would be aligning its structure to that of their UK model. A follow up letter was issued dated 5 August 2014 advising the team that both Mr. D and Ms. Mc of HR were available to discuss this process at any time during this 15 day consultation process. On 8 August 2014 this was explained in greater detail to all affected, including the complainants and persons were asked at the conclusion of the meeting if they understood the process and were given an opportunity to ask questions of the company. No member of the group indicated that they did not understand or dispute the process. All four employees were advised that they could take a number of days to reflect on what was discussed and to take time out of the office to
review options if they so wished. It was also suggested to the group that they would be placed on garden leave. The respondent submits that for the purpose of clarity, all members of the team were free to work as normal in the business during the consultation process. Two employees of the group of four did return to the office to complete a handover. The respondent states that on 6 August 2014, a meeting was chaired with the complainants at which questions were answered in relation to the proposed structure and how this would affect the team. Following the meeting and at the complainants request, the respondent outlined in a letter to the complainants what their redundancy entitlement would be in the event they were to be made redundant. The complainants were informed that their redundancy payment would be calculated based on the following established redundancy formula of the respondent:
- 2 weeks statutory, capped at €600 plus a bonus week;
2 weeks ex-gratia per year of service;
Calculations based on a Payment Cap of 1.25 times basic salary (the "Cap"),
3.2 The respondent states that the complainants were also provided with a settlement agreement which was required to be signed in order to receive any ex-gratia payment. The complainants contacted the respondent seeking a payment equivalent to 3 weeks' pay per year of service with no cap applied. The respondent replied to the complainants clarifying that the company practice with respect to redundancy calculation was as per the original offer. The respondent submits that subsequently, it met with the complainants to confirm that there was no suitable alternative employment identified and to provide formal notification of their redundancy. The complainants subsequently did not agree to sign a settlement agreement and accordingly were paid their statutory redundancy payment and any outstanding entitlements upon termination. The respondent submits that in the event of a redundancy situation the established company practice is that which is aligned to the Company Group UK/Ireland financial policy. The respondent maintains that this has been applied consistently since 2010 to the then 1,800 strong workforce by the company HR Director. The respondent submits that it is noteworthy that a high number of organisations in Ireland during the downturn ceased to pay the ex-gratia element of their redundancy packages and only paid statutory, however, the respondent company continued to pay ex gratia in redundancy situations at this juncture. The respondent submits that over the past 6 years, the respondent has made 236 roles redundant. A large number of these roles were made redundant during the downturn years with the high pressure on costs similar to many organisations at that time. The respondent contends that the complainants in being offered 1.25 times her salary in a redundancy payment was offered the maximum which any employee at her level could receive based on the above formula regardless of their age. The respondent submits that therefore it is not possible for the complainants to have been discriminated against or to have received unequal pay on the grounds of age as no employee can proportionately receive more based on their salary than the complainants were offered in line with the formula.
3.3 The respondent submits that in some cases for middle and senior roles, additional top up payments were made in order to secure non-compete clauses agreed as part of that termination. This would be standard practice for middle and senior roles. The respondent states that it must be noted that while the complainants had long service, they held relatively junior positions by comparison and a top up payment would not be applicable as there would be no concerns for junior roles in terms of a non-compete element. The respondent submits however, in recognition for the complainants long service, the respondent did offer an additional top up to those involved in the restructure. For the complainants, this equated to an additional €15,000 ex gratia but this was refused by the complainants. The respondent submits that the total package which Ms. D was offered was €64, 481.25 and this was far in excess of the package offered to two other employees, one older (54 Years) and one younger (33 years) who were made redundant at the same time. The respondent further submits that the ex-gratia alone which was offered to Ms. D of €23,827 was in excess of the ex-gratia of the three other employees aged 33, 49 and 54 who were made redundant at the time. The respondent submits that in the case of Ms. B, the total package she was offered was €65,860 and the ex gratia alone which was offered to her was €20,455. The respondent submits that the comparator was offered €16,422.73 of an ex-gratia payment and €5000 as an additional ex-gratia amount. The total redundancy package offered to the comparator was €32,493.
3.4 The respondent submits that the complainants have duplication of claims, in that, they have made claims of equal pay and equal treatment. The respondent states that the complainants cannot maintain and succeed under both of these heads of claim as this would amount to a double recovery and double litigation of the same issues. In this regard, the respondent cites the case of Henderson v Henderson. The respondent asserts that the purpose of this rule was described in the High Court case of Culkin v Sligo County Council by Kearns P. in the following terms;
“The rule in Henderson v Henderson is well established and is frequently applied as part of the policy of the courts to avoid double litigation of the same issues…This rule is in the interests of all parties to a case, who should not be expected to prosecute or defend the same proceedings repeatedly and to the public, who have an interest in ensuring that court time is not wasted”
The respondent states that this complaint is not an appropriate equal pay complaint. The respondent submits that the legislative basis upon which to ground an equal pay claim relating to age is set out in section 29(1) of the Acts which provides:
“It shall be a term of the contract under which C is employed that, subject to this Act, C shall at any time be entitled to the same rate of remuneration for the work which C is employed to do as D who, at that or any other relevant time, is employed to do like work by the same or an associated employer”
For completeness, per section 29(2) of the Acts, relevant time for this purpose is defined as “any time (on or after the commencement of this section) which falls during the 3 years which precede, or the 3 years which follow, the particular time.” The respondent submits that the wording of section 29(1) of the Acts clearly demonstrates that it is intended to apply to pay or remuneration which an employee receives in exchange for work that the employee has done or is required to do as part of his/her employment (e.g. an employee’s hourly wage). The respondent submits that it does not apply to an ex gratia redundancy payment. The respondent asserts that it is notable that the leading authorities on the issue of the lawfulness of redundancy formulae which allegedly favour certain age groups and/or caps on redundancy payments which are linked to length of service have been brought and determined on the basis that they are equal treatment cases (e.g. Hanlon v Lake Communications Ltd. and Hospira v Roper & Ors). The respondent submits that the complainants have failed to establish any facts which are sufficient to raise an inference of unequal pay based on age grounds. The respondent asserts that the substance of their complaints is that as a result of the cap, the complainants were provided with a lower redundancy payment. The respondent states that while this is true, it does not in any way infer a difference of treatment or payment based on age and that each employee who was made redundant had the exact same redundancy payment formula applied to them by the respondent. The respondent submits that in the event of the complainants overcoming the evidentiary legal burden of proof, the claims must fail because there is no evidence that the complainants have been paid less than another employee by reason of their age.
3.5 The respondent submits that it uses and has used the same redundancy formula of (i) statutory redundancy plus (ii) two weeks’ pay per year of service plus (iii) the application of a cap of a maximum of 1.25 times basic yearly salary. The respondent contends that the formula has been consistently and uniformly applied across employees of all ages for redundancies effected since 2010. The only exceptions are for negotiated exits or for senior level employees where on occasion, termination packages are individually negotiated because for example, there may be a requirement to ensure compliance with post termination restrictive covenants. The respondent submits that it is a material consideration that it, after discussions with the complainant, offered the complainant an additional €15,000 ex gratia payment. Therefore the total package which the complainant was offered was €64,481. The respondent maintains that this was far in excess of the package offered to two other employees, on older (54 years) and one younger (33 years) who were made redundant at the same time. The respondent states consequently, it is clear that the complainant has in no way been treated less favourably on account of her age. The respondent argues that the operation of its redundancy scheme does not amount to indirect unequal pay for the purposes of Section 29(4) of the Act. The respondent cites the Equality Tribunal decision in Hanlon v Lake Communications Ltd. This case considered whether a cap on a redundancy calculation (such as the one at issue in the instant case) amounts to indirect discrimination. In that case, the complainants challenged a similar redundancy payment formula to the case at had (which provided for the payment of 3.5 weeks’ pay per year of service plus statutory redundancy, capped at 1 years’ salary) claiming it was indirectly discriminatory against older workers with longer service insofar as the cap had the effect of diluting the yield of the ex gratia payment which the complainants received. The respondent argues that this is an identical argument to the one in this case. The respondent states that the Equality Officer in Hanlon recognised that this cap meant that;
“..while anyone with more than 10 years’ service would have been affected by the cap, to some extent.. no one was paid less, those with more service were paid the same as each other and more than those with less than ten year’ service.”
3.6 The respondent submits that the Equality Officer determined that age was not the primary factor in the differing treatment and concluded that the redundancy cap did not amount to discrimination on the grounds of age. The respondent submits that Hanlon is the clear authority for the proposition that a cap such as the one operated by the respondent is not discriminatory on the age ground and therefore cannot ground a claim under section 29(4) of the Acts given that it does not result in a lesser payment (in proportion to an employee’s salary) being provided to employees as a result of their age nor is it the primary factor in any such differing treatment relating to the age of an employee. The respondent submits that the complainant has only adduced a single Scottish Employment Tribunal decision Wilson v Diageo (Scotland) Ltd S/4100513/13 in support of its argument that the Hanlon case should not be applied in the instant case. In this regard, the respondent submits that no analysis of the issue as to whether the cap in Wilson was discriminatory was undertaken by the Scottish Employment Tribunal in light of the fact that the respondent had conceded this point and did not put it at issue. The respondent argues that therefore it is an extremely weak authority for this legal point. In addition, the respondent argues that it would be inappropriate and require exceptional justification for an Adjudication Officer to apply a Scottish Employment Tribunal in favour of a decision by an Irish Equality Officer. Furthermore, the respondent argues that the Scottish Tribunal in the Wilson decision emphasised in its conclusions that that case should be limited to its own facts, thereby undermining any argument that it is general authority (in Scottish jurisprudence or otherwise) for a proposition that a redundancy cap is discriminatory;
“we should state that the decision in this case is particular to its facts and taking into account the difficulties faced by the respondent regarding lack of evidence, the fact the decision to impose the cap was taken in 2001 but not imposed until almost 10 years later and the fact that the respondent was endeavouring to justify their actions after the event”.
3.7 The respondent submits that the named comparator is not an appropriate comparator and there was no attempt by the legal representatives of the complainants to show that the comparator performed “like work” as the complainants which is required for advancing the complainants’ equal pay claims as was set out in an equal pay case namely Power v Blackrock College DEC-E2008-072:
“the complainant is required to identify an actual comparator for the purposes of his complaint with whom he performs “like work” in terms of section 7 of the Acts…as the complainant has failed to identify an actual comparator with whom he performed “like work” with, his complaint must fail”
The respondent submits that while the complainants and the comparator worked in the finance department, the roles and the work they performed were distinct and not interchangeable. Ms. B was employed as a Credit Controller and her main duties were credit control, the invoicing of clients, chasing clients for credit and posting payments received from clients. Ms. D was employed as an Accounts Supervisor. The main duties of her role included performing balance sheet reconciliations, nexus system set up, management of capex for units, carrying out profit protection audits and providing support to the respondent’s Operation Manager on SAP. In contrast, the comparator was employed as a Commercial/Purchasing Analyst and performed duties which were entirely distinct, separate and not interchangeable with those performed by the complainants. The comparator’s main duties included performing an analysis of the respondent’s purchases, reviewing draft supplier contracts, billing of suppliers for rebates and reconciliation of rebates due. The respondent submits that if it is accepted that the comparator is an appropriate comparator for the purposes of an equal pay claim which it strongly denies, it submits that the treatment or pay provided to the complainants was not by any measure less favourable than the treatment or pay afforded to the comparator. In this regard, the respondent submits it applied the exact same redundancy calculation to both the complainants and the comparator. The complainants were offered a greater ex gratia payment than the comparator. The respondent submits that the complainants were offered an amount which exceeded the cap but the comparator was not.
1.25 times Ms. B’s basic salary is equal to €50,860. However, Ms. B was offered a total redundancy package of €65,860. 1.25 times the comparator’s basic salary is €55,993. The comparator was offered less than this amount i.e. €32,492.
1.25 Ms.D’s basic salary is equal to €49,481. However, Ms. D was offered a total redundancy package of €64,481. 1.25 times the comparator’s basic salary is €55,993. The comparator was offered less than this amount i.e. €32,492.
The respondent submits that it is clear from the above that the complainants were not in any way treated in a less favourable manner than the comparator and that they were in fact treated in a more favourable manner.
3.8 The respondent submits that age is not the primary fact in the differing treatment which resulted from the cap and it submits that this is demonstrated by the statistics provided at the hearing. The respondent states that in 2012, the cap was applied to employees with an age range of 35-66 (i.e. 31 years). The respondent submits that this shows that it is length of service and not age which is the determinative factor as to whether the cap applies or not. Of the 11 employees to whom the cap applied to in 2012, 6 were younger than the complainant was on the date of her redundancy. Further, in 2012, 19 employees aged 50+ (i.e. older than the complainant) were made redundant in this year. However, the cap was only applied to 5 of these employees. Therefore the cap was not applied to 14 employees who were older than the complainant. In 2014, 16 employees aged 50+ (older than the complainant) were made redundant in this year. However, the cap was only applied to 3 of these employees. Therefore the cap was not applied to 13 employees who were older than the complainant. In 2015/2016, 3 employees aged 50+ were made redundant (i.e. older than the complainant). The cap did not apply to any of these employees. The cap however did apply to an employee aged 37 (i.e. younger than the complainant).
3.9 The respondent submits that without prejudice to its submission that the cap does not amount to indirect discrimination, the rationale for the operation of the cap throughout the respondent’s business is as follows;
there is a finite “pot” available to the respondent to make ex gratia redundancy payments. The cap ensures there is an equitable distribution of this pot amongst all employees who are made redundant; and
the cap is necessary for business certainty, financial planning and budgetary reasons. In addition, it ensures the financial stability of the respondent. Every responsible business requires a necessary level of certainty around future financial liabilities and expenditure. The imposition of the cap is a legitimate business aim which is necessary to ensure the respondent can adequately budget for future redundancies.
The respondent submits that in the CJEU decision of Odar v Baxter Deutschland GmbH, the court had to consider if a redundancy payments scheme in Germany which differentiated between workers on grounds of age contravened Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation. The court considered that the arrangements in issue were objectively justified on the basis, inter alia, that they allowed for a fair distribution of limited financial resources as between younger and older workers. In addition, as set out in the CJEU case of Kohler v Land Hessen and approved by an Equality Officer in O’ Mahony v Southwest Doctors On Call Ltd, while budgetary/ costs reasons cannot in and of themselves constitute a legitimate aim, they may underpin the policy behind measures taken by businesses which can. This has been referred to in UK jurisprudence as the “costs plus” principle which allows the employer to demonstrate another factor in addition to costs in order to justify any indirectly discriminatory measure. The respondent submits that while costs/budgetary considerations form part of the rationale behind the cap, it has also been imposed to ensure an equitable distribution amongst the respondent’s workforce regardless of age or length of service.
3.10 The respondent submits that a public policy point arises and bears consideration in this matter. It submits that it is common case that redundancy caps similar to the one at issue are operated frequently by employers in Ireland who chose to go over and above the obligations imposed on them by statute and pay their employees ex gratia amounts in circumstances where redundancies become necessary. The respondent submits that it is ironic that, in showing goodwill towards its workforce, it is now being accused of discriminating against its employees. The respondent submits that should such a cap be held to be contrary to the Acts, it will wholly disincentivise employers throughout Ireland from operating a policy of paying ex gratia amounts to its staff in redundancy situations and attempting to impose heretofore legitimate financial controls to facilitate an equitable distribution of the finite “pot” available.
3.11 The respondent refers to the fact that Counsel for the complainants on numerous occasions throughout the hearing requested that the Adjudication Officer draw adverse inferences from the respondent’s “failure” to provide the exact information requested by the complainant in its EE2 Form dated 7 July 2016, in the exact form which it requested that information be provided in, per section 81 of the Acts. In this regard, the respondent submits that no such adverse inference should be drawn. Section 81 allows adverse inferences to be drawn where either the respondent “failed to supply” the information, the information provided was “false and misleading” or the information provided “was otherwise not such as the complainant required”. The respondent submits that it supplied the complainants with the document regarding statistics on the morning of the hearing and this document provides comprehensive information on the redundancies (outside of negotiated exits) made by the respondent in the last 5 years. In this regard, the respondent submits that it has neither failed to supply information or has provided false or misleading information. The respondent further submits that given that there were two further opportunities to respond to this information by way of submissions following the hearing (thereby curing any alleged prejudice it had suffered) it is absurd to suggest that the complainants have not been provided with information which it “required” to advance their case. The respondent refers to the complainants insistence upon specific information being provided in relation to the redundancies of the respondent’s “head office” staff. However, the respondent submits that as set out by Mr C of HR this category of “head office” staff does not exist. There is no basis for distinguishing between these staff and the respondent’s “unit staff”. The respondent submits that it does not operate separate policies or procedures for its “head office” staff in relation to redundancy terms or otherwise. The respondent states that Mr. C was the Human Resources Director of the respondent’s total workforce as a whole and not of “head office staff” or “unit staff” alone. The respondent states that at any rate, the complainants have not provided any reason for requiring this information in order to advance their case outside of, seeking to advance the misconceived and irrelevant argument of there being some form of custom and practice in respect of redundancy terms for the respondent’s head office staff (which in any case is denied by the respondent). The respondent further submits that it is notable when pressed on the reason for requiring this information, Counsel for the complainants were unable to do so choosing instead to reserve a response for later written submissions. The respondent contends that it is apparent that the information they have sought was to advance a contractual claim and that they objected to the information provided by the respondent on the day of the hearing as it was unhelpful to the within claim. The respondent submits that the relevant jurisprudence demonstrates that adverse inferences will generally only be drawn where there has been a complete lack of information provided which was central to the complainant’s case without justification. The respondent submits that in the High Court case of Iarnrod Eireann v MurphyIEHC 326, Mr. Justice Hedigan noted that the Equality Officer in the hearing at first instance of the matter was correct in drawing an inference that the information was not helpful to the employer’s case;“In light of the fact that the documentation has never been produced even at this hearing when it was central to the application.. [and] when questioned about it, has studiously avoided any reference to the contents of the documentation in question. This silence is impossible to justify”
3.12 The respondent states that much was made by Counsel for the complainants that the information was only furnished to them on the morning of the hearing. The respondent submits that the complainants legal team were provided with the document immediately at the first opportunity prior to the hearing. In addition the respondent contends that Counsel for the complainants insistence on reiterating this fact during the hearing is a somewhat hypocritical assertion in circumstances where the complainants legal team (i) saw fit to deliberately withhold an e-mail (which again in any case goes towards the complainants irrelevant custom and practice argument) which they later sought to adduce in evidence during the hearing (ii) failed to identify a comparator, as is required, at any stage prior to the hearing. The respondent states that the complainants have argued that they have a contractual claim to an ex-gratia and as such this claim falls outside of the Acts. In conclusion, the respondent submits that in light of the complainants insistence on seeking to adduce evidence and advance arguments of alleged custom and practice of the respondent regarding redundancy terms, alleged implied contractual terms of the complainants and wholly irrelevant matters such as the respondent’s lawful decision to not offer outplacement services to employees who did not sign up to a compromise agreement fall outside the Acts and bears no relevance to a claim of age discrimination or unequal pay under the Acts.
4. Conclusions of Equality Officer
4.1 The issue for decision by me is whether the complainants were discriminated against in relation to their conditions of employment on the grounds of age in terms of section 6(2)(f) of the Acts contrary to section 8(6)(c) in relation to the redundancy package it offered them on termination of their employment. I have considered all the evidence both written and oral presented to me. Section 85A of the Employment Equality Acts sets out the burden of proof which applies in a claim of discrimination. It requires the complainant to establish, in the first instance, facts from which it may be presumed that there has been discrimination in relation to her. If she succeeds in doing so, then, and only then, is it for the respondent to prove the contrary. 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. In deciding on these complaints, therefore, I must first consider whether the existence of a prima facie case has been established by the complainant. In a previous Determination, the Labour Court, whilst examining the circumstances in which the probative burden of proof operates, held as follows –
"Section 85A of the Acts provides for the allocation of the probative burden in cases within its ambit. This requires that the Complainant must first establish facts from which discrimination may be inferred. What those facts are will vary from case to case and there is no closed category of facts which can be relied upon. All that is required is that they be of sufficient significance to raise a presumption of discrimination. However, they must be established as facts on credible evidence. Mere speculation or assertions, unsupported by evidence, cannot be elevated to a factual basis upon which an inference of discrimination can be drawn. 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 Having carefully examined all the evidence in relation to the instant case; while the complainant has put forward arguments in relation to an equal pay claim together with an equal treatment claim, having carefully adduced all the evidence at length, in my view, the claim of the complainants is more appropriately treated as one of discrimination in relation to conditions of employment contrary to section 8 of the Acts rather than a claim of unequal pay. I am also cognisant of the leading authorities in cases such as this one relating to a cap on redundancy payments i.e. Hospira v Roper & others EDA 1315, Hanlon v Lake Communications Ltd DEC-E2014-062 and the Scottish Tribunal decision in Wilson v Diageo (Scotland) Ltd. where the issue of a cap on redundancy payments was determined under the Acts as an equal treatment claim. With regard to conditions of employment, Section 8(6) of the Acts states that an employer shall be taken to discriminate against an employee in relation to conditions of employment if, on any of the discriminatory grounds, the employer does not offer or afford to that employee the same treatment [my emphasis] in relation to overtime, shift work, short time, transfers, layoffs, redundancies, dismissals and disciplinary measures as the employer offers or affords to another person where the circumstances in which both such persons are employed are not materially different.
While the complainants have submitted that they were directly discriminated against on grounds of age in relation to the cap on the redundancy payment, I note that employees older than the complainants were unaffected by the cap and therefore I am satisfied that there is no prima facie case to ground a claim of direct discrimination on age grounds. I am satisfied that the Hospira case can be distinguished from the within matter as the facts of that case are entirely different. In the Hospira case, there was direct reference in the redundancy scheme to the closeness of the employees to retirement and section 34(3)(d) was applied by the Labour Court. However, the circumstances are completely different and distinguishable in this case, in that, the complainants were considerably younger in the within claim and had at least 15 or more years to go to retirement age and until they would be in receipt of a state pension.
4.3 According to the Employment Equality Acts, indirect discrimination occurs “where an apparently neutral provision, criterion or practice would put persons of a particular age at a particular disadvantage compared with persons of a different age, unless that provision, criterion or practice is objectively justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary.” In this regard, the complainants submit that given their length of service i.e. 27 and 31 years respectively which is inextricably linked to age, as a result of the capping on redundancy payments to a maximum of 1.25 times salary, they received proportionately less ex-gratia payment per year of service (.25 in the case of Ms. B and .4 in the case of Ms. D in contrast to the comparator who received 2 weeks per year of service) and that this dilution became more the longer their service in contrast to their younger colleague Ms. M. In this regard, details regarding years of service and redundancy calculations are at the Appendix below. Having adduced the evidence, I prefer the arguments of the complainants, in that, on account of their considerable length of service which is inextricably linked to their ages, their ex gratia payments were proportionately less favourable vis a vis their younger comparator. I am satisfied therefore that the complainants have established a prima facie case of indirect discrimination on grounds of age. I am also persuaded in this regard by the detailed decision of the Scottish Employment Tribunal in Wilson v Diageo (Scotland) Ltd. which upheld a claim by an employee that a cap on ex gratia redundancy payments was indirectly discriminatory. Consequently, in such circumstances, the onus shifts to the respondent to establish that the provision is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary. The Acts, inter alia, implement the Framework Directive on equal treatment in employment and occupation. Domestic legislation must be interpreted in light of the wording and purpose of European legislation and where there is a conflict between both, European legislation takes precedence. Article 6 of the Directive states:
Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.
Such differences of treatment may include, among others:
(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection
4.4 Therefore, the respondent must have a legitimate aim for the capping of redundancy payments to a maximum of 1.25 times an employee’s salary and this aim must be capable of being objectively and reasonably justified. The means of achieving that aim must also be appropriate and necessary. The respondent submits that while costs/budgetary considerations form part of the rationale behind the cap, it has also been imposed to ensure an equitable distribution amongst the respondent’s workforce regardless of age or length of service. I note on the day of the hearing the former HR Director of the company stated that the redundancy policy had been historically inconsistent in Ireland and that in line with the UK, it wanted to put in place a consistent redundancy policy. I am of the view that the arguments given in this regard do meet the first limb of the test of objective justification and the next limb for the respondent to overcome is to demonstrate that the means chosen to achieve that aim are appropriate and necessary.
4.5 Having carefully examined the evidence on this matter at length, I am mindful that the manner in which the respondent dealt with the complainants at the time they were advised their positions were at risk, the relatively short consultative process and the fact that one of the complainants was on annual leave for a substantial part of that consultative process and the fact the respondent ousted them from the out placement programme which I find was callous and ill-judged given the remarkable length of service of the two complainants with the company. The complainants gave 27 and 31 years of service respectively to the company. It is an extraordinary length of time with the one employer and both complainants gave cogent testimony on the day of the hearing in relation to standing by the company in good times and in bad and the loyal dedicated service they gave to their employer over almost three decades. Having carefully examined the evidence at length, I find that while the aim of the respondent constituted a legitimate aim, the respondent did not provide any evidence at the time of applying the provision that it had considered whether there were other less discriminatory ways of achieving the aim. I note the evidence of the HR Director on the day of the hearing stating that the redundancy policy had been historically inconsistent in Ireland and I find therefore that this would substantiate the complainants’claims that there was no exact redundancy policy and different circumstances pertained to different employees. I am very cognisant from hearing the testimony of the complainants regarding their in-depth knowledge of previous redundancy packages which they were privy to and signed off on given the nature of their roles in the accounting and payroll area. I note that very little by way of arguments was given at the hearing by the respondent in the area of objective justification as they continually maintained it was a direct discrimination claim and not one of indirect discrimination. However, in the supplemental submissions following hearing the respondent submitted that while costs/budgetary considerations form part of the rationale behind the cap, it was imposed to ensure an equitable distribution amongst the respondent’s workforce. On balance, I find the arguments of the complainants more cogent and convincing. I am satisfied that in the particular circumstances pertaining to the specific claims within, that being the remarkable and dedicated long service given by the complainants, the callous and ill-judged manner they were treated at the time of the redundancy that the means chosen by the respondent to achieve the aim was not necessary nor was it proportionate. The respondent provided no evidence that it examined less discriminatory means/a more proportionate means of achieving that aim. I am also mindful of the comparative difficulty of loss of employment suffered by older employees i.e. finding another job, family and financial commitments compared with those of the younger age group, that being the comparator. Having carefully evaluated all the evidence, I find that the complainants have established a prima facie case of indirect discriminatory treatment on grounds of age and the respondent has failed to satisfy me that its actions, insofar as the treatment of the complainants is concerned, can be objectively justified and the complainants are therefore entitled to succeed in their claims.
5. DECISION OF THE EQUALITY OFFICER
5.1 I have concluded my investigation of this complaint and hereby make the following decision in accordance with Section 79(6) of the Employment Equality Acts.
5.2 I find that the complainants were indirectly discriminated against on grounds of age in terms of section 6(2) of the Acts and contrary to section 8 of those Acts in relation to the manner in which the respondent calculated their entitlements as regards redundancy packages on termination of their employment.
5.3 In accordance with my powers under section 82(1) (d) of the Acts, I order that the respondent provide equal treatment i.e. pay Ms. B and Ms. Ms. D the appropriate shortfall amount - as detailed at the Appendix to this Decision i.e. the ex-gratia uncapped - and to calculate the effect of those payments, when added to the amounts previously paid to each of them and make the necessary adjustments which arise in terms of individual liability to the Revenue Commissioners having regard to the rules and regulations governing the taxation of termination agreements on cessation of employment. This is to place the complainants in a position they would be in had discrimination not occurred. I also order that the complainants be paid €5000 each for the effects of the said discrimination and this amount is not subject to tax.
18 July 2017
 Arturs Valpeters v Melbury Developments  21 E.L.R. 64.
Years of Service
Ex-gratia with Cap
Ex- gratia uncapped
*cap did not apply to comparator