Mr. M(represented by Mr. Saul Woolfson, instructed by Bruce St. John Blake & Co.,
Solicitors) -v- An Electrical Switch Panel Production Company (Represented by IBEC)
1. CLAIM
The case concerns a claim by Mr. J.M. that an electrical switch panel production company discriminated against him on the age and disability grounds in terms of section 6(2)(f) and (g) of the Employment Equality Act, 1998 and in contravention of section 8 of the Act in relation to his conditions of employment. A preliminary issue arose as to whether the complainant had compromised an equality claim when he signed an agreement to accept a sum of money in full and final settlement of all claims, rights and entitlements against the company.
2. BACKGROUND
2.1 The respondent submits that the complainant had settled all claims against the company on being made redundant and that he received consideration for the settlement of the claims. It submits that he was represented by his Trade Union in negotiating the settlement. The complainant submits that he did not settle or compromise any claims under the Employment Equality Act, 1998 and that the consideration paid related to his redundancy package and the termination of his employment.
2.2 The complainant referred a complaint under the Employment Equality Act 1998 to the Director of Equality Investigations on 1 April 2003. On 29 January 2004, in accordance with her powers under section 75 of that Act, the Director delegated the case to Mary Rogerson, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part VII of the Act. The case had previously been delegated to another Equality Officer. In the light of the complainant's alleged compromise of his claim, the Equality Officer indicated to the parties that she would investigate as a preliminary matter whether the complainant could pursue a claim under the Employment Equality Act, 1998. A submission was received from the complainant on the preliminary issue on 6 May 2004 and from the respondent on 8 April 2004. A joint hearing of the claim was held on 12 May 2004.
3. SUMMARY OF THE COMPLAINANT'S WRITTEN SUBMISSION
3.1 The complainant submits that the statutory provisions require the Equality Officer to hear the parties and determine the claim. It submits that there is no statutory provision, save for those in relation to time limits for the bringing of a claim and those provided for under section 79(3) in relation to a defence to an equal pay claim which permit an Equality Officer to determine, prior to hearing the claim, a preliminary issue relating to jurisdiction.
3.2 The complainant did not settle or compromise any claims under the Employment Equality Act, 1998. The 1998 Act is not referred to in the purported Termination Agreement.
3.3 The terms and wording of the agreement and the documentation accompanying it make it clear that the agreement was in the nature of and referred solely to a redundancy package or payment. The total amount paid to the complainant related to the statutory lump sum redundancy entitlement under the Redundancy Payments Act, with an additional payment of €3903.90 to bring the statutory lump sum up to a figure of 2 weeks pay per year of service. The other amounts paid at that time and identified in the table of payments refer expressly to the claimant's holiday and notice entitlement.
3.4 The nature of the purported Termination Agreement concluded is such that it can only admit of one interpretation, that the agreement related to a payment on foot of redundancy. For example, an interpretation which purported to construe the agreement as barring any claims by the claimant of any description against the company relating to past or future events would, for example, purport to include any claim for personal injury, which would not be permissible and would be in breach of the complainant's right of access to the Courts pursuant to Article 34 of the Constitution.
3.5 The purported Termination Agreement does not list or refer in its text to the Employment Equality Act, 1998, nor does it list any particular statutes for the purposes of excluding any claims pursuant to statutory entitlements. The complainant who was represented by his Union official in relation to the purported Termination Agreement did not negotiate on the basis that it excluded any claims under the 1998 Act in relation to his conditions of employment whilst he was employed, nor indeed in relation to any claims under the 1998 Act in relation to the termination of his employment.
3.6 The negotiations were conducted by the complainant's Union official without any direct input from the complainant. The complainant was not consulted about nor advised in relation to the contents of the agreement. His Union official concentrated solely on achieving an improvement on the terms offered over and above the statutory redundancy entitlement pursuant to the Redundancy Payments Act. Even in circumstances, where the purported Termination Agreement was to be construed as referring to the settlement of any potential claims under The Employment Equality Act, 1998, the agreement is void and of no effect, being an agreement concluded between a union and a company, the terms of which are inconsistent with the provisions of the 1998 Act and/or give rise to discrimination by reason of the ouster of the complainant's rights under the Act and/or amounting to victimisation.
3.7 The agreement, if it is to be construed as referring to settlement of claims under the 1998 Act, amounts to a term or condition of employment which is in breach of the equality clause (s30) contained in the complainant's contract of employment and/or amounts to a procedure or practice resulting in or amounting to discrimination.
3.8 The complainant had no legal advice at the time when he concluded the purported Termination Agreement. Any purported exclusion of statutory rights is subject to the doctrine of "informed consent". The complainant was not advised in writing or at all that he should take appropriate advice as to his legal rights and/or the potential effect of the proposed agreement on his legal rights and in particular, his statutory rights under the 1998 Act. The complainant refers to the Circuit Court Judgement of Mr. Justice Buckley in Hurley v. Royal Yacht Club1 in this regard.
3.9 Applying the principles of Buckley J. in the Hurley case to the purported Termination Agreement at issue in this case, the following is submitted:
(i) The complainant received no legal advice;
(ii) There was no negotiation or discussion with the complainant about an exclusion or waiver of any rights under the 1998 Act;
(iii) The complainant had no direct input in regard to the negotiations resulting in the purported Termination Agreement;
(iv) The purported Termination Agreement does not refer in its body to any claims under the Employment Equality Act, 1998
(v) The complainant was not advised in writing or otherwise to obtain legal advice;
(vi) The totality of the documentation relating to the purported Agreement and the payments made on foot of it clearly indicate that the agreement related to redundancy terms.
3.10 The purported Termination Agreement is not supported by consideration and/or without prejudice, consideration which is referable to the compromise of a claim under the Employment Equality Act, 1998. The payment made by the respondent is on foot of a statutory redundancy entitlement with an additional payment in respect of improved terms for same.
3.11 The complainant refers to PMPA Insurance Company v Keenan2 in which Carroll J applied the "contra proferentes"rule - that as the company was seeking to rely on the phrase "in full and final settlement of all claims", it must be construed against them. The complainant submits that the rule should be applied against the respondent in the present case.
3.12 The complainant was subjected to duress in respect of the Agreement. His will was overborne and/or deflected by virtue of the pattern of conduct adopted by the respondent toward him. Following his layoff at the end of November 2002, the complainant did not receive any wages and his sole source of income through the period of December to the receipt of the payment on foot of the purported Termination Agreement was his social welfare entitlement.
4. SUMMARY OF THE RESPONDENT'S SUBMISSION
4.1 The complainant settled all claims he had under the Employment Equality Act, 1998 by way of settlement dated 17 January 2003 for consideration of €3903.90. It is established law that an employee can settle a claim for discrimination under the Employment Equality Act, 1998 in that he or she can accept sum of money in satisfaction of a claim for infringement of his or her rights.
4.2 The complainant refers to PMPA v Keenan (1983) IR 330 where Mr. Justice Carroll in the High Court held that employees can agree to compromise a claim for compensation for discrimination provided the agreement is supported by consideration. He stated:
"If an individual currently receives equal pay under his or her contract of employment, and an agreement not to pursue a claim for arrears of equal pay is supported by consideration (e.g. additional benefits to which the individual would not otherwise be entitled), I can see nothing contrary to public policy in allowing the parties to compromise, in such a fashion, what is a claim for a liquidated sum."
The respondent submits that in Rainwater v. University College Dublin3, the Equality Officer applied the PMPA case and held that the complainant could not pursue her claim for equal pay as she had settled it already.
4.3 In the present case, the complainant entered into a settlement supported by consideration. The employer had no obligation to pay the sum of €3903.90 and it was paid on condition that the settlement agreement was entered into. The complainant's employment with the respondent was at an end at that stage so the question of his contracting out of his right to equality does not arise. The agreement is clearly in settlement of all claims the employee may have in connection with his employment. The agreement specifically refers to claims under Statute such as claims under the Employment Equality Act, 1998.
4.4 The complainant was advised by his Trade Union official prior to signing the agreement and therefore knew the meaning and effect of the agreement.
4.5 The complainant was fully aware of his rights as a person with a disability. Shortly before the complainant and a colleague's pay claims were referred to the LRC, a meeting took place between the complainant, his Union representative and the company. The meeting was to discuss performance and pay issues. At the meeting, the complainant expressed the view that he was being discriminated against because of his disability and in front of the company personnel present, he turned to his Union representative and instructed him to institute an equality claim against the respondent. The Union representative responded that he was not disposed to do so at that point and would deal with the pay issue. Clearly, the complainant when he agreed to settle all claims with his employer both past and future knew that it included any equality claims he might have.
4.6 The complainant is prevented from pursuing his claim under the Employment Equality Act, 1998 because he has already settled the matter in January 2003.
5. CONCLUSIONS OF THE EQUALITY OFFICER
5.1 In this case, the complainant alleges that the respondent directly discriminated against him on the age and disability grounds in relation to his conditions of employment. A preliminary issue arose as to whether the complainant had compromised an equality claim when he signed an agreement on being made redundant to accept a sum of money in full and final settlement of all claims, rights and entitlements against the company. This Decision therefore deals only with the preliminary issue and does not deal with the substantive issue of whether discrimination occurred. In making my Decision in this case, I have taken into account all of the evidence, both written and oral, submitted to me by the parties.
Jurisdiction to determine a preliminary issue
5.2 The complainant submitted that I did not have jurisdiction to determine a preliminary issue prior to hearing a claim and that I should proceed to investigate the case in substance and conclude the investigation. I reject the complainant's submission in the matter and consider that it is necessarily implicit in the effective exercise of my functions to conduct a preliminary investigation. In this regard, I refer to Hogan and Morgan when referring to the ultra vires doctrine and particular rules of statutory interpretation:
"The general rule remains that stated by Lord Selborne in Attorney General v. Great Eastern Railway Co4: "Whatever may fairly be regarded as incidental to or consequential upon, those things which the legislature has authorised, ought not, (unless expressly prohibited), to be held by judicial construction, to be ultra vires.""5
The principle has been applied by the Irish superior courts in a number of cases.6
5.3 I also refer to the High Court in the case of Aer Lingus Teo v. The Labour Court7 which held:
"The Labour Court can decide on receivability at the same hearing as it determines the question of discrimination. That is not to say that the Labour Court may not hear a preliminary point on receivability and decide whether the complaint is out of time or whether there is a reasonable cause for delay, ...... But it is not obliged to do so, any more than a court is obliged to hear a preliminary issue on whether a claim is statute barred or not. The Labour Court must be allowed a discretion in the running of the Court whether to have a preliminary hearing or deal with all questions, including that of receivability at one hearing."
On appeal, the Supreme Court stated:
"It was contended on behalf of Aer Lingus that the Labour Court must first make an initial determination that a complaint is receivable before making the administrative decision to refer the matter to the equality officer. ....... I find myself in agreement with the High Court judge that this view is not correct. If it were otherwise then the Labour Court would, as the judge pointed out, have to hold a preliminary enquiry into every case whereas in fact the Labour Court can decide on the question of the acceptability at the same time as it falls to determine the merits of the case. The Labour Court is quite free to have such a hearing if it wishes but I do not think it is correct to claim that it must have such a hearing."
There are a number of precedents of the Tribunal where preliminary matters have been dealt with 8 and upheld on appeal by the Labour Court9. I will therefore proceed to determine the preliminary issue.
5.4 The relevant extract from the agreement which was signed by the complainant states:
"I, JM hereby accept the sum of €3903.90 gross, in full and final settlement of all claims, rights, and entitlements arising both from my former employment and the termination thereof, with TS Ltd and it's associated companies both under Statute and Common Law. I understand that this sum is in full and final settlement of any past, present and future claims against TS Ltd and its associated companies."
Caselaw on compromising claims
5.5 The complainant referred to the Circuit Court case of Hurley v. Royal Yacht Club which considered whether the applicant was precluded from pursuing proceedings before the Employment Appeals Tribunal by reason of his having signed an agreement accepting certain payments 'in full discharge of all claims' against the respondent. The Circuit Court in that case held:
"It cannot have been the intention of the legislature to prevent employers and employees from compromising claims under the Act. The question which therefore arises is: under what circumstances can claims be legitimately compromised. Not, I think, until the employee is in a proper position to agree to a compromise. In several areas of the law, the Supreme Court has held that any consent by a person to waive a legal right which that person has, must be an informed consent."
The Circuit Court went on to hold that the applicant in that case was entitled to be advised of his legal entitlements and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that they had been taken into account by the applicant. He also considered that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which, he stated, presumably in that case would have been legal advice. He proceeded to find the agreement void.
5.6 Whilst I note the Judgment of the Circuit Court in the Hurley case, the complainant also referred to the higher authority of the High Court in PMPA Insurance Co. v. Keenan which concerned the issue of whether an equal pay claim had been compromised. A relevant extract from the High Court Judgement in the case was quoted by the respondent and is referred to at paragraph 4.2 above. Ms. Justice Carroll then immediately proceeded to consider the issue of consideration (i.e. additional benefits to which the individual would not otherwise be entitled) in that case and held:
"If there was no such consideration, and an employer, being legally obliged to pay equal remuneration from the 31st December, 1975, agreed to pay it from a later date provided there was a waiver of past claims, it could not be said that there had been a valid waiver since the employer would have done nothing that he was not obliged to do by law; therefore, there would have been no consideration to support the waiver."
5.7 In the PMPA case, the High Court also considered the meaning of "all claims" and held:
"The words "all claims" could not mean "all claims by employees" -- e.g., including a claim by an employee for personal injuries against the company. The words must be limited by the context of the negotiations. In my opinion, they could be construed as meaning all claims connected with the matters on which the trade union was negotiating, i.e., current remuneration."
Ms. Justice Carroll then considered that in that case, it was not clear that the union officials were negotiating in respect of individual claims for arrears of equal pay and the parties were not estopped from claiming arrears. On appeal to the Supreme Court, Mr. Justice Henchy agreed with Ms. Justice Carroll's interpretation of "all claims" and held:
"The words "all claims" should be held to include no more than salary claims made in the negotiations leading to that settlement, and there is no evidence that the present claim came up in those negotiations."
The evidence in this case
5.8 In the case before me, Mr. Prizeman of the complainant's Union (the TEEU), gave evidence that he negotiated with the company to improve the redundancy package available to Mr. M over and above what was available to him statutorily. He was initially looking for four weeks pay per year of service and the company initially offered a half weeks pay per year. He submitted that eventually the package that was offered was two weeks pay per year of service and he considered it was the best terms he could get for the complainant in the circumstances. Mr. Prizeman considered that his role on behalf of the complainant was to negotiate a severance payment and not to negotiate an exclusion of claims including any equality claim. He was not aware that the complainant would sign a document such as the Termination Agreement in issue and considered that he would sign a document in relation to his redundancy only. He clarified that he never saw the document signed by the complainant until the morning of the preliminary hearing. Mr. Prizeman stated that at one meeting with the company, the complainant mentioned his disability but he never mentioned a discrimination claim or equality subsequently. The complainant gave evidence that the circumstances in which he signed the document were that he was contacted by his Union Official who advised that the package available to him was the best increased redundancy he could get. He attended at the company's offices without his Union representative and signed the Termination Agreement there and then.
Context of the complainant's agreement
5.9 In this particular case, I have considered the context of the negotiations of the parties. At that time, the claimant had been on lay-off for a number of weeks during which time, his Union official had been seeking to negotiate an improved redundancy package over and above the complainant's statutory redundancy entitlement. The complainant received an amount of €1774.50 statutory redundancy based on his service and salary. At that time, there was no statutory entitlement to two weeks pay per year of service. The complainant received additional sums of €3903.90, 195.20 and 1301.30. On a schedule detailing the payments, the latter two payments are specifically stated to be "Holiday Entitlement" and "In Lieu Of Notice". Opposite the amount of €3903.90 is stated "3 Years Service x two week=6 weeks @ 650.65" I note that the sum of €3903.90 is based on 2 weeks pay per year of service which is a common way of calculating a redundancy payment. It was not disputed that an equality claim was not discussed between the respondent and the complainant's union official in the course of the negotiations leading up to the payment of two weeks pay per year of service. I note also that the document in issue is headed "Termination Agreement" which suggests that it relates to the termination of the complainant's employment and there is no evidence to indicate that the document relates to an equality claim. The company's representative, Mr. Mc Cann gave evidence that he considered that the sum was a settlement figure for termination and expressed the companies desire to close all issues when he met the complainant. In this case, I am satisfied that the sum of €3903.90 does not relate to the complainant's statutory redundancy entitlement. However, I am satisfied that it relates to the complainant's redundancy and represents an improvement in the complainant's overall redundancy package following negotiation on that particular matter only by the company and the complainant's union official. On the balance of probability and in particular, taking into account, the context of the negotiations leading up to the payment of the amount in question, I find that there was no compromise of an equality claim or consideration to compromise such a claim.
Contra Proferentem rule
5.10 In the Aer Lingus case, as the meaning of "all claims" was unclear, Ms. Justice Carroll proceeded to apply the contra proferentem rule. She held that:
"Since the phrase "in full and final settlement of all claims" emanated from the company, it must be construed against them."
I do not accept the respondent's contention that because the complainant at a meeting mentioned his disability or referred to a discrimination case, he had put his claim on the table and that the claim subsequently became the subject of a compromise between the parties. In this case, there is no reference to the settlement of any particular statutory claims. I do not think in the instant case where the full and final settlement of all claims, rights and entitlements "both under Statute and Common Law" are referred to, that it is sufficient to clarify that there was a settlement of any equality claim, it being a claim under Statute. In the circumstances, I consider that the phrase is ambiguous and must be construed contra proferentes. Accordingly, I find that the phrase "in full and final settlement of all claims, rights and entitlements" relates to the compromise of all claims relating to the complainant being made redundant and does not compromise an equality claim by the complainant.
5.11 In summary, I find that the Termination Agreement was made in the context of negotiating a termination of the employee's employment when he was being made redundant following a period of time on lay off. In particular, it was not submitted by the respondent and there is no evidence to suggest that the parties discussed any equality claim that the complainant might pursue in the course of negotiations leading up to the signing of the agreement. As referred to at paragraph 5.10 above, I do not find that a claim existed on the date that the agreement was signed. I also find that there was no compromise of an equality claim and that the consideration in the termination agreement related to an improvement in the complainant's overall redundancy package and does not relate to consideration for a compromise of an equality claim by the complainant.
5.12 The issue of the complainant signing the agreement under economic duress was also submitted by the complainant, however, as I have found that the agreement did not compromise the complainant's equality claim, it is not necessary for me to consider the issue of duress.
5.13 There were a number of other cases cited by the respondent and I will briefly consider them. The respondent referred to the Decision of the Equality Tribunal in Rainwate v. University College Dublin10. In that case, the Equality Officer considered the fact that the Employment Equality Agency referred to a claim by the complainant under the Anti-Discrimination (Pay) Act, 1974 in correspondence dated 12 April 1996 with the respondent prior to the alleged settlement of the claim on 11 June 1996 and that the respondent's legal adviser advised the respondent regarding the equal pay claim. She was therefore satisfied that an equal pay claim existed at the date of settlement. In this case which can be distinguished from Rainwater, whilst it is accepted that the complainant referred to discrimination in a meeting on one occasion and that he had arranged a consultation with a solicitor in relation to a potential claim, I do not find that an equality claim was in existence on the date that the Termination Agreement was signed by the complainant.
5.14 Additionally, the respondent referred to the EAT Determination of Kiely v. Leo Laboratories.11 The EAT in that case held that the agreement signed by the employee was valid and the Tribunal had no jurisdiction to hear the matter. That case can be distinguished from the instant case as the agreement signed by the employee in Kiely specifically referred to the Unfair Dismissals Acts. The respondent also referred to a subsequent EAT Decision in Martin Fitzgerald v. Pat the Baker.12 and submitted that it was held than an employee can lawfully settle a claim already in being, where s/he had the benefit of professional advice. The case referred specifically to "a claim, already in being," and considered that where such a claim is settled by the parties, a term excluding further claims might be included in the agreement and that different considerations apply, especially if the employee has the benefit of professional advice. Whilst the document in that particular case referred to the specific Acts in respect of which claims could not be brought (including the Unfair Dismissals Act), the EAT held the agreement to be void as it was prepared by one side without any meaningful negotiation before it was written and the claimant received no advice before he appended his signature.
6. DECISION
6.1 Based on the foregoing, I find that the complainant did not compromise an equality claim when he signed the Termination Agreement dated 17 January 2003. I will therefore proceed to investigate the substantive issue in the claim referred.
_________________
Mary Rogerson
Equality Officer
8 June 2004
1[1997] ELR 225
2[1983] IR 330
3DEC-E2004-004
4(1880) 5 App. Cas. 483
5Hogan and Gwynn Morgan, Administrative Law in Ireland (3rd edition), p 402
6An Blascaod Mor Teo v. Commissioners of Public Works, High Court, Kelly J, nreported 19 December 1996. , Mc Glinchey v. Governor of Mountjoy Prison, High Court, Lynch J. [1988] IR 671, Keane v. An Bord Pleanála & anor [1997] 1 I.R. 184
7[1990] ELR 113 & [1990] ILRM 485
8Damery v. The Italian Embassy DEC-E2001-039, A Complainant v. FAS DEC-E2003- 029, A complainant v. A company DEC-E2002-036
9FAS v. A Complainant EDA044
10DEC-E2004-004 9 February 2004
11[1998] ELR 172 28 January 1997
12[1999] ELR 227 8 December 1998