FULL RECOMMENDATION
SECTION 83, EMPLOYMENT EQUALITY ACT, 1998 PARTIES : EASON & SON LIMITED (RESPONDENT) (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND MS MARY BROWN (COMPLAINANT) (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Mr Duffy Employer Member: Mr Carberry Worker Member: Mr O'Neill |
1. Appeal against decision of Director of Equality Investigations Dec-E2002-026.
BACKGROUND:
2. The background to this case is set out in Equality Officer's Recommendation (details with the Court). The Equality Officer, in her Recommendation, which issued on 21st June, 2002, found that the claimant was not discriminated against contrary to the terms of the Act.
The Union appealed the Recommendation to the Labour Court on the 31st July, 2002, on the following grounds:-
The Equality Officer erred in law and in fact in deciding that the Respondent did not discriminate against the Claimant in the following manner:-
(i) The Equality Officer erred in law and in fact in failing to find that the Claimant/Appellant had been discriminated against on the gender ground in relation to remuneration contrary to the 1998 Act. Article 141 (formerly 119) of the Treaty of Rome and Council Directive 75/117EEC.
(ii)
The Equality Officer erred in law and in fact in failing to find that the (including the Claimant/Appellant) in the circumstances constituted unlawful indirect discrimination on the gender ground.
(iii) The Equality Officer failed to apply the correct principles of law to determine whether or not indirect discrimination had occurred and whether that indirect discrimination was unlawful.
(iv) The Equality Officer failed to apply correctly the jurisprudence of the Court of Justice of the European Communities.
(v) The Equality Officer failed to require the Respondent to discharge the appropriate burden of proof in order to show objective justification for the indirect discrimination established and thereby rebut the presumption of discrimination raised by the facts.
(vi) The Equality Officer failed to apply the correct principles in determining whether there was objective justification for indirect discrimination.
(vii) The Equality Officer erred in law and /or in fact in not awarding the Claimant/Appellant equal pay, arrears of remuneration pursuant to the 1998 Act and appropriate compensation for the discrimination experienced by her.
(viii) On all grounds submitted during the Equality Officer's investigation and such grounds as may be submitted during the course of the appeal.
Without prejudice to the foregoing the appellant reserves the right to adduce such further or other grounds as may be appropriate to the appeal of the Recommendation of the Equality Officer on the hearing of the appeal.
The Court heard the appeal on the 12th February, 2003.
DETERMINATION:
Ms Mary Brown (the complainant) and her named comparator are employed, as sales assistants, by Eason and Sons Limited (the respondent). The claimant is a part-time worker who works 22.5 hours per week. The comparator works full-time (37.5 hours per week). Under a collective agreement with SIPTU, the respondent pays service pay to employees based on their years of service. Both the complainant and the comparator have more than 20 years service, which is the maximum reckonable for the purpose of the agreement. The complainant receives a weekly payment of €2.29 in respect of service pay which is 60% of the amount paid to the comparator and is pro-rata to her working hours. The comparator receives a weekly payment of €3.80 in respect of service pay. The complainant contends that service pay was intended to be based on service only and that the practice of the respondent in applying an hours worked qualification, in her case, is discriminatory.
There are a total of 220 sales assistants employed by the respondent, 128 of whom are full time workers and the remaining 92 are part-time workers. Of the 128 full time workers, 108 are women and 20 are men. All 92 part-time workers are women.
The dispute was referred to the Office of the Director of Equality Investigations pursuant to section 77(1) of the Employment Equality Act 1998 (the Act). The Equality Officer who investigated the complaint found that the complainant had not been discriminated against. The complainant appealed to this Court.
Issues for Determination:
The entitlement to equal pay is derived from Section 19 of the Act which provides as follows: -
- 19-(1) It shall be a term of the contract under which A is employed that, subject to this act, A shall at any time be entitled to the same rate of remuneration for the work which A is employed to do as B who, at that or any other relevant time, is employed to do like work by the same or an associated employer.
The Union, on behalf of the complainant contends that the allowance in question relates to years of service with the employer and should not be dependent upon the number of hours worked. They say that since women comprise 100% of the respondents part-time sales staff, the reduction in the rate of service pay by reference to hours worked operates to the disadvantage of women to a significantly greater extent than in the case of men. On this basis they contend that the complainant is being indirectly discriminated against by the payment to her of a lower rate of service pay than would be paid if she could satisfy the requirement of being a full time worker, contrary to Article 141 of the EC Treaty and section 15 of the Act.
The respondent contends that indirect discrimination cannot arise in this case since the group of part-time workers and the group of full time workers are predominately female. The complainant contends that, on the authority of the decision of the European Court of Justice inHill and Stapleton v Revenue Commissioners and Department of Finance [1998] ECR 1- 03739, and inLewen v Lothar Denda [1999] ECR 1-07243, only the composition of the disadvantaged group (in this case part-time workers) should be looked at.
The Entitlement to Equal Pay.
The first question for consideration by the Court is whether, on the facts of this case, the complainant is being denied equal pay with the comparator, within the meaning of Article 141 of the EC Treaty, or the same rate of remuneration, which is the corresponding term used in section 19 of the Act. The practical application of that principle in cases involving part-time workers has been considered by the ECJ in a number of authorities.
A generally accepted definition of discrimination is that formulated by the ECJ inFinanzamt Koein- Altstadt v Schumacker [1995] ECR 1-225as follows:
- “It is settled law that discrimination can arise only through the application of different rules to comparable situations or the application of the same rule to different situations.”
Here the dispute centred on the non-payment to the complainant of a Christmas bonus because she was on parental leave and therefore absent from her employment at the time the payment fell due. An issue arose in the case as to whether the award of the allowance was subject only to the condition that the worker was in active employment when it was awarded or whether it constituted retrospective pay for work performed in the course of the year.
In answering the questions referred by the National Court the ECJ stated as follows-
- “The refusal to pay a woman on parenting leave a bonus as an exceptional allowance given voluntarily by an employer at Christmas does not therefore constitute discrimination within the meaning of Article 119 of the treaty where the award to that allowance is subject only to the condition that the worker is in active employment when it is awarded.
- The position would be different if the National Court was to classify the bonus at issue under National law as retroactive pay for work performed in the course of the year in which the bonus is awarded.
In those circumstances, an employer’s refusal to award a bonus,even one reduced proportionallyto workers on parenting leave who work during the year in which the bonus is granted, on the sole ground that their contract of employment is in suspense when the bonus is granted, places them at a disadvantage as to those who’s contract is not in suspense at the time of the award and who in fact receive the bonus by way of pay for work performed in the course of the year. Such a refusal therefore constitutes discrimination within the meaning of Article 119 of the treaty since female workers are likely, as noted in paragraph 35 of this judgement, to be on parenting leave when the bonus is awarded far more often than male workers.”
[Emphasis added]
- The position would be different if the National Court was to classify the bonus at issue under National law as retroactive pay for work performed in the course of the year in which the bonus is awarded.
InHill and Stapletonthe ECJ gave a preliminary ruling on a number of questions referred by this Court pursuant to Article 234 of the Treaty. The dispute in the main proceedings concerned a rule whereby Civil Servants who returned to full-time work having completed a period of job-sharing, were given a point on the pay scale applicable to full-time staff which was lower than that which they previously occupied when job-sharing. This arose because service while job-sharing was calculated by reference to the actual length of time worked in the post. In the case of full-time staff service was calculated by reference to calendar years of service. Here the Court stated:
- The regression to which workers are subject when entering or returning to full-time work directly affects their pay. They are in fact paid less than double what they would have earned had they been job-sharing. Consequently, their hourly rate of pay is reduced. Reference to the criterion of hours worked during the period of job-sharing employment, as provided for under the scheme applicable here, fails to take account either of the fact that job-sharing, as pointed out in paragraph 26 of the present judgment, is in a unique category as it does not involve a break in service, or of the fact, stated in paragraph 27 of the present judgment, that a job-sharer can acquire the same experience as a full-time worker. Furthermore, a disparity is retroactively introduced into the overall pay of employees performing the same functions so far as concerns both the quality andthe quantity of the work performed. The result of this disparity is that employees working full time but who previously job-shared are treated differently from those who have always worked on a full-time basis.
- The regression to which workers are subject when entering or returning to full-time work directly affects their pay. They are in fact paid less than double what they would have earned had they been job-sharing. Consequently, their hourly rate of pay is reduced. Reference to the criterion of hours worked during the period of job-sharing employment, as provided for under the scheme applicable here, fails to take account either of the fact that job-sharing, as pointed out in paragraph 26 of the present judgment, is in a unique category as it does not involve a break in service, or of the fact, stated in paragraph 27 of the present judgment, that a job-sharer can acquire the same experience as a full-time worker. Furthermore, a disparity is retroactively introduced into the overall pay of employees performing the same functions so far as concerns both the quality andthe quantity of the work performed. The result of this disparity is that employees working full time but who previously job-shared are treated differently from those who have always worked on a full-time basis.
InKowalask v Freie und Hansestadt Hamburg [1990] ECR 1-2591the ECJ had to consider a provision in a collective agreement which precluded part-time workers from entitlement to redundancy pay. In its judgement the Court stated as follows:
- “(1). Article 119 of the EEC treaty is to be interpreted as precluding the application of a clause in a collective wage agreement applying to the national public service under which employers may exclude part-time employees from the payment of a severance grant on termination of their employment when in fact a considerable lower percentage of men than of women work part-time, unless the employer shows that the exclusion is based on objectively justified factors unrelated to any discrimination on grounds of sex.
(2). Where there is indirect discrimination in a clause in a collective agreement the class of persons placed at a disadvantage by reason of that discrimination must be treated in the same way and made subject to the same scheme,proportionately to the number of hours worked, as other workers, such scheme as remaining, for want of correct transposition of Article 119 of the EEC treaty into National law, the only valid point of reference.”
- “(1). Article 119 of the EEC treaty is to be interpreted as precluding the application of a clause in a collective wage agreement applying to the national public service under which employers may exclude part-time employees from the payment of a severance grant on termination of their employment when in fact a considerable lower percentage of men than of women work part-time, unless the employer shows that the exclusion is based on objectively justified factors unrelated to any discrimination on grounds of sex.
InHelmig v Deutsche Angestellten- Krankenkasse [1994] ECR 1-5727the issue for consideration was whether overtime pay should be paid to part-time workers for time worked in excess of their contract hours as was the case with the full-time workers. Again, the Court looked to see if the rules or criteria for the granting of overtime rates established different treatment for full-time and part-time employees and whether that difference effects considerably more women than men. The Court stated: -
- “Only if those two questions are answered in the affirmative does the question arise of the existence of objective factors unrelated to discrimination which may justify such a difference in treatment.
There is unequal treatment wherever the overall pay of a full time employee is higher than that of part-time employees for the same number of hours worked on the basis of an employment relationship
In the circumstances in these proceedings, part-time employees do receive the same overall pay as full time employees for the same number of hours worked.”
- “Only if those two questions are answered in the affirmative does the question arise of the existence of objective factors unrelated to discrimination which may justify such a difference in treatment.
The judgement inHelmigwas quoted with approval by Mr Advocate General La Pergola inHill and Stapleton(see paragraph 27 and 28 of the opinion). He pointed out that that case was concerned with ensuring that part-time workers received the same pay, hour-on-hour, as full-time workers. The Advocate General pointed out that in the case with which he was then concerned, former job-sharers were being subjected to a reduction in their pay, hour-on-hour, relative to those who remained on job-sharing or those who had never job shared.
Application of These Principles to the Instant Case:
It is now well established since the decision of the ECJ inVon Colson and Kamann v Land Nordrhein – Westfalen [ECR] 1819, that legislation adopted to implement a Directive is to be interpreted and applied in the light of the wording and purpose of the Directive so as to ensure the result envisaged by the Directive. This interpretative obligation was subsequently approved in this jurisdiction by the Supreme Court inNathan v Bailey Gibson [1998] 2 IR 162.Consequently, section 19 of the Act must be interpreted having regard to the jurisprudence of the ECJ on the interpretation of Directive 75/117 and Article 141 on which it is based.
Accordingly, on the basis of the authorities reviewed, the Court is satisfied that the complainant’s entitlement to the same rate of remuneration as that paid to the comparator can be met if they are both subjected to the same rules or criteria in the calculation of their overall pay and in fact receive the same remuneration relative to hours worked.
On the evidence before it the Court is satisfied that the complainant is in receipt of equal pay within the meaning of Article 141 of the EC Treaty and Directive 75/117.
In the first place, entitlement to service pay is determined by reference to the actual number of years of service in both cases. Secondly, while the monetary amount of service pay is expressed as a different weekly rate in both cases that figure can vary downwards depending on the total number of hours actually worked. That criterion applies equally to the complainant and to the comparator as it does to part-time and full time workers generally within the employment. Clearly, the situation would be different if full time workers were paid a fixed amount that did not vary in relation to hours worked. While the Union has argued that on its correct construction the agreement does not provide for a reduction in the amount payable due to absences, it is common case that the agreement, in practice, is applied in that way.
Other Issues:
In the course of the submissions the parties raised other important issues in relation to the circumstances in which indirect discrimination on grounds of gender could be found to exist in relation to part-time work. By agreement with the parties, the Court has indicated that unless it found that the complainant had been subjected to unequal treatment it would not be necessary or appropriate to make any findings on these questions.
It is, however, noteworthy that in none of the cases referred to in this determination did the ECJ require a comparison between the gender composition of part-time workers relative to full time workers within the employment concerned. Rather, the Court was prepared to take judicial notice of the fact that women are far more likely to be engaged in part-time work than men and consequently, any disadvantage attached to part-time working constitutes, prima facie, indirect discrimination against women.
However, section 19(4) of the Act clearly requires a claim of indirect discrimination in terms of pay to be based on a comparison with the pay of those of the opposite gender employed, at like work, by the same or an associated employer.
Hopefully, the difficulties identified in this case in applying that provision in circumstances in which both the complainant and the comparator are part of a group which is predominantly of the same gender should not arise in the future. The law in relation to the protection of part-time workers is now contained in the Protection of Employees (Part-Time Work) Act 2001under which the requirements for comparison are significantly different to those under the Employment Equality Act. In the Court's view, that legislation should provide a more appropriate vehicle for the processing of similar type claims in the future.
Determination:
The Court determines that the complainant herein has not been discriminated against in terms of her pay contrary to section 19 of the Employment Equality Act 1998.
Signed on behalf of the Labour Court
Kevin Duffy
3rd March, 2003______________________
LW/MB.Deputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Larry Wisely, Court Secretary.