Morrissey v Dunlaoghaire/Rathdown County Council
1. DISPUTE
This dispute involves a claim by Mr. Morrissey that he was discriminated against on grounds of age, within the meaning of section 6(2)(f) of the Employment Equality Act, 1998 and in contravention of section 29 of that Act in the manner in which Dunlaoghaire/Rathdown County Council calculated his lump sum and pension on retirement.
2. BACKGROUND
2.1 The complainant was employed as a Planning Inspector with the respondent and retired in July, 2001 having reached the age of sixty-five. Over a number of years the post of Planning Inspector had been re-graded on a number of occasions, the most recent of which resulted in the post being upgraded to Grade 6 level with effect from 1 July, 1999. The complainant had been remunerated at the second long service increment point (LSI2) of the Grade 5 incremental pay scale prior to July, 1999. Following the upgrading, the complainant was remunerated at the first long service increment point (LSI1) of the Grade 6 level. He was unable to reach the LSI2 of that grade before his retirement, which impacted on his retirement lump sum and pension. He contends that his assimilation to the Grade 6 pay scale on a basis other than point to point constitutes discrimination of him on grounds of age. He alleges that other staff of the respondent were assimilated on that basis in circumstances similar to his and that he was treated less favourable than those employees. The respondent rejects the allegations.
2.2 The complainant referred a complaint under the Employment Equality Act, 1998 to the Office of the Director of Equality Investigations on 17 December, 2001. In accordance with her powers under the Act the Director delegated the complaint to Mr. Vivian Jackson, Equality Officer, for investigation and decision and for the exercise of other relevant functions under Part VII of the Act. A Preliminary Hearing was held on 27 May, 2002. In light of the jurisprudence of the European Court of Justice on what constitutes pay within the meaning of Article 141 (previously Article 119) of the Treaty establishing the European Community, the Equality Officer decided that the complaint constituted a claim for equal pay. The complainant cited two named comparators with whom he contended he performed "like work" within the meaning of section 7 of the Employment Equality Act, 1998. The respondent disputed that "like work" existed between the complainant and the named comparators. Notwithstanding this argument, it submitted that the rate of remuneration received by the complainant was lawful by virtue of section 29(5) of the Employment Equality Act, 1998. In such circumstances the Act provides at section 79(3) that an Equality Officer may investigate, as a preliminary issue, the question as to whether or not the rate of remuneration paid to the complainant is lawful by virtue of section 29(5). The Equality Officer decided therefore, to proceed on that basis. Written submission were received from both parties. The earliest convenient date for all parties on which a Final Hearing on the complaint could take place was 20 March, 2003. A number of issues emerged at the hearing which gave rise to further correspondence with the parties subsequently. Final confirmation from the parties that the Equality Officer was in possession of all necessary material from their perspective was received on 29 May, 2003.
3. SUMMARY OF COMPLAINANT'S SUBMISSION
3.1 The complainant retired from Dunlaoghaire/Rathdown County Council in July, 2001 at the age of sixty-five years. When he retired he had over forty-eight years service with the respondent, the last thirty-two of which were in the post of Planning Inspector. Over the years this post had been re-graded on a number of occasions, the latest of which resulted in it being upgraded to Grade 6 with effect from 1 July, 1999. The complainant's rate of remuneration prior to 1 July, 1999 was at the second long service increment point (LSI2) of the Grade 5 pay scale. Following the upgrade, his revised rate of remuneration was at the first long service increment point (LSI1) on the Grade 6 pay scale. The complainant did not qualify for progression to the LSI2 on the Grade 6 pay scale until 1 July, 2002. However, as he had to retire in July, 2001 he was unable to do so and his pension and lump sum was calculated on the basis of his rate of remuneration at that time (LSI1 of Grade 6). He contends that this constitutes discrimination of him on grounds of age. He further contends that his assimilation to the Grade 6 pay scale on a basis other than point to point underpins this discriminatory treatment. The complainant cites two comparators Mr. A, who is an Inspector in the Water Pollution area of the local authority and Mr. B, who is the County Librarian, both of whom he contends were assimilated to new pay scales on a point to point basis in circumstances similar to his.
3.2 The complainant argues that upgrading of the post of Planning Inspector from Grade 5 to Grade 6, with effect form 1 July, 1999 under the provision of "Better Local Government" did not involve an increase in duties or responsibilities of that post. Rather, it was a retrospective recognition of the gradual increase in the complexities and remit of the post over a number of years. He submits that the re-grading of the post is not similar to a promotion and consequently, the procedures which apply to starting pay on promotion should not apply. He further submits that these procedures are intended to apply to circumstances involving voluntary promotion to a higher grade where a new range of duties and responsibilities are involved. These new duties may or may not be related to a person's existing job. The complainant argues that the application of the procedures governing starting pay on promotion in his case deprives him of the opportunity to reach the LSI2 of the Grade 6 scale because he retired before the qualifying period elapsed. He states that this opportunity is available to his younger colleagues.
3.3 The complainant contends that the respondent is applying the starting pay on promotion procedures in an arbitrary manner. In addition to the two comparators cited, the complainant states that there are other instances where assimilation to a re-graded pay scale was conducted on a point to point basis, but he is unable to provide specific details. He further states that pay awards under the benchmarking process involves the replacement of an existing pay scale with a new one and assimilation to the new pay scale will be on a point to point basis.
4. SUMMARY OF RESPONDENT'S CASE
4.1 The respondent states that as part of the "Better Local Government" process agreement was reached between the respondent and the relevant trade unions that a number of posts would be re-graded from Grade 5 to Grade 6, including those of Planning Inspector. The re-grading was subject to acceptance by the staff involved of a number of productivity measures which included (i) that the revised salary was inclusive of call out charges, (ii) co-operation with the implementation of new technology and (iii) co-operation with new operational arrangements. The re-grading was effective from 1 July, 1999 and entry to the higher scales was in accordance with Department of the Environment and Local Government Circular 5/67 which governs the starting pay of local government employees on appointment or promotion. The relevant extracts from this Circular are set out at Appendix A.
4.2 The respondent states that in July, 1999 the complainant was on LSI1 of Grade 5 which was €30,587. As this rate of pay exceeded the minimum of the Grade 6 pay scale, Rule 6 of Circular 5/67 applied. This placed the complainant on the fifth point of the Grade 6 pay scale. However, as he had been on his existing rate of pay for more than three years Rule 7 of Circular 5/57 also applied and this place the complainant on the LSI1 of Grade 6, which was €33,571. The respondent further states that it was instructed by the Department of the Environment and Local Government to apply the terms of the Circular in its letter of 18 December, 2001 and adds that other local authorities also applied the Circular when carrying out similar re-gradings.
4.3 The respondent rejects the complainant's assertion that the assimilation of Mr. A to corresponding points of new pay scales occurred in similar circumstances to his situation. It states that Mr. A, who is an Inspector in the Water Pollution area of the organisation, was re-graded from Grade 5 to Grade 6 in August, 1996. The re-grading arose out of discussions on re-organisation matters which involved the integration of the former county and Dunlaoghaire borough areas, specifically in relation to water pollution. He was required to carry out duties which were more wide-ranging and onerous than those of his colleagues in the other local authority areas, some of which were carried out at Assistant Engineer level. Having regard to the special circumstances of his case and following discussion with his trade union, he was re-graded to Grade 6 on a personal basis and he went on to the new pay scale at the corresponding point to his existing point at Grade 5. The respondent furnished the Equality Officer with the relevant Manager's Order in respect of this matter. It submits therefore that the circumstances in respect of Mr. A were entirely different to those of the complainant.
4.4 The respondent also rejects the complainant's contentions in respect of Mr. B, who is the County Librarian. It states that this post was re-graded in 2001 to Senior Executive Officer level (Grade 8) following national negotiations with the relevant trade union in relation to a claim for parity between County Librarians and Senior Executive Officers. The negotiations were part of the implementation of "Branching Out - A New Public Library Service" which set out the way forward for the library service in terms of infrastructural development and a range of measures to improve the availability, accessibility and quality of library services to the public. The respondent further states that it was not part of the implementation of "Better Local Government". It accepts that assimilation of Mr. B to the Senior Executive Officer pay scale was by way of corresponding point, which was specifically covered in the terms of the Agreement and approved by the Department of the Environment and Local Government, but submits, in light of the foregoing, that these circumstances differ considerably for those which applied to the complainant. In support of this contention the respondent furnished a copy of the Department's Circular Letter and the relevant Manager's Order.
4.5 The respondent states that twenty-eight staff, including the complainant, were re-graded from Grade 5 to Grade 6 as part of the implementation of "Better Local Government" with effect from 1 July, 1999. These re-gradings were carried out in accordance with the conditions approved by the Minister for the Environment and Local Government which were set out it that Department's letter of 18 September, 2001 (see Appendix B). The respondent further states that the group of twenty-eight staff who were upgraded, including the complainant, were the only staff in the local authority who were upgraded automatically without a competitive process as a result of the implementation of "Better Local Government".
5. CONCLUSIONS OF THE EQUALITY OFFICER
5.1 The issue for decision by me is whether or not Dunlaoghaire/Rathdown County Council discriminated against the complainant on grounds of age, within the meaning of section 6(2)(f) of the Employment Equality Act, 1998 and in contravention of section 29 of that Act, when it applied the terms of Department of the Environment and Local Government Circular 5/67 to his rate of pay following his upgrading to Grade 6 with effect from July, 1999 and the consequential impact of those actions on his retirement lump sum and pension. In reaching my decision I have taken into account all of the written and verbal submissions made by both parties.
5.2 The European Court of Justice has determined that "the concept of pay, within the meaning of Article 119 of the Treaty establishing the European Union, comprises any consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer"1. The Court further held that "the fact that certain benefits are paid after the termination of the employment relationship does not prevent them from being in the nature of pay, within the meaning of Article 119 of the Treaty"2 The Court subsequently held that "a system of practically automatic salary classification based on rules contained in an collective agreement ..... where those rules govern changes in salary to an employee who continues in the same type of work ..... is practically an automatic re-classification in a higher salary grade and come, in principle, within the concept of pay as defined by Article 119 of the Treaty"3. As the circumstances of the complainant's case concerns the automatic upgrading of his post to a higher grade with the consequential increase in salary and the impact of that process on his retirement lump sum and pension, it follows that the case falls to be dealt with as a claim for equal pay under the Employment Equality Act, 1998.
5.3 Section 2 of the Employment Equality Act, 1998 defines remuneration as follows:
"in relation to an employee, does not include pension rights but, subject to that, includes any consideration, whether in cash or in kind, which the employee receives, directly or indirectly, from the employer in respect of the employment.". Consequently, my investigation cannot encompass the complainant's allegations of discrimination in respect of his pension entitlements as they are specifically excluded from the definition of remuneration. However, the element of his claim which involves his retirement lump sum falls within the remit of my authority.
5.4 The complainant's claim in essentially that the application of the Department of environment and Local Government's Circular 5/67, which governs the starting pay on promotion or appointment of staff in the local authority sector, resulted in him being treated less favourably than his younger colleagues, in that he was unable to reach the highest point on the incremental pay scale of Grade 6, a grade to which he had been automatically upgraded, before his retirement. He submits that instead of applying the Circular, the respondent should have assimilated him to the new pay scale at a point which corresponded to the point he was on before the post was upgraded (Grade 5). He cites two comparators who were upgraded on a point to point basis in support of his claim. The respondent confirmed that the named comparators had been upgraded on a point to point basis but submits that there were specific circumstances surrounding those arrangements which are totally different to the complainant. It further submits that the complement of staff upgraded at the same time as the complainant had the terms of Circular 5/67 applied to them and that age was not a factor in that process. Notwithstanding this argument, the respondent contested that "like work" existed between the complainant and the named comparators.
5.5 Section 29 of the Employment Equality Act, 1998 provides, inter alia, the following:
"(1) 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.
(5) Subject to subsection (4), nothing in this Part shall prevent an employer from paying, on grounds other than the discriminatory grounds, different rates of remuneration to different employees.".
Section 6(2) of the Act defines the discriminatory grounds for the purpose of the Act and includes, inter alia
"(f) that they are of different ages, but subject to subsection (3) (in this Act referred to as "the age ground")".
5.6 Section 79 (3) of the Act provides that where a question arises whether or not a difference in the rates of remuneration to which the case relates are lawful by virtue of section 29(5) of the Act, the Equality Officer may decide that the question shall be investigated as a preliminary issue. In the course of the preliminary hearing of the case on 27 May, 2002 the respondent argued that there were grounds other than the discriminatory ground cited (age) for the differences in remuneration and I decided to proceed as permitted by section 79(3) and investigate that matter as a preliminary issue.
5.7 The complainant submits that two named comparators were upgraded previously and were assimilated to the new pay scales at the corresponding point. He was unable however to furnish details of their ages but argued that they were younger than him. This was not contested by the respondent, although the ages of the comparators were not furnished by either party. The respondent accepts that both comparators were upgraded on the basis of corresponding point but argues that those appointments were carried out in circumstances which are totally different from those concerning the complainant. I note that Mr. A was upgraded in 1996 following discussions on re-organisation as a result of the integration of the respondent and another local authority at that time, that he was required to carry out duties which were more wide-ranging and onerous than those of his colleagues in the other local authority areas, some of which were carried out at Assistant Engineer level in those areas and that having regard to the special circumstances of his case and following discussion with his trade union, he was regraded to Grade 6 on a personal basis. The respondent has furnished a copy of the relevant Manager's Order in respect of the issue.
5.8 I note that the respondent states that Mr. B, who was a County Librarian, was re-graded in 2001 to Senior Executive Officer level (Grade 8) following national negotiations with the relevant trade union in relation to a claim for parity between County Librarians and Senior Executive Officers and that the negotiations were part of the implementation of "Branching Out - A New Public Library Service" which set out the way forward for the library service in terms of infrastructural development and a range of measures to improve the availability, accessibility and quality of library services to the public. I further note the respondent's argument that this re-grading was not part of the implementation of "Better Local Government", which is the process under which the complainant was re-graded. The respondent has also furnished a copy of the relevant Manager's Order in respect of this matter. I have examined this material and I am satisfied that the circumstances surrounding both Mr. A's and Mr. B's re-grading differ significantly from those pertaining to the complainant and that their respective ages were not a factor in the process. In addition, I would point out that it is not my role to effectively restrict employers or their representatives, or indeed employees or their representatives, to a single approach when determining pay structures. Flexibility must be permitted to allow negotiations to reach conclusions which best fit the needs of both parties at any given time. The mere fact that different results emerge from the negotiation process cannot be regarded as discriminatory unless they operate in a less favourable manner to an individual, or group, to which they apply. As I have previously stated I do not consider this to be the outcome in the instant case.
5.9 Notwithstanding my comments in the preceding paragraph, I note the respondent states that twenty-seven other employees were re-graded to Grade 6 at the same time as the complainant as part of the process of "Better Local Government". I further note the respondent's comment that this group of staff were the only employees to be up-graded automatically without a competitive process. I am of the view therefore, that these twenty-seven employees are appropriate comparators for the purpose of the complainant's case. The respondent states that the terms of the Department of Environment and Local Government 5/67 were applied to the starting pay of all of these employees, including the complainant. I have examined the details supplied by the respondent in this regard and I am satisfied that this is the case. Whilst the ages of those staff were not furnished I am also satisfied, on balance, that they were of different ages. I am therefore of the view that the age of the complainant was not a factor taken into account by the respondent in determining on what point on the upgraded pay scale the complainant should be placed and he was treated in the same manner as twenty-seven of his colleagues.
5.10 The complainant was at LSI2 of the Grade 5 pay scale in July, 1999, which was €30,587 at that time. On being upgraded to Grade 6 his revised salary was €33,573 which corresponded to LSI1 on that scale. It is not in dispute that he would have had to wait until July, 2002 before he was eligible for progression to the LSI2 of that Grade, a date which postdates his retirement from the respondent. He argues that he was unable to do this, although his younger colleagues had that opportunity. Progression on an incremental pay scale generally reflects an employee's service to the organisation. The introduction of the concept of long service increments (LSI) to the local authority sector was, inter alia, to recognise the long periods of service which staff had achieved without any further increase in remuneration, once they had reached the maximum of a particular pay scale. Attainment of the LSI was based on service. The complainant could not attain LSI2 on the Grade 6 pay scale before he retired. Colleagues who were younger than him could do so. However, in order to achieve that point, those colleagues would have to complete the appropriate period of service. The fact that the passage of time permitted them to reach that point, does not, in my view constitute discrimination. As I stated above I have examined the assimilation of the twenty-eight staff in the respondent organisation to the revised Grade 6 pay scale following the upgrading and I am satisfied that appointment to a particular point was not based on an employee's age. In addition, as I have previously stated, progression along an incremental pay scale is inextricably linked with an employee's service. Section 34 (7) of the Act provides as follows:
"It shall not constitute discrimination on the age ground for an employer to provide for different persons -
(a) different rates of remuneration .......
if the difference is based on their relative seniority (or length of service) in a particular post or employment.".
It follows therefore that the fact the complainant could not reach LSI2 because he was unable to fulfil the necessary service requirements before retirement, does not constitute discrimination of him on grounds of age. I would add that had the respondent assimilated him to LSI2 of Grade 6 it might well have afforded him preferential treatment over his colleagues which, of itself, could fall foul of the Act.
5.11 In light of my comments in the preceding paragraphs I find that the differences in the rate of remuneration paid to the complainant at the time of his retirement and those rates which might fall due to be paid to his twenty-seven colleagues who were upgraded with him at their retirement are not based on discrimination on grounds of age.
6. DECISION OF THE EQUALITY OFFICER
6.1 I find that the rate of remuneration paid to the complainant at the time of his retirement was lawful by virtue of section 29 (5) of the Employment Equality Act, 1998. Consequently, the substantive issue fails and no further action on the matter will take place in accordance with section 79 of the Act.
______________________________________
Vivian Jackson
Equality Officer
12 September, 2003
1 Barber v Guardian Royal Exchange Assurance Group [Case C-262/88]
2 Barber v Guardian Royal Exchange Assurance Group [Case C-262/88]
3 Nimz v Freie und Hansestadt Hamburg [Case C- 184/89]
APPENDIX A
EXTRACT FROM CIRCULAR 5/67
Extract from Department of Environment and Local
Government Circular 5/67
Starting Pay on Promotion
Rule 6
Where the minimum of the new scale is less than existing pay , the officer may enter the new scale at the point nearest , but not below existing pay plus one increment, and (a) where the point of entry on the new scale is equal to existing pay, he may retain his existing incremental date, if any, (b) in any other case, the date of promotion or new appointment shall be the new incremental date.
Rule 7
Where an officer .......has been on a fixed salary or the maximum of his existing salary scale for at least three years at the date of his promotion or new appointment, he may enter the new scale in accordance with the appropriate Rule and with a further additional increment, but in that case the date of promotion or new appointment will be the officer's new incremental date.