Glen(Represented by Frances Meenan, Solicitor) AND Ulster Bank Ireland Ltd(Represented by Arthur Cox, Solicitors)
1. DISPUTE
1.1 This dispute concerns a claim by Mr Brian Glen, employed as a Senior Solicitor by Ulster Bank Ireland Ltd, that he is entitled to the same rate of remuneration as that paid to a named younger female comparator, also employed by the company as a Solicitor, in accordance with the provisions of section 19 (1) and section 29 (1) of the Employment Equality Act, 1998.
1.2 Frances Meenan, Solicitor, referred a claim on behalf of the complainant to the Director of Equality Investigations on 15 February 2002 under the Employment Equality Act, 1998. In accordance with her powers under section 75 of that Act, the Director then delegated the case on 22 April 2002 to Anne-Marie Lynch, 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. Submissions were sought from both parties and a joint
hearing was held on 7 October 2003. The original complainant's referral had also asserted discriminatory treatment and a claim under an equality clause, but it was confirmed at the hearing that claim was restricted to equal pay. Subsequent correspondence with the parties concluded on 15 October 2003.
2. THE COMPLAINT
2.1 The complainant's case was referred under the provisions of section 19 (1) of the Act which provides:
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.
Section 18 states that "A" and "B" represent two persons of the opposite sex so
that, where "A" is a woman, "B" is a man, and vice versa.
2.2 The complainant also referred his case under the provisions of section 29 (1) of the Act 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.
Section 28 (1) (e) states that "C" and "D" represent two persons who are of different ages.
2.3 Section 19 (5) of the Act provides that:
...nothing in this Part shall prevent an employer from paying, on grounds other than the gender ground, different rates of remuneration to different employees.
2.4 Section 29 (5) provides that:
...nothing in this Part shall prevent an employer from paying, on grounds other than the discriminatory grounds, different rates of remuneration to different employees.
2.5 In relation to the investigation of claims for equal pay, the Act provides at section 79 (3) that:
If, in a case which is referred on the ground that the complainant is not receiving equal remuneration in accordance with an equal remuneration term, a question arises whether the different rates of remuneration to which the case relates are lawful by virtue of section 19 (5) or 29(5)...the Director may direct that that question shall be investigated as a preliminary issue and shall proceed accordingly.
2.6 Such a question arose in this claim, and I therefore proceeded on the basis of investigating whether the different rates of remuneration were justified on grounds other than gender and age. The respondent conceded like work in respect of the comparator, and work inspections were not carried out.
2.7 At a preliminary hearing of the claim in September 2002, it was agreed that the respondent would provide the complainant with details of its calculation of his salary. If agreement was reached that the complainant's remuneration was higher than that of the comparator, the claim would be withdrawn. The respondent provided the complainant with two sets of actuarial calculations of his remuneration, one including his pension entitlements and the second excluding them. In response, the complainant's representative advised that her client had instructed that it was his intention to proceed with the investigation and invited the respondent to make its submission.
3. SUMMARY OF THE RESPONDENT'S CASE
3.1 The respondent acknowledged that the complainant and his comparator, Ms M, were engaged in like work. It argued, however, that there were objective non-discriminatory grounds for the salary paid to Ms M and further argued that the complainant was in fact paid more than the comparator.
3.2 The respondent said that in 2001 it underwent a process of restructuring its business. All of its retail banking business had previously been conducted by Ulster Bank Limited, a Northern Ireland company. It was decided to transfer this business in the Republic of Ireland to Ulster Bank Ireland Limited, a Dublin-registered company. This necessitated the retaking or amending of security in respect of in excess of 500 loans on the respondent's books. As Senior Solicitor, the complainant was directly involved in this process and a three-month time period was fixed for completion of the project. It was recognized that the employment of an additional suitably qualified and experienced lawyer was necessary on a short-term basis to assist the complainant.
3.3 Having considered several options, it was decided that the only feasible solution was to employ Ms M to carry out the project. She had previously been employed by the respondent in this field, and had left its employment to work for another financial institution. The respondent said that the complainant was fully supportive of the proposal and that he was the principal negotiator of the short-term employment proposal with the comparator. It was he who advised the respondent that the comparator was seeking an hourly rate of £40 (€50.80) and he justified the rate by reference to a similar sum being paid to a relief solicitor employed in the Belfast office. The respondent said that the complainant also determined that the comparator should be hired for approximately 240 hours over a period of three months.
3.4 The respondent contended that the reasons for any differences in remuneration between the complainant and the comparator were not related in any way to the age or gender of either individual. The comparator's rate of remuneration was driven by market forces and necessitated by the urgent need to secure an experienced specialist in this area to complete a short-term project within the designated time frame and without the luxury of a learning curve.
3.5 Notwithstanding this argument, the respondent claimed that the remuneration of the complainant was higher than that of the comparator. It said that the complainant joined its employment in 1983 following almost twenty years working with another financial institution. He had not been entitled to any pension benefits from his previous employment, either by deferred pension or by transfer of money to the respondent's pension fund. The respondent agreed to give the complainant credit for his previous service, and said that the current capital cost to it of granting the additional backdated service of 18 years and 9 months was €346,000. In his role of Senior Solicitor the complainant was graded as being Business Specialist Level 2 and was in receipt of a base salary of €71,055 at November 2001. His contract of employment stipulated that he work a 36.25-hour week until the end of 2001, and subsequently a 35-hour week.
3.6 The respondent said that in estimating his total remuneration it was necessary to consider all aspects of his salary package, which it said included base salary (€71,055), performance award (€8,714 - 13% in 2001), car (€15,987 - cash equivalent value based on payback scheme), annual leave in excess of the statutory minimum (€2,460 - average daily rate for 9 additional days), profit sharing (€7,106 - based on 2001 Profit Share Scheme), pension (€13,856 - actuary's advice of cost of provision of pension), club subscriptions (€1,270), permanent health insurance (€678) and private medical examination (€152 - medical cost spread over three years).
3.7 Taking into account all of these elements, the respondent provided actuarial calculations estimating that the complainant's hourly rate of pay was €79.19 (36.25-hour week) or €82.02 (35-hour week) if his pension entitlements were included, and €57 (36.25-hour week) or €59 (35-hour week) if pension entitlements were excluded.
4. SUMMARY OF THE COMPLAINANT'S CASE
4.1 The complainant said that, since the respondent conceded the existence of like work between him and the comparator, the matters to be addressed were:
(i) whether the respondent was entitled to rely on sections 19 (5) and 29 (5);
(ii) whether the comparator was in receipt of higher remuneration than the complainant; and
(iii) whether the respondent could have regard to the complainant's pension benefits (which were admitted) in calculating his remuneration.
4.2 Regarding what he described as the respondent's "market forces defence", the complainant submitted that the scheme of the legislation provided that there was a rebuttable presumption of gender discrimination once a gender based comparison showed that a man, doing like work or work of equal value to that of a woman, was being paid less than the woman, The variation between the contracts is presumed to be due to the difference in gender. The burden passed to the employer to show that the explanation for the variation was not tainted by gender. In order to discharge this burden, the employer must (a) establish that the reason for the difference was genuine and not a sham; (b) in addition, establish that the less favourable treatment was for that reason; and (c) demonstrate that the reason is significant and relevant.
4.2 The complainant disputed the respondent's assertion that the employment of the comparator was the only option available to it. He said that the work could have been outsourced to a firm of solicitors. He also denied that he had any involvement in determining that the comparator be employed by the respondent. He said that he had no authority to determine such matters, although he accepted that he agreed with the decision to hire her.
4.3 With reference to the respondent's argument that he was paid a higher hourly rate than the comparator, the complainant asserted that he was in fact paid €34.16 per hour, compared to €50.80 paid to the comparator. In assessing his hourly rate of pay, the complainant said that the bonus paid to him in 2002 was in the region of 4-5% as opposed to the 13% claimed by the respondent. He disputed the car value claimed by the respondent, and rejected the inclusion of club subscription on the ground that this related to his Law Society Practising Certificate without which he could not practice as a solicitor. The complainant said the permanent health insurance referred to was the standard group discount allowed by the insurance company, and claimed that it was highly irregular to include contractual leave in a calculation of remuneration. Regarding certain other matters claimed as "intangible benefits" by the respondent, such as preferential rates for home loans, personal loans, generous sick leave and sick pay, the complainant said he did not avail of those facilities.
4.4 The complainant pointed out that the definition of remuneration in the 1998 Act says that it includes any consideration, whether in cash or in kind, which the employee receives, directly or indirectly, from the employer in respect of the employment but quite specifically does not include pension rights. He said claims of discrimination regarding pension rights must be referred under the Pensions Act, 1990. He rejected the respondent's suggestion that an employer, although not an employee, may rely on the level of pension benefit paid to an employee in calculating remuneration in the context of a claim under the 1998 Act. He said that if such had been the intention of the legislation, the Act would have stipulated it.
4.5 The complainant further contended that, during his 19 years of employment with the respondent, the only new lawyers recruited by it on a permanent basis were female and younger than he was. He claimed the respondent had a policy of restricting suchrecruitment to younger female professionals.
5. INVESTIGATION AND CONCLUSIONS OF THE EQUALITY OFFICER
5.1 In reaching my conclusions in this case I have taken into account all of the submissions, both oral and written, made to me by the parties.
5.2 The respondent claimed that the complainant's assertions that it only employed younger female solicitors was not only incorrect, but also had no relevance to a claim for equal pay. I agree with the respondent's argument in this regard and will therefore only consider his claim for equal pay with Ms M. There are two matters to be considered: (a) were there objective nondiscriminatory reasons for the level of remuneration paid to Ms M?; (b) if not, was the complainant in fact paid more than Ms M, as argued by the respondent?
5.3 The first matter therefore is consideration of the respondent's arguments that it can avail of the exemptions provided for in section 19 (5) and 29 (5), quoted in 2.4 and 2.5 above.
5.4 The respondent provided a large amount of internal documentation dealing with the corporate restructuring. An internal memorandum dated 26 September 2001, from the Head of Group Risk to the Head of Credit Risk and copied to several other people including the complainant, emphasised the necessity to complete the retaking of securities within three months and pointed out the cost implications for the respondent as the relevant legal fees would not be charged to customers. Possible alternatives for completing the work were seconding one solicitor in each jurisdiction or re-engaging recently departed Managers or Area Directors. Each recipient of the memorandum was asked to put forward a structure as to how the matter should be progressed.
5.5 In an email to Credit Evaluation dated 1 October 2001, the complainant said that a member of staff on his office would be on holiday so the office would be put under more pressure. He went on to say "As [Ms M] may be available, it may be worth our while contacting her...we need to get the additional staff asap." On the following day, the complainant sent another email saying "[Ms M] called in to see me this morning and I discussed with her the possibility of her coming back to us...[she] is prepared to help out...at an hourly rate of £40 which reflects the package she had with [her former employer]. Please let me know if this is acceptable to the Bank..."
5.6 Credit Evaluation copied this email to the steering committee dealing with the restructuring, saying that "[Ms M] used to work within the Solicitors Dept...She is quite capable of undertaking the work correctly and quickly...It is now the call of the steering committee as to whether they wish to cover this cost. We really have little choice but to employ someone. There is insufficient resources within the Solicitors Dept to undertake this work themselves so we have to buy in the skill."
5.7 Following a request from the steering committee for an estimate of the cost of completion of the project, the complainant responded by email dated 12 October 2001, wherein he said he understood the amount of £40 per hour "will be equivalent to the rate paid in STG£ in the North to [a relief solicitor]." He went on to say "In my view it is imperative that we obtain the services of [Ms M] without delay as she knows the ropes and can work completely unsupervised because of her previous experience in this department and in [her former employer]." The steering committee notified the complainant on 17 October that the temporary appointment had been approved.
5.8 The complainant denied at the hearing that he had suggested Ms M for the position. He had in fact hoped to engage another solicitor, but he had been unavailable, and Ms M's name was suggested by others. I acknowledge his argument that the decision to offer the contract to Ms M was taken by the steering committee and that his involvement was restricted to making contact with her, whoever suggested her name.
5.9 The documents provided clearly demonstrate that there was an urgency about the employment of an extra lawyer, that the timescale did not permit the employment of someone without specific experience in the field, and that Ms M herself stipulated that she be paid at the rate of £40 per hour. In the circumstances, I cannot find that the respondent had any choice but to agree to her terms. I am satisfied that there were objective non-discriminatory reasons, unconnected with gender or age, for the hourly rate of remuneration paid to Ms M. Consequently, I do not need to consider the arguments as to whether the complainant's rate of pay was actually higher than that paid to the comparator.
6. DECISION
6.1 Based on the foregoing, I find that Ulster Bank Ireland Ltd did not discriminate against Mr Brian Glen on the basis of his pay in terms of section 19 and section 29 of the Employment Equality Act, 1998.
_____________________
Anne-Marie Lynch
Equality Officer
26 April 2004