DEC-E2004-054 Full Case Report

Mr. Owen McLaughlin vs Department of Finance

1. DISPUTE

1.1 The dispute concerns a claim on the grounds of age by Mr. Owen McLaughlin against the Department of Finance that he is entitled to the same rate of remuneration as that paid to two named comparators in terms of Section 7 of the Employment Equality Act, 1998.

2. BACKGROUND

2.1 The complainant commenced employment in the Civil Service as a Clerical Officer on 12th February, 2001. Then on 14th May, 2001 he was appointed to the position as a contract Executive Officer (hereinafter referred to as EO) on a temporary basis for one year and he was attached to the Department of Justice, Equality and Law Reform. At the time of his appointment as a contract EO the complainant was 21 years old. The two named comparators were appointed to contract EO positions on 5th and 11th June, 2001. At the time of their appointment one was 24 years old and the other was nearly 24 years old. The complainant alleges that he performs 'like work' with these two named comparators yet they are in receipt of a higher salary. It is his contention that the difference in pay is related to his age. The respondent denies the allegation.

2.2 Consequently the complainant referred a complaint under Section 7 of the Employment Equality Act, 1998 to the Director of Equality Investigations on 23rd September, 2003. In accordance with her powers under Section 75 of that Act the Director then delegated the claim to Gerardine Coyle, Equality Officer on 31st March, 2004 for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part VII of the Act. A preliminary joint hearing took place on 2nd June, 2004 at which the respondent accepted that the complainant performed 'like work' with the named comparators and held that there were 'grounds other than age' in accordance with Section 29(5) of the Employment Equality Act, 1998 for the difference in pay between the complainant and the named comparators. As a result the respondent submitted its arguments by way of submission and the complainant responded also by way of submission. A further joint hearing took place on 19th August, 2004. Additional information was received from the respondent and the final information was received on 31st August, 2004.

3. SUMMARY OF THE RESPONDENT'S SUBMISSION

3.1 The respondent notes that Section 34(6) of the Employment Equality Act, 1998 sets out the requirement that age-related remuneration be eliminated by 18th October, 2002 and to comply with this provision it did not include references to age points in its circular 31/2002 which contained revised rates of pay for civil servants with effect from 1st October, 2002. The respondent states that the Civil Service Unions subsequently entered discussions which resulted in an agreement on the shortening of the Executive Officer (hereinafter referred to as EO) pay scale by the elimination of the previous minimum. This agreement also covered assimilation of serving staff onto the new scale and incremental dates for such staff. It is the respondent's contention that it complied with the requirements of the Employment Equality Act, 1998 by its actions in the elimination of age related remuneration.

3.2 The respondent notes that the complainant is alleging that two other contract workers who are older than him earn €27,154 while his salary is €24,670. It is accepted that they all perform like work with each other. According to the respondent the complainant is a temporary unestablished EO employed on a temporary basis to perform the same work as the civil service grade of EO and the pay scale for EO applies to him. Initially these posts were sanctioned for one year only and the full EO scale did not apply. However the sanction was subsequently extended and the full scale applied.

3.3 The respondent states that the relevant pay scales are as follows:

The respondent notes that there are no age points since 1st October, 2002 and that the scale was shortened by one point with the removal of the previous minimum on 18th October, 2002. According to the complainant was appointed to the first point of the scale in May, 2001 by virtue of his age at a time when age differentiated starting pay was permissible. He moved to the second point of the scale on his birthday on reaching age 22 and was offered a further contract on this basis in May, 2002. The complainant's salary on 15th May, 2002 was the second point of the EO (age 22) and he was on that point from his previous birthday. The respondent notes that there was no legal prohibition on age differentiated pay in May, 2002.

3.4 The respondent states that prior to the passage of the Protection of Employees (Fixed-Term Work) Act, 2003 the rules governing incremental progression for temporary unestablished staff were governed by a General Council Agreed Report. This provides that a temporary civil servant who attains two years service may be granted two increments with effect from the date on which the service requirement is satisfied. The respondent says that such individuals did not receive an increment at the end of their first year but received a double increment on the completion of two years service. Therefore an individual who was placed on the third point of the scale would not have received any increase at the end of their first year but would have progressed to the previous fifth (current fourth) point at the end of two years service. The respondent says that this should have happened to the two comparators named by the complainant i.e. this double increment should have been paid with effect from the completion of the two years service. However it was backdated resulting in an overpayment of one increment which it is intended to recoup. In the complainant's case the respondent says that age related pay scales superseded the provisions of the General Council agreement. The complainant received increments on his birthday so the double increment at the end of two years did not apply. The respondent notes that the complainant received the first increment on his birthday after less than two years' service and this places him in a more favourable position than other contract staff who did not benefit from age related increments and who had to wait two years to receive any increments.

3.5 The respondent denies that it discriminated against the complainant on the grounds of his age in relation to pay. The rules applied in assimilating him to the new shortened scale were exactly the same as the assimilation arrangements applied to all persons including the named comparators. The respondent notes that the application of the same rules to the different age situations does not affect which point the individual is placed and therefore there can be no discrimination. It is the respondent's contention that the complainant has failed to establish a prima facie claim of discrimination on the grounds of age and on that basis the respondent submits that the burden of proof is not transferred to it. Without prejudice to this argument the respondent submits that the different rates of pay arise from and are justified by the fact that the individuals concerned had to be assimilated onto a new pay scale which did not have any age differentiation on 18th October, 2002 in accordance with the Employment Equality Act, 1998. The point on the scale prior to the assimilation was the only factor in deciding where the individual should be placed on the revised scale. The respondent says that the fact that some individuals were on higher points than others prior to assimilation arose from a combination of service and age at a time when legislation allowed age differentiated pay scales and was not the result of discrimination on grounds of age within the meaning of the Employment Equality Act, 1998.

4. SUMMARY OF THE COMPLAINANT'S SUBMISSION

4.1 The complainant contends that he has established a prima facie claim of discrimination on the grounds of age given that the respondent accepts that 'like work' exists between that performed by him and the named comparators yet they are in receipt of a higher salary. It is the complainant's contention that the variation arises from the age related incremental progression prior to October, 2002 and the subsequent assimilation of this system into a new scale of incremental progression which came into effect as a result of the Employment Equality Act, 1998.

4.2 According to the complainant temporary, unestablished, contract staff are restricted to the first five points of the Civil Service EO pay scale². The complainant notes that the pay scale which temporary, unestablished, contract staff are on, relates to the salaries for those recruited before 6th April, 1995 and not the EO pay scale for those recruited after 6th April, 1995. In this regard the complainant states that he and the named comparators are in a distinct category and actually receive less than Civil Service EO as they make full PRSI contributions. The complainant notes that he received no double increment on the completion of two years service as a contractual employee while the two named comparators did receive this double increment. The complainant does not accept that the arrangements have been more beneficial to himself given that he has not received a double increment and despite receiving age related increments up to October, 2002 he still continues to receive substantially less than other contract staff who have less service than himself.

4.3 The complainant submits that the assertion that a person of 'any age' would progress to the relevant point on the revised scale is incorrect and is based on false reasoning. The complainant notes that the respondent clearly states that the fact that some individuals were on higher points than others prior to assimilation arose from a combination of service and age at a time when legislation allowed age differentiated pay scales. In this regard the complainant says that as he is among the longest serving temporary unestablished contract workers in his office and he has more service than either of the two named comparators then the only factor which accounts for his lower salary prior to the time when legislation allowed age differentiated pay scales, was his age. Taking these facts in conjunction with the respondent's assertion that the point on the pay scale prior to assimilation was the only fact in deciding where an individual should be placed on the revised pay scale the complainant is adamant that his position on the revised Civil Service pay scale was solely determined on the basis of his age. The complainant therefore contends that he has been and continues to be the subject of age discrimination. According to the complainant despite having more service than the two named comparators he still finds himself on the second point of the revised pay scale while the two named comparators are on the fourth point of that same pay scale. The complainant submits that the procedures followed by the respondent in order to incorporate him into the revised pay scale were based on age resulting in discrimination on the grounds of age.

5. CONCLUSIONS OF THE EQUALITY OFFICER

5.1 The issue for decision in this claim is whether or not there are grounds other than age within the meaning of Section 29(5) of the Employment Equality Act, 1998 for the difference in pay between the complainant and the two named comparators. I note that the respondent accepts that 'like work' exists between the complainant and the two named comparators in terms of Section 7 of the 1998 Act. In making my decision in this claim I have taken into account all of the information, both written and oral, made to me by the
parties.

5.2 Firstly I do not accept the respondent's argument that the complainant has failed to establish a prima facie claim of discrimination in this case. The onus is on the complainant to show that he performs 'like work' with the two named comparators in terms of Section 7 of the Employment Equality Act, 1998 and that the reason for the difference in pay is related to one of the grounds under the 1998 Act and in this case age is cited. As the respondent has accepted the complainant's contention that he performs 'like work' with the named comparators the onus then shifts to the respondent to show that there are 'grounds other than age' for the difference in pay between the complainant and the named comparators.

5.3 The history of the progression of the complainant and the named comparators up the pay scale following their appointments as contract EOs is set out in Appendix A. It is clear from this information that the complainant was subject to age-related pay scales following his appointment while the named comparators were above the ages set out in the pay scales and therefore were paid at a higher salary. Under Section 34(6) of the Employment Equality Act, 1998 the respondent had a period of three years from 18th October, 1999 in which to put in place arrangements to bring to an end age-related remuneration. As can be seen from the information supplied at paragraph 3.3 above and also set out again in Appendix A the respondent revised it pay scales on 1st October, 2002 to remove age-related remuneration and then on 18th October, 2002 it reduced the pay scale from 11 points to 10 points and retained the two long service increments. I am, therefore, satisfied that the respondent conformed with its requirements under the 1998 Act to bring to an end age-related remuneration within the three year period.

5.4 It is the complainant's contention that, while the respondent has no longer agerelated pay scales, his remuneration is still lower than the two named comparators despite the removal of age-related remuneration and also because of the fact that he had been subject to age-related remuneration. The respondent denies that it has discriminated against the complainant on the grounds of his age in relation to his pay. According to the respondent the complainant was paid on the basis of the age-related pay scales when he was appointed to the position of a contract EO in May, 2001 and at this time it was not unlawful to operate age-related pay scales. Then in accordance with the requirements under the Employment Equality Act, 1998 the respondent amended its pay scales to remove references to age and it treated all employees in the same manner. The complainant and all other members of staff who had been subject to the age provisions on the pay scales were moved to the new pay scales in the same way. In the complainant's case he commenced on the first point of the scale at the age of under 22. At his following birthday (some 10 months later) he moved to the second point on the scale i.e. at age 22. When age was removed from the pay scales the complainant remained on the second point of this new scale. This new scale was shortened by one point on 18th October, 2002 and the complainant was placed on the first point of the scale and moved to the second point of this new scale on his birthday (27th March, 2003) which had been his increment date. Then on 27th March, 2004 the complainant progressed to the third point of this scale. By comparison the two named comparators were not subject to the agerelated point on the pay scale as one was 24 years of age and the other was almost 24 years of age at the time of their appointments. On their appointment dates 5th and 11th June, 2001 respectively they were placed on the third point of the pay scale (at 23 or over). At the end of their first year of service they received no increment and so stayed on the third point of the scale one year later on 5th and 11th June, 2002. Then on 18th October, 2002 with the shortened pay scale they moved to the second point of the scale and at 5th June, 2003 they received two increments in accordance with General Council Report 1301 to move to the fourth point of the pay scale. By June, 2004 these two named comparators had moved to the fifth point of the pay scale, two increments ahead of the complainant.

5.5 At the hearing of this claim the complainant noted that he did not receive any written confirmation from the respondent that he was placed on the EO pay scale. On appointment his contract noted that there were five points on his pay scale. The complainant accepted that the Union had entered into agreements with management in relation to pay but he stated as follows:

"to say that, ordinarily, a rule of general application, is not discriminatory, is not to deny that general rules, which are apparently non-discriminatory, may impact differently on
different people and, thus, operate discriminatorily".

According to the complainant he was moved over from the old pay scales (i.e. age-related)to the new pay scales (non age-related) but the move over was still determined by age. The respondent accepts that it was not clear in his appointment contract that his pay was based on the EO pay scale. However it notes that the complainant received all the increases (e.g. benchmarking) which EOs received. Furthermore the respondent held that the complainant, the named comparators and all his colleagues affected by the change were treated the same irrespective of their age.

5.6 It is understandable the complainant's view that the move from the old pay scale was determined by his age. However an issue of a somewhat similar issue to this was addressed in the Health sector where segregated pay scales on the basis of gender were in operation. An Equality Officer Recommendation³ held that with effect from the repeal of Sections 17(2)(c) and 17(2)(d) of the Employment Equality Act, 1977 in September, 1982 the practice of promoting on the basis of segregated panels was contrary to the provisions of Section 2(a) and 3 of the 1977 Act. The Equality Officer recommended immediate discussions on a new system of promotion which would comply with the provisions of the 1977 Act. As a result a Joint Union/Management Forum was set up to devise new employment practices to include an alternative system to ensure compliance with the law. A subsequent claim for equal pay in the case of 3 Named Male Employees v Eastern Health Board⁴ found that an agreement was reached between Unions and Management on the criteria to be applied equally to both male and female staff in relation to promotion and the Equality Officer in that case was satisfied that the criteria set was applied equally to all staff members irrespective of their gender. In this case the respondent moved from age-related pay scales to pay scales which were not related to age. In moving existing staff members from the original age-related pay scales to non age-related pay scales the same criteria was adopted for all staff irrespective of their ages. In effect all staff transferred to the new scale at a level not less than their existing pay (i.e. a standard non-regression principle). I am therefore satisfied that the respondent fulfilled its requirement to conform with the provisions of the Employment Equality Act, 1998 by removing age-related remuneration and that the new pay scales were applied to all staff in a similar manner irrespective of age. The 'ground other than age' for the difference in pay is the non-regression principle.

5.7 Section 29(4) of the 1998 Act defines indirect discrimination (non-gender) (pay) as follows:

"(4) Where a term of a contract of employment or a criterion applied to employees (including C and D) -
(a) applies to all employees of a particular employer or to a particular class of such employees (including C and D),
(b) is such that the remuneration of those who fulfil the term or criterion is different from that of those who do not,
(c) is such that the proportion of employees who can fulfil the term or criterion is substantially smaller in the case of the employees having the same relevant characteristic as C when compared with the employees having the same relevant characteristic as D, and
(d) cannot be justified as being reasonable in all the circumstances of the case,

then, for the purposes of subsection (1), C and D shall each be treated as fulfilling or, as the case may be, as not fulfilling the term or criterion, whichever results in the higher remuneration".

To argue that he had been indirectly discriminated against by the respondent the complainant would have to show that a criterion (which was not in itself directly about age) applied to employees including himself and the named comparators after 18th October, 1999 which resulted in them being paid differently; that the proportion of employees of his age able to satisfy the criterion was substantially smaller than the proportion of employees of the name comparator's age able to satisfy it, and that the criterion could not be justified as reasonable in all the circumstances of the case. The only criterion determining the difference between the complainant's and the named comparator's pay after 18th October, 1999 is the pay scale. The nonregression principle as adopted by the respondent can be justified as being "reasonable in all the circumstances of the case". On this basis I find that the complainant has failed to make out a claim of indirect discrimination within the meaning of Section 29(4) of the 1998 Act.

6. DECISION

6.1 In view of the foregoing I find that the Department of Finance did not discriminate against Mr. Owen McLaughlin in relation to his remuneration in terms of Sections 7 and 29 of the Employment Equality Act, 1998.

______________________
Gerardine Coyle
Equality Officer
10th September, 2004

APPENDIX A

Details of Pay to Complainant and to the Named Comparator

Details of Pay Scales

Details of Pay to the Complainant and the Named Comparators:

2 General Council Report - 1301

3 Equality Officer Recommendation - EE14/1983

4 Equality Officer Recommendation - 3 Named Male Employees v Eastern Health Board -EP 14/1998(Upheld by the Labour Court - DEP002)