EDA068

Background to the Issue in Dispute

The Programme for Prosperity and Fairness (PPF) provided for the establishment of a Public Service Benchmarking Body to examine Public Service pay and jobs and to make recommendations thereon. The Body issued its report on 30th June 2002. It recommended pay increases of various amounts for different grades of Civil Servants. In the case of Clerical Officers the Body recommended increases of 8.5%. In the case of the higher grades of Assistant Principal Officer and Principal Officer, it recommended increases of 13.8% and 11.7% respectively.

The successor to the PPF, Sustaining Progress, provided for the phased implementation of the increases recommended by the Benchmarking Body.

In parallel with the work of the Benchmarking Body a similar exercise was undertaken in respect of Craft Workers employed in the Public Service. This exercise resulted in an increase in pay of 17% for those affected.

Proceedings before the Court

It was submitted by the Respondent that if the Director was wrong in her decision the correct course would be for the Court to remit the matter to the Director for consideration of the substantive questions at issue.

It is noted that Section 83(5) of the Act provides, in effect, that where the Court determines an appeal from the Director on a preliminary issue, under Section 79(5) of the Act, in favour of the Complainant, the case shall be referred back to the Director for an investigation of the substantive issues. The decision under appeal in this case was given under Section 87 of the Act. That Section does not expressly provide for the issuing of a preliminary decision by the Director nor does it contain any provision corresponding to that at Section 83(5).

It is, however, clear from a reading of Sections 86 and 87 as a whole that parties are entitled to a full hearing at first instance of all issues arising in a complaint referred to the Director under Section 86 and are also entitled to a fullde novoappeal to this Court. If the Court were to conclude that the Director did have jurisdiction to consider the substantive questions put in issue by the Complainants the result envisaged by the Oireachtas could only be achieved by remitting the case of the Director for a full hearing at first instance.

Accordingly, the Court is satisfied that it should apply, by analogy, the provisions of Section 83(5) to the present case. Hence, the only matter which the Court can consider in this appeal is whether a valid reference, capable of being investigated under Section 86 of the Act, was referred to the Director.

The Position of the Parties

The Complainants are Clerical Officers in the Civil Service, which is a predominantly female grade. The grade of both Assistant Principal Officer and that of Principal Officer are predominantly male. The Complainants contend that the outcome of the process, in so far as it disadvantaged predominantly female grades, was discriminatory on gender grounds. They referred a complaint to the Director seeking to have what they regard as the offending provisions of the report of the Benchmarking Body declared null and void. The Complainant further contend that the parallel benchmarking exercise as applied to Craft Workers, who are predominantly male, is an additional source of discrimination and they seek to impugn this process also.

The Complainants do not contend that either the PPF or Sustaining Progress are collective agreements. Nor do they contend that the report of the Benchmarking Body is itself a collective agreement. They submitted that the combined effect of all three instruments, in so far as they determine the pay of Civil Servants, constitute a collective agreement between the Civil Service Trade Unions and the Government as an employer, represented by the Department of Finance. They advanced the argument that having identified the discrimination of which they complain, namely the unequal pay increases afforded to women as against men, it was for the Director to identify the agreement from which that discrimination is derived and to declare it void.

The Respondent contended before the Director and contended equally before this Court that the report of the Benchmarking Body is not a collective agreement and does not come within the ambit of Section 86 of the Act. The Respondent further contended that it is for the Complainants to identify the agreements and the provisions thereof which they claim are null and void by virtue of Section 9. The Respondent maintained that the Complainants have not referred any identifiable collective agreement to the Director and have not asked the Director for relief which she could grant. On that point the Respondent submitted that the Complainant did not identify any provision of a collective agreement which they wish to have declared null and void on grounds of discrimination.

General Observations

The net point for consideration by the Court in this case is whether a valid complaint has been referred to the Director on which her jurisdiction under Section 86 of the Act could be founded. The Court is not aware of any previous case in which the applicability of Section 86 was considered by the Court or by the Equality Tribunal. As this is the first application of its type to come before the Court, and as the general principles relating to the application (but not the fact and issues arising in the substantive complaint) were fully argued by the parties, the Court considers it appropriate to set out, in general terms, its opinion on a number of considerations relevant to the net point at issue.

The Legal Context

The Act gives effect in domestic law to the provisions of Article 141 (ex 119) of the EC Treaty, as elaborated by Directive 75/117/EC on the Approximation of Laws of the Member States Relating to the Application of the Principle of Equal Pay for Men and Women. InDefrenne v Sabena [1976] ECR 455, the ECJ made it clear that the principle of equal pay forms part of the foundations of the Community. The right to equal pay must, therefore, be regarded as a fundamental right of every citizen of the Community which must be fully protected and vindicated by the Members States.

Article 10 of the Treaty obliges Member States to take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. The ECJ has made it clear in its case law that this obligation extends to all the institutions of the Member States, including in matters within their jurisdiction, the Courts. Thus courts and tribunals of the Member States must interpret and apply their national law in a way which ensures the full effectiveness of European law (see in particularAmministrazione delle Finanze dello Stato v Simmenthal[1978] ECR 629).

The Court must apply that general principle in its approach to the present case.

The Act of 1998 provides a homogeneous range of measures intended to ensure the effective application of the principle of equal pay. The primary and most powerful measure which it provides is the jurisdiction given to the Director by Section 77 of the Act to investigate complaints from individuals who consider themselves wronged by being denied equal pay. This jurisdiction is coupled with the broad powers to award redress conferred on the Director by Section 82 of the Act. It is clear from a perusal of the relevant Sections of the Act that the jurisdiction of the Director under Section 86 could not be regarded as in any sense analogous to the investigative powers with which she is invested by Section 77.

The jurisdiction of the Director under Section 86 of the Act is complementary to that conferred on her by Section 77, but cannot be used as an alternative route to obtain the same result as is available in an application under Section 77. It is clear that the redress available to a successful applicant under Section 86 is purely declaratory and no substantive redress can be ordered by way of compensation or otherwise. Section 87(1)(b) of the Act allows the Director, if she considers it appropriate, to provide guidelines to the parties to an agreement on how a void provision might be recast. This power is significantly less potent than that conferred on the Director by Section 82(1) of the Act which allows her,inter alia, to order any person to take such measures are necessary to comply with the Act.

It is also clear from the wording of Section 9(1) of the Act, which is considered later in this Determination, that a provision in an agreement or order which offends against the principle of equal pay, is voidab initio(from its beginning). Its invalidity is not dependant on a declaration to that effect by the Director under Section 87. Thus a provision in an agreement or order which offends against Section 9, could never be relied upon in defence of a claim brought under Section 77 of the Act. This applies whether or not the offending provision has been the subject of a prior investigation under Section 86.

Thus, it is clear that while a complainant in an equal pay claim may be assisted by a declaration in her favour under Section 87 of the Act, her claim could never be defeated by the absence of such a declaration. In that sense Section 86 is complementary to Section 77 but serves a separate purpose within the legislative scheme.

Statutory Provisions

There are a number of statutory provisions which arise for consideration in this case.

The main provision is to be found at Section 9(1) of the Act. This provides: -

• 9.—(1) In a case where—
  

• (a) an agreement or order to which this section applies contains a provision in which differences in rates of remuneration are based on any of the discriminatory grounds, and
  
  (b) in relation to a person to whom the agreement or order relates, that provision conflicts with an equal remuneration term in that person's contract of employment, then, subject to subsection (4), that provision shall be null and void.
  
  

• 
  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.

• 
  (3) This section applies to the following agreements and orders, whether made before or after the coming into operation of this section:
  
  (a) collective agreements;
  
  (b) employment regulation orders, within the meaning of Part IV of the Industrial Relations Act, 1946; and
  
  (c)registered employment agreements, within the meaning of Part III of that Act.
  

• 86.—(1) If the Authority or a person who is affected by a collective agreement claims that a provision of that agreement is null and void by virtue of section 9, the Authority or that person may refer the question of that agreement to the Director; and in this section (and section 87) the Authority or the person making such a reference is referred to as "the complainant".
  
  Subsection (2) of Section 86 provides:
  
  (2) For the purposes of this section (and section 87)—
  
  • (a) the expression "collective agreement" shall be taken to include an order or agreement falling within paragraph (b) or (c) of section 9 (3),
    
    (b) a person is affected by a collective agreement if that person is an employee whose remuneration or whose conditions of employment are, in whole or in part, governed by the agreement (or any part of it), and
    
    (c) "the respondents" means the parties to the agreement, other than (where relevant) the complainant.
    
    

• 87.— (1) Where a collective agreement is referred to the Director under section 86, it shall be the purpose of—
  
  • (a) mediation by an equality mediation officer under subsection (3) of that section, or
    
    (b) a decision of the Director under subsection (4) of that section,
    
    • to identify which (if any) provisions of the agreement are null and void by virtue of section 9 and, if the equality mediation officer or, as the case may be, the Director thinks it appropriate, to provide guidance to the parties to the agreement as to how alternative or amended provisions might be devised which it would be lawful to include in the agreement.
      

• “Member States shall take the necessary measures to ensure that provisions appearing in collective agreements, wage scales, wage agreements or individual contracts of employment which are contrary to the principle of equal pay shall be, or may be declared, null and void or may be amended.”

• “The principle of equal pay for men and women outlined in Article 119 [now 141] of the Treaty, hereafter called the “principle of equal pay” means that for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration”.

The Approach of the Court

From this legal framework the following principles emerge: -

1. Where a provision in a collective agreement comes within the ambit of Section 9 it is voidab initiowhether or not it has been the subject of a declaration to that effect under Section 87.

2. A reference under Section 86 must relate to a provision in an agreement as defined by Section 9 and the subject matter of the complaint must be that the impugned term of the agreement provides for unequal pay for like work.

3. The Complainant must be a person whose pay or conditions of employment are governed by the impugned agreement.

4. The term “collective agreement” was not defined by the Act at the material time. While the term must be given a wide meaning in line with Article 4 of Directive 75/117/EC, it can only relate to an agreement fixing pay and / or conditions of employment. It follows that the parties to the agreement must be employers and workers or their Trade Unions.

5. It is for the Complainant to identify the instrument which they wish to have investigated and to establish in aprima facieway the basis upon which they contend that it offends against Section 9 of the Act.

Conclusions of the Court

Pay Determination System.

The substance of the claim made by the Complainant is that the report of the Benchmarking Body was discriminatory in that it provided higher increases for predominantly male grades, such as Assistant Principal Officers and lower increases to the predominantly female grade of Clerical Officer. They also contended that the process was wholly lacking in transparency in that no reasons were given for the increases awarded and no information was published on the methodology used by the Body to arrive at its recommendations. The Complainants also contrasted the more favourable criteria used in parallel benchmarking, which applied to Craft Workers who are mainly men, with that used in their case and to the higher increases recommended for Craft Workers.

The Union contended that the Director and the Court should look at the totality of the pay determination system in the Civil Service, which includes the benchmarking exercise, so as to ensure that pay discrimination is not being practised. They advanced the argument that a pay determination system which is lacking in transparency isprima faciediscriminatory and that the outcome of such a system should be struck down unless the Respondent can show that the process was not tainted by unlawful discrimination. In support of this contention the Union referred the Court to the decision of the ECJ in Case C- 127/92 Enderby v Frenchay Health Authority and Secretary of State for Health Authority[1993] ECR 5535 and in Case 109/88Handels- og Kontorfunktionaerernes Forbund I Danmark v Dansk Arbejdsgiverforening, acting on behalf of Danfoss[1989] ECR 3199(Danfos).

The Case Law

The Court has considered both authorities.Enderbyconcerned an equal pay claim brought by a speech therapist against the respondent health authority. The Complainant argued that the members of her profession, which was overwhelmingly female, were paid appreciably less than members of comparable professions whose jobs were of equal value to hers. Dr Enderby cited, in particular, the higher pay received by clinical psychologists and pharmacists which were professions in which, at an equivalent professional level, there were more men than women. The Respondent countered that the difference in pay arose from different collective bargaining arrangements which was a ground other than sex. A question also arose as to which party should bear the burden of proving that the difference in pay was sex based. In its reply to the questions referred by the Court of Appeal for England and Wales the ECJ ruled as follows: -

• 16. However, if the pay of speech therapists is significantly lower than that of pharmacists and if the former are almost exclusively women while the latter are predominantly men, there is a prima facie case of sex discrimination, at least where the two jobs in question are of equal value and the statistics describing that situation are valid.
  
  17. It is for the national court to assess whether it may take into account those statistics, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short-term phenomena, and whether, in general, they appear to be significant.
  
  18. Where there is a prima facie case of discrimination, it is for the employer to show that there are objective reasons for the difference in pay. Workers would be unable to enforce the principle of equal pay before national courts if evidence of a prima facie case of discrimination did not shift to the employer the onus of showing that the pay differential is not in fact discriminatory (see, by analogy, the judgment in Danfoss, cited above, at paragraph 13).
  
  19. In these circumstances, the answer to the first question is that, where significant statistics disclose an appreciable difference in pay between two jobs of equal value, one of which is carried out almost exclusively by women and the other predominantly by men, Article 119 of the Treaty requires the employer to show that that difference is based on objectively justified factors unrelated to any discrimination on grounds of sex.
  

• 20. In its second question, the Court of Appeal wishes to know whether the employer can rely as sufficient justification for the difference in pay upon the fact that the rates of pay of the jobs in question were decided by collective bargaining processes which, although carried out by the same parties, are distinct and which, considered separately, have no discriminatory effect.
  
  21. As is clear from Article 4 of Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women (OJ 1975 L 45, p. 19), collective agreements, like laws, regulations or administrative provisions, must observe the principle enshrined in Article 119 of the Treaty.
  
  22. The fact that the rates of pay at issue are decided by collective bargaining processes conducted separately for each of the two professional groups concerned, without any discriminatory effect within each group, does not preclude a finding of prima facie discrimination where the results of those processes show that two groups with the same employer and the same trade union are treated differently. If the employer could rely on the absence of discrimination within each of the collectivebargaining processes taken separately as sufficient justification for the difference in pay, he could, as the German Government pointed out, easily circumvent the principle of equal pay by using separate bargaining processes.
  
  23. Accordingly, the answer to the second question is that the fact that the respective rates of pay of two jobs of equal value, one carried out almost exclusively by women and the other predominantly by men, were arrived at by collective bargaining processes which, although carried out by the same parties, are distinct, and, taken separately, have in themselves no discriminatory effect, is not sufficient objective justification for the difference in pay between those two jobs.
  

• 10. It is apparent from the documents before the Court that the issue between the parties to the main proceedings has its origin in the fact that the system of individual supplements applied to basic pay is implemented in such a way that a woman is unable to identify the reasons for a difference between her pay and that of a man doing the same work . Employees do not know what criteria in the matter of supplements are applied to them and how they are applied . They know only the amount of their supplemented pay without being able to determine the effect of the individual criteria . Those who are in a particular wage group are thus unable to compare the various components of their pay with those of the pay of their colleagues who are in the same wage group .
  
  11. In those circumstances the questions put by the national court must be understood as asking whether the Equal Pay Directive must be interpreted as meaning that where an undertaking applies a system of pay which is totally lacking in transparency, it is for the employer to prove that his practice in the matter of wages is not discriminatory, if a female worker establishes, in relation to a relatively large number of employees, that the average pay for women is less than that for men .
  

• 14. Finally, it should be noted that under Article 6 of the Equal Pay Directive Member States must, in accordance with their national circumstances and legal systems, take the measures necessary to ensure that the principle of equal pay is applied and that effective means are available to ensure that it is observed. The concern for effectiveness which thus underlies the directive means that it must be interpreted as implying adjustments to national rules on the burden of proof in special cases where such adjustments are necessary for the effective implementation of the principle of equality.
  
  15. To show that his practice in the matter of wages does not systematically work to the disadvantage of female employees the employer will have to indicate how he has applied the criteria concerning supplements and will thus be forced to make his system of pay transparent .
  
  16. In those circumstances the answers to Questions 1 ( a ) and 3 ( a ) must be that the Equal Pay Directive must be interpreted as meaning that where an undertaking applies a system of pay which is totally lacking in transparency, it is for the employer to prove that his practice in the matter of wages is not discriminatory, if a female worker establishes, in relation to a relatively large number of employees, that the average pay for women is less than that for men.
  

Parallel benchmarking

The Court notes that the Union have also sought to rely on the different outcome which Craft workers derived from the parallel benchmarking exercise. They nominated a comparator whose pay is determined by that process.

Two points arise from this later referral. Firstly, the Complainants cannot impugn the parallel benchmarking process even it could be considered a collective agreement because their pay is not determined by that process (see Section 82(2)(b) ). Secondly, as already stated in this Determination, an application under Section 86 of the Act is not analogous to an equal pay claim and the Section does not provide an alternative means of pursuing such a claim.

If the Complainants wish to pursue an equal pay claim under Section 77 of the Act in reliance on Section 19, and cite as a comparator a man whose pay is determined by parallel benchmarking, they could, of course, mount a collateral attack on both pay determination systems if they were raised in defence of unequal pay for equal work. However, in the instant case, the parallel benchmarking process, even if it were a collective agreement (and the Court makes no such finding) could not be investigated by the Director nor by this Court having regard to the clear provisions of Section 82(2)(b).

Report of the Benchmarking Body

While the Union made extensive and wide ranging arguments on behalf of the Complainants the essence of their case is encapsulated in the concluding paragraphs of their written submission in the following terms: -

• “In conclusion the Union is asserting on behalf of the eight claimants that the Benchmarking Body outcome forms a collective agreement in the context of the Civil Service and that this collective agreement is discriminatory against women for the following reasons;
  

National Partnership Agreements

Both PPF and Sustaining Progress are referred to as Social Partnership Agreements. They are made between a number of social partners including Government, both in its Constitutional capacity and as an employer. They deal with a range of social and economic issues including pay. In so far as these agreements have parties who are not employers and deal with issues other than pay and conditions of employment, they could not be classified as collective agreements properly so called.

However, even if the pay provisions in both agreements which relate to the Public Service could be regarded as a collective agreement between the Government as an employer and the Public Service Unions, (and the Court makes no finding on this point) the Union have not referred to any provision of either document which could be construed as contravening an equal remuneration term in the Complainants’ contracts of employment. In the case of PPF paragraphs 9 to 16, inclusive, of Framework I, Annex II, provided for the setting up of a Benchmarking Body and defined its role. In the case of Sustaining Progress, Paragraph 19.9 of the section dealing with Public Service pay provides for the phased payments of the increases recommended by the Benchmarking Body. Paragraphs 19.20 to 19.23, inclusive, deal with associated and ancillary matters relating to the conditions for payment of the increases.

In the Courts view none of these provisions come within the intendment of Section 9 of the Act. Moreover, even if these provisions could be declared a nullity and expunged from the documents in question this could not give the Complainant the redress which they seek. General Council Report 1424 merely gives effect to the provisions of Sustaining Progress and the same consideration apply to this. It follows that none of these instruments could validly form the subject matter of a reference to the Director under Section 86 of the Act. As the report of the Benchmarking Body is not a collective agreement it follows that an instrument capable of being investigated under Section 86 has not been referred to the Director. On this point the Court accepts that a series of instruments, none of which is a collective agreement, can become such an agreement when taken in combination.

Determination

For all of the forgoing reasons the Court is satisfied that the Decision of The Director is correct and should be affirmed. The Unions appeal is disallowed.



Signed on behalf of the Labour Court



Kevin Duffy
22nd June 2006______________________
JOCChairman



NOTE

Enquiries concerning this Determination should be addressed to Joanne O'Connor, Court Secretary.