RUDDY
(REPRESENTED BY MS. CLIONA KIMBER BL
INSTRUCTED BY H O'REILLY & CO - SOLICITORS)
AND
SDS (AN POST)
(REPRESENTED BY MR. ANTHONY KERR BL
INSTRUCTED BY AN POST SOLICITORS)
1. DISPUTE
This dispute involves a claim by Mr. Stanley Ruddy that he was discriminated against by SDS (An Post) on grounds of age, in terms of section 6(2) of the Employment Equality Act, 1998 and contrary to section 29 of that Act, when it refused him access to a owner-driver scheme as part of the respondent's overall restructuring programme in October, 2003.
2. BACKGROUND
2.1 The complainant worked as a Driver with SDS (An Post) from 1980 until his retirement in 2004. In 2002 the respondent began to generate operating losses and following a review of its activities it engaged with the relevant trade union regarding the future of the company. This process resulted in a Collective Agreement between the union and the company. An integral part of the Agreement was a reduction in staff numbers through incentivised voluntary severance and early retirement schemes and the introduction of an owner-driver scheme which was advertised to staff in mid-2003. The complainant was interested in availing of the owner-driver option but states he was prevented from applying for it because it was restricted to certain employees under the age of 60 years and he was over that age at that time. He asserts that this constitutes less favourable treatment of him on grounds of age. The respondent accepts that the owner-driver scheme was restricted to certain employees under 60 years of age but submits that if it had not placed such a restriction on the scheme it would have incurred significant costs and it relies on the defence available at section 34(3) of the Act. Notwithstanding this the respondent argues, inter alia, that (i) the matter is pursuant to a collective agreement and is therefore governed by section 85 of the Act, (ii) the complainant did not formally apply for the scheme and does not therefore have the locus standi to maintain his claim and (iii) the matter is one governed by section 10 of the Act and a claim under that section cannot be maintained by an individual complainant.
2.2 The complainant referred a complaint under the Employment Equality Act, 1998 to the Equality Tribunal on 18 December, 2003. 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. Submissions were received from both parties and a Hearing of the complaint took place on 25 November, 2005, 1 March, 2006, 30 June, 2006 and 21 July, 2006. A number of points arose at the final hearing which required further clarification and gave rise to correspondence between the parties and the Equality Officer for a period.
3. SUMMARY OF COMPLAINANT'S CASE
3.1 The complainant was employed as a driver with the respondent from 1980 until his retirement in 2004. He states that he was a member of the Communication Workers Union (CWU) and he was aware that union was engaged in talks with the respondent during 2003 in respect of a restructuring programme in an effort to address the poor financial position the respondent found itself in at that time. He adds that around June, 2003 he became aware that the respondent was offering a range of termination packages and attended a meeting in the Red Cow Hotel in Dublin. He states that at that time he expressed an interest in the voluntary retirement scheme and not the owner-driver scheme. He subsequently became interested in the owner-driver scheme as it afforded him a more attractive financial package and the possibility of continuing to work as a self employed person. He made enquires from Mr. Tommy Devlin, CWU representative in SDS in September, 2003 and was informed by him that he could not avail of the owner-driver scheme because he was over 60 years of age. The complainant adds that this was subsequently confirmed by Ms. Walsh of the respondent's HR Department when he spoke with her on the phone in November/early December, 2003. The complainant states that he did not therefore make a formal application for the scheme as he considered it a futile exercise. He argues that this should not, however, deprive him of pursuing his case and submits that it would be contrary to the spirit of equality legislation if the respondent was permitted to adopt and operate a discriminatory policy and follow it up with oral confirmation of the impugned practice, thus making it crystal clear a person is not eligible and then seek to rely on the fact that no application was made. In this regard the complainant refers to the Equality Officer decision of Clifford v Aosdana1 . He adds that the Labour Court held in O'Dwyer v Coillte Teoranta2 that the setting of different ages in respect of a severance gratuity constitutes prima facie evidence of discrimination on grounds of age and seeks to rely on that finding in the instant case.
3.2 The complainant accepts that the document "Revised Working Arrangements with CWU for New SDS" is a Collective Agreement. He adds however, that this document does not contain any statement which indicates that the owner-driver scheme is restricted to persons less than 60 years of age. This restriction appears in both the respondent's internal Office Notice dated 3 June, 2003 and its Information Booklet entitled "Owner-Driver Transition Scheme" dated June, 2003. He submits that these documents are not part of the Collective Agreement and merely set out the detailed arrangements for access to the scheme. He contends that the respondent's arguments about provisions in a Collective Agreement are therefore irrelevant.
3.3 The complainant states that the owner-driver scheme was part of a broader programme operated by the respondent to effect a reduction in staff numbers. The scheme would result in those availing of it ceasing to be employees of the respondent before the natural expiration of their employment and as an inducement to apply for the scheme they would receive an immediate lump sum severance payment. In addition, they would have an option to seek work with a new company (Transpost) as a self-employed person, again with some assistance from the scheme. It is the lump sum severance payment that the complainant takes issue with, arguing that he suffered a serious detriment when compared to a colleague (Mr. A) who had similar service to him and was able to avail of the owner-driver scheme because he was under 60 years of age. The complainant submits that it is well settled caselaw at European and national level that any remunerative elements of a person's employment fall within the definition of pay for the purposes of Article 141 of the European Treaty and the Equal Pay Directive3 . He refers in particular to the ECJ judgement in R V Secretary of State for Employment ex parte Seymour-Smyth and Perez4 and the decisions of Equality Officers in Perry v Garda Commissioner5 and O'Dwyer v Coillte Teoranta6 and the decision of the Labour Court on that case on appeal7 . He submits therefore that his complaint is one of equal pay under the Act.
3.4 The complainant rejects the respondent's argument that the Internal Office Notice and Information Booklet constitute an advertisement in terms of section 2 of the Act and he therefore has no cause of action. He states that his claim is not that a discriminatory advertisement was published but that he was less favourably treated on grounds of age in that he did not receive equal remuneration with a named comparator in relation to his employment. He adds that if the respondent's rationale was accepted in this instance a respondent could evade a claim of discriminatory treatment under the Act merely by reducing a potentially discriminatory practice into words and placing that document on a notice board.
3.5 The complainant submits that the defence available to respondent in accordance with section 34(3) of the Act is an exception to the principle of equality and must therefore be strictly construed. He submits that the respondent is attempting ex post facto to argue that opening the owner-driver scheme to employees over 60 years of age would give rise to significant additional costs. He argues that an amount of €577,832 (the additional cost identified by the respondent if no age restriction applied to the scheme) could not be regarded as significant when compared with the €52.5m set aside in the respondent's budget for the entire restructuring programme in 2003 - representing just over 1% of that figure. When compared against other items in the respondent's Annual Account for 2003 the additional cost equates to .3% of An Post assets and .1% of staff costs. In addition, the complainant submits that Decision of the Labour Court in the Coillte case - that the relevant time is the time of the claim in assessing significant costs - is a valid one as it has not been appealed to the High Court and it is therefore a correct statement of the law. He adds that as far as he is aware only two other cases have been referred to the Equality Tribunal concerning this scheme and the Equality Officer should only have regard to those cases in examining the section 34(3) defence, if at all.
4. SUMMARY OF RESPONDENT'S CASE
4.1 The respondent states that it began to generate operating losses in 2002 at a level which was unsustainable and following a review of its activities it engaged with the relevant trade union regarding the future of the company. This process resulted in a Collective Agreement between the union and the company. An integral part of the Agreement was a reduction in staff numbers through incentivised voluntary severance and early retirement schemes and the introduction of an owner-driver scheme which was advertised to staff in mid-2003. The respondent accepts that there was an upper age limit of 60 years on the owner-driver scheme. It produced an Office Notice and separate Information Booklet on the scheme and circulated them through the company. It also held a number of briefing sessions for staff in Dublin hotels. Staff interested in the owner-driver scheme were required to apply between 18 June, 2004 - 4 July, 2003 and a number of designated Support Staff were assigned to assist those employees. The respondent states that there is no record that the complainant spoke with the designated Support Staff for his area nor is there a copy of his application for the scheme and it submits that he does not therefore have the locus standi to maintain his claim before the Tribunal.
4.2 Notwithstanding the arguments set out in the preceding paragraph the respondent submits that the owner-driver scheme was introduced as part of a cost-cutting restructuring arrangement which was agreed between the company and the relevant trade union (CWU). It submits that the Restructuring Agreement (entitled "Revised Working Arrangements with CWU for New SDS") constitutes a Collective Agreement for the purposes of the Act and refers in particular to the definition of Collective Agreement inserted to equality legislation following the enactment of the Equality Act, 2004. It further submits that section 9 of the Act renders any provision in a Collective Agreement which is discriminatory as null and void and the complainant cannot therefore rely on it to ground his claim.
4.3 The respondent rejects the complainant's assertion that his claim is one of equal pay under the Act. It refers to the ECJ judgement in Burton v British Railways Board8 where the Court had to determine, inter alia, whether the fixing of different retirement ages for male and female employees fell to be considered as a pay or treatment issue. It states the Court held that the issue concerned "not the benefit itself" but whether "the conditions of access" was discriminatory and therefore it did not fall to be considered as an "equal pay" case. The respondent submits the fact that the fixing of certain conditions of employment might have pecuniary consequences on an employee is not sufficient to bring it within the realm of an equal pay matter. The respondent further submits that Coillte case is not relevant to the instant case. It contends that in that case Counsel for Coillte conceded that the severance gratuity came within the definition of equal pay and that such a concession is not binding at law. It adds that in any event the Court appears to have viewed the matter as one of equal treatment as it found that other potential complainants were time barred under the Acts. The Court could only make such a finding if it characterised the matter as one of equal treatment.
4.4 The respondent argues that the Office Notice and Information Booklet produced by it were no more than an advertisement which relates to employment in terms of the definition of "advertisement" contained at section 2 of the Act. It submits that sections 10 and 85 of the Act therefore apply. There is no provision in the Act permitting an individual complainant to refer a claim of discriminatory advertising, that role is vested in the Equality Authority - a matter that has been determined by the Labour Court9 . Consequently the complainant has no standing upon which to bring his claim to the Tribunal.
4.5 The respondent seeks to rely on the defence available to it at section 34(3) of the Act in that its actions do not constitute unlawful discrimination of the complainant in circumstances where if it did not apply the upper age limit of 60 years on the owner-driver scheme it would have incurred significantly increased costs. It furnished actuarial evidence which shows that 40 employees ceased employment with the respondent under the owner-driver scheme. It adds that the cost of the scheme with the age restriction was €3m. It states that if the upper age limit had not been applied the cost of the scheme would have increased by €577,832 an increase of 19% overall and an average increase of €14,446 per person. The respondent states that at the time of the scheme (late 2003) it was suffering an overall loss of €32m and allowing access to the scheme to those over 60 years of age would have increased this loss by 2%. The respondent adds that if the claim is found to be one of equal pay then the timelimit for referral of further claims has not yet expired and the respondent estimates that a potential 27 additional claims could be lodged with the Tribunal. It submits therefore that it is appropriate for the Equality Officer to have regard to these potential additional costs in examining the matter. The respondent further submits that the Labour Court erred in law in examining the issue of increased cost in the Coillte case by reference to the situation at the date of the Hearing in that case. It adds that the correct test is the cost involved at the time of the scheme - in this case 2003.
5. CONCLUSIONS OF THE EQUALITY OFFICER
5.1 The issues for decision by me are (i) whether or not the complaint is properly before me for investigation, (ii) whether the complaint is one of equal pay or equal treatment, (iii) whether or not the respondent discriminated against the complainant on grounds of age when it restricted access to the owner-driver scheme to eligible employees under 60 years of age and (iv) if the respondent treated the complainant less favourably on grounds of age contrary to the Employment Equality Act, 1998 whether or not it can avail of the defence available to it at section 34(3) of the Act. In reaching my Decision I have taken into consideration all of the submissions, oral and written, made to me by the parties.
5.2 I shall look at the issue of whether or not the complaint is properly before me for investigation in the first instance. There are a number of elements to the respondent's arguments on this point. The first of those is that the complainant never formally applied for the owner-driver scheme so he could not have been refused and he therefore lacks the locus standi to maintain his claim. I note the complainant accepts he made no formal application for the scheme. He states this stems from information he received, in the first instance, from Mr. Devlin, local representative of the CWU - a person it is accepted was heavily involved in the restructuring discussions and its implementation. I am of the view that it is reasonable for the complainant to seek the advice of such a person in attempting to decide what course of action to take. The complainant states that he accepted Mr. Devlin's word that he could not apply for the scheme because of his age. I am satisfied on balance that things occurred the way the complainant says they did because (i) Mr. Devlin was unable to say (at the Hearing) one way or the other whether or not he spoke with the complainant and (ii) he was aware of the upper age limit for the scheme but did not consider it an issue as it had not been raised by anybody - a point also confirmed at Hearing by Mr. Delaney, Deputy General Secretary of the CWU. It is common case between the parties that the complainant subsequently spoke on the phone with Ms. Walsh of the respondent's HR Department who confirmed Mr. Devlin's comments that the scheme was not available to people over 60 years of age. In tandem with this the respondent's Internal Office Notice and Information Booklet clearly stated the operation of the upper age limit. I am satisfied that it was perfectly clear to the complainant that an upper age limit applied and it was reasonable for him to assume he could not apply at that time. On the basis of the evidence submitted on this point, particularly that of Mr. Burke, the respondent's HR Manager who had specific responsibility for processing the applications, I am satisfied that had the complainant submitted an application it would have been rejected by the respondent on the basis that he was over 60 years of age. In the circumstances I consider it unreasonable to expect the complainant to have made a formal application for the scheme to maintain a locus standi. In addition, I note that in O'Dwyer v Coillte Teoranta10 the Labour Court held that the setting of different ages in respect of the benefits of the scheme constitutes prima facie evidence of discrimination on grounds of age. I am therefore of the view that, in the circumstances, the failure of Mr. Ruddy to express a formal interest in the scheme during the period the respondent set for receipt of applications does not prevent him from maintaining his complaint to this Tribunal. In reaching this decision I am also cognisant of the fact that at least four applications for the scheme were accepted by the respondent after the official timelimit had expired although it was unable to furnish details of same or the reasons why this had occurred. It is clear therefore that the respondent was flexible in the manner it which it handled applications.
5.3 The respondent also submits that the Internal Office Notice and Information Booklet produced by it were no more that an advertisement which relates to employment in terms of the definition of "advertisement" contained at section 2 of the Act. It submits that sections 10 and 85 of the Act therefore apply and the complainant cannot refer a complaint on that matter and therefore has no standing upon which to bring his claim. The complainant states that his claim is not that a discriminatory advertisement was published but that he was less favourably treated on grounds of age in that he did not receive equal remuneration with a named comparator in relation to his employment. He adds that if the respondent's rationale was accepted in this instance a respondent could evade a claim of discriminatory treatment under the Act merely by reducing a potentially discriminatory practice into words and placing that document on a notice board. I am in agreement with the complainant entirely on this point. Section 85 of the Act assigns power to Equality Authority to refer a complaint to this Tribunal in relation to an advertisement covered by section 10 of the Act. I am satisfied that was in intended to be covered by the definition of "advertisement" in that section is a notice or announcement in any instrument of the media, including recruitment agencies i.e. an advertisement of an external nature and it did not mean it cover internal memos or office notices indicating vacancies, promotion competitions etc. If the respondent's arguments on this point were to be accepted it would mean that a respondent could, for example, deprive a person of the individual right of redress in respect of an alleged discriminatory act as regards access to employment/promotion by committing the matter to paper and labelling it an advertisement as the complaint would have to be taken by the Equality Authority. Such a proposition would render practically every competition in the civil service, for example, outside the scope of the Act and would give rise to an absurd situation.
5.4 The respondent argues that the owner-driver scheme was introduced as part of a cost-cutting restructuring arrangement to deal with the dire financial situation it found itself in during 2003. It adds that the programme of measures was agreed between the company and the relevant trade unions (CWU). It submits therefore that the Restructuring Agreement (entitled "Revised Working Arrangements with CWU for New SDS") constitutes a Collective Agreement for the purposes of the Act. It states that section 9 of the Act renders any provision in a Collective Agreement which is discriminatory as null and void and the complainant cannot therefore rely on it to ground his claim. The complainant accepts that the document "Revised Working Arrangements with CWU for New SDS" is a Collective Agreement but states that it does not contain any statement which indicates that the owner-driver scheme is restricted to persons under 60 years of age. This restriction appears in both the respondent's internal Office Notice dated 3 June, 2003 and its Information Booklet entitled "Owner-Driver Transition Scheme" dated June, 2003. He submits that these documents are not part of the Collective Agreement - they set out the detailed arrangements for access to the scheme and contain discriminatory practices/procedures. I note that the document "Revised Working Arrangements with CWU for New SDS" is comprehensive and covers a wide range of issues which impact on all staff in the company, including drivers. It identifies the Key Principles underpinning the restructuring arrangement and sets out the Joint Vision (Union-Management) Vision for the future of the company. I note Mr. Delaney's evidence that the document was ultimately ratified at a Special Delegate Conference of the CWU in June, 2003. I am therefore satisfied that it constitutes a Collective Agreement for the purposes of the Act. The Internal Office Notice of 3 June, 2003 and the Information Booklet entitled "SDS Restructuring Programme, Owner - Driver Scheme (also dated June, 2003) set out the specific details and eligibility requirement for the scheme. Whilst it is clear that the CWU would have been involved in the preparation of the documents they could not be considered as Collective Agreements. The upper age limit of 60 years appears in these documents and not in the Collective Agreement mentioned above. It is noteworthy that the evidence of Mr. Delaney at hearing was that the CWU did not request the operation of an upper age limit but was prepared to accept one because members did not take issue with it. Having examined all the evidence on this matter I find against the respondent on this point. In light of my comments in this and the preceding two paragraphs I find that the complaint is properly before me for investigation.
5.5 I shall now examine the issue of whether the complaint is one of equal pay or equal treatment. The respondent seeks to rely on the decision of the ECJ in Burton v British Railways Board11 a judgement which I note is over 20 years old. The concept of pay for the purposes of Article 141 of the European Treaty and the Equal Pay Directive12 has been the subject of numerous references to the ECJ subsequent to the Burton judgement. It is now well settled that the definition of pay set out by that Court at paragraph 12 of Barber v Guardian Royal Exchange Assurance Group13 is the definition most commonly and consistently applied by subsequent chambers of that Court, by our National Courts, the Labour Court and this Tribunal. It defines pay as "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. Accordingly, 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 (now Article 141) of the Treaty.". The element of the scheme which is at issue here is the incentive payment which was part of the owner-driver scheme and was not paid to employees who opted for the other restructuring options on offer. This payment was made as an inducement to employees to terminate their employment with the respondent and is a consideration that flowed from the employment relationship after that relationship ended. I find therefore that Mr. Ruddy's claim is one of equal pay under the Employment Equality Act, 1998.
5.6 I shall now examine the substantive issue of the complaint - (i) whether or not the complainant was subjected to less favourable treatment on grounds of his age by the respondent and (ii) whether the respondent can rely on section 34(3) of the Act. On the former point it is accepted by the respondent that it applied the upper age limit of 60 years for eligibility to the owner-driver scheme. As stated at paragraph 5.2 above the Labour Court held in O'Dwyer v Coillte Teoranta14 that the setting of different ages in respect of the benefits of the scheme constitutes prima facie evidence of discrimination on grounds of age. I therefore find that the complainant has established a prima facie case of discrimination in the instant case. In defence of the impugned act of discrimination the respondent seeks to rely on section 34(3) of the Act which states as follows:
"Nothing .... shall make unlawful discrimination on the age ground ... in circumstances where it is shown that there is clear actuarial or other evidence that significantly increased costs would result if the discrimination were not permitted in those circumstances.".
The respondent argues that the relevant time for application of this test is the time when the scheme was available - late 2003. If this proposition is correct then in my view it follows that the actuarial evaluation would have to be completed at that time to enable the respondent make a fully informed decision on its actions. This was not the case. The actuarial evidence furnished by the respondent was prepared in the course of the investigation of the complaint by this Tribunal some three years after the event. The financial information furnished by the respondent on the cost of operating the owner-driver scheme with no age restriction shows that the additional cost it would have incurred was €577,832. I note that this material also indicates that the potential saving to the respondent by ceasing the employment (rather than retaining them to retirement age) of the 40 people who actually left under the scheme was around €11.8m. I further note that it had set aside a budget of €52.5m to cover costs associated with the overall restructuring programme in 2003. On the basis of the foregoing I am not satisfied that the respondent has adduced clear actuarial or other evidence that significantly increased costs would result if the discrimination was not permitted. The respondent submits that an estimated 27 additional claims could be lodged with the Tribunal if the complainant is successful in his complaint and argues that it is appropriate for the Equality Officer to have regard to these potential additional costs in examining the matter. I do not accept the respondent's arguments on this point. No definite costing was furnished by the respondent to substantiate its assertion in this regard and it is not for me to speculate whether any or all of those persons will refer a complaint to the Tribunal. I find therefore that the respondent discriminated against the complainant on grounds of age contrary to the Employment Equality Act, 1998.
6. DECISION OF THE EQUALITY OFFICER.
6.1 I find that (i) Mr. Ruddy's complaint is properly the Tribunal for investigation, (ii) that the complaint is one of equal pay under the Employment Equality Act, 1998, (iii) that the respondent discriminated against the complainant on grounds of age, in terms of section 6(2) of the Act and contrary to section 29 of that Act when it refused him access to a owner-driver scheme as part of the respondent's overall restructuring programme in October, 2003 and (iv) that the respondent has failed to adduce the necessary evidence to avail of the defence under section 34(3) of the Act.
6.2 The respondent furnished details as part of its evidence which shows that had the complainant being permitted to avail of the owner-driver scheme in 2003 he would have received a gross incentive payment of €92,442. Instead he received €22,126 when he retired in December, 2004, a difference of €70,316. I consider it appropriate that the complainant should be placed in the position that he would have been in had the discrimination not occurred and I order the respondent, in accordance with section 82 of the Employment Equality Acts, 1998 and 2004, to pay the complainant the amount of €70,316. This award constitutes pay for the purposes of the Act and is therefore subject to the tax code.
____________________________
Vivian Jackson
Equality Officer
26 April, 2007
1. EE/2004/46
2. EDA 064
3. Council Directive 76/207/EEC
4. Case C-167/97
5. DEC-E2001/29
6. DEC-E2005/39
7. EDA064
8. [1982] ECR 555
9. Burke V Fás EDA/0418
10. EDA 064
11. [1982] ECR 555
12. Council Directive 76/207/EEC
13. Case C-262/88
14. EDA 064