FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 83, EMPLOYMENT EQUALITY ACT, 1998 PARTIES : DYFLIN PUBLICATIONS LIMITED (REPRESENTED BY CONOR HANNAWAY SHRC LIMITED) - AND - IVANA SPASIC (REPRESENTED BY SVETISLAV FILIPOVIC) DIVISION : Chairman: Mr McGee Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Appeal under Section 83 of the Employment Equality Act, 1998.
BACKGROUND:
2. The Worker appealed the Equality Officer's Decision in accordance with Section 83 of the Employment Equality Act, 1998 on 7th March, 2008. A Labour Court hearing took place on the 2nd September, 2008.
The following is the Court's Determination:-
DETERMINATION:
Subject:
Appeal under Section.83 of the Employment Equality Acts 1998-2007 against Equality Officer’s Decision No. DEC-E2008-002.
Background:
1. The complainant, who is a native of the Republic of Serbia, has claimed that the respondent discriminated against her on the race ground by not paying her the same rate of pay and commission as her chosen comparators. While the respondent accepts that the complainant and her comparators were engaged in like work, it submits that any differences in remuneration were based on grounds other than race.
2. The complainant was employed by the respondent in the position of Advertising Executive with effect from November 2004. She was paid a basic salary of €20,000 per annum. She queried this, as it was lower than the level indicated on the advertisement for the job, but her salary did not increase. She claimed that she could not and did not earn commission on sales, a point contradicted by the respondent.
- Her sales target was €3,200 per week or €166,000 per annum. She left the Company in February 2006 for another job.
4. In her decision, dated 31st January 2008, the Equality Officer found that there were grounds other than race for the difference in pay between the complainant and her named comparators and accordingly found that the respondent did not discriminate against the complainant on the race ground contrary to Section 29(1) of the Acts in relation to her pay.
5. The Complainant appealed this decision to the Court on 7th February 2008. A Labour Court hearing was held on 2nd September 2008.
Complainants’ Arguments:
1. The advertisement for the job indicated that the reward for on-target performance could be as high as €55,000-€60,000 in total earnings, yet, when she queried the low level of pay offered by the respondent, the Managing Director told her it was because she was “not from here” and that her performance would be reviewed with a view to an increase if she performed well. Despite being named “sales person of the month” the following month, this did not happen, despite requests from her. She considered this, in conjunction with the above referral, to be indicative of racial prejudice against her.
2. She had considerable expertise in the field of advertising sales and input to trade magazines both in Botswana and in her native Serbia. She outlined details of her employments to the respondent who made only cursory attempts to verify her experience gave up easily and did not credit her with her level of experience and expertise, nor was this reflected in her salary.
3. She never had a chance to earn commission. There was no reference to commission in her letter of appointment and the only time she allegedly got commission (according to the Company) this was actually a recalculation of her salary based on the difference between a “5-week” and a “4 –week” month. The Company had only just changed from weekly to monthly pay). There was no indication on her payslip at that time that the sum in question (€231) was commission. Her two Irish comparators earned 10% commission on sales and this, indeed, was in their letters of appointment.
4. She was entirely interchangeable with her two comparators and, indeed, the respondent was not querying “like work”, yet the comparators had a basic salary of €28,000, plus 10% commission compared to her salary of €20,000 with no commission.
5. She did not even get her basic salary in 2005, as her P.60 shows that she only earned €19,039, a shortfall of nearly €1,000 on her basic salary of €20,000.
6. When an Advertising Sales Executive left, his “leads” were unequally distributed in favour of her comparators and against her, thus widening the pay gap and again showing bias in favour of her Irish comparators.
7. A contention by the respondent that 3 other Advertising Sales Executives were also comparators and had salaries similar to hers is not valid. They could all earn commission (and did) and in one case, the woman mentioned was a relative of the Managing Director and had access to lucrative and regular work from which the complainant was excluded.
Respondent’s Arguments:
1. The Managing Director of the respondent Company told the Court that he absolutely refuted the complainant’s allegation that she was paid a lower salary or that he said she was “not from here”. The respondent is an equal opportunities employer with many non-national employees.
2. There were essentially three levels of basic starting salary - €20,000, €25,000 & €28,000, depending on a successful applicant’s verifiable previous experience. He had been unable to satisfactorily verify the complainant’s previous experience, despite attempts to contact referees. In the circumstances, she was placed on the basic €20,000 salary and monitored to see how she would succeed against a relatively low sales target. She did not, except on one occasion, reach this target.
3. Her comparators were on higher salaries through a combination of years of service and or verified previous performance/experience. This is how the Advertising Industry has always worked; the better sellers have a higher basic and can then earn more in commission. This is true regardless of factors such as nationality, gender etc. One of her comparators started two years before the complainant on a salary similar to hers and had achieved advancement through experience and performance. The other was an experienced and proven sales executive when he came to the Company. Their targets were a lot higher than the complainant’s. There were three others who were comparable comparators also, on similar salaries to the complainant (but only one on a comparably low target). They were all Irish. See table below: -
| Name | Start Date | Starting Salary | Annual Target | Actual |
| Comparator(J.C | November 2002 | €20,800 | €176,800 | 2005/ €241,000 |
| Comparator(S.T) | September 2003 | €20,800 | €176,800 | 2004/ €110,000 |
| Comparator(G.W | July 2004 | €28,000 | €252,000 | 2005/ €132,000 |
| Comparator(D.C) | October 2004 | €20,000 | €166,000 | 2005/ €132,000 |
| Comparator(ML) | February 2004 | €20,000 | €166,000 | 2005/ €130,000 |
| Comparator(I.S) | November 2004 | €20,000 | €166,000 | 2005/ €75,000 |
4. On the only month during which the complainant earned commission, it was paid to her in the next month’s pay cheque (an extra €231). This was not reflected on the payslips as the Company had only changed to monthly pay a month previously and was on a “trial” system of payslips. Payslips now show commission, expressed as such. The complainant’s contention that the €231 was “an extra weeks pay” i.e. 5 weeks rather than 4, was untrue. The Annual salary was divided simply into 12 equal moieties.
5. There was no bias involved in any lowering of the complainant’s salary below the basic, which was guaranteed. The reason for the shortfall was caused by unauthorised absences/extra holidays (details supplied to the Court).
6. The sales opportunities and the sales leads of departing staff were equally available to all sales staff.
7. There is no built in salary review but salaries are always subject to review and depend on sales targets being met.
8. Commission is calculated as 10% of the amount which sales exceed monthly targets.
The Law:
This claim is, in effect, an equal pay claim. It falls to be decided by reference to the provision of s. 29 of the Act. As the ground relied upon is that of race the provisions of Directive 2000/43/EC (the Race Directive) are also relevant.
Section 29(1) of the Act provides a general entitlement to equal pay as between persons who are differentiated on any of discriminatory grounds and who are engaged in like work. However, subsection (5) of s.29 provides a general saver which allows for the payment of different remuneration to employees on grounds other than the discriminatory grounds. It provides as follows: -
“nothing in this part shall prevent an employer from paying, on grounds other than the discriminatory grounds, different rates of remuneration to different employee”.
Article 2 of the Directive provides that there shall be no direct or indirect discrimination based on racial or ethnic origin. Article 3 (c) of the Directive provides that the prohibition of discrimination contained at Article 2 extends to employment and working conditions, including dismissal and pay.
Section 85A of the Act, as amended, now provides for the allocation of the probative burden as between the parties. It provides, in effect, that where facts are established by or on behalf of a Complainant from which discrimination may be inferred it shall be for the Respondent to prove the absence of discrimination.
The test for applying that provision is well settled in a line of decisions of this Court starting with the Determination inMitchell v Southern Health Board[2001] ELR 201.That test requires the Complainant to prove the primary facts upon which he or she relies in seeking to raise an inference of discrimination. It is only if this initial burden is discharged that the burden of proving that there was no infringement of the principle of equal treatment passes to the Respondent. If the Complainant does not discharge the initial probative burden which he bears, his case cannot succeed.
The application of this test was recently considered by this Court in Determination EDA0821Cork City Council and Kieran McCarthy. In pointing out that the Complainant must not only establish the primary facts upon which he or she relies but must also satisfy the Court that those facts are of sufficient significance to raise the inference contended for, the Court said the following: -
- The type or range of facts which may be relied upon by a complainant can vary significantly from case to case. The law provides that the probative burden shifts where a complainant proves facts from which it may be presumed that there has been direct or indirect discrimination. The language used indicates that where the primary facts alleged are proved it remains for the Court to decide if the inference or presumption contended for can properly be drawn from those facts. This entails a consideration of the range of conclusions which may appropriately be drawn to explain a particular fact or a set of facts which are proved in evidence. At the initial stage the complainant is merely seeking to establish a prima facie case. Hence, it is not necessary to establish that the conclusion of discrimination is the only, or indeed the most likely, explanation which can be drawn from the proved facts. It is sufficient that the presumption is within the range of inferences which can reasonably be drawn from those facts.
- Section 63A(2) does not expressly or impliedly prevent the tribunal at the first stage from hearing, accepting or drawing inferences from evidence adduced by the respondent disputing and rebutting the complainant's evidence of discrimination. The respondent may adduce evidence at the first stage to show that the acts which are alleged to be discriminatory never happened; or that, if they did, they were not less favourable treatment of the complainant; or that the comparators chosen by the complainant or the situations with which comparisons are made are not truly like the complainant or the situation of the complainant; or that, even if there has been less favourable treatment of the complainant, it was not on the ground of her sex or pregnancy.
That was a case in which discriminatory treatment on grounds of pregnancy was alleged. Nevertheless the principle enunciated on how the application of the test for determining if the burden of proof shifts is equally applicable in an equal pay claim such as this. What the passage quoted indicates is that the Court should consider the primary facts which are relied upon by the Complainant in their proper context. It also indicates that in considering if the burden of proof shifts the Court should consider any evidence adduced by the Respondent to show that, when viewed in their proper context, the facts relied upon do not support the inference contended for by the Complainant.
In respect to the instant case the Court adopts the approach indicated by Mummery LJ in the passage quoted.
Facts Found by the Court or Admitted:
It is accepted that the Complainant and the cited comparators are engaged in like work within the statutory meaning of that term. It is also admitted that the Complainant and the comparators are remunerated differently.
The Court is satisfied on the evidence adduced that the pay determination system operated by the Respondent is based on assessment of an individuals verifiable prior experience and track record in similar employment. The Court is further satisfied that the Complainant’s salary was determined by reference to this criterion
The respondent made some effort to establish the veracity of the complainant’s references and previous experience, by making a number of phone calls to Serbia and Botswana. No response was received and the respondent employer did not pursue the matter further.
The Court accepts that it is common practice in the advertising sales industry to remunerate staff by paying a basic salary and commission. This was also the practice of the Respondent.
There is an acknowledgment on both sides that there is a payment of €231 in August 2005 which does not fit within the basic salary structure. The complainant alleges that this is accounted for by the change at that time from weekly to monthly pay. The respondent alleges that it is the only commission earned by the complainant during her period of employment
The sales targets of the comparators who had a higher basic salary were commensurately higher.
There were deductions from the basic salary of the Complainant. However the Court is satisfied that they are accounted for by extra holidays and unauthorised absences.
Court Findings:
The first question which the Court must consider is whether the Complainant has established facts from which discrimination may be inferred. The only fact relied upon by the Complainant in support of her claim is that she is paid less that her comparators and the difference in nationality or ethnic origin as between her and her comparators. However what is alleged in this case is direct discrimination on the race ground in relation to pay. In such cases the application of the test for shifting the burden of proof operates somewhat differently than in cases involving discriminatory treatment or indirect discrimination in relation to pay.
Here there is an acknowledged difference in pay as between the Complainant and her comparators. Such a difference may, in some circumstances, be sufficient to place the probative burden on the employer. Where, however, as in the present case, it is contended that the impugned difference in pay is grounded in factors other than the nationality or ethnic origin of either the Complainant or the comparators, there is an onus on the Respondent to make out that assertion. If the Respondent succeeds in so doing any inference of discrimination which might otherwise arise is thus negated. However, facts may be established from which it could be inferred that the apparently neutral grounds relied upon are a covert means of reducing the Complainant’s pay. It might also be established that grounds relied upon constitute a provision, practice or criterion which puts persons of the same nationality or ethnic origin as the Complainant at a particular disadvantage. In either situation a prima facie case of discrimination may arise.
The Court heard evidence that the Complainant was placed on a salary which was within a band of salaries normally applied by the Respondent. She was placed on the lowest band because the Respondent was not satisfied that she had relevant prior experience in a similar role. There was also evidence that employees of Irish nationality who lacked prior experience were similarly placed on the lower pay band. The Court accepts the veracity of that evidence.
The Court also heard evidence that the comparators were on higher salaries than that of the Complainant because of longer service or experience. In that regard the recent Judgment of the ECJ in Case C- 17/05Cadman v Health and Safety Executive[2006] IRLR 969 is apposite. Here, in deciding that differences in pay which are grounded on length of service do not give rise to prima facie discrimination, the Court had this to say: -
- “Since, as a general rule, recourse to the criterion of length of service is appropriate to attain the legitimate objective of rewarding experience acquired which enables the worker to perform his duties better, the employer does not have to establish specifically that recourse to that criterion is appropriate to attain that objective as regards a particular job, unless the worker provides evidence capable of raising serious doubts in that regard”
Having evaluated all of the evidence adduced in this case the Court is satisfied that the difference in pay as between the Complainant and her comparators is grounded on considerations which are wholly unrelated to the nationality and ethnic origin of either the Complainant or the comparators. On that basis the Court must hold that the Respondent has made out a defense under s. 29(5) of the Act. Moreover, there is no evidence from which it could be inferred that the Respondent’s pay determination system is a covert means of reducing the Complainant’s pay nor is there evidence that it places persons of the Complainant’s nationality or ethic origin at a particular disadvantage.
It follows that the Complainant has failed to establish facts from which discrimination may be inferred. Accordingly the Complainant cannot succeed.
Determination
It is the determination of the Court that the claim herein is not well founded. The Complainant’s appeal is disallowed and the decision of the Equality Officer is affirmed.
Signed on behalf of the Labour Court
Raymond McGee
19th December, 2008______________________
JFDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to John Foley, Court Secretary.