THE EQUALITY TRIBUNAL
EMPLOYMENT EQUALITY ACTS 1998-2008
Decision - DEC-E2010-259
PARTIES
David Moher
(represented by Mr. Daniel Moher, Solicitor)
and
The Department of Enterprise, Trade & Innovation
(formerly The Employment of Enterprise, Trade
& Employment)
File Reference: EE/2006/103
Date of Issue: 23rd December, 2010
Headnotes: Employment Equality Acts, 1998 to 2008 - discriminatory treatment - age - conditions of employment - prima facie case of discrimination - payment of statutory redundancy entitlements - issue of jurisdiction - respondent not the correct employer within meaning of Acts - no jurisdiction
1. Dispute
1.1 This case concerns a complaint by Mr. David Moher that he was discriminated against by the Department of Enterprise, Trade & Innovation on the grounds of age contrary to section 6(2)(f) of the Employment Equality Acts, 1998 to 2008 in terms of the decision to refuse his application for payment of a statutory redundancy lump sum from the Social Insurance Fund when he was made redundant from his employment with Safecare Technology Limited after it had been placed into voluntary liquidation.
2. Background
2.1 Mr. David Moher referred a complaint under the Employment Equality Acts, 1998 to 2004 to the Director of the Equality Tribunal on 7th April, 2006. In accordance with her powers under section 75 of the Employment Equality Acts, the Director delegated the case on 25th November, 2009 to me, Enda Murphy, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions under Part VII of the Employment Equality Acts, 1998 to 2008. This is the date I commenced my investigation. A written submission was received from the complainant on 26th September, 2008 and from the respondent on 12th November, 2008. As required by section 79(1) of the Acts and as part of my investigation, I proceeded to hearing on 23rd September, 2010.
3. Facts of the Case
3.1 The following facts were not in dispute between the parties in relation to this case. The complainant was employed by Safecare Technology Limited as a carpenter from 14 February, 2000 until 19 August, 2005 when he was made redundant after the company was placed into voluntary liquidation. The complainant was seventy years of age on the date that he was made redundant. The complainant made an application to the respondent on 5th September, 2005 for payment of a statutory redundancy lump sum from the Social Insurance Fund in relation to his period of employment with Safrcare Technology Limited. It is the case that statutory redundancy lump sums are an employment right for eligible employees, and payment is, in the first instance, the responsibility of the employer. In cases where the employer is insolvent (as was the situation in the present case) payment is made directly to the employee from the Social Insurance Fund. The payment of statutory redundancy entitlements from the Social Insurance Fund is administered by the Department of Enterprise, Trade & Innovation.
3.2 Under the Redundancy Payments Scheme which operated at the material time of the complainant's claim for a statutory redundancy payment, a number of requirements existed which were put in place to assess an individual employment situation. One of these criteria required that the individual must be between the age of 16 and Old Age Pension age (which at the time was 66 years of age). At the time of his application for payment from the Social Insurance Fund, the complainant was above the age of 66, and as he did not comply with section 3 of the Redundancy Payments Act, 1971 (as amended by section 5 of the Redundancy Payments Act, 1979) his application for payment was refused. Accordingly, the complainant's application for payment of a statutory redundancy lump sum was refused by the Department of Enterprise, Trade & Innovation on 14th October, 2005. The existence of the upper age limit of 66 years of age for qualifying for statutory redundancy as stipulated in section 5 of the Redundancy Payment Act, 1979 was subsequently removed in the Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act, 2007 which became effective on 8th May, 2007.
4. Issue of jurisdiction in relation to whether or not the complainant was an employee of the respondent
4.1 The Director of the Equality Tribunal does not have jurisdiction to investigate a complaint of discriminatory treatment unless the complainant is an "employee" as defined at section 2 of the Employment Equality Acts, 1998 to 2008. In the present case, an issue has arisen as to whether or not the complainant was employed by the Department of Enterprise, Trade & Innovation within the meaning of section 2 of the Acts. As a result, I informed both parties that I would deal with this issue of jurisdiction as a preliminary issue.
4. Complainant's case in relation to the issue of jurisdiction
4.1 The complainant's submissions in relation to the issue of jurisdiction can be summarised as follows:
- It was submitted that although section 2 of the Employment Equality Acts refer specifically to discrimination by the "employer", the actual act of rejecting his application for a statutory redundancy payment from the Social Insurance Fund in the present case can be characterized as discrimination by the respondent on behalf of his employer.
- It was submitted that the respondent, in the circumstances of the present case, is fulfilling (or refusing to fulfill) the "employers" obligations in accordance with the provisions of section 32 of the Redundancy Payments Acts, 1967 to 2003.
- It was submitted that the respondent's decision to reject the complainant's application for payment of a statutory redundancy lump sum can be characterized as an act done on behalf of, or as an agent of, the employer within the meaning of section 15 of the Employment Equality Acts. The complainant submitted that the act of rejecting his claim for a statutory redundancy payment on the grounds of his age would have been discriminatory under the Acts had it been performed by his employer. He submitted that it is of no relevance that the decision to refuse the payment was ultimately taken by the respondent in its capacity as a government Department.
- It was submitted that the respondent had the implied consent of the complainant's employer within the meaning of section 15(2) of the Acts to settle its obligations under the Redundancy Payments Acts when it became insolvent. The complainant argued that this is supported by the fact that the respondent can require an employer to reimburse the Social Insurance Fund in situations where an employer is insolvent and cannot afford to pay the statutory redundancy entitlements of its employees. By doing so, the respondent is ensuring that an insolvent employer meets its obligations under the Redundancy Payments Acts. Accordingly, an employer pays into the Social Insurance Fund with the expectation that the respondent will cover the statutory redundancy entitlements of its employees if it becomes insolvent. The complainant submitted that this is demonstrative of the manner in which the respondent acts as an agent for the employer in terms of the obligation to pay statutory redundancy entitlements
- It was submitted that the discriminatory effect was the same to the complainant whether or not the statutory redundancy payment was denied by the solvent employer or the respondent (in the event of the employer's default). The complainant submitted that had the employer been solvent it would also have used section 5 of the Redundancy Payments Acts to refuse the payment of his statutory redundancy entitlements.
5. Respondent's case in relation to the issue of jurisdiction
5.1 The respondent's submissions in relation to the issue of jurisdiction can be summarised as follows:
- The respondent submitted that there was no employment relationship between it and the complainant within the meaning of section 2 of the Employment Equality Acts in terms of the decision to refuse his application for payment of a statutory redundancy lump sum from the Social Insurance Fund.
- The respondent submitted that the complainant was not an "employee" of the respondent within the meaning of section 2 of the Redundancy Payments Acts (as amended) at any stage, either at the time he was made redundant or when the decision was taken to refuse his application for payment of a statutory redundancy lump sum. The respondent submitted that in order to qualify for a statutory redundancy payment there must have been an employment relationship between an employee and his/her employer. It submitted that no such relationship (either within the meaning of the Employment Equality Acts or the Redundancy Payments Acts) existed at any juncture between it and the complainant.
- The respondent submitted that section 19 of the Redundancy Payments Acts clearly provides that the onus to pay the statutory redundancy entitlements of its employees rests with the employer in the first instance. In accordance with the provisions of section 32 of the Redundancy Payments Acts, the payment of employees' statutory redundancy entitlements can be made from the Social Insurance Fund in circumstances where the employer is insolvent. The respondent submitted that, in such circumstances, the respondent does not step into the breach of the employer but rather it administers the payment of the statutory redundancy entitlements from the Social Insurance Fund.
- The respondent denies that it was acting on behalf of, or as an agent of, the respondent within the meaning of section 15 of the Employment Equality Acts in terms of its decision to refuse the payment of a statutory redundancy lump sum from the Social Insurance Fund to the complainant.
6. Conclusions of the Equality Officer in relation to the issue of jurisdiction
6.1 The issue for decision by me in relation to this issue is whether or not the complainant was an employee of the respondent, in terms of section 2 of the Employment Equality Acts, 1998 to 2008 and therefore, has the locus standi to maintain his complaint before this Tribunal. In reaching my decision, I have taken into consideration all of the submissions, both written and oral, submitted to the Tribunal as well as the evidence adduced at the oral Hearing.
6.2 Section 2 of the Employment Equality Acts, 1998 to 2008 defines an "employee" as follows: -
".... a person who has entered into or works under (or where the employment has ceased, entered into or worked under) a contract of employment .... ".
The same section defines "employer" as follows: -
"... in relation to an employee, the person with whom the employee has entered into or for whom the employee works under (or where the employment has ceased, entered into or worked under) a contract of employment".
The same section also defines "contract of employment" as follows: -
"(a) a contract of service or apprenticeship, or (b) any other contract whereby (i) an individual agrees with another person personally to execute any work or service for that person ... ".
6.3 The definition of "employee" therefore covers persons employed on both a contract of service and a contract for services. It follows therefore that the complainant must have been employed under a contract of service or a contract for services by the respondent to enable him to pursue this claim under the Employment Equality Acts. The question of whether or not a particular employment is to be regarded as a contract of service or a contract for services has been the subject of a number of decisions by the Courts in this jurisdiction including the cases Denny -v- Minister for Social Welfare and Tierney -v- An Post . In these cases the question for determination was whether a person was engaged as an employee or was self-employed on a contract for service. It is clear from the judgments in such cases that the factors which are taken into consideration in order to determine whether or not a person can be regarded as an employee include issues such as the element of control involved in the working relationship, who paid the employees' wages, the nature of the contract that existed between the parties etc.
6.4 In the present case, it was not in dispute that the complainant was employed by Safecare Technology Limited from February, 2000 until September, 2005 when he was made redundant from his position after the company was placed into voluntary liquidation. It is therefore clear that the complainant had been an employee of, and accordingly, had been employed under a contract of service with Safecare Technology Limited. The complainant's entitlement to a redundancy payment had therefore been accrued on the basis of his employment with Safecare Technology. I am satisfied that the complainant was an employee of Safecare Technology Limited within the meaning of section 2 of the Employment Equality Acts.
6.4 The complainant submitted that the respondent's decision to reject his application for payment of a statutory redundancy lump sum can be characterized as an act done on behalf of, or as an agent of, the employer within the meaning of section 15 of the Employment Equality Acts. The main trust of the complainant's argument was that the respondent, in effect, steps into the breach of an insolvent employer in terms of its obligations to pay the statutory redundancy entitlements of its under the Redundancy Payments Acts.
6.5 In considering this issue, it is necessary to consider the role that the respondent plays in relation to the payment of statutory redundancy entitlements to an employee when his/her employer has become insolvent. Under the Redundancy Payments Scheme all eligible employees are entitled to a statutory redundancy payment on being made redundant and payment is, in the first instance, the responsibility of the employer. In cases where the employer is insolvent payment is made to the employee directly from the Social Insurance Fund (as provided for in section 32 of the Redundancy Payments Acts). The respondent in the present case administers the payment of statutory redundancy payments to employees from the Social Insurance Fund. Section 32(1) of the Redundancy Payments Acts states:
"When an employee claims that an employer is liable to pay to him a lump sum under section 19 and either that -
(a) the employee has taken all reasonable steps (other than legal proceedings) to obtain the payment of the lump sum from the employer and the employer has refused or failed to pay it or has paid part of it and has refused to pay the balance, or
(b) the employer is insolvent and the whole or part of the lump sum remains unpaid,
the employee may apply to the Minister for a payment under this section".
6.6 I am of the view that it is clear from the wording contained in the aforementioned provisions of the Redundancy Payments Acts that the Minister (or the respondent in the present case) carries out a very specific function in administering the payment of statutory redundancy lump sums to employees from the Social Insurance Fund, in circumstances where the employer has been declared insolvent and therefore cannot afford to pay the redundancy entitlements of it employees. It is clear that any actions which the respondent carries out in the discharge of its obligations under the Redundancy Payments Acts are entirely independent and distinct from the employment relationship that existed between the employee and the insolvent employer. I am satisfied that the discharge of these functions by the respondent clearly do not result in the establishment of an employment relationship (within the meaning of the Employment Equality Acts) between the respondent and the employee who had applied for payment of a statutory redundancy lump sum from the Social Insurance Fund. I cannot accept that the respondent was acting on behalf of, or as an agent of, the complainant's employer (Safecare Technology Limited) within the meaning of section 15 of the Employment Equality Acts in the circumstances of the present case in terms of its decision to refuse his application for the payment of a statutory redundancy lump sum from the Social Insurance Fund.
6.7 Having regard to foregoing, I find that the complainant was not an "employee" of the respondent in terms of section 2 of the Employment Equality Acts, 1998 to 2008.
7. Decision
7.1 Having investigated the above complaint, I hereby make the following decision in accordance with section 79(6) of the Employment Equality Acts, 1998 to 2008. I find that the complainant was not an employee of the respondent in terms of section 2 of the Employment Equality Acts, 1998 to 2008 and he therefore does not have the locus standi to maintain his complaint before this Tribunal in respect of the alleged discriminatory treatment of him on the grounds of age, in terms of section 6(2) of the Employment Equality Acts, 1998 to 2008 and contrary to section 8 of those Acts as regards his conditions of employment.
_______________
Enda Murphy
Equality Officer
23rd December, 2010