FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 83, EMPLOYMENT EQUALITY ACTS, 1998 TO 2008 PARTIES : EIRCOM LIMITED (REPRESENTED BY ARTHUR COX AND COMPANY SOLICITORS LIMITED) - AND - RAYMOND MCGOVERN DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Ni Mhurchu |
1. Appeal under Section 83 of the Employment Equality Acts, 1998 to 2008.
BACKGROUND:
2. The Worker appealed the Decision of the Equality Officer to the Labour Court on the 20th September, 2010. A Labour Court hearing took place on the 22nd March, 2011. The following is the Court's Determination:
DETERMINATION:
This is an appeal by Mr Raymond J. McGovern against the Decision of the Equality Tribunal in his claim against his former employer, Eircom Ltd, alleging discrimination on grounds of age.
The parties are referred to herein as they were at first instance. Hence Mr McGovern is referred to as the Complainant and Eircom is referred to as the Respondent.
At the appeal, the Complainant appeared in person. The Respondent was represented by Mr Brian Conroy B.L., instructed by Arthur Cox Solicitors.
The material facts
The claim relates to the alleged exclusion of the Complainant from two voluntary severance schemes put in place in 2004 and 2005. The conditions under which the scheme applied were set out in a document entitled Group HR Circular 26/2004. This circular provided that the scheme was not open to employees who could avail of their pension entitlements. An employee with the requisite service could avail of their pension entitlements from age 60 onwards. The maximum retirement age was 65. Two schemes were put in place pursuant to this Circular, namely VLS 19/04 and VLS 21/05.
At the time the 2004 scheme was introduced the Complainant was approaching his 60th birthday. At the time the 2005 scheme was offered the Complainant was over 60 years of age.
The Complainant contends that he was refused access to both schemes by reason of his age.
The complaint was investigated by the Equality Tribunal which found against the Complainant. The Complainant appealed to this Court.
Preliminary questions of law.
The Respondent raised two preliminary points of law. Firstly, it contends that the within complaint was referred to the Equality Tribunal 19 months after the closure of the 2004 scheme and that any cause of action in relation to that scheme is out of time. In relation to the 2005 scheme the Respondent admitted that its refusal to admit the Complainant to the scheme was related to his age. It contends that this refusal is saved by Section 34(3) of the Act which provides : -
- In an occupational benefits scheme it shall not constitute discrimination on the age ground for an employer—
(b)to fix different such ages for all employees or a category of employees,
(c)to use, in the context of such a scheme, age criteria in actuarial calculations, or
(d)to provide different rates of severance payment for different employees or groups or categories of employees, being rates based on or taking into account the period between the age of an employee on leaving the employment and his or her compulsory retirement age,
The Respondent contends that the scheme in issue is an occupational benefit scheme within the meaning of Section 34(3A) of the Act which provides: -
- In subsection (3) —
“occupational benefits scheme” includes any scheme (whether statutory or non-statutory) providing for benefits to employees or any category of employees on their becoming ill, incapacitated or redundant but does not include any occupational pension scheme providing for pensions, gratuities or other allowances payable on retirement or death;
The Complainant accepts that the scheme is an occupational benefit scheme but he contends that Section 34(3) does not give the Respondent an unfettered right to discriminate on age grounds in its application of the scheme.
The Respondent contends that the Complainant’s exclusion from the 2004 scheme was unrelated to his age. It further contends that any complaint which the Complainant may have in relation to the 2004 scheme is statute barred. Nevertheless, it accepts that if its contention in relation to the effect of Section 34(3) of the Act is correct, the exclusion of the Complainant from both the 2004 and 2005 schemes on grounds of age, upon which he relies, is outside the purview of the Act and neither complaint can succeed.
In these circumstances, and by agreement between the parties, the Court decided to consider the construction and application to the instant case of Section 34(3) of the Act as a preliminary matter.
Position of the parties
The Respondent contends that Section 34(3) of the Act is clear and free from any ambiguity. It submits that the Court must apply the statutory provision as it finds it and hold that a refusal or failure to admit the Complainant to the scheme in issue is not unlawful. In advancing that submission the Respondent relied on the Decision of Charleton J. inMinister for Justice Equality and Law Reform and The Commissioner of An Garda Siochana v The Equality Tribunal and Ors. [2009] 20 ELR 116.
The Complainant, who appeared in person without professional assistance, submitted that the Respondent cannot simply rely on Section 34(3) of the Act and that it must act fairly. The Court structured this submission in legal terms and put it to Counsel for the Respondent that the legal import of the Complainant’s contention was that Section 34(3) of the Act must be interpreted and applied in light of the wording and purpose of Directive 2000/78/EC and in particular Article 6 thereof which provides: -
- Article 6
Justification of differences of treatment on grounds of age
1. Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.
Such differences of treatment may include, among others:
(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;
(b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;
(c) the fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement.
2. Notwithstanding Article 2(2), Member States may provide that the fixing for occupational social security schemes of ages for admission or entitlement to retirement or invalidity benefits, including the fixing under those schemes of different ages for employees or groups or categories of employees, and the use, in the context of such schemes, of age criteria in actuarial calculations, does not constitute discrimination on the grounds of age, provided this does not result in discrimination on the grounds of sex.
Counsel did not accept that there was any conflict between Section 34(3) of the Act and Article 6 of the Directive. Counsel further submitted that the Decision inMinister for Justice Equality and Law Reform and The Commissioner of An Garda Siochana v The Equality Tribunal and Orsprecludes the Court from importing words into Section 34(3) of the Act by reliance on the Directive. In advancing that submission Counsel relied upon the following passage from the judgment of Charleton J.: -
- There is no principle of European law which allows an administrative body or a court of limited jurisdiction to exceed its own authority in order to achieve a result, whereby it is of the view that European legislation has not been properly implemented at national level and that this situation is to be remedied by the re-ordering in ideal form of national legislation. The limit of jurisdiction is of primary importance to the exercise of authority, whether the court be one established as an administrative body, or is one of the courts under the Constitution. In the event that a view emerges that national legislation has not properly implemented European legislation, this is no more than an opinion. The respondent does not have the authority to make a binding legal declaration of inconsistency or insufficiency on a comparison of European and national legislation. The High Court has that power as this has been expressly reserved to it by Article 34 of the Constitution.
In case C- 268/06Impact v Minister for Agriculture and Food and Others[2008] IRLR 552 at 564 the then ECJ restated the well settled interpretative obligation (or the doctrine of indirect effect as it is also known) on national courts and tribunals as follows: -
- According to settled case law, national courts are obliged, when applying domestic law, to interpret it, so far as possible, in the light of the wording and the purpose of a Directive in order to achieve the result sought by that Directive and thus to satisfy the third paragraph of Article 249 EC.
The principle that national law must be interpreted in conformity with Directives requires national courts to do whatever lies within their jurisdiction, taking the whole body of domestic law into consideration and applying the interpretative methods recognised by domestic law, with a view to ensuring that the relevant Directive is fully effective and achieving an outcome consistent with the objective pursued by it.To do so they must use in full the discretion that is given to them under national law
However, the obligation to interpret national law in conformity with a Directive is limited by general principles of law – particularly those of legal certainty and non-retroactivity – and cannot serve as the basis for an interpretation of national law contra legem.
InMurphy v Telecom Eireann[1989] ILRM 53 Keane J. (as he then was) said the following in relation to the obligation on this Court to interpret and apply domestic law in accordance with this interpretative obligation as follows: -
- “The Oireachtas has provided in the Act of 1974 a statutory machinery intended to give effect to the principle of equal pay for equal work and has entrusted the arbitral role between employers and employees in this area to the Labour Court. That tribunal in discharging its statutory function is as much bound to apply the law of the community as is this court. Similarly, where national law and community law conflict, it must give precedence to community law. It is accordingly entirely appropriate in the light of the ruling of the Court of Justice of the EC in the present case to remit the matter to the Labour Court with a direction that the issues between the parties should be determined on the basis that the appellants and the male employee are employed in ‘like work’ . The statutory adjudication must, in other words, be arrived at by applying the relevant principle of community law enunciated by the Court of Justice of the EC rather than the words of ss. 2 and 3 of the Act of 1974 literally construed as our principles of statutory construction require. This seems to me entirely in accordance with the judgments of the Court of Justice in Simmenthal and in the present case.
However, as inMurphy v Telecom Eireann,the Court should only adopt that approach where the question of European law is settled by a definitive decision of the Court of Justice of the European Union (formally the ECJ). All statutes enjoy a presumption of compatibility with EU law and in cases of doubt this Court should apply national law as it finds it or seek a preliminary ruling on the point in issue from the CJEU. The Court does not believe that this is an appropriate case in which to make a reference to the European Court. Moreover for the reasons that follow the Court does not consider it necessary to form a concluded view on the correctness of the submissions advances by Counsel on the interpretative issue arising in this case.
Even if that submission is incorrect, and the statutory provision should be interpreted in light of Article 6.1 of the Directive, the effect would be that the Court should consider if the decision to exclude employees who could avail of their pension entitlements by virtue of being over 60 years of age is objectively and reasonably justified. The scheme provided substantial lump sum payments, up to €140,000, as an inducement for employees to voluntarily terminate their employment with the company. The clear purpose of the scheme was to effect a reduction in the Respondent’s payroll costs which, over time, would more than offset the initial cost of the scheme. Clearly the savings which the Respondent could realise under the scheme were directly related to the remaining potential service of employees availing of the scheme.
In that regard it was manifestly reasonable for the Respondent to direct the funding available under the scheme to those employees with longer remaining tenure in employment and to exclude those whose remaining potential service would be insufficient to realise sufficient savings so as to justify the initial outlay. In the Court’s view that constituted a legitimate objective the attainment of which required the imposition of some cut-off point related to the age, and consequently the remaining tenure, of employees. It was equally reasonable to set that cut-off point at or about the point where an employee would have five or fewer years of service remaining.
Accordingly, on the facts of this case, whether Section 34(3) is to be given a literal interpretation or a purposive interpretation in harmony with Article 6.1 of the Directive, the result would be the same and the Court would have to conclude that the exclusion of the Complainant by operation of that provision was not unlawful.
In these circumstances the Court has reached the conclusion that the within complaint cannot succeed.
Determination
It is the Determination of the Court that the Decision of the Equality Tribunal be affirmed and the appeal is disallowed.
Signed on behalf of the Labour Court
Kevin Duffy
27th June, 2011______________________
JFChairman
NOTE
Enquiries concerning this Determination should be addressed to John Foley, Court Secretary.