DEC-E2013-073- Full Case Report

The Equality Tribunal

Employment Equality Acts 2000 to 2011

DECISION NO: DEC-E2013-073

5 Complainants
(Represented by John Kane)

v

SIPTU
(Represented by Tony Walsh, Head of Infrastructure)

Date of Issue: 23 July 2013

File No.EE/2010/808/861/862/863/867

Keywords: Employment Equality Acts - discriminatory treatment - gender - marital status - family status - voluntary severance scheme- prima facie case

1. Dispute and delegation

1.1 This dispute concerns claims by Ms. Catherine McDonnell, Ms. Annette Glass, Ms. Bridget O' Donoghue, Ms. Noeleeen Noone & Ms. Sharon McDonnell (hereafter "the complainants") that they were subjected to discriminatory treatment by SIPTU (hereafter "the respondent) in relation to a voluntary severance package on grounds of their gender, marital status and family status, in that, as job-sharers they received a less favourable severance package than full-time employees.

1.2 Ms McDonnell referred a claim of discrimination to the Director of the Equality Tribunal on 29 October 2010 under the Employment Equality Acts. Ms. Annette Glass, Ms. Bridget O' Donoghue, Ms. Noeleen Noone referred claims of discrimination on 15 November, 2010 and Ms. Sharon McDonnell referred a claim of discrimination on 16 November 2010. On 21 December, 2012, in accordance with his powers under section 75 of the Acts, the Director then delegated the case to Valerie Murtagh - an Equality Officer - for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part VII of the Acts on which date my investigation commenced. As required by Section 79(1) and as part of my investigation, I proceeded to hearing on 20 February 2013. Final supplementary documentation was received on 17 April, 2013.

2. Summary of Complainant's case

2.1 The 5 complainants were employed by SIPTU as administrative assistants in a job-sharing capacity. The respondent introduced a voluntary severance package in late 2009. The severance package had a number of elements i.e.
(i) €3000 per year of service for whole time/job-sharing staff and pro-rata for part-time staff
(ii) statutory redundancy
(iii) 50% of Employer's rebate
(iv) the ceiling of the equivalent of 3 years current salary

The complainants' representative contends that the respondent correctly applied the €3000 per year figure to the job-sharers similar to the whole time staff which was the correct approach given that job sharers were on whole-time salary but their job sharing service was converted into whole-time years with the accrued whole-time service. However, the alleged discrimination relates to the capping of the complainants' salaries at the equivalent of three years current salary. The representative for the complainants argues that had the 2009 proposals been applied correctly, for example the complainant Ms. Catherine McDonnell would have received €138,000 as opposed to €79,738 as outlined below.

2.2 The complainants' representative states that a voluntary severance package was negotiated by the respondent and the Staff Representative Council (SRC) in 2005 and the main features of same were:
(i) €2500 per year of service
(ii) statutory redundancy
(iii) no ceiling
(iv) no distinction between whole-time, part-time or job-sharers years of service

The complainants' representative submits that the 2005 deal was balloted on by the staff and duly accepted and confirmation of same sent to the respondent by the SRC. This agreement was the subject of correspondence between a number of the complainants and SIPTU up to November 2007. In late 2009, a revised package was introduced. The complainants' representative understands that the respondent initiated these negotiations against a backdrop of their belief that they wished to give greater encouragement to employees to apply for same. The outcome of these negotiations was never put to a ballot of the staff and therefore never formally accepted by them. As soon as the outcome of the negotiations became known, both the respondent and the SRC were alerted by the complainants' representative that it was (a) a worse deal for some of the job-sharers and (b) the 3 year ceiling as interpreted by the respondent could seriously disadvantage job-sharers. The job-sharers were assured by the SRC that it would look into the matter with the respondent and address the concerns raised by them and it was confident that a solution would be found before any applicants departed on the package. The complainants' representative contends that this commitment by the SRC was never honoured and neither was the deal put to the staff by ballot for approval. The complainants' representative submits that the absence of a clear definition of what was meant by the equivalent of 3 years salary ceiling as it applies to the different categories of whole-time, part-time and job sharers is critical to the complainants' claim. The equivalent of three years salary should have meant the salary earned for 156 weeks worked.

2.3 The complainants' representative submits that the complainants were all married and had young families and consequently sought the job-sharing facility. He states that as 99% of all job-sharers in this employment or across industry are female, discrimination against them is gender sensitive. He contends that job-sharers are whole-time employees on the full salary when working and the only difference with other whole-time employees is that they accumulate their service at half the rate. He argues that job-sharers are distinctly different from the part-time staff in that;
(a) they cannot work elsewhere when on unpaid leave
(b) they cannot draw social welfare on their week off
(c) they must cover for each other when one partner is absent
(d) the job must be discharged in a seamless fashion where the members, activists, management and staff will suffer no negative consequence because two persons are sharing the one job.

The complainants' representative alleges that the complainants were discriminated against on grounds of gender, marital status and family status, in that, as job-sharers they were treated less favourably in relation to the voluntary severance package vis á vis full-time employees.

3. Summary of Respondent's case

3.1 The respondent submits that the Tribunal does not have jurisdiction to hear four of the five claims as it argues that these claims were lodged outside the six month time limit required by the Acts. The respondent contends that the complainants are part-time workers contrary to the claim by the complainant's representative that "job-sharers are distinctly different from part-time staff". The respondent submits that clause 3 of the EC Council Directive concerning the framework agreement on part-time work (Directive 97/81/EC) defines a part-time worker as an employee "whose normal hours of work, calculated on a weekly basis or on average over a period of employment of up to one year, are less than the normal hours of work of a comparable full-time worker". The only difference between the complainants and other part-time workers is the part-time work pattern, i.e. one week on, one week off. The principle of pro rata, (where a comparable full-time employee is entitled to a specific remuneration or other benefit, which is directly proportional to the number of hours he/she works averaged over a period of employment up to one year, compared to the yearly average number of working hours of the comparable full-time employee) was applied to the complainants. The respondent contends that there is nothing discriminatory or illegal in itself in the application of pro rata.

3.2 The complainants are alleging discriminatory treatment in the application of the three year ceiling of the severance package on the basis of gender, marital status and family status. The respondent submits that in order to sustain a claim of discriminatory treatment on such a basis, the complainants must demonstrate that the group of employees who are allegedly being treated more favourably are predominantly of a different gender, marital status and family status. The respondent contends that in this case, a total of 32 employees left the respondent's employment on the exit package which was available, of these, 29 were women (including the 5 job-sharers) the majority of which, both full-time and part-time were married with children. In that regard, the respondent submits that it is not possible to claim that the complainants were discriminated against on the basis of their gender, marital status and family status. The respondent contends that, as there is no marked imbalance between the complainants and their colleagues (the employees who were allegedly treated more favourably in terms of gender, marital status and family status), the complainants have failed to establish a prima facie case of discrimination. The respondent contends that similarly, in the instant case, the complainants were not treated differently in relation to the application of the ceiling because they are women and married with young families but because they were job-sharers. The respondent argues that the complainants' entire case is built on a difference of treatment between part-time workers and full-time workers and the respondent submits that this is not a discriminatory ground covered by the Employment Equality Acts. The respondent argues that the lapsed 2005 Agreement has no bearing on this case as it was superseded by the 2009 Agreement.

4. Conclusions of Equality Officer

4.1 I have considered all the evidence both written and oral presented to me. Section 85A of the Employment Equality Acts sets out the burden of proof which applies in a claim of discrimination. It requires the complainants to establish, in the first instance, facts from which it may be presumed that there has been discrimination in relation to them. If they succeed in doing so, then, and only then, is it for the respondent to prove the contrary. The Labour Court has held consistently that the facts from which the occurrence of discrimination may be inferred must be of "sufficient significance" before a prima facie case is established and the burden of proof shifts to the respondent. In deciding on these complaints, therefore, I must first consider whether the existence of a prima facie case has been established by the complainants. In a recent Determination the Labour Court ¹, whilst examining the circumstances in which the probative burden of proof operates, held as follows -

"Section 85A of the Acts provides for the allocation of the probative burden in cases within its ambit. This requires that the Complainant must first establish facts from which discrimination may be inferred. What those facts are will vary from case to case and there is no closed category of facts which can be relied upon. All that is required is that they be of sufficient significance to raise a presumption of discrimination. However, they must be established as facts on credible evidence. Mere speculation or assertions, unsupported by evidence, cannot be elevated to a factual basis upon which an inference of discrimination can be drawn. Section 85A places the burden of establishing the primary facts fairly and squarely on the Complainant and the language of this provision admits of no exceptions to that evidential rule."

Jurisdictional Issues - Time Limits

4.2 The respondent has argued that only one of the complainants, namely, Ms. Catherine McDonnell had submitted the complaint within the six month time limit and that the other four claims are outside the time limit prescribed by section 77 (5) (a) of the Act and are therefore statute barred. The representative for the complainants stated that he contacted the Equality Authority for advice and was given instruction to complete the EE1 form and name Ms. Catherine McDonnell and list the other four complainants on the form and submit to the Tribunal. Following receipt of the registered letter by the Tribunal, the representative was contacted by a member of the Tribunal and advised to submit individual EE1 forms for each of the complainants and he followed up by submitted individual forms for the other four complainants. The representative for the complainants stated that he wrote to the general secretary of the respondent in October 2010 outlining the basis of the claims of the five complainants and that the respondent was on notice of the claims. The representative submits that given this and the fact that the other four claims were submitted on individual EE1 forms albeit a week after the 6 month time limit had expired that they have advanced reasonable cause for the delay in submitting the four outstanding claims. Having examined all the documentation and testimony on this issue, I find that all five complainants had their complaints lodged within the prescribed 6 month time limit given that the complainants' representative lodged, by registered post on 28 October 2010, the EE1 form which was completed by Ms. Catherine McDonnell and listed the names of the other four complainants. The follow-up action of a staff member of the Tribunal requesting an individual EE1 form on behalf of each complainant was an administrative function only. Therefore, I am satisfied that each claim on behalf of the five complainants is validly before me and I have jurisdiction to hear these complaints.

Discriminatory treatment

4.3 The central question which must be answered is: Does the severance package in relation to the 3 year ceiling of current salary constitute discrimination either direct or indirect against the job-sharers vis-á-vis the full-time staff ? It is only if a finding of discrimination is made that the question of objective justification arises. Direct discrimination occurs when a person is treated differently from, or less favourably than another person on the grounds of their gender. In this particular case, the alleged discrimination occurred because of the decision of the company to place a ceiling on earnings of 3 years current salary. I am satisfied that this decision cannot be regarded as directly discriminatory as it is not directly linked to the gender of the parties concerned and on the face of it, appears to equally affect both women and men. Therefore no question of direct discrimination arises.

Indirect Discrimination is defined by Section 19(4) of the Acts as follows:
(4) Where a term or a contract or a criterion applied to employees (including A and B)-
(a) applies to all the employees of a particular employer or to a particular class of such employees (including A and B)
(b) is such that the remuneration of those employees who fulfil the term or criterion is different from that of those who do not,
(c ) is such that the proportion of employees who are disadvantaged by the term or criterion is substantially higher in the case of those of the same sex as A than in the case of those of the same sex as B, and
(d) is not appropriate and necessary and cannot be justified by objective factors unrelated to A's sex,
then, for the purpose of subsection (1) A and B shall each be treated as fulfilling or, as the case may be, as not fulfilling the term of the criterion, whichever results in the higher remuneration.

A generally accepted definition of discrimination is that formulated by the European Court of Justice (the ECJ) in Finanzant Koein- Altstadt v Schumacher [1995] ECR 1-225 as follows:
"It is settled law that discrimination can arise only through the application of a different rule to comparable situations or the application of the same rule to different situations."

4.4 In the instant case, a total of 32 employees left the respondent's employment on the exit package which was available, of these, 29 were women (including the 5 job-sharers) the majority of which, both full-time and part-time were married with children. Therefore, I am satisfied given those statistics that the complainants have not demonstrated a prima facie case of discrimination on the basis of their gender, marital status and family status. There is a substantial line of authority from the ECJ to the effect that payment of a benefit pro rata to the number of hours worked cannot be regarded as discriminatory. This approach was also followed by the Labour Court in the case of Brown v Easons & Sons Limited [ADE 02/12] where the Court found that the payment of service pay pro rata to the number of hours worked based on the hourly rate was not discriminatory. The pro rata principle has been extensively considered by the ECJ in, amongst others, the cases of;
- Lewen V Lothar Denda [1999] ECR 1-07243 (Lewen);
- Helmig v Deutsche Angestellten-Krankenkasse[1994] ECR1-5727(Helmig) ;
- Schonheit v Stadt Frankfurt am Main [2003] C/402;
and by the Labour Court in
- Eason and Sons Limited v Browne ADE 02/12
- TSB ESOP Trustees Ltd. v Brady & Others and McGivern ADE/04/7
In Lewen, the dispute centred on the non-payment to the complainant of a Christmas bonus because she was on parental leave and therefore absent from her employment at the time payment was due. In answering the questions referred by the National Court the ECJ stated as follows:
" an employers refusal to award a bonus, even one reduced proportionately to workers on parental leave from work during the year in which the bonuses granted on the sole ground that the contract of employment is in suspense when the bonus is granted, places them at a disadvantage."

This judgment indicated that discrimination contrary to article 141 of the Treaty and Directive 75/117 occurs where an element of remuneration is made conditional upon a criterion which can be fulfilled more easily by members of one gender than those of the other. However, the reference in the passage quoted above to a bonus reduced proportionately indicates that the payment of a pro rata benefit in such circumstances is permissible.

In Helmig, the issue for consideration was whether overtime pay should be paid to part-time workers for time worked in excess of the contract hours as was the case with the full-time workers. Again, the Court looked to see if the rules or criteria for the granting of overtime rates established different treatment for full-time and part-time employees and whether that difference affected considerably more men than women. The Court stated:

"only if these two questions are answered in the affirmative does the question arise of the existence of objective factors unrelated to discrimination which may justify such a difference in treatment.

There is unequal treatment wherever the overall pay of a full-time employee is higher than that of part-time employees for the same number of hours worked on the basis of an employment relationship.

In the circumstances in these proceedings, part-time employees do receive the same overall pay as full-time employees for the same number of hours worked."

Accordingly, the Court held that there was no discrimination in that case and that the question of requiring objective justification for the rules at issue did not arise. In Schonheit, at paragraph 69, the Court states,
"to establish whether there is indirect discrimination, it is necessary to ascertain whether the provisions at issue have a more unfavourable impact on women then men".
At paragraph 90 in the same judgment of the court states:

"it should be stated at the outset that, as the Advocate General has noted at Point 102 of his opinion, community law does not preclude a retirement pension being calculated pro rata temporis in the case of part-time employment".

4.6 Overall, in taking all of the evidence into consideration including the relevant caselaw in the instant case, I am satisfied that the application of the capping of the severance amount to three years current salary under the scheme, as between full-time and part-time workers including the job-sharers is based on the hours worked according to the principle of a pro rata temporis and does not constitute unfavourable treatment under the Acts either directly or indirectly. Given that I am satisfied that no unequal treatment exists, there is no necessity to consider the defence of objective justification.

5. Decision of the Equality Officer

5.1 In reaching my decision, I have taken into account all the submissions, written and oral that were made to me. Having investigated the above complaints, I hereby make the following decision in accordance with section 79(6) of the Employment Equality Acts, 1998 to 2008. I find that the respondent did not discriminate either directly or indirectly against the complainants on grounds of gender, marital status and family status in terms of section 6(2) of the Acts and contrary to section 8 of the Acts by capping the severance payment available to employees at three years current salary.

____________
Valerie Murtagh
Equality Officer
23 July, 2013

Footnotes:

¹ Arturs Valpeters v Melbury Developments [2010] 21 E.L.R. 64.