DECISION NO: DEC-E/2013/022
PARTIES
SAMAITAS
(REPRESENTED BY RICHARD GROGAN & ASSOCIATES - SOLICITORS)
AND
NURENDALE LTD. T/A PANDA WASTE
(REPRESENTED BY MR. ANTHONY PAUL BYRNE BL INSTRUCTED BY IN-HOUSE SOLICITORS)
File No: EE/2010/130 & EE/2011/555
Date of issue: 19 March, 2013
Headnotes: Employment Equality Acts 1998- 2011 - sections 6, 8 & 74 - race - discriminatory treatment -victimisation - illegal performance of contract - enforcing contract tainted by illegality
1. DISPUTE
This dispute involves claims by Mr. Augustus Samaitas, who is a Lithuanian national, that he (i) was discriminated against by the respondent in respect of his conditions of employment on grounds of race in terms of section 6(2) of the Employment Equality Acts, 1998 -2008 and contrary to section 8 of those Acts, (ii) performs like work, in terms of section 7(1)(a) of the Employment Equality Acts, 1998-2011 with two named comparators, who are of different nationalities to him, and is entitled to the same rate of remuneration as paid by the respondent to those comparators in accordance with section 29 of those Acts and (iii) was victimised by the respondent in terms of section 74(2) of the Employment Equality Acts, 1998-2011.
2. BACKGROUND
2.1 The complainant commenced employment with the respondent as a Helper in May, 2007 and was appointed to the position of Driver in February, 2009. He contends that he was discriminated against by the respondent on grounds of race contrary to the Employment Equality Acts, 1998-2008 in terms of his conditions of employment. He further contends that he performs like work with two named comparators, of different nationalities to him and is therefore entitled to the same rate of remuneration as paid by the respondent to those comparators in accordance with section 29 of the Employment Equality Acts, 1998-2011. Finally he asserts that he was victimised by the respondent in terms of section 74(2) of the Employment Equality Acts, 1998-2011 for having referred a complaint to this Tribunal. The respondent rejects the complainant's assertion that it discriminated against him on grounds of race or that it victimised him in terms of section 74(2) of the Acts. It accepts that the complainant performed like work in terms of section 7(1)(a) of the Employment Equality Acts, 1998-2011 with the two named comparators and submits that (a) there was no difference in the rates of remuneration paid to them for a period covered by the claim and (b) during the period when there was a difference in the rates of remuneration paid to them and the complainant, those rates are lawful in accordance with section 29(5) of the Acts. As a preliminary point the respondent submits that the complaints should not be heard by the Tribunal as the complainant fraudulently misrepresented his position in terms of holding a valid driving licence to perform his duties, a matter which was the subject of criminal proceedings and consequently he invalidated his contract of employment.
2.2 The complainant referred a complaint under the Employment Equality Acts, 1998 -2008 to the Equality Tribunal on 24 February, 2010 alleging that he was discriminated against by the respondent on grounds of race in terms of his conditions of employment. He referred a second complaint to the Tribunal on 26 July, 2011 contending that he performed like work, in terms of section 7(1)(a) of the Employment Equality Acts, 1998-2011, with two named comparators of different nationalities to him and he was therefore entitled to the same rate of remuneration as paid to those comparators by the respondent in accordance with section 29 of those Acts. The complainant referred a third complaint to the Tribunal on 14 December, 2011 asserting that he was (i) discriminated against by the respondent in respect of his conditions of employment on grounds of race in terms of section 6(2) of the Employment Equality Acts, 1998 -2011 and contrary to section 8 of those Acts and (ii) victimised by the respondent in terms of section 74(2) of the Employment Equality Acts, 1998-2011 for having referred his previous complaints to the Tribunal. In accordance with his powers under the Acts the Director delegated the complaints to the undersigned - Vivian Jackson, Equality Officer - for investigation, decision and for the exercise of other relevant functions of the Director under Part VII of the Acts. My investigation of the complaints commenced on 4 May, 2012 - the date the complaints were delegated to me. A hearing on the complaints took place on 16 May, 2012. At the outset of this Hearing the complainant's representative withdrew the entirety of the first complaint referred to the Tribunal alleging discrimination on grounds of race in respect of his conditions of employment. A number of issues arose at the Hearing which required further clarification and gave rise to correspondence between the Equality Officer and the parties. This process concluded in late August, 2012.
3. SUMMARY OF COMPLAINANT'S CASE
3.1 The complainant rejects the respondent's argument that the Tribunal has no jurisdiction to investigate his complaints. He accepts that he was convicted in the District Court under the road traffic legislation for driving without a valid and correct driving licence but argues that this matter only came to light after he had referred his complaints to this Tribunal. Consequently, the Tribunal should proceed to investigate his complaints.
3.2 The complainant commenced employment with the respondent as a Helper in May, 2007 and was appointed to the position of Driver in February, 2009. His hourly rate of remuneration increased from €10 per hour to €12.60 per hour on foot of this appointment. He contends that he performs like work, in terms of section 7(1)(a) of the Employment Equality Acts, 1998-2011, with two named comparators - Mr. A (who is from the Czech Republic) and Mr. B (who is a Latvian national). He further contends that both of these comparators were paid a higher hourly rate of remuneration than him (€14) and submits that he was entitled to this rate of remuneration pursuant to section 29(1) of the Acts.
3.3 The complainant states that the respondent introduced revised contracts of employment for a number of Drivers in March, 2010. He adds that these new contracts contained amended conditions of employment and increased the hourly rate of pay to €14.40 per hour. The complainant states that he was not given a revised contract of employment, despite being entitled to same and submits that this amounts to less favourable treatment of him on grounds of race (nationality) contrary to the Acts. He adds that during this period he was given a contract of employment by the respondent in respect of his role as a Driver but it contained incorrect information and he refused to sign it on the basis of legal advice he received. The complainant further states that the respondent informed him in March, 2010 that he would not receive a revised contract of employment unless he withdrew his first complaint from this Tribunal. It is submitted that this amounts to victimisation in terms of section 74(2) of the Employment Equality Acts, 1998-2011.
4. SUMMARY OF RESPONDENT'S CASE
4.1 The respondent rejects the complainant's assertions in their entirety and notwithstanding it position in this regard submits that the Tribunal has no jurisdiction to investigate the complaints as the complainant, through his actions, frustrated his contract of employment and rendered it invalid. The respondent states that the complainant misrepresented the position that he held a valid appropriate driver's licence to perform his duties. It adds that as a consequence of this the complainant was convicted under the road traffic legislation in the District Court and in the circumstances the Tribunal cannot investigate his complaints.
4.2 The respondent accepts that the complainant and comparators performed like work in terms of section 7 of the Employment Equality Acts, 1998-2001. It further accepts that for a period prior to the appointment of the complainant to the position of Driver in February, 2009 it paid Drivers €14 per hour. The respondent states that in the months prior to February, 2009 the respondent encountered financial difficulties and as part of a cost reduction exercise it reduced the hourly rate of remuneration paid to Drivers by 10% - the new hourly rate applicable was therefore €12.60. It states that the complainant was paid this hourly rate of remuneration on his appointment as a Driver in February, 2009 and there was therefore no difference in the rate of remuneration paid to him and the comparators at that time.
4.3 The respondent states that the pay reduction mentioned in the previous paragraph was applied to fifteen employees who were employed as Drivers at that time. It adds that these Drivers included nationals from six different countries, including Lithuania. The respondent states that these Drivers, which included the two comparators, sought to dispute the 10% pay reductions by referring claims under the Payment of Wages Act, 1991. The respondent states that at this time it had sought to address a number of issues of concern to it and the parties engaged in negotiations which addressed these concerns and the Drivers' issue of the pay reduction. It adds that this engagement was facilitated through the respondent's Work's Committee and the matter was resolved to both parties' satisfaction. The outcome of these discussions was revised contracts of employment for all these staff. Part of the negotiated settlement for those fifteen Drivers who had previously suffered a pay cut was that their hourly rate of remuneration would increase to a new hourly rate of remuneration of €14.40. The respondent states that this revised rate of remuneration did not apply to the complainant as he had not been previously subjected to the pay cut. It submits therefore that this amounts to grounds other than the discriminatory ground which renders the rate of remuneration paid to the complainant and the comparators lawful pursuant to section 29(5) of the Acts. The respondent also states that (a) there were Lithuanian nationals amongst the fifteen Drivers who were paid the higher rate of remuneration, (b) there was a Latvian Driver on the same rate of remuneration as the complainant and (c) all drivers recruited after March, 2010 were paid €12 per hour. It submits therefore that the nationality of the individuals involved was not a factor taken into account in determining a person's rate of remuneration.
4.4 The respondent rejects the assertion that it victimised the complainant. It states that despite several requests by his supervisors the complainant had refused to sign his updated contract of employment following his appointment as Driver. It adds that this refusal continued and the contract had not been signed in March, 2010 and indeed was never signed by him. The respondent restates the position outlined in the previous paragraph that the complainant was never entitled to the revised rate of remuneration (€14.40) paid to the fifteen Drivers who previously suffered the 10% pay cut and therefore rejects the assertion that he would receive a revised contact with this new higher rate of remuneration if he withdrew his first complaint from this Tribunal.
5. CONCLUSIONS OF EQUALITY OFFICER
5.1 The issues for decision by me is whether or not the complaints are validly before the Tribunal for investigation and if so whether or not (a) the complainant is entitled to the same rate of remuneration as paid by the respondent to two named comparators in accordance with section 29 of the Employment Equality Acts, 1998-2011, (b) the respondent discriminated against the complainant on grounds of race, in terms of section 6(2) of the Employment Equality Acts, 1998-2008 and contrary to section 8 of those Acts as regards his conditions of employment and (c) the respondent victimised the complainant in terms of section 74(2) of the Employment Equality Acts, 1998-2011. In reaching my Decision I have taken into consideration all of the submissions, oral and written, made to me in the course of my investigation as well as the evidence presented at the Hearing.
5.2 The first issue to be addressed is whether or not the complaints are validly before the Tribunal for investigation. The respondent submits that the complainant fraudulently misrepresented his position in terms of holding a valid driving licence to perform his duties, a matter which was the subject of criminal proceedings shortly before the Hearing. The respondent states that the complainant pleaded guilty to the offence and the Probation Acts were applied to him. It is submitted on behalf of the respondent that the actions of the complainant in this regard invalidate his contract of employment as a Driver and in the circumstances the Tribunal has no basis upon which to investigate his complaints. It is submitted on behalf of the complainant that although he was convicted in the District Court under the road traffic legislation for driving without a valid and correct driving licence, that this matter only came to light after he had referred his complaints to this Tribunal and consequently, the Tribunal should proceed to investigate his complaints.
5.3 The submission advanced by the respondent on this point relies on the common law principle that a contract tainted with illegality is not enforceable. This basic principle was stated over two hundred years ago in Holman v Johnson1 and has been applied on numerous occasions since. In this jurisdiction Barron J held in Hayden v Sean Quinn Properties Ltd2. that a contract of employment which seeks to avoid revenue or social welfare obligations was illegal and wholly unenforceable. The Employment Appeals Tribunal adopted this approach3 until the Oireachtas amended the unfair dismissal legislation in 1993 and afforded that Tribunal an express statutory jurisdiction to entertain complaints under those statutes, notwithstanding the fact that the parties agreed to contravene the income tax or social welfare legislation. It must be noted however that no such provision exists in the employment equality legislation.
5.4 It is clear that the rigid application of the above principle can lead to unfair consequences between the parties and courts and tribunals are cognisant of this. In this jurisdiction Hogan J in Hussein v Labour Court and Younis4 stated (whilst noting the comments of Geoghan J in Downing v O'Flynn 5) "So far as illegal contracts are concerned, the courts must, where possible, avoid applying too severe an approach, still less some formalistic approach that the enforcement of an illegal contract always presents insuperable public policy objections.". In the course of this judgement Hogan J drew a distinction between a contract that is illegal from the outset - in that case a contract which was expressly excluded by statute and thus void - and a contract that was created legally at the outset and was illegally performed by some incidental unlawful act and a party to the contract participated in that illegal performance. In Re Red Sail Frozen Foods Ltd. (In Receivership)6 Laffoy J noted the comments of Gibson LJ in Hall v Woolston Hall Leisure Ltd.7 as follows "In cases where the contract of employment is neither entered into for an illegal purpose nor prohibited by statute, the illegal performance of the contract will not render the contract unenforceable unless in addition to knowledge of the facts which make the performance illegal the employee actively participates in that illegal performance. It is a question of fact in each case whether there has been a sufficient degree of participation by the employee." and held that "it is reasonable for present purposes to adopt the requirement of active participation in addition to knowledge of the facts to render a contract of employment unenforceable." 8.
5.5 In the instant case it is clear that the contract is not one that was illegal from the outset as it was (i) not entered into by the parties for an illegal purpose or (ii) prohibited by statute. The question therefore is whether or not the contract is one that was illegally performed and if so, whether or not that illegality is sufficient to render the contract unenforceable. It is clear from the dictum of Laffoy J above that knowledge of the illegality and degree of active participation on the part of an employee are factors which this Tribunal must consider in any deliberations on the issue of whether or not a contract of employment is enforceable. The complainant, as a driver of a large waste disposal lorry, was required under Irish road traffic legislation to hold a valid licence which entitled him to do so. From the outset of his appointment to the position of Driver with the respondent in February, 2009 he deliberately deceived his employer by presenting it with a forged driving licence which indicated that he had formally achieved the driving skills required for the position. The complainant continued with this deception until 2012, when he was prosecuted, pleaded guilty and had the Probation Acts applied to him in the District Court for that offence. I am satisfied that during this period the respondent was entirely unaware of the complainant's deception, although questions might be asked as regards the level of checks and balances it operated at the time in terms of the provenance of its drivers' qualifications. The actions of the complainant could not be regarded as "some incidental illegality in the performance of the contract" given the necessity for him to possess the appropriate driving licence in order to legally perform the tasks which were central to his daily work and the potential consequences for both him and the respondent in terms of insurance cover in the event of an accident, particularly one involving a third party. In the circumstances I find that the nature of the complainant's illegal behaviour goes to the core of the employment relationship between the parties and is such that the contract of employment between him and the respondent is unenforceable. I find therefore that his claims, based entirely on aspects of his employment subsequent to his appointment as a Driver, must fail.
6. DECISION OF THE EQUALITY OFFICER
I have completed my investigation of this complaint and in accordance with section 79(6) of the Employment Equality Acts, 1998-2008 I issue the following decision. I find that the contract of employment between the complainant and the respondent is tainted by illegality to such a degree that the contract is unenforceable and his complaints therefore fails in their entirety.
_______________________________________
Vivian Jackson
Equality Officer
19 March, 2013
1 [1775] 1 Cowp. 341
2 [1994] ELR 45
3 See for example Lewis v Squash Ireland [1983] IRLM 363
4 [2012] IEHC 364
5 [2000] 4IR 383
6 [2007] 2 IR 361
7 [2000] 1 WLR 225
8 [2007] 2 IR 361