EMPLOYMENT EQUALITY ACTS
Decision DEC-E2013-042
PARTIES
McPhillips
(Represented by SIPTU)
-V-
ISS Facility Services
(Represented by IBEC)
File references: EE/2010/450
Date of issue: 16 May 2013
Headnotes: Discrimination on grounds of age - retirement age - fixed term contract over compulsory retirement age - objective and reasonable justification - Employment Equality Acts -- sections 6(2)(f), 6(3)(c), 8(6), 74(2)
1. Dispute
1.1 This dispute concerns a complaint by Mr. Michael McPhillips (hereinafter 'the complainant') that he was subjected to discriminatory dismissal by ISS Facility Services (hereinafter 'the respondent') on the grounds of age in terms of Section 6 of the Act of the Employment Equality Acts. He also made a claim of victimisation.
1.2 The complainant referred a complaint under the Employment Equality Acts to the Equality Tribunal on 10 June 2010. In accordance with his powers under the Acts the Director delegated the complaint to the undersigned - Deirdre Sweeney, 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 complaint commenced on 24 July 2012 the date the complaint was delegated to me. Submissions were received on behalf of both parties. As required by section 79(1) of the Acts and as part of my investigation, I proceeded to hearing on 27 September 2012. At the hearing I requested further submissions from both parties addressing legal issues raised by the claims and a further hearing was held on 15 November 2012.
2. Summary of the Complainant's Submission
2.1 The complainant submits that he was employed by the respondent as an external grounds operative. He worked on the same site for eleven years. His employment had transferred to the respondent as a result of a transfer of undertaking. In a letter dated 25 May 2009 he was told that he had to retire when he reached 65 years on 8 June 2010. He objected to this on the grounds that it was discriminatory in terms of the EU Directive 2000/78/EC.1 He was informed that to continue his employment he would have to sign a yearly contract which he understood would be renewed annually. He wrote to the respondent on 29 May 2009 confirming that unless it was against the law to employ him he objected to having to leave his employment and accepting the offer of a yearly contract if still available. On reaching 66 in June 2010 he was informed by the respondent that the contract was not to be renewed. He contends that the respondent's argument that this contract allows him to be dismissed at 66 years of age denies him his employment rights as laid down in the EU Directive2. He contends that the contract he was forced to sign to remain in employment at age 65 is an illegal contract and should not be permitted.
2.2 The complainant contends that the respondent terminated his contract on the ground of age and contends that evidence has been adduced to clearly and unequivocally substantiate this. At the hearings the respondent's witnesses have given evidence that the respondent offered him a fixed term contract of one year only because of his age. The complainant contends that he was offered this because he had challenged the respondent's decision to terminate his employment on reaching 65 years. It is the complainant's assertion that the respondent in this instance did not have justified, objective and reasonable grounds, in the first instance, to justify a retirement age of 65.
2.3 The complainant submits that a previous Equality Officer decision3 supports his case. In this decision the Equality Officer stated that
"For the avoidance of doubt, I am not saying that the respondent is not entitled to set a mandatory retirement age but that this requirement should be capable of being justified on objective and reasonable grounds".
The complainant submits that the respondent in this case also has not shown that there are objective and reasonable grounds for the termination of the complainant's employment.
In this regard the complainant also cites the judgment of McKechnie J in Donnellan v MJELR & Ors,4
"national measures relating to compulsory retirement ages are not excluded from consideration under Directive 2000/78/EC. Any discrimination with regards to age must, as put by that Directive, serve a legitimate aim or purpose, and the means taken to achieve that purpose must be appropriate and should go no further than is necessary, i.e. they should be proportionate."
The complainant submits that the claim before the Equality Officer must be considered in its totality, back to when he was advised that his employment was being terminated because he had reached the age of 65. The complainant submits that the respondent had not justified either his proposed retirement at age 65 or the termination of his employment at the age of 66. In conclusion the Equality Officer is asked to find in the complainant's favour and award him compensation that is fair and equitable in the circumstances.
3. Summary of the Respondent's Submission
3.1 The respondent states that the complainant was employed as an external grounds operative and worked 39 hours per week. He was initially employed by Noonan Services Ltd in October 1998 and following a successful tender by the respondent transferred over to their employment in 16 October 2006. On 25 May 2009 the company wrote to the complainant stating that his 65th birthday was approaching on 8 June 2009, that the respondent had a normal retirement age of 65 as per his contract of employment and asked him if he wished to avail of early retirement or would like the respondent to organise some retirement course for him. If not the respondent would assume that he wished to work to 5 June and retire on 8 June, 2009 his 65th birthday.
3.2 The respondent states that on 29 May 2009 the complainant wrote to his site manager Ms. A outlining that it was his request to stay on working despite his approaching retirement age. He further stated that he objected to leaving his employment and accepted the offer of a yearly contract that was available to him. On 4 June 2009 the respondent wrote to the complainant stating that they accepted his decision to stay in his current employment and confirmed that they had enclosed two copies of a fixed term contract. On 31 May 2010 the respondent wrote to the complainant stating that this was notice of termination of his fixed term contract which was to expire on 7 June 2010. The respondent contends that, as per the company policy the retirement age is 65 years but following his request the company had issued him with a one year fixed term contract which was due to finish.
3.3 On 6 June 2010 the complainant's union representative wrote to Mr B the HR Director stating that their member was concerned that he had been treated unfairly and had been discriminated against on the grounds of age by the respondent and requested the reason that his contract had not been renewed. The HR Director responded stating that the complainant had been on a fixed term contract of employment.
3.4 The respondent states that it has been the well established practice of the Equality Tribunal and the Labour Court to require a complainant to present, in the first instance facts from which it can be inferred that he was treated less favourably than another person is, has or would be treated on the basis of the discriminatory ground cited. It is only when he has discharged this burden to the satisfaction of the Equality Officer that the burden shifts to the respondent to rebut the inference of discrimination raised. The respondent contends in this regard that the complainant has failed to discharge this burden of proof.
3.5 The respondent's HR Director Mr. B, in evidence at the hearings, confirmed that in certain circumstances it operates a policy of retirement at age 65 years. Within the sectors in which it operates (cleaning and secuirity) it is not possible to have a universally applicable policy of retirement at that age, as employees may transfer into its employment under the "Transfer Regulations" when already over age 65 years. This commonly arises in those sectors. The HR Director confirmed that approximately 50 people over 66 years of age are employed by it. The majority of them are security officers who transferred over from another company who did not have a mandatory retirement age.
3.6 Ms C an administrator in the respondent's HR Department stated at the first hearing that the respondent's policy is to offer a one year fixed term contract to those employees approaching age 65 who are due to retire at 65 which, if voluntarily accepted, is not renewed after the natural expiry. She confirmed in her evidence that that the reason the complainant's contract was not renewed was in line with this policy. She confirmed that fixed term contracts would be renewed for younger employees. She also confirmed that the company does not provide an occupational pension scheme.
3.7 Ms A the Facilities Service Manager and the complainant's supervisor also gave evidence at the first hearing. She confirmed that the complainant had raised with her his objections to retiring when he received the letter of 25 May 2009 from HR. She also confirmed that she had signed the letter of 4 June 2009 on behalf of the respondent. This letter stated, inter alia
" ..We are happy to accept your decision to stay in your current employment and confirm that all your responsibilities, terms and conditions related to your position of External Grounds Operative will remain the same as per your contract of employment prior to your 65th birthday.
Enclosed you will find two copies of fixed term contract which will be renewed on annual basis. I would appreciate if you could sign and return one copy to me as soon as possible...."
Ms A confirmed at the hearing that this letter was reviewed by the HR Department before she issued it
3.8 The respondent states that the parties are in dispute as to whether both the retirement and the natural expiry of the fixed term contract are before the Equality Officer in this complaint. The respondent submits that only the latter is in scope in the complaint. The respondent submits that the complainant's retirement is a stand-alone separate event in the context of this complaint. In this instance and in line with policy before reaching age 65 the complainant was offered a fixed term contract. He had the option to choose or not to choose to avail of the offer. He accepted the offer by letter of 25 May 2009, two weeks before he reached age 65. The respondent contends that by voluntarily availing of an option on offer to continue his employment beyond retirement age he no longer has grounds for complaint concerning retirement age.
3.9 The respondent contends that in the period 8 June 2009 to 7 June 2010 the complainant had the opportunity to lodge some form of complaint to the Equality Tribunal concerning when he reached age 65 but he did not. After 8 June 2010 any such complaint must be judged to be outside the time limits under the Acts for a legitimate complaint. The respondent further contends that the complainant signed off on a fixed term contract which had a clear provision identifying its natural expiry to be on 7 June 2010 as he was advised by letter of 25 May 2010. The respondent submits that the complainant's termination was only because of the natural expiry of the fixed term contract and no other reason. It submits that it would be quite unrealistic to say that just because the person is one year older than the natural expiry of a fixed term contract freely entered into, it could be represented as age discrimination.
4. Conclusions of Equality Officer
4.1 The issue for decision by me is whether or not the respondent dismissed the complainant in circumstances amounting to discrimination on grounds of age, in terms of section 6 of the Employment Equality Acts, 1998-2007 and contrary to section 8 of those Acts when it terminated his employment in 7 June 2010. In reaching my Decision I have taken into account all of the submissions, oral and written, made to me in the course of my investigation as well as the evidence presented at the Hearings.
4.2 Section 6(1) of the Employment Equality Acts provides that discrimination shall be taken to occur where " a person is treated less favourably than another person is, has been or would be treated in a comparable situation on any of the grounds specified in terms of subsection (2)...". Section 6(2) (f) of the Acts defines the discriminatory ground of age as follows "as between any two persons...that they are of different ages..."
It follows therefore that the complainant must be the subject of less favourable treatment in comparison to another person of a different age.
4.3 In evaluating the evidence before me I must first consider whether the complainant has established a prima facie pursuant to Section 85A of the Employment Equality Acts. This requires the complainant to establish, in the first instance, facts from which discrimination may be inferred. It is only where such a prima facie case has been established that the onus shifts to the respondent to rebut the inference of discrimination raised.5
4.4 The complainant submits that the respondent attempted to terminate his employment when he reached 65 years of age. When the complainant objected to this on the grounds of possible discrimination in terms of the provisions of the Employment Equality Acts and the EU Directive 2000/78/EC he was told that he could continue in employment with the same terms and conditions as heretofore by signing a yearly contract which would be renewed on an annual basis. The evidence of the respondent's witnesses is that "fixed term contracts" (which the respondent asserts this is) are not renewed for anyone over 65 years of age while fixed term contracts are renewed for younger employees. In Donnellan v The Minister for Justice, Equality and Law Reform and Others,6 McKechnie J. held that the termination of an employee's employment solely on reaching a particular age (in that case sixty years old) constituted direct discrimination on grounds of age contrary to the Acts. It follows therefore that in the instant case the complainant has discharged the initial burden on proof required and the respondent must therefore satisfy me that there are factors which justify the treatment of the complainant.
4.5 The respondent has advanced the argument that it can rely on the exemption provided at section 6(3) (c) of the Acts. The respondent contends that this section grants an absolute defence to the respondent and is not subject to a test of objective justification by reference to Article 6 of the Framework Directive.
Section 6(3) (c) provides
"Offering a fixed term contract to a person over the compulsory retirement age for that employment or to a particular class or description of employees in that employment shall not be taken as constituting discrimination on the age ground"
4.6 Any derogation from the principle of equal treatment such as that provided for in Section 6(3) (c) must be strictly construed. A number of issues arise in relation to the interpretation of this section in relation to this particular case. In the first instance the derogation provided for is confined solely to a fixed term contract being offered to a person over the compulsory retirement age for that employment. The first issue therefore to be addressed is whether the contract under which the complainant was employed was actually a fixed term contract. In this regard I am guided by the views expressed by Laffoy J. in UPM Kymmene Corporation v. BWG Limited7 in relation to the construction of a contract where she stated inter alia
"...51.The basic rules of construction which the court must apply in interpreting the documents which contain the parties' agreements are not in dispute. The court's task is to ascertain the intention of the parties and the intention must be ascertained from the language they have used, considered in light of the surrounding circumstances and the object of the contract......
.......54.Fourthly the representation the meaning of which is sought to be ascertained was compounded by several statements contained in a number of documents. The general rule of construction is that all the statements must be considered in their entirety, and in their bearing on one another, the primary object being to ascertain whether the conjoint effect of the whole complex representation is true or false of the whole of the facts..."
4.7 The essence of a fixed term contract is that it will come to an end by the occurrence of an objective condition specified in the contract itself.8 In the present case the evidence before me in relation to this issue is the respondent's letter of 4 June 2009 enclosing copy of contract to be signed by the complainant. The respondent's letter clearly confirms to the complainant that all his responsibilities, terms and conditions related to his position of External Grounds Operative will remain the same as per his contract of employment prior to his 65th birthday. In addition it states that this contract he was being asked to sign will be renewed on an annual basis (my emphasis). Neither statement suggests that this is a fixed term contract. Indeed it is clearly stated that there will be no change to his terms and conditions as per his contract of employment prior to his 65th birthday. I consider that the complainant for the full period of his employment with the respondent was employed on a continuous successive permanent contract. Therefore the exception to the principle of equal treatment provided by Section 6(3) (c) of the Acts does not apply in the present case. I find as a matter of fact that the complainant's employment did not terminate due to the expiry of a fixed term contract of employment but was terminated because he was over 65 years of age and was coming up to his 66th birthday.
4.8 The complainant also contended that he suffered victimisation in terms of the Acts by being offered a yearly contract when he had objected to having to retire at age 65. As I have found that there was no change in his employment contract I find that his claim in relation to victimisation cannot succeed.
4.9 I consider it may be useful for me to outline that, notwithstanding the respondent's submission that the complainant's retirement age as per his contract of employment was 65 years of age; the respondent was unable to submit any evidence to this effect. While the respondent submitted that the normal retirement for its employees is 65 years and that this was in the employee handbook, it was accepted, at the first hearing, that there is no reference to retirement age in its employee handbook submitted in evidence. The respondent accepted that the terms and conditions of the complainant's employment with his previous employer continued to apply following the transfer of undertaking. The respondent was unable to furnish any evidence that the complainant's terms and conditions with his previous employer included a retirement at age 65 years, or indeed at any age, at the time of his transfer. The complainant stated that while he had had a contract with his previous employer he did not have a copy now and did not remember whether it said anything about retirement.
4.10 I have already found at 4.4 that the termination of the complainant's employment on his reaching 66 years constitutes discrimination on grounds of age. Notwithstanding that I am not satisfied that an actual retirement age had been fixed in his case, he was, in effect, retired. The Employment Equality Acts, inter alia, transpose Directive 2000/78/EC into national law. It is settled law that interpreting national legislation, national courts must do so in light of the wording and purpose of European legislation and where there is conflict between both, European legislation takes precedence. Article 6 of the Framework Directive permits Member States to legislate for exemptions to the principle of equal treatment on grounds of age provided such exemptions are objectively justified. In Donnellan v The Minister for Justice, Equality and Law Reform & Others9 McKechnie J stated, in looking at the regulations governing the application of compulsory retirement ages of senior members of An Garda Síochána, that "national measures relating to retirement ages are not excluded from consideration under Directive 2000/78/EC. Any discrimination with regards to age must, as put by that Directive, serve a legitimate aim or purpose and the means taken to achieve that purpose be appropriate." I am satisfied that McKechnie J's comments are authority for the proposition that I must construe derogation from the principle of equal treatment on grounds of age in the Acts in light of Article 6(1) Directive 2000/78/EC. Consequently, it falls to the respondent to satisfy me that the approach it adopted is "objectively and reasonably justified by a legitimate aim ... and the means of achieving that aim are appropriate and necessary". The respondent considered that, were it to set out arguments in respect of authorities provided through CJEU judgments and Equality Officer decisions on the matter of retirement age and objective justifications, it would weaken its argument that the natural expiry of a fixed term contract is the only issue before the Equality Officer and that retirement age was not at issue in this case.
4.11 In summary, I am satisfied that, on the totality of the evidence, the complainant has established a prima facie case of discriminatory dismissal on the grounds of age and the respondent has failed to rebut it.
Decision
5.1 I have completed my investigation of this complaint and in accordance with section 79(6) of the Employment Equality Acts I issue the following decision. I find that the complainant has not established a prima facie case of victimisation in accordance with Section 74(2) of the Acts and this aspect of his complaint must fail. I find that the complainant was discriminatorily dismissed in terms of Section 6(2) (f) contrary to Section 8(6) (c) of the Acts.
5.2 Section 82(1) of the Employment Equality Acts sets out the redress which an Equality Officer can order when a complaint of discrimination is upheld. The section provides inter alia that I can order re-instatement or re-engagement, with or without compensation. At the outset of the Hearing the complainant confirmed that due to the length of time since his dismissal the redress he sought was compensation rather than re-instatement. In light of this I am satisfied that the appropriate redress in this instance is an award of compensation. In calculating the redress I have taken into account all of the circumstances of the case. Pursuant to 82(1) (c) I order the respondent pay the complainant €22000 (roughly equivalent to one year's salary) for the effects of discriminatory dismissal. This award is in compensation for the infringement of the complainant's statutory rights, does not include any element of remuneration and, therefore, is not subject to income tax as per Section 7 of the Finance Act 2004.
_______________
Deirdre Sweeney
Equality Officer
16 May 2013
1 Council Directive 2000/78 establishing a general framework for equal treatment in employment and education
2 Ibid.
3 Nolan v Quality Hotel Oranmore DEC-E-2012-110
4 [2008] IEHC 467
5 Labour Court Determination No. EDA0917
6 [2008] IEHC 467
7 [1999] IEHC 178
8 Section 2 Protection of Employees (Fixed-Term Work) Act 2003
9 [2008] IEHC 467