THE EQUALITY TRIBUNAL
PENSION ACTS 1990-2011
Decision DEC-P2013-001
PARTIES
Mr Seamus Kelly (represented by Mr Michael O’Brien)
and
Iarnrod Eireann (represented by Hugh Hannon, Solicitor for Iarnrod Eireann)
File References: PEN/2012/005
Date of Issue: 11th November 2013
1. Claim
1.1. The case concerns a claim by Mr Seamus Kelly that Iarnrod Eireann discriminated against him on the ground of age contrary to Section 66(1) and 66(2)(f), and in contravention of S. 70 of the Pension Acts 1990 to 2011, in relation to access to an occupational pension scheme. .
1.2. The complainant referred a complaint under the Employment Equality Acts 1998 to 2008 to the Director of the Equality Tribunal on 17 April 2012. A submission was received from the complainant on 26 July 2012. A submission was received from the respondent on 12 September 2012. On 7 October 2013, in accordance with his powers under S. 75 of the Acts, the Director delegated the case to me, Stephen Bonnlander, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under S. 81 of the Pension Acts. On this date my investigation commenced. As required by the Acts and as part of my investigation, I proceeded to hold a joint hearing of the case on 23 October 2013.
2. Summary of the Complainant’s Written Submission
2.1. The complainant submits that he was born on 16 May 1947 and commenced employment with the respondent on 6 September 1999, at age 52. He was then prevented from joining the respondent’s pension scheme, which was closed to new entrants over the age of 50. He wrote to the respondent in 2003, expressing a desire to buy notional years of service. He was again refused. The complainant retired from the respondent on 6 June 2012, after just over 13 years of service with the company.
2.2. He contends that the refusal to allow him to join the respondent’s pension scheme was discriminatory on the ground of age, from the commencement of the Social Welfare (Miscellaneous Provisions) Act 2004 onwards, when the protection from discrimination in pension schemes was extended to all nine discriminatory ground enumerated in the Employment Equality Acts.
3. Summary of the Respondent’s Written Submission
3.1. The respondent denies discriminating the complainant as alleged or at all. It submits that the pension scheme is a statutory scheme which was established in the Statutory Instrument 242/1945, in accordance with S. 44 of the Transport Act, 1944. In terms of age and eligibility to join, the instrument stated that applicants for admission needed to be at least 20 years of age and not older than 50 years of age on appointment to the respondent’s regular staff.
3.2. The respondent further states that persons such as the complainant had the opportunity to enter into a Personal Retirement Savings Account with an agreed provider.
3.3. Furthermore, the respondent points out that S. 72(1) of the Acts provide that
It shall not constitute a breach of the principle of equal pension treatment on the age ground for a scheme to:
(a) fix age or qualifying service or a combination of both as a condition or criterion for admisssion to the scheme.
3.4. With regard to the applicability of EU Directive 2000/78/EC, which was transposed into Irish law by the Social Welfare (Miscellaneous Provisions) Act 2004 with regard to occupational pensions, the respondent points out that Art 6 of the Directive states that
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 that this does not result in discrimination on the grounds of sex.
3.5. The respondent submits that since benefits payable under its pension scheme are not based on length of service, an age such as the one fixed needs to apply to ensure that every member pays in a minimum amount of contributions. The respondent further states that it also runs a voluntary pension benefits scheme which applies to employees who have at least ten years continuous service. The complainant participated in this scheme and received the maximum payout of €9,523.04 on retirement.
3.6. Finally, the respondent relies on the Equality Tribunal decision DEC-P2011-004, which relates to an employee at Bus Eireann to whom the same limitations applied. In that case, the Equality Officer found that S. 72(1) of the Acts afforded the respondent a full defence. She further considered in detail whether an employer was required to provide an objective justification for setting such age limits. In this context, she examined Article 6 of the EU Directive 2000/78/EC. She found that Article 6(2), which refers to the setting of age limits in pension and invalidity benefits, does not contain a saver that an objective justification for setting such limits needs to be provided, and only contains the provision that the setting of these age limits must not be discriminatory on the ground of sex. She found the provision “clear and unambiguous” and therefore held that S. 72(1)(a) and (b) were a full defence for the respondent in relation to the prima facie case raised by the complainant.
4. Conclusions of the Equality Officer
4.1. The issues for decision in this case are whether the complainant was discriminated against on the ground of his age, within the meaning of the Acts, in being denied access to the respondent’s pension scheme.
4.2. In coming to my decision, I have considered all oral and written evidence presented to me by the parties.
4.3. It is common case that the complainant was not permitted to join the respondent’s pension scheme because he was over 50 years of age when he commenced working for the respondent. I am therefore satisfied that in accordance with Section 76 of the Acts that the complainant has established that he was treated less favourably than a person who was recruited between the ages of 20 and 49 was treated in similar circumstances, in that he was not admitted to the pension scheme because of his age and thus has established a prima facie case of discriminatory treatment on the age ground. Accordingly, the burden of proof has shifted to the respondent.
4.4. At the hearing of the complaint, the complainant’s representative accepted the Equality Officer’s reasoning in DEC-P2011-004, which I have outlined in paragraph 3.6 above, and that it applied to the above case as well. He therefore accepted that the respondent had a full defense for setting the upper age limit for joining its pension scheme at 50 years of age. He argued, however, that the respondent had discriminated against his client with regard to its PRSA (Personal Retirement Savings Account) scheme, and submitted that I should make a recommendation to the respondent akin to the Equality Officer’s recommendation in DEC-P2011-004.
4.5. Ms. A, IR officer for the respondent, and Mr B., who administers the pension scheme for the CIE group of companies, gave evidence about the PRSA scheme. Ms A stated that a campaign would have been launched with the introduction of the PRSA scheme in 2002, since it was a new departure for CIE. The main means of disseminating information were booklets and announcements on noticeboards in various workplaces. The uptake was not very large. Staff to avail of it were mostly part-time staff who were not eligible to join the main pension scheme because of their lack of work hours. Ms A noted that few staff joined CIE over the age of 50, and that most of those staff had pension savings or entitlements built up from other employments. The PRSA scheme is a non-contributory scheme from the perspective of the respondent, i.e. it is only the worker who can build up savings in a tax-beneficial manner; CIE does not financially contribute to this.
4.6. The complainant stated that he had no knowledge of the existence of the scheme. His representative argued that this was on account of his age. The complainant would have been 55 years of age at the material time. The complainant’s representative alleged that the information disseminated by the respondent with regard to the introduction of the scheme was insufficient, and that his client should have been written to personally. In response to a direct question on how an alleged failure on the part of the respondent to write to his client personally was any different from not writing personally to a part-time gatekeeper in his 30s, the complainant’s representative said that he was not alleging that his client was less favourably treated than a younger person.
4.7. However, this is what the complainant would have to prove in order to make out a case for less favourable treatment with regard to the PRSA scheme. I am therefore satisfied that the complainant has failed to establish a prima facie case for less favourable treatment on the ground of age with regard to accessing the respondent’s PRSA scheme.
4.8. I also asked the complainant’s representative what benefit it would be for his client if I made a recommendation similar to the one in DEC-P2011-004, given that his client has already retired, and has missed out on any benefit membership of the PRSA scheme could have provided for him, given that he missed out on any taxation benefits or investment gains connected to it. The complainant’s representative did not answer this satisfactorily.
5. Decision
5.1. Based on all of the foregoing, I find, pursuant to S. 81E of the Acts, that the respondent did not discriminate against the complainant on the age ground pursuant to S. 66(1)(a) and 66(2)(f) and in terms of S. 70 of the Acts in relation to the rules of admissibility to the respondent’s occupational pension scheme, or with regard to access to its non-contributory Personal Retirements Savings Account (PRSA) scheme.
______________________
Stephen Bonnlander
Equality Officer
11 November 2013