AWD142

Background

The claimants are employed by the Respondent an Employment Agency within the meaning of the Act. They are assigned to work for Cronin Movers Group Limited (the Hirer). They submitted a complaint to the Right Commissioner on 30 October 2012 in which they asserted that, contrary to section 6(1) of the Act, they were paid less than directly employed workers doing the same or similar work. The Respondent rejected the complaint stating that it had been advised by the Hirer that directly employed workers who were paid more than the complainants had long service and had been employed when the business environment was more benign and the Company’s financial circumstances were better. It advised the Respondent that it had not recruited staff on or around 5 December 2011 but had it done so it would have paid them the rates that apply to the Claimants. It noted that it had recruited staff subsequent to 5 December 2011 and paid them at that rate.

The Claimants rejected the Respondent’s position and submitted a complaint to the Rights Commissioner. The Rights Commissioner upheld the complaint as outlined above. The Respondent appealed against that decision to this Court.

Preliminary Issue

The Complainants state that the Respondents submitted the appeal to the Labour Court outside the time limit set out in the Act. They argue that the Rights Commissioner issued her decision on 17 July 2013. They argue that the Respondent did not submit an appeal to the Labour Court until 23 September 2013. They argue that as this was outside the time limit for appeals set out in the Act the Court does not have jurisdiction to consider the appeal.

The Respondent argues that the Rights Commissioner issued her decision on 17 July and that it submitted an appeal to the Court on 19 August 2013. In that appeal it correctly identified the Rights Commissioner Decision Numbers under appeal but mistakenly named the Hirer in place of the Employment Agency on the form. It submits that the Court, within the six week time limit, set a date for a hearing. The error on the form was corrected by letter dated 23 September 2013. It submits that the intention to appeal the relevant Rights Commissioner decisions was clearly notified to the Court within the permitted period under the Act. It argues the Court has jurisdiction to consider the appeal.

Findings of the Court

The Law

Schedule 2 sets out the relevant provisions regarding appeals to this Court from a decision of a rights commissioner. It states

• 2. (1) A party concerned may appeal to the Labour Court from a decision of a rights commissioner underparagraph 1and, if the party does so, the Labour Court shall— (a) give the parties an opportunity to be heard by it and to present to it any evidence relevant to the appeal, (b) make a determination in writing in relation to the appeal affirming, varying or setting aside the decision, and (c) communicate the determination to the parties.
  (2) An appeal under this paragraph shall be initiated by the party concerned, giving, not later than 6 weeks (or such greater period as the Court may determine in the particular circumstances) from the date on which the decision to which it relates was communicated to the party, a notice in writing to the Labour Court containing such particulars as are determined by the Labour Court undersubparagraph (4)and stating the intention of the party concerned to appeal against the decision

The Complainants state that they are agency workers within the meaning of the Act and are currently employed as general operatives, drivers and acting foreman and paid the following rates of pay

General Operative €9.00 per hour

Driver €11.00 per hour

Acting Foreman €12.50 per hour

They state that workers directly employed by the hirer to do the same or similar work are paid the following rates of pay

General Operative €10.93 per hour

Driver €13.17 per hour

Acting Foreman €13.00 per hour.

They argue that they are entitled under the Act to the same basic conditions of employment as directly employed workers. They argue that by paying them lower rates of pay the Respondent is in breach of section 6(1) the Act..

Mr James Perry, on his own behalf, and on behalf of the other complainants states that discussions between the complainants and both the Hirer and the Respondent regarding the basic conditions of employment including the hourly rate of pay and the implications of the Directive for them took place between December 2011 and May 2012. He states that they were assured in the course of those discussions that their rate of pay would be adjusted to bring it into line with directly employed workers after the Act came into force. The complainants accepted these assurances at face value. However after the Act came into force the assurances were not honoured, despite numerous requests to the Respondent and Hirer to do so. In October 2012 the complainants submitted a complaint to the Rights Commissioner under the Act. They argued that they are entitled to the same basic pay rates as workers directly employed by the hirer doing the same work.

He states that in reply the Respondent identifies two directly employed workers that are paid less than the going rate that applies generally to directly employed workers. He states that they do not undertake the same work as the complainants.

He states that one of those workers, Mr Danut Danila, was on 5 December 2012, employed as a Warehouse Supervisor. He states that none of the complainants are employed in that capacity.

He states that the second of those workers, Mr Sam Darcy, is primarily employed as a warehouse operative. He states that none of the complainants are employed in that capacity.

He states that on rare occasions they assist with moves. He states however that all staff, in exceptional circumstances, undertake work outside their normal duties in order to ensure that client needs are met. He states that this does not alter the core nature of their duties as outlined above.

He further states that Mr Sam Darcy did not commence employment with the company until 21 May 2012 i.e. after the date on which Act came into force (16 May 2012) and some 5 months after the relevant date (5 December 2011), for determining the pay and conditions of employment that generally applied to workers employed on the same work by the hirer. He further states that Mr Darcy occasionally worked outside the warehouse delivering and picking up crates. He states that this work was normally undertaken by a courier and not by the complainants.

He acknowledges that since the complaint was lodged with the Rights Commissioner both Mr Danila and Mr Darcy have been more regularly involved in moves.

Respondent's Position

The Respondent states that it has been advised by the Hirer that it employs a number of workers at historic rates of pay but that the business environment and the trading circumstances of the Company would not have allowed it to employ workers on those rates of pay had they been hired on 5 December 2011. The Hirer told the Respondent that it would have hired direct workers on the rates currently paid by the Respondents to the Complainants.

It states that, prior to 5 December 2011, its most recent direct employee was recruited on 12 March 2009 as a Driver/General Operative on a rate of €9.00 per hour. This was increased to €10.00 per hour with effect from 5 August 2010 when he was promoted to the position of Warehouse Supervisor.

Another worker, a nephew of the Managing Director, commenced employment on 21 May 2012 on an hourly rate of €8.00 per hour. This was increased to €9.00 per hour on 29 August 2012.

The Respondent submits that the Complainants are employed in a number of different capacities on any given day. They may be employed as drivers, warehouse staff, general operatives or assistant foreman. They are paid a rate appropriate to each duty for the hours they work in that capacity. This could give rise to them being paid different hourly rates of pay depending on the duties being performed at different times on any given day.

The Hirer suffered a severe downturn in business from January 2008 to December 2012 inclusive (details supplied to the Court). It also incurred substantial losses over that time. The numbers employed were reduced and the rates of pay and conditions of employment were reduced where possible (details with the Court).

In 2009 the rates paid to Agency workers employed as general operatives were reduced from €10.50 per hour to €9.50 per hour and subsequently to €9.00 per hour for new agency workers employed after 2010. The rates paid to Agency drivers were reduced from €12.50 per hour to €11.00 per hour. Directly employed workers were asked to take a 5% reduction in pay but they by and large declined to do so. Their rates were left unchanged.

The Respondent acknowledges that the hirer did not employ any new direct workers in or around 5 December 2011 but argues that the evidence supports its contention that, had it done so, they would have been paid the rates currently paid to the Complainants.

The Law

This Act was signed into law on 16^thMay 2012. It transposes in Irish law Directive 2008/104/EC of the European Union on Temporary Agency Work. Consequently the Court is obliged to interpret and apply the Act, as far as possible, in light of the wording and purpose of the Directive so as to achieve the result envisaged by the Directive. The Act commenced on 16^thMay 2012. Sections 2, 3, 4, 5, and 6 are deemed to have commenced on 5^thDecember 2011, the date on which Members States were required to implement the Directive.

The purpose of the Directive is set out at Article 2 thereof as follows: -

• The purpose of this Directive is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the principle of equal treatment, as set out in Article 5, is applied to temporary agency workers, and by recognising temporary work agencies as employers, while taking into account the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.

• The principle of equal treatment

  1.The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.

• 6.— (1) Subject to any collective agreement for the time being standing approved undersection 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.

• • (3) Where the assignment of an agency worker commenced before 5 December 2011 and ended or ends on or after that date, that assignment shall, for the purpose of determining the agency worker’s basic working and employment conditions in accordance with subsection (1), be deemed to have commenced on that date.

• 
  •“basic working and employment conditions” means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer, and that relate to—
  • (a) pay,(b) working time,(c) rest periods,(d) rest breaks during the working day,(e) night work,(f) overtime,(g) annual leave, or(h) public holidays;

• 
  •(a) basic pay, and (b) any pay in excess of basic pay in respect of— (i) shift work, (ii) piece work, (iii) overtime, (iv) unsocial hours worked, or (v) hours worked on a Sunday,

• (1)It shall be the duty of the hirer of an agency worker to provide the employment agency that employs that agency worker with all such information in the possession of the hirer as the employment agency reasonably requires to enable the employment agency to comply with its obligations under this Act in relation to the agency worker.

It would appear that the purpose of the Directive and the Act is to ensure that agency workers and directly employed workers occupying the same job enjoy the same basic working and employment conditions including, among other things, pay rates. Where the basic working and employment conditions of directly employed workers are established by law or by collective agreement agency workers come within the scope of the legislation or collective agreement. Where no collective agreement or legislation applies agency workers are entitled to "any arrangement that applies generally" in respect of directly employed workers occupying the same job.

In this case no collective agreement or legislation applies. Accordingly the Court must have regard to "any arrangement that applies generally" in determining whether the Respondent is complying the the Act.

It is common case that the Claimants in this case were assigned to work for the Hirer before 5 December 2011 and accordingly Section 6(3) of the Act applies to these workers.

It is common case that there is a group of workers occupying the same job who are paid a higher rate of pay than the Complainants. The Respondent states that these workers have long service and enjoy a legacy rate of pay that would not be paid to workers employed on 5 December 2011. The Respondent argues that those rates of pay are historic and date from a time when the business could afford such rates.

It is common case that the Hirer employed two workers, referred to above, who were paid less than that historic rate. It argues that the rates paid to these workers are indicative of the rates of pay that would have been paid to directly employed workers employed on or around 5 December 2011 when the Act is deemed to have come into effect.

In response Mr Perry states that neither of those workers occupy the same job, within the meaning of section 6(1) of the Act, as the Complainants. He argues that the first mentioned worker occupied the job of warehouse foreman and only occasionally worked on the transport fleet. They argue that the second worker was a relative of the Managing Director and occupied a different job in a different capacity.

Based on the information supplied to it the Court finds that the first identified worker does not occupy the same job as the Complainants. He is described by the Respondent as a "warehouse foreman" and undertakes work primarily in the warehouse. He is occasionally assigned to work on the transport fleet but the Court finds that that is not his core duty and he cannot be said to occupy the same job as a driver, an assistant foreman or a general operative. Accordingly the Court finds that he does not occupy the same job as the Complainants. The Court finds that he is not relevant for the purposes of this complaint.

The Court was told that the second named worker, a relative of the Managing Director, was employed so as to give him some work experience. He is primarily employed in the warehouse and in the collection of crates in a small transport vehicle. He is not employed as a driver, an assistant foreman or as a general operative and accordingly is not occupying the same job as the complainants.

The Respondent argues that it complied with section 6(1) of the Act as the rate notified to it by the hirer is the rate on which direct employees would have been employed had they been hired on 5 December 2011.

Section 6(1) states

The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking,at least those that would apply if they had been recruited directly by that undertaking to occupy the same job. (emphasis added)

It argues that the evidence supports the contention that they are paid the rate of pay that “would apply if they had been recruited directly by that undertaking to occupy the same job” on the relevant date. It submits that by so doing it has discharged its obligations under the Act.

The Court does not accept that that is a proper construction of the Act and would be incompatible with the directive.

Section 6(1) must be read together with Section 2 of the Act and the Directive which state

Section 2 of the Act

“basic working and employment conditions” means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement,or any arrangement that applies generally in respect of employees, or any class of employees,of a hirer,(emphasis added)

Article 2 of the Directive states -

The purpose of this Directive is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the principle of equal treatment, as set out in Article 5, is applied to temporary agency workers, and by recognising temporary work agencies as employers, while taking into account the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.

The principle of equal treatment(Article 5)

1. The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.

When read together, the Court finds that the complainants are entitled to be paid the rate of pay that “applies generally” to directly employed workers occupying the same job. To put it simply they are entitled to the going rate for the job. This may be established by way of statute, by way of collective agreement or by way of an arrangement that generally applies to workers occupying the same job.

Where a statute or a collective agreement applies the appropriate rate of pay can be simply determined. Where no statute or collective agreement applies the Court must establish the rate that generally applies to directly employed workers occupying the same job. It is not a notional rate that would be paid to workers employed on that date. It is the actual rate that generally applies to directly employed workers occupying the same job. That cannot be a notional rate that the Respondent simply asserts would be applied to workers employed on a particular day. It is the rate that actually applies generally and is similar to a rate set out by statute or by collective agreement. It is a matter of fact to be determined by the Court on the basis of the evidence presented. If the Court were to consider a hypothetical rate as distinct from the rate that actually applies it would undermine the principle of equal treatment and defeat the purpose of the Directive and of the Act.

There may be some workers that are paid a higher or a lower rate than that which generally applies. Such exceptional rates are not relevant for the purposes of applying the Act. The rate to which the Court must have regard in that which applies generally and not exceptional rates that apply to individuals irrespective of the reasons for those rates of pay. The principle of equal treatment set out in the Act and the Directive is intended to establish a parity between the directly employed and agency workers in respect of the generally applied basic working and employment conditions including pay. Accordingly exceptional arrangements cannot be relevant to that consideration.

In this case the evidence submitted by the Respondent in supplementary submissions discloses that on 5 December 2011 the rates payable to the class of workers concerned were as follows. There were 6 drivers directly employed by the Company of which 5 were paid €13.19 per hour while 1 was paid €11.47 per hour. There were 4 Assistant Foremen employed 3 of whom were paid €13.19 per hour while one was paid €13.00 per hour. 1 General Operative was employed who was paid €10.93 per hour. One General Operative/Van Driver was paid €13.00 per hour.

The Respondent acknowledges that no directly employed workers were recruited by the Hirer on or around 5 December 2011. The Respondent submitted evidence of hourly rates paid to other workers who were employed in May 2012 and thereafter. It seeks to rely on the rates paid to these workers as evidence of the rate of pay on which workers would have been employed on 5 December 2011.

This is a misunderstanding of the Act. A directly employed worker recruited on a particular rate of pay on 5 December 2011 would not of itself establish a generally applied rate of pay for a category of workers. What the Court must examine is the rate of pay of directly employed workers occupying the same job as agency workers as set out in statute, in a collective agreement or which applies generally to those workers. An individual, recruited on a particular day, occupying the same job and paid a different rate of pay would constitute an exception which the Court must disregard unless they were representative of a class of worker within the meaning of the Act. Establishing such a class of worker would be a relatively easy matter were new workers employed after a particular date covered by a collective agreement or by statute setting out their terms and conditions of employment. However identifying such a group where no collective agreement or statute applies would be a more difficult matter to be established on evidence by the person asserting that proposition. Thus the burden of proof in that case would lie with the person asserting that proposition. To do otherwise would defeat the intention of Directive and the Act as it would deprive an agency worker of the protection of equal treatment. It would amount to the Court setting aside the basic working and employment conditions that applied generally on the basis of a mere assertion. That could not be countenanced by the Court.

Equally the Court does not accept that rates of pay introduced 5 months after 5 December 2011, the date on which the Act is deemed to have come into force for the Complainants, can be of any assistance to it in determining the rates of pay that generally applied on that date. Subject to the observations above the Court must determine the going rate of pay in place on 5 December by reference to the rates in payment at that time.

In this case documents submitted by the Respondent disclose that directly employed workers occupying the same job as the Complainants were paid a higher hourly rate of pay than that paid to Agency workers whose assignment commenced on 5 December 2011.

The Respondent presented two arguments in favour of its position. Firstly it argued that the Court should consider the rates of pay of two named workers as indicative of the rates that would generally apply to workers recruited around the time the Act came into operation. The two workers it sought to rely on do not occupy the same job as the Complainants and consequently are not relevant for the purposes of the complaint before the Court. It then argued that the rates of pay of workers occupying the same job as the complainants employed after the Act came into force should be considered by the Court. The Court finds that the Act sets 5 December 2011 as the relevant date on which the Court must determine the basic working and employment conditions to which the Complainants are entitled under the Act.

The Court finds that the evidence discloses that the rates of pay that applied generally to directly employed workers occupying the same job on that date were significantly higher than those paid to the Complainants. The Court therefore rejects the argument presented by the Respondent on that point.

The Respondent finally argued that the downturn in business made it unaffordable for it to pay new employees the same rate of pay as those that applied to long serving workers. The Court must approach this argument with the utmost caution. The CJEU has decided that cost alone cannot compromise a fundamental right set out in European Law.(Sch�nheit v Stadt Frankfurt am Main (Joined Cases C-4/02 and C-5/02[2003] ECR I-12575,para 85, and Zentralbetriebsrat der Landeskrankenh�user Tirols v Land Tirol (Case C-486/08) [2010] ECR I-3527, para 46.)The Directive confers on agency workers a fundamental right to equal treatment with directly employed workers occupying the same job. The benefit of the directive in an individual case cannot be compromised by the cost of so doing. The right is established in law and must be afforded to agency workers in accordance with law. Were the Court to accept the hypothetical argument put forward by the Respondent in this case it would in effect be allowing it to plead cost as a justification for not applying to agency workers the rate that “applies generally” to directly employed workers. The Court cannot adopt this approach as to do so would defeat the purpose of the Directive and of the Act. This is particularly the case where the rate claimed by the Complainants applies generally to directly employed workers occupying the same jobs whereas the rate contended for by the Respondent was in fact paid to no directly employed workers at the relevant time.

For these reasons the Court in this case determines that the complaints are well founded.

Redress

The Act states

• 
  A decision of a rights commissioner under subparagraph (2) shall do one or more of the following, namely—
  • 
    (a) declare that the complaint was or, as the case may be, was not well founded,

    (b) require the employer to take a specified course of action (including reinstatement or reengagement of the employee in circumstances where the employee was dismissed by the employer), or

    (c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances but not exceeding 2 years remuneration in respect of the employee’s employment,

  
  and the references in the foregoing clauses to an employer shall be construed, in a case where ownership of the business of the employer changes after the contravention to which the complaint relates occurred, as references to the person who, by virtue of the change, becomes entitled to such ownership.

In accordance with Clauses (a) and (b) of subparagraph (3) above, the Court declares that the Claimant’s complaint is well founded and it directs the Respondent herein pay the Complainants the rates, as determined above, that “applied generally” to directly employed workers occupying the same job with effect from17 May 2012. The Court determines those rates as follows: -

General Operative €10.93 per hour

Driver €13.19 per hour

Assistant Foreman €13.19 per hour

The Decision of the Rights Commissioner is amended accordingly and substituted with the terms of this Determination.

The Court so determines.

Signed on behalf of the Labour Court



Brendan Hayes
6th February 2014______________________
CCDeputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Ceola Cronin, Court Secretary.