EMPLOYMENT EQUALITY ACTS
DECISION NO. DEC-E2015-124
PARTIES
Sheamus Maguire
-v-
Neville’s Bakery
(Represented by Byrne Wallace, Solicitors)
File reference: EE/2013/011
Date of issue: November 2015
HEADNOTES: Employment Equality Acts Sections 6 (2) (a) as amended by section 4 the Employment Equality Act 2004. Conditions of Employment- Discriminatory dismissal - Age
1 DISPUTE
1.1 This dispute concerns a claim by Mr Maguirethat he was discriminated against by the company on the grounds of age contrary to section 6 (2) of the Employment Equality Acts.
1.2 The complainant referred his claim to the Director of the Equality Tribunal on 10th, January 2013 under the Employment Equality Acts. On 28th May 2015, in accordance with his powers under section 75 of the Acts, the Director delegated the case to me, Pat Brady, 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.
1.3 Submissions were received from both sides and in accordance with Section 79(1) of the Acts and as part of my investigation I proceeded to a hearing on June 4th 2015.
1.4 This decision is issued by me following the establishment of the Workplace Relations Commission on the 1st October 2015, as an Adjudication Officer who was an Equality Officer prior to the 1st October 2015, in accordance with section 83 (3) of the Workplace Relations Act 2015.
2 COMPLAINANTS' SUBMISSION
2.1 The complainant started work for the respondent in 1995 at which point there was no mention of a retirement age. He did not have a written contract. He was required to retire on his sixty-fifth birthday on February 2nd 2013. He submitted that there is no standard retirement age in the bakery trade.
2.2 He accepts that he received regular reports from the company’s superannuation fund (‘Members Annual Benefit Statement’) that included a reference to the value of his pension at ‘normal retirement age’ but that he did not treat this as an indication that he would have to retire at sixty-five. He said he was told by the then Managing Director (his brother) that the pension and retirement age were not linked.
2.3 He says he is in good health and continued to be capable of full time employment and made it clear on approach to his retirement that he felt he was being ‘pushed out’ and that he proposed to dispute the decision and make a claim.
3 RESPONDENT'S SUBMISSION
3.1 The respondent submitted that it was entitled under Section 34(4) of the Employment Equality Acts to fix a retirement age and submitted legal authorities to support that case, while also recognising that as a result of the Palacios de la Villa judgement Section 34(4) appeared to be no longer compatible with the Directive.
3.2 Without prejudice to that argument it also submitted that it could objectively justify doing so on the basis of a need to ensure progression and promotion within the company. Evidence was given on the age profile of the company. Approximately 25% was in the age range 50 plus, 50% were 40-50 and 25% under these ages. It was also necessary to avoid dismissal of employees on grounds of capacity.
3.3 Evidence was given by DK of a conversation between the complainant and the company management on November 20th 2012 in which the complainant professed himself looking forward to retirement and that he would have no difficulty passing the time as a result of his involvement in the Order of Malta, that money was not an issue for him and that he assumed that he would be going on his next birthday.
3.4 The company (DK) gave evidence that details of the retirement were discussed on January 9th and 10th including pension options and when SM asked what the retirement date was, and was told it was the following February it was understood that the complainant was happy to retire.
3.5 In its legal submission the respondent submitted that the Equality officer had no jurisdiction to decide the matter otherwise than in accordance with Section 34(4) of the Act. It also noted that the matter had been referred to the Tribunal before the alleged discriminatory act had been committed.
3.6 Finally, the company submitted that another of its employees had recently retired aged sixty-five.
4 FINDINGS & CONCLUSIONS OF THE EQUALITY OFFICER
4.1 I have to decide if the complainant was dismissed in a discriminatory manner on the grounds of age. 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 hearing.
4.2 Section 85A (1) of the Employment Equality Acts, 1998 – 2007 states: “Where in any proceedings facts are established by or on behalf of a complainant from which it may be presumed that there has been discrimination in relation to him or her, it is for the respondent to prove the contrary.” This means that the complainant must establish primary facts upon which the claim of discrimination is grounded and then the burden of proof passes to the respondent
4.3 It is clear from the decision of the High Court in Donnellan v Minister for Justice Equality and Law Reform IEHC 467 that where an employee is forced to retire at a particular age there is prima facie discrimination within the meaning of Article 2 of Directive 2000/78/EC. The doctrine of direct effect does not arise in this case although the Tribunal remains obliged to interpret our domestic law, as far as possible, in light of the wording and purpose of the Directive so as to produce the result envisaged by the Directive
4.4 I find that while the complainant may have displayed some equanimity about his impending retirement in the months leading up to it as it approached it seems that he changed his mind. However, he failed to communicate this to the respondent, which had no indication of a problem, or any opportunity to react to it.
4.5 Two key issues arise for decision here. The first concerns the applicability of Section 34.4 of the Act which accords to the employer the right to ‘fix’ a retirement age. The Labour Court had given detailed consideration to this in the recent (July 2015) case of Earagail Eisc Teo v Richard Lett (EDA 1513).
4.6 In that case the Court noted that Section 34(4) of the Act, prima facie, allowed the Respondent to fix a retirement age without contravening the prohibition of discrimination on grounds of age. It stated that;
‘The jurisprudence of the CJEU on the circumstances in which compulsory retirement is saved by Article 6 of the Directive is relevant only if the Court finds that a retirement age was in fact fixed by the Respondent and that the retirement age applied to the Complainant. (Underlining added)
4.7 It seems clear from this that there must be a positive act to fix the retirement age in respect of the specific employee to whom the case refers, and a clear understanding on the part of the employee that it has been. It does not suffice to rely on a generalised power under section 34.4 to justify termination of the contract retrospectively.
4.8 There is the further consideration in this case that despite the purported introduction of a retirement age through the issuing of new contracts of employment the claimant did not accept the new contract which ought to have set some alarm bells ringing. Despite his apparent equanimity about the impending retirement as demonstrated by his conversations with witness it was clear that by the time the retirement came along the company was on notice that the Complainant was not by that time happy and had changed his mind.
4.9 The second issue is whether it can be inferred that there was an ‘implied’ term of his contract arising, in particular from the pension documentation.
4.10 In Earagail Eisc (referred to at 4.5 above) the Labour Court reviewed the decision by the High Court in McCarthy v HSE [2010] IEHC 75 where it held that an employer’s retirement policy could be implied into a contract of employment by either the custom and practice or ‘officious bystander’ tests which might put an employee on notice of the applicable retirement age by virtue of the retirement age in the superannuation scheme of which the employee was a member.
4.11 The evidence related to the Members Annual Benefit Statement however must be considered. The complainant received this annual statement since he joined the scheme in 2007. It contains the words ‘Normal Retirement Age 65’ and elsewhere the statement ‘Guaranteed Capital Sum at Normal Retirement Age’. On the one hand this seems a clear indication of a proposed retirement age but the complainant submitted that, in his case the normal retirement age as defined for pension purposes and his actual retirement age were not connected. But again the question arises as to whether an ‘indication’ of a ‘normal’ retirement age and that age was sixty five years is either sufficiently clear in its applicability to the claimant or represents a ‘fixing’ of a retirement age in the specific case of the claimant, as provided for in Section 34.4 of the Act; which provision was relied on heavily by the respondent. This is considered in more detail below.
4.12 Evidence was given by the respondent of one other employee recently retiring at 65 years of age this can hardly be seen as a custom and practice and it must be set against the claimant’s evidence regarding custom and practice in the bakery trade. It may not have been strictly applicable in his case but it grounds sufficient doubt about the retirement age.
4.13 The evidence in relation to a company retirement age was not conclusive. The respondent company in recent years has introduced a new Contract of Employment specifying a retirement age of 65 but this was not accepted by the claimant and he did not sign it, although he did not tell the company what his objections to it were. The introduction of the new contracts may represent recognition by the company of the need to regularise the retirement situation but if so the complainant’s decision not to formally accept it places him outside its application.
4.14 The claimant submitted that there is no defined retirement age in the bakery trade although the company stated that the complainant was not employed as a baker (although he is in fact qualified in a branch of the trade) this adds further doubt as to whether the normal principles governing what would become an implied term were present. (The officious bystander test i.e. that it was so obvious that the question hardly needed to be asked). The test in Shirlaw v Southern Foundaries Ltd [1939] 2 K.B 206 was referred to in the Earagail Eisc decision by the Labour Court and it defines the standard as being;
‘Something so obvious that if, while the parties were making the bargain, an officious bystander were to suggest some express provision for it in the agreement they would testily suppress him with a comment ‘Oh, of course’.
As previously observed, the Court accepts, in principle, that a policy on retirement can take effect as a contractual term if it is promulgated in such a manner that those to whom it applies either knew, or ought to have known, of its existence. In so far as the policy was promulgated through the handbook, for reasons already stated, the Court does not accept that the terms of the handbook were incorporated in the Complainant’s contract of employment or that they became an implied term in his contract.
Nevertheless, the decision in McCarthy v HSE indicates that an employer’s retirement policy could be implied into a contract of employment by application of either the ‘custom and practice test’ or the ‘officious bystander test’, referred to earlier. The Court is satisfied on the evidence that the existence of such a policy was not so well known and acquiesced in as to attract a contractual status by application of either test.’
4.15 Likewise the Labour Court considered the custom and practice test adopted in Maguire v Irish Press [1937] 71 I.L.T.R 194 where it was held that the practice must be
‘so notorious, well known and acquiesced in that in the absence of agreement in writing it is to be taken as one of the terms of the contract between the parties.
The claimant’s evidence regarding retirement age in the bakery trade is sufficient to challenge the criteria just referred to. On the facts in this case there was very considerable doubt about the application of any implied term to the complainant for the reasons just rehearsed. Critically the Labour Court stated that;
‘A crucial consideration in addressing the question of incorporation or implication is whether the employee knew or ought to have known of the term contended for.’
The claimant’s evidence was that he did not.
4.16 For example could the terms of the ‘new’ contract of employment be regarded as also signalling to the complainant that that was now company policy
4.17 A similar decision about being ‘on notice’ was held in Sweeny v Aer Lingus DEC-E2012-135 where despite not having a written contract the employee was held to have been aware of the normal retirement age as a result of her being a Trustee of the Pension Fund. Although in that case the discrimination was held to have occurred.
4.18 In relation to the submission on behalf of the respondent above regarding its jurisdiction The Equality Tribunal relies on authority from the High Court in justifying its approach in implementing the jurisprudence of the European Court and the Directive to the effect that there must be objective justification for the retirement, (see Donnellan –v- The Minister for Justice, Equality and Law Reform [2008] IEHC 467) and I am bound to follow it.
5. DECISION
5.1 I have investigated the above complaints and make the following decisions in accordance with section 79 of the Acts that:
· The Respondent did not fix a retirement age in respect of the claimant and therefore cannot rely on section 34.4 to justify the termination
· I find that the various tests for deciding whether a term could be implied into the contract that sixty-five represented the age of retirement are not met sufficiently and there was evidence to the contrary.
· While some evidence was offered regarding the age profile of the company’s employees the respondent did not provide the necessary objective justification for the dismissal and therefore it is discriminatory.
· However, I take into account in making my award that the respondent was on notice of the retirement date for a considerable time and objected to it very belatedly.
5.2 I order the respondent to pay the complainant €10,000 in compensation for the discriminatory treatment suffered. This figure represents compensation for infringement of his rights under equality legislation in relation to discrimination and does not include any element relating to remuneration, and is therefore not taxable.
__________________
Pat Brady
Adjudication Officer/Equality Officer
November 2015