EMPLOYMENT EQUALITY ACTS
DECISION NO. DEC-E2016-041
PARTIES
Tomás Horgan and Claire Keegan
(Represented by Peter Ward S.C. and Eilis Barry B.L.,
instructed by Hayes Solicitors)
AND
Department of Education and Skills, Department of Finance, Department of Public Expenditure & Reform, Government of Ireland, Ireland, Attorney General
(Represented by Brian Kennedy S.C. and Nap Keeling B.L.,
instructed by Chief State Solicitor’s Office)
File references: EE/2012/069, 077, 081, 164, 169, 405, 111, 113, 114, 167, 172 & 408
Date of issue: 4 March 2016
HEADNOTES: Employment Equality Acts - Sections 6 and 8 - Age – Equal Pay
1. DISPUTE
1.1 This dispute concerns claims by Tomás Horgan and Claire Keegan that they were discriminated against by the Department of Education and Skills, the Department of Finance, the Department of Public Expenditure & Reform, the Government of Ireland, Ireland and the Attorney General on the grounds of age contrary to section 6 (2) (f) of the Employment Equality Acts in relation to conditions of employment and that that they perform “like work”, in terms of section 7 of the Employment Equality Acts with a named comparator and are entitled to equal remuneration in accordance with section 29 of the Employment Equality Acts.
1.2 The complainants referred claims against the six respondents to the Director of the Equality Tribunal on 31 January 2012, 9 February 2012 and 27 July 2012 under the Employment Equality Acts. On 3 July 2014, in accordance with his powers under section 75 of the Acts, the Director delegated the cases to me, Hugh Lonsdale, 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. Submissions were received from both sides. In accordance with Section 79 (1) of the Acts and as part of my investigation I proceeded to a hearing on 26 November 2014. At the start of the hearing the complainant withdrew their claim in relation to conditions of employment. Final information was received on 15 January 2015.
1.3 This decision is issued by me following the establishment of the Workplace Relations Commission on 1 October 2015, as an Adjudication Officer who was an Equality Officer prior to 1 October 2015, in accordance with section 83 (3) of the Workplace Relations Act 2015.
2. SUMMARY OF THE COMPLAINANTS’ CASE
2.1 Mr Horgan was appointed to start work as a teacher in St Josephs Convent National School from 3 October 2011 at the age of 22.
2.2 Ms Keegan was appointed to start work as a teacher from 11 October 2001 at the age of 23.
2.2 Both complainants were appointed to the first point of a new scale for teachers which had been brought in from 1 January 2011. This scale had been reduced by 10% from the previous scale for teachers. Also, before 1 January 2011 all teachers appointed in a similar position had started on, at least, the second point of the scale.
2.2 The complainants submit that their appointments were discriminatory as the changes effective from 1 January 2011 particularly affected younger teachers. They claim that they suffered direct and indirect discrimination in respect of remuneration. They name “all teachers who gave service as teachers in state-funded schools prior to 1 January 2011”, and they named a specific comparator.
2.3 The complainants submit that the appropriate respondents are those who have responsibility for pay and cite section 77 (4) of the Employment Equality Acts which defines the respondent inter alia as the person: “who is alleged to have discriminated against the complainant or, as the case may be, who is responsible for providing the remuneration to which the remuneration term relates”. They are paid by the Department of Education and Skills but the other respondents all have various responsibilities in relation to their remuneration. They also submit that Circulars 18/2010 (issued by the Department of Finance) and 00/40/2011 (issued by the Department of Education and Skills and deals with the Teachers’ Common basic Scale), which brought in the revised pay scales, amounted to the issuing of an instruction to discriminate, which amounts to discrimination in accordance with in accordance with section 2 of the Employment Equality Acts.
2.4 The complainants submit that in 2011 there were 1,827 new teachers. In 2012 there were 1019 in the 20-23 age bracket and 234 were aged 24-25. This means that 68.8% of new starts were under 26 and over 55% under 24.
2.5 The complainants submit that their allegations are covered within the Employment Equality Acts and that the Acts do not contain a defence to such a claim for discrimination by allowing for objective and reasonable justification.
3. SUMMARY OF THE RESPONDENT'S CASE
3.1 The respondents submit they are not the correct respondents. The correct respondents are the Board of Management where the complainants were working at the time they referred these claims.
3.2 Without prejudice to this the respondents submit that as part of measures introduced by the Government to help Ireland recover from the economic collapse serving Public Servants’ pay had been reduced in February 2009 by a new pension related deduction which resulted in an average reduction in pay of 7.5% and from 1 January 2010 by a pay cut of 5 – 10%. In the Croke Park Agreement the Government committed to no further reductions in the pay rates for serving public servants for the lifetime of the Agreement: 2010 to 2014. This Agreement had the additional purpose and benefit of securing industrial harmony in the public sector and thereby helping project confidence both domestically and internationally and in addition minimising the risk of disruption to public services and front line services to those persons including vulnerable members of the population and children who depend on public services.
3.2 However, the economy continued to deteriorate and further substantial savings had to be introduced in Budget 2011 as part of the National Recovery Plan. The respondents submit that as part of Budget 2011 the pay of all new appointees to the public service was reduced by 10% from 1 January 2011. In addition new appointees were required to start on the first point of the relevant salary scale. These measures were introduced to achieve a medium term structural reduction in the cost of the public service.
3.3 Subsequently, as part of the Public Service Stability Agreement 2013-2016 (Haddington Road Agreement) with effect from 1 July 2013 revised salary scales for post 1 January 2011 entrants to primary teaching were introduced. The new scales reduced the differential between them and the scales for teachers appointed before this date to 7%.
3.4 The respondent submits the complainants were correctly placed on the new appointee scale and this was not discriminatory; either direct or indirect. The respondents submit that the complainants have submitted no evidence in relation to their claim of direct discrimination.
3.5 The respondents submit that for there to a claim of indirect discrimination there must be an apparently neutral provision which puts persons of a particular age at a particular disadvantage compared with other employees who carry out like work and the complainants have failed to show that the lower rate of pay has affected the make-up of the applicant group in terms of their age. The complainants have to show that the cut amounts to a disincentive that applied more to young people and the statistics do not show any change in age composition of those entering teaching. Furthermore, people who have been teaching longer are likely to be older. The age threshold (of under 25) put forward by the complainants is artificial.
3.6 The respondent also submits that the claims are misconceived as inevitably people who have been in the profession for a longer period of time are likely to be older than new applicants. Which is why section 34 (7) (b) of the Employment Equality Acts expressly provides:
“It shall not constitute discrimination on the age ground for an employer to provide for different persons—
(a) different rates of remuneration, or
(b) different terms and conditions of employment, if the difference is based on their relative seniority (or length of service) in a particular post or employment.
Therefore it cannot constitute a claim of discrimination on the grounds of age to offer a lower rate of pay to someone who has less seniority.
3.7 The respondents submit that the complainants have failed to identify the correct pool of comparators as the cuts they complain of were applied to all new starts in the public service from 1 January 2011.
3.8 The respondents further submit that the new pay rates were objectively justified by a legitimate aim and means of achieving that aim are appropriate and necessary. The legitimate aim was to achieve a medium term structural reduction in the cost of the public service and was objectively justified having regard to the demonstrable and clear evidence of the budgetary constraints facing the State, the importance of maintaining good industrial relations with existing civil and public servants and the terms of the Croke Park agreement (providing for no further reductions in pay for existing civil and public servants in return for significant productivity arrangement and workplace reforms) and the means of achieving that aim are appropriate and necessary. The reduction in pay rates for new appointees to the public service was one of a number of measures which were required to be taken to ensure the stability of the economy as a whole and was therefore in pursuit of a legitimate aim. The respondents also submit that the means to achieve the aim were proportionate, necessary and appropriate, particularly when seen in the context of all measures taken to control public service expenditure which was part of measures towards the development of a sustainable fiscal model.
4. FINDINGS & CONCLUSIONS OF THE EQUALITY OFFICER
Correct Respondent
4.1 The complainants named six respondents who, in their written submissions, they contend are all have responsibility for the pay of the complainants. Whilst in their written submission the respondents contended that the correct respondents are the Boards of Management of the schools where the complainants were first appointed as teachers. At the hearing the Department of Education and Skills conceded that they were responsible for the remuneration of the complainants.
4.2 As cited by the complainants section 77 (4) of the Employment Equality Acts which defines the respondent inter alia as the person: “who is alleged to have discriminated against the complainant or, as the case may be, who is responsible for providing the remuneration to which the remuneration term relates”. The complainants were employed by the Boards of Management of the schools where they worked. However, the Boards of Management have no role in the setting of the pay scales on which the complainants and the comparator were placed. These are set by the Department of Education and Skills. The other respondents may a role in relation to public service pay but they do not set the scales, that is the responsibility of the Department of Education and Skills. I therefore conclude that the correct respondent is the Department of Education and Skills.
Equal Pay
4.3 I have to decide if the complainants are entitled to equal remuneration to the named comparator 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.
4.4 Section 29 (1) of the Employment Equality Acts states:
“It shall be a term of the contract under which C is employed that, subject to this Act, C shall at any time be entitled to the same rate of remuneration for the work which C is employed to do as D who, at that or any other relevant time, is employed to do
like work by the same or an associated employer.”
In investigating the equal pay claim I am looking at the work that is being done by the complainant and the named comparator. The parties agree that the complainant and the comparator undertake like work.
4.5 The comparator was not present at the hearing to give direct evidence. A union official confirmed that the named comparator was born in 1967 and had been teaching for 22 years and was paid on a different pay scale to the complainants.
4.6 The complainants submit that immediately before 1 January 2011 a new entrant teacher would have been appointed on point 2 of the scale (€31,972) and received a degree allowance of €4,918); giving a total of €36,890.
They were both appointed on the first point of the new scale (€27,814) and received a degree allowance of €4,426; giving a total of €32,240.
They therefore received €4,650 less than they would have done is the scales had not been reduced and appointments only made on the first point. This difference would be perpetuated during their career as a teacher on the ‘common basic scale’.
4.7 The complainants have put forward claims of both direct and indirect discrimination and as set out in Labour Court Determination No DEP993, Irish Aviation Authority v Irish Municipal, Public and Civil Trade Union, "In this case, the difference in remuneration between the claimants and the comparators derives from the grading structure operated by the respondent. Therefore a case of direct discrimination does not arise." I am therefore investigating a claim of indirect discrimination only.
4.8 Section 28 (1) (e) states that: “in relation to the age ground, C and D are of different ages”. This means that there must be a difference in age between the complainants and the named comparator. The complainants were aged 22 and 23 at the time of the alleged discriminatory treatment. The comparator was born in 1967 and had been a teacher for 22 years and was therefore appointed in 1993, at age 26 on a different scale to the complainants. The complainants and the comparator are not paid differently because of their relative seniority as argued by the respondent but because of their appointment on different scales.
4.9 I am therefore looking at the arguments put forward by the respondent which fall within section 19 (4) of the Employment Equality Acts which relates to gender claims but is confirmed in section 29 (4) to apply to the other grounds including age and states:
“ (a) Indirect discrimination occurs where an apparently neutral provision puts persons of a particular gender (being As or Bs) at a particular disadvantage in respect of remuneration compared with other employees of their employer.
(b) Where paragraph (a) applies, the persons referred to in that paragaph shall each be treated for the purposes of subsection (1) as complying or, as the case may be, not complying with the provision concerned, whichever results in the higher remuneration, unless the provision is objectively justified by a legitimate aim and the means of achieving the aim are appropriate and necessary.”
The respondent contends that the new reduced rates are objectively justified by a legitimate aim which was to achieve a medium term structural reduction in the cost of the public service and was objectively justified having regard to the demonstrable and clear evidence of the budgetary constraints facing the State, the importance of maintaining good industrial relations with existing civil and public servants and the terms of the Croke Park agreement (which provided for no further reductions in pay for existing civil and public servants in return for significant productivity arrangements and workplace reforms) and the means of achieving that aim are appropriate and necessary.
4.11 To this end Budget 2011 came up with a range of further cost saving measures. The reduction in pay rates for new appointees to the public service was one of a number of measures which the respondent contends were required to be taken to ensure the stability of the economy as a whole and was therefore in pursuit of a legitimate aim. Also, it has to be noted that the 10% pay cut affected all new recruits to the public service, not just teachers. The respondent also contends that the means to achieve the aim were proportionate, necessary and appropriate, particularly when seen in the context of all the measures taken to control public service pay which was part of measures towards the development of a sustainable fiscal model.
4.12 The complainants contend that the Government had a suite of options open to them but it has to comply with age discrimination legislation in deciding which measures to take and it could have chosen to make the saving through other means that were not discriminatory; such as increasing the pupil/teacher ratio in schools or across the board pay reductions. They also contend the respondent has provided no evidence as to why other choices were not, or could not have been, made. They argue that a measure is not necessary if there are other practicable measures which can be taken which have a less disadvantageous effect on younger employees. They cite ECJ case [2014]ICR 27 HK Danmark v Experian in which it was stated “a measure is appropriate for ensuring attainment of the aims pursued only if it genuinely reflects a concern to attain them in a consistent and systematic manner” and the Advocate General commented that … a measure would not be appropriate and necessary if it excessively prejudices younger workers and that financial burdens cannot justify derogation from the principle of equal treatment.
4.13 It is clear to me, in assessing all the evidence put to me, that coming up to Budget 2011 the Government were looking to make further substantial financial savings in the provision of public services. The respondent has argued that following on from the Croke Park Agreement the Government could not reduce the pay of serving public servants any further. Also, it is clear to me that a reduction in the pupil/teacher ratio could have meant a reduction in the recruitment of new teachers.
4.14 Also, I have to remember that the 10% cut was applied across the board of all new recruits to the public service. Therefore the means to achieve the financial reductions did not just effect the employment of new teachers.
4.15 The respondent also contends, in countering the complainants’ argument that ‘financial burdens cannot justify derogation from the principle of equal treatment’, that the CJEU has recognised that provisions having prima facie indirect discriminatory effect can be justified on the basis of social policy aims. They cite the Rinner-Kuhn case 171/88 when the CJEU ruled that although a legislative exclusive of part time workers from a sick pay provision was prima facie contrary to the aim of Article 157 TFEU, such an exclusion could be objectively justified. Paragraph 14 stated:
“It should however be stated that those considerations insofar as they are generalisations about certain categories of workers do not enable criteria which are both objective and unrelated to any discrimination on grounds of sex to be identified. However, if the member state can show that the means chosen meet a necessary aim of social policy and that they are suitable and requisite for retaining that aim, the mere fact that the provision affects a much greater number of female workers cannot be regarded as constituting an infringement of Article 119.”
4.16 Article 6 of EU ‘Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation states: “Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving the means of achieving that aim are appropriate and necessary.”
4.17 The aims of the Government seem to go beyond the examples given in Article 6, which look toward employment policies and opportunities and I need to consider what was stated in Gerhard Fuchs and Peter Kohler v Lanh Hessen (ECJ cases C-159/10 and C-160/10 the European Court decided:
“73As is apparent from paragraph 65 of the present judgement, in the context of the adoption of measures relating to retirement, EU law does not preclude the Member States from taking account of budgetary considerations at the same time as political, social or demographic considerations, provided that in so doing they observe, in particular, the general principle of the prohibition of age discrimination.
74 In that regard, while budgetary considerations can underpin the chosen social policy of a Member State and influence the nature or extent of the measures that the Member State wishes to adopt, such considerations cannot in themselves constitute a legitimate aim within the meaning of Article 6(1) of Directive 2000/78.”
4.18 In other words, if the cut to starting pay for new entrants was only about saving money then I would have to conclude that it could not be considered a legitimate aim within the context of Article 6(1) of Directive 2000/78. The 10% cut was part of a large number of measures aimed at reducing the pay bill in the public sector. This is a broad national financial policy and the measures taken were also designed to preserve industrial harmony, to send signals to international markets and lenders, to restore international confidence and to protect frontline services. The specific reason given behind this particular measure was the importance of maintaining good industrial relations with existing civil and public servants and the terms of the Croke Park agreement by applying no further reductions in pay for existing civil and public servants in return for significant productivity arrangement and workplace reforms.
4.19 In implementing savings in Budget 2011 the Government had to save money in many different ways as part of the broad national financial policy. In looking at the particular measure before me I accept the respondent’s argument that it was part of a social policy and as such is a legitimate aim and I conclude that the means were appropriate and necessary. I therefore find that the respondent can rely on the defence to indirect discrimination in section 29 (4) (b).
5. DECISION
I have investigated the above complaints and make the following decisions in accordance with section 79 of the Acts that the complainants perform ‘like work’ with the named comparator in terms of Section 7 (1) (b) of the Acts but there are objective grounds other than age for the difference in pay in accordance with section 29(5) of the Act and that the complainants have not been discriminated against by the respondent.
____________________
Hugh Lonsdale
Adjudication Officer/Equality Officer
4 March 2016