Complainant

Respondent

Anonymised Parties

A Director of Marketing

A Telecom and Electronic Communications Infrastructure support Company

Representatives

L. Tennyson BL, instructed by JenniferMcCarthy solicitor of  Daniel Spring & Co.

Kevin Langford, Solicitor of Arthur Cox and Co. Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 77 of the Employment Equality Act, 1998

CA-00026071-001

06/02/2019

The issues in contention concern the alleged Discriminatory dismissal on grounds of Gender, Family Status and Maternity of the Complainant, a Marketing Director, by the Respondent a major Telecoms & IT Infrastructure support Company.

The Complainant began employment on the 12^th October 2012. Following a number of internal promotions, she became Director of Marketing in October 2015. She was made redundant on the 14^th November 2018. She was 5 months pregnant at this date - having notified her employer of her pregnancy on the 1^st November 2018. The Complainant had taken an earlier Maternity Leave in 2017 and had returned to work in February 2018. During her first Maternity Leave she had been replaced by a Mr. Xa. Mr. Xa continued in employment post the maternity Leave and subsequently following the redundancy of the Complainant. The Complainant was given no notice or offered any consultation in regard to her Redundancy, there was no published Selection process and in effect Mr. Xa completely supplanted the Complainant, carrying the same job title and doing the same work as done formerly by the Complainant.

The Complainant supplied in evidence detailed Organisation Charts to support her case. It was accepted that an internal reorganisation has taken place during the early part of 2018 with a lot of job Departmental title/role changes. However, in the final analysis the work of the Complainant remains and is being done by Mr. Xa. who now styles himself Director of Marketing - the job title of the Complainant.

The Complainant cited major Legal precedents in support of her case – in particular reference was made to the Pregnant Workers Directive 92/85/EEC and landmark Irish and ECJ cases.

In final summary the Complainant maintained that she had been Discriminated contrary to the Employment Equality Act,1998 on Gender /Family Status and especially Pregnancy grounds in relation to her Dismissal/Redundancy.

The Respondent Legal advisor opened by pointing out that the Claim for Adjudication was one for Discrimination under the EE Act,1998. It was not under any other piece of Legislation, such as Redundancy or Unfair Dismissal. The case had to be clearly focused on Employment Equality grounds related to Discrimination.

Regarding the specific facts of the case the Complainant was on her first Maternity leave from March 2017. During mid to late 2017 and especially during 2018 the trading position had deteriorated sharply. The industry, the Respondent was in, was undergoing significant flux and a number of re-organisations had to take place in the Respondent to allow the Company to, at its most basic, survive. Some 41 Redundancies took place in 2017. Several internal reorganisations were also necessary and the Complainant, in conjunction with other colleagues, was moved among Business Units in early 2018.

In October 2018 the overall Board of Directors directed the local Management to reduce operating costs by some € 10 million. This necessitated, following a major senior management review, a further round of redundancies and the complete closure of some Business Units. A total of some 63 Redundancies took place globally -fifteen of which were in Ireland -including the Complainant. It was very important to note that the Complainant’s Hierarchical Superior, Ms Xb, had also been made Redundant at the same time. The business unit in which she and the Complainant were employed had ceased to exist.

There was no suggestion of the Complainant’s pregnancy having any impact on the Redundancy decision - the decisions had all been taken in late October prior to the receipt of the Pregnancy notification on the 1^st November.

In Legal submissions the Respondent legal advisor pointed to the need to establish, in an Equality case the clear basis of a prima facie case and cited the landmark case of Mitchell v Southern Health Board in support. The Complainant had not established a clear prima facie case to support her Discrimination claim. The entire Business Unit of the Complainant was closing down and her redundancy, along with 62 other colleagues globally, was product of this rather than any other factors as alleged.

Regarding the EC Pregnacy directive and not withstanding the prima facie case argument stated above Article 10 of the Directive was referred to and Section 10.1 and the exceptional cases argument advanced. The exceptional case here was the need to ensure Company survival and the Redundancies were to this end. The Pregnancy of the Complainant was never an issue. Legal precedents were cited in support of this case

Regarding the continued employment of Mr. Xa it was the Respondents position that he had been initially employed on a Fixed Term Contract. He had proven himself to be making a valuable contribution to the overall business. He was absorbed into the organisation doing demonstrably different work from the Complainant. It was absolutely not a sustainable argument that he was directly replacing the Complainant in any way. Evidence was given to this effect.

In summary the Respondent maintained that the Complainant had not meet the prima facie requirement to successfully support a Discrimination case. Furthermore, and notwithstanding, the Redundancy of the Complainant was an “exceptional case not connected with her condition” as referenced and permitted by Article 10 of the EE directive.

Regarding any perceived or alleged lack of prior Consultation to the Redundancy this is not a requirement of the EE Act,1998 regarding Discrimination cases.

In final summary the Complainant was very reluctantly made Redundant due to pressing business needs and her pregnancy had made absolutely no contribution to the decision.

3:1         The relevant Law and the Burden of Proof.

This case is brought under the Employment Equality Act,1998 and relies majorly on the question of a Discriminatory Pregnancy Related Dismissal.

Accordingly, certain key legal considerations arise and specifically in relation to the burden of proof in a Discriminatory Dismissal/Pregnancy case.

The first consideration must be whether or not the Complainant can at first instance establish that a prima facie case of discrimination occurred. As often stated, “mere assumptions” are not sufficient. The decision of the Labour Court in Southern Health Board v Mitchell still remains the leading decision on the shifting of the burden of proof. The Court considered the extent of the evidential burden which a claimant must discharge before a prima facie case of discrimination can be made out:

“The first requirement is that the claimant must establish facts from which it may be presumed that the principle of equal treatment has not been applied to them. This indicates that a claimant must prove, on the balance of probabilities, the primary facts on which they rely in seeking to raise a presumption of unlawful discrimination.

It is only if these primary facts are established to the satisfaction of the Court, and they are regarded by the Court as being of sufficient significance to raise a presumption of discrimination, that the onus shifts to the Respondent to prove that there is no infringement of the principle of equal treatment.”

The second consideration is then the question of the burden of proof in a Pregnancy Discrimination case.

Bolger, Bruton and Kimber in Employment Equality Law -Round Hall Press 2012 at Section 2-222 is worth quoting

The case law on burden of proof in cases of alleged pregnancy dismissal has developed in a singular manner due to the particular provisions of the Equal Treatment and Pregnancy Directives. It is now well established that the existence of the pregnancy itself is sufficient to shift the burden of proof to the employer to prove that a dismissal of a pregnant employee was not on grounds of the pregnancy.(Ref to the Trailer Care Holdings case EDA128) In other words the rules of burden of proof have been moulded in a manner to take specific account of the jurisprudence on pregnancy.

In plain English the burden of Proof shifts to the Respondent Employer to prove that the alleged Discriminatory dismissal/redundancy was not related in any way to the Pregnancy.

3:2         European Law

Section 10 of the Directive Pregnancy Directive 92/85 is relevant -this requires an employer to cite “duly substantiated grounds in writing” where a pregnant worker is dismissed. Legal Advisors for both parties raised this Directive.

In EDA 195 Teresa Cross (Shanahan) Croc’s Hair and Beauty & Helen Ahern the Labour Court stated clearly the European Law applicable. It is also worth quoting in full

·         -Protection of Women during Pregnancy

It has been made clear by the European Court of Justice that since pregnancy is a uniquely female condition less favourable treatment on grounds of pregnancy constitutes direct discrimination on grounds of gender - decision in Case C-177/88Dekker v Stichting Vormingscentrum voor Jong Volwassenen (VJV-Centrum) [1990] ECR 1-3941.

Since the decision in Dekkerthe protection afforded to pregnant women in employment has been strengthened considerably in the case law of the CJEU and in the legislative provisions of the European Union. Equality on grounds of gender is now expressly guaranteed by Article 23 of the Charter of Fundamental Rights of the European Union.

The Charter is now incorporated in the Treaty on the Functioning of the European Union (the Lisbon Treaty) and has the same legal standing as all preceding and current Treaties. It can thus be properly regarded as part of the primary legislation of the European Union.

The jurisprudential principle that discrimination on grounds of pregnancy constitutes direct discrimination on grounds of sex is now codified in Directive 2006/54/EC on the Principle of Equal Treatment of Men and Women (the Recast Directive). This Directive provides, at Article 2. 2 (c), that any less favourable treatment of a woman related to pregnancy or maternity leave within the meaning of Directive 92/85/EEC constitutes unlawful discrimination for the purpose of that Directive.

In Case 406/06Paquay v Société d'architectes Hoet + Minne SPRL[2007] ECR 1-8511, the Court pointed out that in accordance with its case law the prohibition of less favourable treatment, on grounds of pregnancy comes within the ambit of both the Equal Treatment Directive and the Pregnancy Directive.

The importance of providing real and effective redress in cases where the rights of pregnant workers are infringed was emphasised by the Court at pars 45 -47 of its judgment in Paquay. Here the Court said: -

·         45 However, the objective is to arrive at real equality of opportunity and cannot therefore be attained in the absence of measures appropriate to restore such equality when it has not been observed. Those measures must guarantee real and effective judicial protection and have a real deterrent effect on the employer (Marshall, paragraph 24).

46 Such requirements necessarily entail that the particular circumstances of each breach of the principle of equal treatment should be taken into account. Where financial compensation is the measure adopted in order to achieve the objective previously indicated, it must be adequate, in that it must enable the loss and damage actually sustained as a result of the discriminatory dismissal to be made good in full in accordance with the applicable national rules (Marshall, paragraphs 25 and 26).

47 It is necessary to recall that, in accordance with Article 12 of Directive 92/85, Member States are also bound to take the necessary measures to enable all workers who consider themselves wronged by failure to comply with the obligations arising from that directive, including those arising from its Article 10, to pursue their claims by judicial process. Article 10(3) of Directive 92/85specifically states that Member States shall take the necessary measures to protect pregnant workers or those who have recently given birth or are breastfeeding from the consequences of dismissal which is unlawful by virtue of paragraph 1 of that provision.

At paragraph 49, the Court continued: -

·         49    While recognising that the Member States are not bound, under Article 6 of Directive 76/207orArticle 12 of Directive 92/85, to adopt a specific measure, nevertheless the fact remains, as is clear from paragraph 45 of the present judgment, that the measure chosen must be such as to ensure effective and efficient legal protection, must have a genuine dissuasive effect with regard to the employer and must be commensurate with the injury suffered.

It is abundantly clear from these authorities, and from the legislative provision of the European Union, that women are to be afforded special protection from adverse treatment on account of their condition, from the commencement of their pregnancy until the end of their maternity leave. The entitlement to that protection is to be regarded as a fundamental right within the legal order of the Union which the Courts and Tribunals of the Union must vindicate within the limits of their jurisdiction. It seems equally clear that where a pregnant woman is treated adversely because of her condition during this period of special protection the employer bears the burden of proving, on cogent and credible evidence, that such treatment was in no sense whatsoever related to her pregnancy. This is a matter that the Court will consider further in addressing the application of the burden of proof in cases such as the instant case.

However, all cases rest on their own facts and evidence and we need to consider these.

3:3      Examination of Evidence presented

In examining the evidence presented both orally and in writing the key questions to be examined are

Is a prima facie case of discrimination established?

Was the Pregnancy of the Complainant a determining discriminatory factor in her selection for Redundancy?

3:3:1        Is there a prima facie case of discrimination?

Case law here, particularly where Pregnancy related dismissal is being considered, is quite clear. The fact of being pregnant is sufficient grounds for a prima facie case to be made. It does not mean that a case of Discrimination is being finally proven just that the case can be considered.

As stated above it also shifts the Burden of Proof to the Respondent employer.

It is accepted, on these grounds, that a prima facie case exists.

3:3:2        Pregnancy and Redundancy / The facts of the case as presented.

The undisputed primary fact was that on the morning of the 14^th November 2018 the Complainant was verbally informed by the VP Marketing Mr. Xc that she was being made Redundant. This was accompanied by a detailed letter from the Global VP for HR setting out the Redundancy package on offer.

From the evidence presented it did not appear that any warning had been given of this decision or prior consultation/consideration of alternatives etc had been given.

The Respondent Legal Advisor pointed out, correctly, that this was a Discrimination claim and not a Redundancy Act, 1967 claim and procedural steps required by that latter Act did not strictly apply.

On the day in question some 15 Ireland based staff (including the Complainant) were also made Redundant. This included the Complainant’s immediate superior - effectively the Complainant’s Department was ceasing to exist. Some more junior staff were distributed to other roles in the Organisation.

The redundancies came on foot of a series of Reorganisations dating back to mid-2017. A detailed series of Organisation charts was presented in evidence and debated hotly by the Parties.

The key decision maker, Mr Xd, the CEO, gave detailed oral evidence and was subject to extensive cross examination.

In summary his position was that the Board, in October 2018, had effetely directed him the take €10 Million costs out of the business. In association with a small number of Senior Colleagues, it could be called a Steering Committee - he had closeted himself in a Board room for most of October and made the Business and Redundancy selections – not primarily people but functions.

During this fraught period, he and the other senior colleagues had not been aware that the Complainant was pregnant, and this could not have had any influence on the decisions. When the Complainant formally notified the pregnancy to the Respondent on the 1^st November the decisions had already been made.

The Complainant contested this – while the formal notification was made on the 1^st November 2018 -she was by this stage 20 weeks pregnant and clearly “Showing”. It was not so large an Organisation that her obvious early “Bump” would not have been seen by the Decision makers during October.

This was vigorously denied by Mr.Xd.

The Oral evidence given by Mr. Xd was heartfelt – he was the Manager of a High Tech company in financial turmoil.  The technological business was in a rapid flux and he had to make some very tough calls. He did not have the “bandwidth” to be concerned regarding the pregnancy of a single employee when the entire business was at stake. He had quite simply not been aware of it and it certainly had not been a factor. The Complainant’s immediate Superior, also a Lady, had been made Redundant as well. Some 18 employees across the UK and Ireland had been made Redundant ,13 males and 5 females - this gender mix more than rebutted any suggestion of the alleged Discrimination on Gender or Pregnancy grounds.

Mr. Xd was a very credible witness and his version of events certainly had a convincing ring to them.

The question of the Redundancy Selection process was not gone into in any great detail - it was contended that this was a Discrimination case not a Redundancy Payment Act,1967 case.

However, in weighing the evidence, the fact that the Complainant was highly paid employee (circa €94K approx. per annum) and the Respondent had a very good and expensive to the Employer Maternity leave Scheme could not, in my view be completely ignored. She would have been a considerable overhead to be carried in a period of radical financial retrenchment.

These points, in any reasonable consideration, may have had, in reasonable probability, a bearing on the decision making.  I was not convinced that the Steering Committee and Mr. Xd was completely unaware / indifferent to the overhead costs situation likely to arise from a period of extended maternity Leave.

This became particularly relevant when considering the continuing employment of Mr. Xa -he had been recruited on a temporary basis to cover the Complainants’ first maternity leave but was continued in employment. He was obviously not among the 18 (UK /IRL) employees selected to exit in November 2018.

Numerous Organisation charts detailing reorganisations from 2017 onwards were debated in evidence – to a lay observer it was quite byzantine. However, it was clear that as stated by Mr. Xd-the CEO - in his evidence the Respondent was doing everything possible to remain focused on a changing market even if the reorganisations were rapid. In these Reorganisations Mr. Xa had moved Business units a few times and had undertaken a variety of roles outside of his initial remit. None the less, the same observation could be applied in a more limited way to the Complainant.

It was clear that on the 14th November 2018 he was still employed, and the Complainant was Redundant. This, in the final analysis, a reasonable observer would have had a major difficulty with.

An employer is perfectly entitled to choose which ever employees he wishes to engage and the decision to offer Mr. Xa, a permanent contract was perfectly legitimate. However, when later in the same year a round of Redundancies takes place resulting in a much longer serving female pregnant employee being made redundant it cannot but to a reasonable observer, raise some fairly direct Discriminatory questions. I felt that this issue was never satisfactorily answered.

From the Organisational Charts presented and extensively discussed it was clear that the Complainant and Mr. Xa were effectively almost interchangeable. It was mentioned that Mr. Xa may have been closer to some “deals” and would have been able to “close them out” quicker.

This was not, I surmised, such a major factor in an employment retention / redundancy decision as to outweigh the Pregnancy question.

The Burden of Proof rests here with the Respondent, the pregnancy was the prima facie case, to establish that the Redundancy was not related to the Pregnancy.

The Respondent argued that the exception in Article 10 of the EE Directive should apply -. i.e. “exceptional case not connected with her condition”

For ease I quote

Article 10         Prohibition of dismissal

In order to guarantee workers, within the meaning of Article 2, the exercise of their health and safety protection rights as recognized under this Article, it shall be provided that:

1. Member States shall take the necessary measures to prohibit the dismissal of workers, within the meaning of Article 2, during the period from the beginning of their pregnancy to the end of the maternity leave referred to in Article 8(1), save in exceptional cases not connected with their condition which are permitted under national legislation and/or practice and, where applicable, provided that the competent authority has given its consent;

2. if a worker, within the meaning of Article 2, is dismissed during the period referred to in point 1, the employer must cite duly substantiated grounds for her dismissal in writing;

3. Member States shall take the necessary measures to protect workers, within the meaning of Article 2, from consequences of dismissal which is unlawful by virtue of point 1.

Taking that the Letter of the 14^th November to the Complainant was the very bare and absolute rock bottom minimum required to “cite grounds in writing” the case comes back to the evidence given.

On balance however, the evidence of the CEO, Mr, Xd was crucial. The Board had directed in early October that €10 million in costs be taken out of the Organisation. The Steering team had gone into a Corporate review almost lock down and some 18 UK and Ireland Redundancies/Departmental closures was the result. The pregnancy of one employee was simply not an issue of sufficient status to be considered at this level. The CEO was very convincing on this point and I had to consider carefully his evidence.

3:4        Summary and Final Conclusions

The final Adjudication decision was one of weighing the balance of Probabilities derived from the key facts such as the financial difficulties / the €10 million Board Directive, the retention of Mr. Xa and the knowledge/lack of knowledge by the Respondent of the pregnancy during October 2018.

After careful consideration of all the evidence, both Oral and Written, I came to the view that the Respondent had not sufficiently established that there was no link to the Complainant’s Pregnancy in her inclusion on the 18 staff exit list. It is accepted that the Burden of Proof or Rebuttal is very high in these types of cases. The Respondent CEO was quite clearly under considerable pressure to keep the Company afloat, but this is not an acceptable excuse in a Pregnancy discrimination case.

As stated above the Burden of Proof from both Ireland and Europe is that in a Pregnancy discrimination situation a very detailed case must be made to the Complainant to justify an ending of employment.

Quite frankly this did not happen and quite possibly for reasons allied to the pressure the CEO was under.

However, the Legal position is clear cut and accordingly the case for Discrimination on Pregnancy grounds must stand.

I did not see any compelling evidence to sustain a claim for Discrimination on the Family Status grounds.

4:        Decision:

Section 79 of the Employment Equality Acts, 1998 – 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under section 82 of the Act.

After very careful consideration of all the evidence both Oral and Written I came to the Legal conclusion that the case for Discrimination of Grounds of Pregnancy has been made. The Respondent rebuttal arguments were not such as to completely rule out a reasonable probability of a Discriminatory link.

4:1        Redress/Compensation

The EU directive requires sanctions for breach of the principle of Equal Treatment and especially where a Pregnancy issue is involved to be “Effective, dissuasive and proportionate.”.

The Labour Court in Lee t/a Peking House v Fox EED036 gave guidance that an award had to have regard to the

“effects which flowed from the discrimination which occurred This includes not only the financial loss suffered by the complainant arising from the discrimination but also the distress and indignity which she suffered in consequence thereof”.

Bearing in mind the full context of this case the following factors influenced my consideration of the quantum of an award. The Complaint was a high-profile Director of Marketing on a substantial annual salary. The Industrial Sector is not large, and her Redundancy would have quickly become common knowledge in the Sector. This was reflected in the evidence given reading contacts made post the Redundancy in attempts to secure alternative work. However, it is a High-Tech Industry characterised by considerable staff changes /Redundancies flowing from rapid changes in Technology and Market fluctuations globally. Any award cannot be totally divorced from this reality.

The unfortunate side effect of loosing her entitlement to Statutory Maternity Leave by reason of the date of the Redundancy was clearly quite distressing in a well-advanced Pregnancy situation. This was a bureaucratic matter that could easily have been addressed by the Respondent in consultations with the Complainant regarding the date of the actual ending of service.

Accordingly, having reflected on all the issues involved and in accordance with Section 82 of the Employment Equality Act,1998 I order the Respondent to pay to the Complainant the sums of

1:    € 50,000 as Compensation for Breach and Infringement of a Statutory Right - the Pregnancy Discrimination in regard to the Redundancy. It is not related to any issues of renumeration or salary. This award is not related to the Statutory Redundancy payment already paid to the Complainant.

2:     € 5,000 as Compensation for the distress and upset caused to the Complainant in relation to the difficulties she experienced in qualifying for Statutory maternity Leave as a result of the date of the discriminatory Redundancy. This is an award of Compensation and not related to any issues of renumeration or salary.

The Taxation of this Compensation is a matter to be considered in conjunction with advice from the Irish Revenue Commissioners.

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