Complainant

Respondent

Parties

Kathleen McMullen

An Post

Act

Complaint Reference No.

Date of Receipt

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

CA-00022225-001

18/09/2018

The complainant worked for the respondent as a post operative. After reaching age 66, she worked under a one-year fixed term post-retirement contract. Midway during the year, her employment was ended with one month’s notice. The respondent asserts that this was because it had surplus staff. The complainant asserts that this amounts to discrimination.

The complainant outlined that she worked for the respondent for 21 years. When she reached the age of retirement (66), the respondent offered her an extra year. However, five months into the year, she was let go. She commented that a male member of staff was given the extra year but kept on. While the complainant had been told that this colleague’s role would also end, he continued to work. Another female staff member was not allowed to stay. The complainant said that it should be the same for everyone: everyone should get the year, or no one should get the year. There should be clarity and people should be allowed keep the position for the full year.

The complainant outlined that her role was that of postal operative. She sorted and delivered post. She did the same route every day and this was taken over by a male, aged possibly in his 30s. Her expectation was to get the additional six months to complete the year. She commented that retirement is a big event and she was preparing for pending retirement in April 2019. She finished on the 21st September 2018, but her official date was on the 28th September 2018. There was no issue about her work, and she was very efficient and capable. The complainant said that the respondent was a great place to work. She said that she had heard on the grape vine of others getting the full year. She did not know anyone who was given the extension but cut short.

The complainant said that since her employment came to an end, she had been doing art and pottery, and positive things. There was nothing personal from her managers and this caused her to be very upset.

In submissions, the respondent denied discriminating against the complainant on the grounds of age. It outlined that on the 16th March 2018, it wrote to the complainant to accede to her request to continue working past her 66th birthday. It referred to a memorandum, setting out the terms of the engagement. It cited that should there be surplus staffing, the complainant’s extension would cease. The respondent letter of the 16th March 2018 states “your service has been extended for a maximum of 1 year up to your 67th birthday on a month to month basis.” This surplus staffing arose when staff returned from leave. On the 29th August 2018, the respondent wrote to the complainant to end the extension period. The letter gave one month’s notice.

The respondent indicated that the male colleague referred to by the complainant had started his extension in June 2018. He has since been given notice and is being let go. It said that extensions were rare and had been introduced to cover the gap before the pension age in the pension scheme. The respondent was reducing delivery services. It did not intend to upset the complainant. It was clear that the extension was on a month to month basis. It did not think that casuals were engaged for the Christmas period and this was covered by overtime. There has been a resignation and a transfer out since then.

The complainant worked as a post operative for 21 years and her employment ended on the 28th September 2018. She attained 66 on the 2nd April 2018. The respondent pension scheme provides that the retirement age is the age at which the State Pension (Contributory) is payable. As things stand, this is age 66.

In advance of her 66th birthday, the complainant sought, and was granted, an extension of one year on “a month by month basis”. The memorandum provides “either side may end the employment at any time or for any reason by the appropriate notice” and “the company reserves the right to terminate this extension if a surplus staff situation arises in the office.”

On the 29th August 2018, the respondent wrote to the complainant, giving one month’s notice. The correspondence refers to a surplus staffing situation in the local office. In its response of the 12th September 2018, the respondent states that the complainant’s “temporary arrangement was subject to applicable staffing numbers [in the local office].”

There was discussion at the hearing regarding other staff members (also post-66) being able to continue working throughout their extensions. I accept the respondent’s evidence that the other staff members on extensions were treated similarly to the complainant. I accept that the respondent dismissed the complainant because of the reason set out in the correspondence, i.e. having surplus staff. The question is whether ending the complainant’s employment during the fixed term constitutes age discrimination.

Legal background

Section 6(3)(c) of the Employment Equality Act provides that offering a person over the retirement age a fixed term contract shall not constitute age discrimination if

“(i) it is objectively and reasonably justified by a legitimate aim, and

(ii) the means of achieving that aim are appropriate and necessary.”

The Irish Human Rights and Equality Commission have produced guidelines on “Retirement and Fixed-Term Contracts” (April 2018). The guidelines refer to section 6(3)(c) as an “exemption” and state that it should be strictly construed. They provide that the exemption only applies to the offer of a fixed term contract and not to a contract of indefinite duration. They also state that the exemption only applies to the offer of a fixed term rather than to the terms of the fixed term contract itself. The guidelines state “Where the fixed term contract contains a term that gives rise to discrimination on the grounds of age, or any other protected ground, employers will not be in a position to avail of this exemption.”

The Employment Equality Act transposes Directive 2000/78, which, via Article 2(2), prohibits discrimination on four grounds (including age). The Directive, however, permits direct discrimination on the age ground, where justified. Addressing the justification of differences of treatment on grounds of age, article 6(1) provides “Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.”

Section 8(1) of the Employment Equality Act provides the general prohibition of discrimination in relation to conditions of employment. Section 8(6) provides:

“Without prejudice to the generality of subsection (1), an employer shall be taken to discriminate against an employee or prospective employee in relation to conditions of employment if, on any of the discriminatory grounds, the employer does not offer or afford to that employee or prospective employee or to a class of persons of whom he or she is one—

(a) the same terms of employment (other than remuneration and pension rights),

(b) the same working conditions, and

(c) the same treatment in relation to overtime, shift work, short time, transfers, lay-offs, redundancies, dismissals and disciplinary measures,

as the employer offers or affords to another person or class of persons, where the circumstances in which both such persons or classes are or would be employed are not materially different.” (my emphasis)

Section 34 of the Employment Equality Act sets out savings and exceptions on the age ground. They address differences in treating people according to their age in recruitment and retirement (to note, this is not a retirement case). They address differential treatment in rates of pay and terms and conditions of employment according to seniority or length of service. They address occupational benefit schemes.

Application of the law to this case

The complainant reached the age of retirement and this case does not concern whether her retirement was objectively justified. Neither does it concern whether the decision to offer the fixed term contract was objectively justified. The questions to be determined are whether ending the complainant’s employment and the clause in the memorandum permitting this are discriminatory. If they are, are they capable of being saved by objective justification?

I find that a contract which contains a fixed term (for example a finite date of termination), but also provides for early termination with notice is, as a matter of law, a fixed term contract (see Allen v National Australia Group Europe Ltd [2004] IRLR 847). It follows that the complainant had a fixed term contract of employment, in accordance with the memorandum and other correspondence.

As in all cases of discrimination, section 85A of the Employment Equality Act requires the complainant to establish facts of such significance that raise a prima facie inference of discrimination. Once the complainant has done this, it falls on the respondent to rebut the inference of discrimination.

Having considered the evidence and submissions of the parties, I make the following findings in relation to this case. It is not disputed that the complainant reached the age of retirement and was offered the fixed term to cover the period of the extension. She was placed on a fixed term contract because of her age. The fixed term contract has as a term that the employment relationship can end with notice and specifically, that the employer can dismiss the employee if there are surplus staff in the office. A surplus situation arose, and the complainant’s extension was ended. The terms of her contract and her dismissal were all related to her age. It is clear, therefore, that the complainant has established facts from which the inference of discrimination can be drawn.

Article 6 of Directive 2000/78 permits differential treatment on grounds of age (including direct discrimination), so long as it is objectively justified. This could include the terms of fixed term contract. It is clear, however, that the Employment Equality Act, and section 8(6) in particular, provide that discrimination is not permitted in respect of terms of employment, specifically dismissal. The Employment Equality Act does not provide that a directly discriminatory term can be objectively justified. It follows that the term in the respondent’s memorandum regarding dismissal is not exempted by the Employment Equality Act and not capable of being objectively justified.

Given that I have found that the complainant has established a prima facie of discrimination and the term is not capable of being objectively justified, it follows that the complaint succeeds. There were no other grounds offered to discharge the inference of discrimination.

Even if the term was capable of objective justification, it is likely that it could not be so justified. While having specific terms to encourage the employment of older workers is certainly a legitimate aim, the means used is not proportionate.

The classic authority is Mangold v Helm (C-144/04) where the Court of Justice held that the use of fixed term contracts was for the legitimate aim of increasing the employment of older workers. The Court, however, held that the statutory provision was not proportionate as it authorised “without restriction” the use of fixed term contracts for older workers; instead of being a facility to promote the retention of older workers, fixed term contracts became the norm for this group of workers.

It follows that the complaint of discrimination succeeds. The term relied on by the respondent to dismiss the complainant was discriminatory and not capable of being objectively justified. The act of dismissing the complainant, therefore, was also discriminatory.

Per the Employment Equality Act, the complainant is entitled to redress for the effects of the discrimination. In this case, the complainant incurred obvious loss in having her fixed term contract ended at the midway point. Her employment ended on the 28th September 2018 while it ought to have ended on the 1st April 2019. There were six months left to the extension. I award compensation taking account of this remaining time and the effects of discrimination, as well as the need for redress to be “effective, dissuasive and proportionate”. Taking these factors into account, I award redress of €18,000.

CA-00022225-001

I decide that the complainant has established a prima facie case of discrimination which has not been rebutted by the respondent. I award €18,000 as redress for the effects of discrimination on the age ground. The award is redress for the infringement of the complainant’s statutory rights and therefore not subject to the PAYE/PRSI/USC code.

Employment Equality Act / age discrimination / proportionality

Post retirement fixed term contract