EDA2231

1.Appeal Of Adjudication Officer Decision No ADJ-00029859.


BACKGROUND:

2.This is an appeal by the Aer Lingus Social & Athletic Association (ALSAA) against the Decision of an Adjudication Officer (ADJ-00029859) dated 3 March 2022 in relation to a claim by Doreen Nolan that she was subjected to discriminatory treatment on the ground of age and the ground of gender in contravention of the Employment Equality Act, 1998 “the Act.”

The Adjudication Officer held that Ms. Doreen Nolan was discriminated against on the ground of age and the ground of gender. He awarded a total of €28,000 in compensation comprising an award of €14,000 for the effects of age discrimination and a further award of €14,000 for the effects of gender discrimination.

A hearing of the Labour Court was held on 13 September 2022. For ease of reference the parties are given the same designation as they were at first instance. Hence, Ms Nolan is referred to as “the Complainant” and ALSAA is referred to as “the Respondent”.





DETERMINATION:

Background to the Appeal:

At the outset of the hearing, the Respondent advised the Court that it was appealing the Adjudication Officer’s decision in relation to the quantum awarded, given the precarious financial circumstances of the company. The Court advised the parties that it would hear the appeal on a de novo basis, after which the Respondent made an application to adjourn proceedings to allow for better submissions. The Court having considered that application declined that request and decided to proceed with the hearing. It did so on the basis that both parties were given advance notice of the hearing and were invited to make submissions in advance of the hearing. The Court was of the view that both sides had been provided with ample opportunity to furnish whatever submissions that they intended to rely on at the hearing.

Both parties confirmed to the Court that they did not intend to provide any witness testimony to the Court as the factual matrix was largely agreed. Both parties confirmed that they wished to rely on their oral and written submissions.

Factual Matrix:

The Respondent is a large sports and fitness complex based at Dublin Airport. The Complainant was employed as a receptionist with the Respondent from 2008 until the termination of her employment on 27 June 2020.

It is accepted that the Complainant did not receive a written contract of employment at the commencement of her employment in 2008. In 2010, the Respondent issued a statement of terms and conditions of employment and an employee handbook to all employees, including the Complainant. The statement of terms and conditions of employment did not specify a retirement age. The statement referred to relevant sections in the employee handbook where more detailed employment terms were set out. The handbook section titled “Pension and Retirement” states‘normal retirement age for all ALSAA employees is 65 years of age’. The Complainant did not query or raise any issues about the new retirement policy at the time.

The Complainant was the first employee to reach 65 years of age following the introduction of the employee handbook. In the month before the Complainant’s 65th birthday, she was informed by the Respondent that she would have to retire upon reaching 65. The Complainant queried why she was singled out to retire as the handbook did not specify that an employee had to retire at 65. At her request, she was allowed to remain in employment beyond that date and was issued with two successive fixed term contracts. Her employment was terminated on 27 June 2020 when her second fixed term contract expired.

Summary of Complainant’s Position - Age Ground:

SIPTU, on behalf of the Complainant, submits that the Complainant was subjected to discriminatory treatment on the ground of age contrary to the Employment Equality Act.

SIPTU submits that despite its inclusion in the employee handbook there was never any compulsory retirement at age 65 within the company. The handbook did not specify that an employeehad toretire at 65 years. The Complainant is one of only two employees who have been compulsorily retired. Several of the Complainant’s colleagues continued to work beyond age 65 with no compulsory retirement. One of those, Ms J., who worked as a cleaner, was allowed to continue working until age 74. It could be argued that the work carried out by that worker was of a more onerous nature than that of the Complainant’s receptionist duties. The current CEO continues to work within the company at age 74.

Prior to the Complainant’s birthday she was advised that she was required to retire at 65 as per the company handbook. The Complainant queried why she was being singled out as the handbook did not specify that an employee was required to retire at 65 and other employees were allowed work beyond that age.

The Complainant was the first employee in the company to be compulsorily retired upon reaching her 65^thbirthday. The Complainant believed that she could continue to work beyond age 65 without issue in line with other colleagues. Furthermore, the previous CEO, who issued the statement of terms and conditions of employment to her in 2010, confirmed in a subsequent email that the company did not have a policy to enforce retirement at any age.

She requested to work longer and while this was facilitated, there was no objective justification provided to the claimant in relation to the issuing of a fixed term contract. When the Complainant requested a further extension in advance of the expiry of the second fixed term contract, there was no meaningful engagement by the Respondent, contrary to the Code of Practice. Her employment was simply terminated on 27 June 2020. No rationale was provided to show that her compulsory retirement was objectively and reasonably justified by a legitimate aim that was appropriate and necessary to achieve that aim.

The Complainant was fit, capable and eager to remain in her role. There is no evidence that any of these matters were considered by the Respondent and no explanation or objective justification was offered by the Respondent for the decision to treat the Complainant differently to other employees.

The Code of Practice on Longer Working S.I. No. 600 of 2017 specifies that a request from an employee to work longer than their contracted retirement age should be considered carefully, which entails an assessment of whether the retirement is justified on a legitimate and objective basis. Where a decision is made to refuse a request, the grounds for the decision should be set out and communicated to the employee.

SIPTU submits that there was no explanation or objective justification for the termination of the Complainant’s employment and, as a result, she was subjected to discriminatory treatment on the age ground in contravention of the Act.

Summary of Complainant’s Position - Gender Ground:

SIPTU, on behalf of the Complainant, submits that the Complainant was subjected to discriminatory treatment on the ground of gender contrary to the Employment Equality Act.

When the Complainant was issued with her second fixed term contract, she was subject to a reduction in pay. Her hourly rate of pay was reduced from €17.45 to €13.00 per hour. A male colleague, Mr M., who was retained in employment after his 65^thbirthday was not subjected to any wage reduction. The Complainant suffered €7,000 loss in earnings because of her reduced salary. The comparator Mr M. suffered no loss in pay. That comparator did not have to sign a contract of employment. He was allowed to stay on for a two-year period. SIPTU submits that as a result the Complainant was subjected to discriminatory treatment on the gender ground in contravention of the Act.

SIPTU submits that the Complainant has made out a prima facie case that she was subjected to discriminatory treatment on both the age and gender ground which has not been rebutted. The Complainant’s employment was terminated unfairly and unnecessarily in breach of the Act. As a result, the Complainant has suffered stress, indignity, and significant financial loss. Her pay was reduced causing significant financial loss, which her employer undertook to reimburse, but has not done so. SIPTU, on behalf of the Complainant seeks an award of compensation for breaches of the Act that is reasonable and dissuasive.

Summary of Respondent’s Position -Age Ground:

A retirement policy of 65 years of age was introduced in 2010 as part of a process to standardise terms and conditions of employment for all employees in the company. The normal retirement age was set at 65 years, as a number of employees were members of a pension scheme which fell due at that age. The new retirement policy did not apply to employees who had already reached the age of 65 and these individuals were allowed to remain on in employment beyond that age.

The Complainant was the first employee to reach the age of 65 since the introduction of the new retirement policy in 2010.

The Complainant sought to remain in employment after her 65^thbirthday. That request was initially declined, and the Respondent relied on the employee handbook to support that decision. Following engagement with the Complainant’s trade union and an external HR adviser it was agreed to issue the Complainant with a one-year fixed term contract on the same terms and conditions of employment. The Complainant’s union sought that a term be included in that contract which would allow the Complainant the right to a further fixed term contract. This was agreed in principle, however, there was no discussion regarding the specific terms that would apply. The Complainant was subsequently issued with a 2^ndfixed term contract but did not retain her original employment terms, which were reduced. The Complainant’s employment was terminated on the expiry of that contract.

The Respondent submits that the Complainant was unfortunate in being’the first out of the gate’after a retirement age of 65 years was introduced in 2010. A few people had retired in the intervening years but had done so voluntarily and before reaching the age of 65. The Complainant was the first personrequiredto retire at age of 65. Although she was issued with a fixed-term contract after her retirement age, the Respondent accepts that it did not take account of the WRC’s code of practice SI 600/2017. It acknowledges it did not set out any objective justification for the treatment of the Complainant and accepts that she was discriminated on the ground of age. It is appealing the Adjudication Officer’s decision in relation to quantum, given the precarious financial circumstances of the company.

Summary of Respondent’s Position - Gender Ground:

The Respondent rejects that the Complainant was discriminated against on the grounds of gender. It accepts that she was treated unfairly vis-�-vis other colleagues who did not have their pay reduced but rejects that this constitutes discrimination on the grounds of gender. The Complainant’s rate of pay was reduced when she was issued with a second fixed term contact solely because of the precarious financial position of the company at the time.

The comparator cited by the Complainant, Mr M., and another female employee, Ms G., reached their normal retirement age of 65 years after the Complainant and both were allowed to remain in employment. Neither Mr M. nor Ms G had their pay reduced, as the financial position of the company had improved by that time, and they continued to be paid at their full rates of pay.

The Respondent accepts that the Complainant was treated unfairly in relation to her terms of employment, however, it rejects that she was discriminated against on the grounds of age.

The Law Applicable:

Section 6(1) of the Act provides, in relevant part, as follows: -

• “For the purposes of this Act and without prejudice to its provisions relating to discrimination occurring in particular circumstances discrimination shall be taken to occur where—
  
  (a)a person is treated less favourably than another person is, has been or would be treated in a comparable situation on any of the grounds specified insubsection (2)(in this Act referred to as the ‘discriminatory grounds’) which—
  • 
    (i) exists,
    (ii) existed but no longer exists,
    (iii) may exist in the future, or
    (iv) is imputed to the person concerned,
  
  (b) a person who is associated with another person—
  • (i) is treated, by virtue of that association, less favourably than a person who is not so associated is, has been or would be treated in a comparable situation, and
    (ii) similar treatment of that other person on any of the discriminatory grounds would, by virtue ofparagraph (a), constitute discrimination.
  (2) As between any 2 persons, the discriminatory grounds (and the descriptions of those grounds for the purposes of this Act) are—
  • ( a) that one is a woman and the other is a man (in this Act referred to as “ the gender ground”),
    …
    ( f) that they are of different ages, but subject to subsection (3) (in this Act referred to as “ the age ground”),

• Offering a fixed term contract to a person over the compulsory retirement age for that employment or to a particular class or description of employees in that employment shall not be taken as constituting discrimination on the age ground if—
  • (i) it is objectively and reasonably justified by a legitimate aim, and
    (ii) the means of achieving that aim are appropriate and necessary.

• 
  “Without prejudice to subsection (3), it shall not constitute discrimination on the age ground to fix different ages for the retirement (whether voluntarily or compulsorily) of employees or any class or description of employees if —
  (i) it is objectively and reasonably justified by a legitimate aim, and

• 85A.—(1) 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.

Deliberations and Findings:

The Complainant in this case alleges that she was discriminated against and treated less favourably than other employees on the grounds of age and on the ground of gender.

In any case involving an allegation of discrimination it is for the Complainant in the first instant to establish primary facts which could lead to an inference that discrimination has occurred. Once these facts are proved, and if the Court regards them as being of sufficient significance to raise an inference of discrimination, then the onus of proving the contrary shifts to the Respondent.

The Retirement Age:

It is agreed by both sides that the Complainant was not issued with a contract of employment upon the commencement of her employment. The Court was told that implementing a retirement policy of 65 years came about as part of an effort to standardise matters and to issue everyone with a statement of their individual terms and conditions of employment. The Court is satisfied in those circumstances that the Complainant had no contractual retirement age at the time of her employment by the Respondent in 2008.

It is accepted that in 2010 the Complainant was issued with a short Statement of Terms and Conditions of Employment. An unsigned copy of the one-page document was provided to the Court which states as follows:

• “This document details the main terms and conditions of your employment as issued by the Association pursuant to the Terms of Employment (Information) Act 1994-2001. It refers specifically to the employee named in section 2 below. In some instances reference is made to the relevant sections of the Employee Handbook where more detailed information of your employment terms may be found. Therefore for completeness, you should acquaint yourself with both this information and with the terms provided in the Employee Handbook; a copy of which is available on request…”.

• “Membership of a pension scheme is optional although we would encourage participation from the outset of your employment and as such, ALSAA, will facilitate membership of a Personal Retirement Savings Account or other relevant pension scheme.
  
  The normal retirement age for Alsaa employees is 65 years of age at which point a pension is paid to members who opted to join the pension scheme”.

• “The terms of a staff handbook can attain contractual status in a number of ways. The individual contract of employment may refer to the handbook thus incorporating its terms into the contract. A term as to retirement may also be implied in the contract by application of the so called officious bystander test enunciated in Shirlaw v Southern Foundaries Ltd [1939] 2 K.B. 206. Here the test was set out in the following terms: -
  • 
    “Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying 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’.”
  
  A term can also be implied in the alternative, and somewhat overlapping, ‘custom and practice’ test adopted in this jurisdiction by Maguire P inO'Reilly v Irish Press [1937] 71 I.L.T.R 194. Here 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…it is necessary in order to establish a custom of the kind claimed that it be shown that it was so generally known that anyone concerned should have known of it or easily become aware of it.”
  
  It seems to the Court that this custom and practice test can appropriately be applied in considering if the policy of an employer took effect as a contractual term or a condition of employment.
  
  The terms of a pension scheme may also be relied upon as either implying a term as to retirement or by incorporating the terms of the scheme into the contract.
  
  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 Court notes that the Complainant was the first personrequiredto retire at age of 65, as others had retired in the intervening years but had done so voluntarily and before reaching the age of 65.

Having regard to the all the circumstances, the Court cannot accept that the Complainant had knowledge of a retirement age of 65 years. No evidence was adduced of the Complainant having been so informed or having been provided with any document from which such a requirement could have been discerned. The Complainant was not aware of any other employee who was required to retire before she reached 65. Compulsory retirement ages must be capable of objective justification both by the existence of a legitimate aim and evidence that the means of achieving that aim is appropriate and necessary.

Based on the facts presented to the Court in this case, the Court finds that the Complainant was dismissed because of her age. There was no express term in her contract of employment setting a compulsory retirement age at age 65 years and, in the Court’s opinion, no such term can be regarded as having been implied or incorporated on any of the accepted tests.

The argument in relation to fixed-term contracts has no relevance in circumstances where there was no compulsory retirement age for the Complainant. Section 6(3(c) of the Act only becomes relevant where there is a compulsory retirement age, and an employer decides to keep an employee on beyond that on a fixed term contract or series of such contract. That was not the case here. Here the Complainant had no retirement age. She should have been allowed to continue on her pre-existing contract until such time as she decided to retire or possibly on one of the four grounds articulated in section 6(4) of the Unfair Dismissals Act 1977.

The Court finds that the complaint of discriminatory treatment on the ground of age to be well founded.

The Gender Ground:

The primary fact contended by the Complainant in relation to her claim of discrimination on the gender ground is that a male comparator did not have his pay reduced when he was retained in employment after his 65^thbirthday, while her rate of pay was reduced. The treatment of the male comparator contrasted with the treatment of the Complainant who was subject to a reduction in her hourly rate of pay from €17.45 to €13.00 per hour when she was issued with a second fixed term contract. It was not disputed by the Respondent that the Complainant had her pay reduced when she was issued with a second fixed term contract, while a male employee was retained in employment after his 65^thbirthday with no diminution in his rate of pay.

On this basis, the Court is satisfied that Complainant has established primary facts which are sufficient to raise a presumption of discrimination on the grounds of gender. In such circumstances the burden of proof shifts to the Respondent to rebut the claim of discriminatory treatment.

In response to questions from the Court, SIPTU accepted that the cause of action in relation to the claim of discrimination on the grounds of gender did not occur until such time as the male comparator, Mr M., was facilitated with an extension of his employment after his 65^thbirthday without any reduction in his pay. It was also accepted that a female employee whose retirement date fell shortly after Mr M. was also facilitated with an extension of her employment after her 65^thbirthday, without any reduction in her pay.

For its part, the Respondent accepts that the Complainant was treated unfairly in comparison to these two colleagues but rejects that she was discriminated against on the ground of gender. It asserts that the reduction in the Complainant’s her pay related solely to the company’s financial circumstances at that time.

In circumstances where both a female colleague and a male colleague were retained in employment beyond their normal retirement, without a diminution in their rates of pay, the Complainant cannot rely on the difference in the Respondent’s treatment of the Complainant compared to the male comparator cited to assert that she was discriminated on the ground of gender.

The Court finds that the Respondent has successfully rebutted the complaint of discrimination on the ground of gender. Accordingly, the Court finds that the complaint on the ground of gender is not well founded.

Redress:

The Court was urged by the Respondent to have regard to the precarious financial circumstances of the company in making any award.

The Respondent was invited to comment on the case ofWatters Garden World Ltd v Panuta (EDA098). In that case the Labour Court held that:-

• “There is no support in authority or in statute for the proposition that the Court should have regard to the financial circumstances of a Respondent in measuring the quantum of compensation to which a successful Complainant is entitled. Section 82(1)(c) of the Act merely provides that the Court may make “an order for compensation for the effects of acts of discrimination or victimisation….”. Article 15 of Directive 2000/43/EC (the Race Directive) and Article 17 of Directive 2000/78/EC (the Framework Directive) provides that compensation must be “effective, proportionate and dissuasive”. While the size of any award intended to have dissuasive effect may, for its effectiveness, have to take account of the financial capacity of an enterprise, the other elements of the award are related solely to the pecuniary loss suffered by the Complainant and the gravity of the transgression. The financial capacity of the Respondent is neither an aggravating nor a mitigating factor in measuring compensation under those headings”.

While the Court acknowledges and has sympathy for the financial difficulties that the Respondent finds itself in, it is well settled that an award of compensation for the effects of acts of discrimination must be proportionate, effective, and dissuasive and the financial capacity of the Respondent is neither an aggravating nor a mitigating factor in measuring compensation under those heading subject to the limitation set out in Watters above.

Determination:

The Court finds that the Complainant was not discriminated against on grounds of gender and that complaint is not well founded. The decision of the Adjudication Officer in relation to the complaint on the grounds of gender is overturned.

The Court is satisfied that the Complainant was discriminated against on grounds of age in contravention of the Act and finds that her complaint is well founded. The decision of the Adjudication Officer in that regard is affirmed.

An award of compensation for the effects of acts of discrimination on the ground of age must be proportionate, effective, and dissuasive. In the last year of her employment the Complainant suffered a loss of €7,000 gross. The Complainant’s annual salary prior to this was €28,000. Taking all of the above into consideration and having regard to the opportunity suffered by the Complainant to continue on in the employment the Court determines that an award of compensation be measured at €20,000. The Decision of the Adjudication Officer is varied accordingly.

	Signed on behalf of the Labour Court
	Katie Connolly
SL	______________________
25 November 2022	Deputy Chairman