Doran v. Minister for Finance [2001] IEHC 57; [2001] 2 IR 452 (3rd April, 2001)

Judgment of Mr. Justice Roderick Murphy delivered the 3rd day of April 2001. 1. BACKGROUND 1. This is an application by way of Special Summons against a determination of the Labour Court of the 26th of July 1999 (No. 99/2) which held that there was objective justification for indirectly discriminatory pay practice in relation to the Applicants, who at all material times were Clerical Assistants, and comparator Paperkeepers. 2. The first 26 named Applicants were at all material times employed as Clerical Assistants by the Respondents and are represented by the Civil and Public Services Union, the last named Applicants. 2. PREVIOUS REFERENCES 2.1 On the 14th of November 1991 the Union referred a complaint of pay discrimination on behalf of the claimants to the head of Equality Services of the Labour Court under Section 7 (1) of the Anti-Discrimination (Pay) Act 1974 (“The 1974 Act”). 3. The Equality Officer issued recommendation EP07/98 on the 8th of April 1998 which found that, although the claimants were employed on “like work” as that performed by the compareters, the difference in pay was unrelated to sex and the Respondents’ therefore had not discriminated against the Applicants, contrary to the terms of the 1974 Act. 2.2 On appeal to the Labour Court pursuant to Section 8 of the 1974 Act the determination, already referred to, accepted that the differences in pay for the two grades are justified on grounds other than sex. The Court, accordingly, upheld the Equality Officers recommendation. 3. LABOUR COURT DETERMINATION 3.1 The Labour Court noted what it believed to be the common case that the grade of Clerical Assistant, to which the Applicants belonged, is a recruitment grade whereas the grade of Paperkeeper (as comparators) is a promotional grade. It also regarded it to be common case that it is possible to gain promotion from the grade of Clerical Assistant while and it is not possible to gain promotion from the grade of Paperkeeper. The Labour Court also noted the Respondent’s contention, among other grounds, that in order to motivate staff and to maintain a sense of vocation it was necessary to promote them and that the promotion could be accompanied by an increase in pay and result in different pay scales. These reasons, it claimed, constituted grounds other than sex under Section 2 (3) the 1974 Act in relation to the difference in pay between the two grades. 3.2 The Labour Court referred to the considerable volume of European and Irish Case law on the point: Flynn -v- Primark (1997) ELR218; Bilka-Kaufhaus Gmbh -v- Weber (1986) ECR1607 and Enderby -v- Frencahy Health Authority (1993) IRLR591. 3.3 That Court also referred to the Council Directive 97/80/EC of the 15th of December 1997. Article 2 of that directive states that : “ Indirect discrimination shall exist where an apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one sex unless that provision, criterion or practise is appropriate and necessary and can be justified by objective factors unrelated to sex”. 3.4 The Labour Court accepted the fact that the Clerical Assistant grade is a recruitment grade from which the claimants may seek promotion to other grades. The Court also accepted the fact that the Paperkeeper grade is a grade from which there are no further promotional outlets. The Court then continued: “ Given the particular circumstances of the grade of Paperkeeper within the Civil Service structure, the Court finds as a fact that the creation of grade of Paperkeeper was necessitated by need to encourage motivation among staff who could attain that grade, to maintain a sense of vocation amongst them in the long-term and to raise morale amongst those members of the Respondents’ staff employed within the section. Due to the fact that there were no further outlets from that grade, the only appropriate means of encouraging staff in this grade was by means of a pay differential and, accordingly, the pay difference was necessary for the reasons outlined above. The Court is assisted in this view by the fact that at the top of the respective scales, the Clerical Assistant grade, in fact, earns more than the Paperkeeper grade, allied to the fact that there are no promotional opportunities from the grade of Paperkeeper. This is not the case in the case of the Clerical Assistants who have unlimited promotional opportunities through a heirarchy of grades. The Court, accordingly, finds as a fact that the differences in remuneration arising from those measures correspond to a real need on the part of the Respondents and were appropriate and necessary to that end”. 3.5 As a result of those findings and views the Court accepted that the difference in pay for the two grades is justified on grounds other than sex and, accordingly, upheld the Equality officers recommendation. 4. APPLICANTS’ SUBMISSION 4.1 Ms. Mary Honan, Barrister of Law, on behalf of the Applicants, submitted that indirect sex discrimination refers to disadvantage resulting from a criterion which is gender neutral but which nevertheless impacts adversely and substantially on a particular sex. Once a prima facia case of indirect discrimination is established the onus of proof shifts to the Respondent to show objective justification for the measures resulting in the pay differential. Having considered Enderby , Nathan -v- Bailey Gibson and Flynn -v- Primark (1) Ms. Honan referred to the classical formulation of the test for objective justification in Bilka - Kaufhaus . 4.2 That test, she submitted, was as follows: ....where it is found that the measures chosen for achieving the objective correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objectives pursued and are necessary to that end”. 4. Moreover the measure chosen to achieve a particular objective must be consistent with the principle of proportionality. 4.3 Four Nett issues arise in the Applicants’ submission. 4.3.1 The first of these, detailed in grounds (i) and (ii) relates to direct discrimination on grounds other than sex. Counsel for the Applicants submit that the Labour Court accepted that a motivational policy aimed at maintaining a sense of vocation was a ground other than sex. The means chosen to achieve this objective resulted in a grading structure with pay differential. The motivational policy was twofold: to motivate Service Officers and others to apply for the Paperkeeper grade and to motivate the Paperkeepers who had no promotional outlet. 5. In her submission, Ms. Honan says that motivation or intention is not a relevant factor in discrimination cases. Most pay discrimination could be thus validated. 6. The history of Clerical Assistant and Paperkeeper grades clearly shows, in the Applicants submission, that the grading structure is originated and developed as sex differentiated grades. To accept the nature of this structure as legitimising a pay differential is to perpetuate the discrimination which the legislation was designed to change. 7. The employer must prove that the differentiation is genuinely attributable to grounds other than sex. It cannot be used to uphold a practise which seeks to conceal discrimination on sexual grounds (See Keane J in Minister for Transport Energy and Communication -v- Campbell (Unreported, 29.06.96) and Irish Crown Cork -v- Desmond (1993) ELR 180. 8. Ms. Honan adopted the passage of Lord Denning, MR. in K Cross (Quarrying Services) Limited -v- Fletcher (1998) IRLR 361 as follows: “ The issue depends on whether there is a material difference (other than sex) between her case and his . The tribunal is to have regard to her and to him to the personal equation of the women as compared to the man, irrespective of any extrinsic forces which lead to the variation and pay. As I said in Shields -v- E Commes Holdings Limited (1998) IRLR 263, Section (3) applies “where the personal equation of the man is such that he deserves to be paid at higher rate than the woman”. Thus the personal equation of the man may warrant a wage differential if he has much longer length of service or has superior skill.... Or to other circumstances personal to him”. 9. It is submitted on behalf of the Applicant that a motivational policy resulting in the creation of a grading structure which was indirectly discriminatory cannot satisfy Section 2 (3). It had a disparate impact on women. The Labour Court found that the pay practice resulting from this policy constituted prima facie indirect discrimination. 10. The Applicants submit that the Labour Court failed to apply the correct principles in that it accepted as a ground other than sex a ground which was indirectly discriminatory, tainted with sex discrimination and was unspecific and subjective. 4.3.2 The second of the four issues is that of indirect discrimination and objective justification (grounds (iii) (viii) of the appeal). The Labour Court found as a fact that the differences in remuneration arising from the motivational need corresponded to real needs on the part of the Respondents and were appropriate and necessary to that end. 11. In the Applicants’ submission the test in Bilka as elaborated in Hill and Stapleton ( (1998) IRLR 466 ) and in Seymour-Smyth ( (1999) IRLR 253 ) was not satisfied in the Labour Court’s decision. 12. Generalisations do not constitute legitimate objective justification (Jerster). An explanatory approach is not sufficient justification as it would lead to the perpetuation of sexual roles in working life and afford a legal argument for maintaining the status quo (Enderby). 13. In particular the European Court expressly rejected an alleged motivationally policy as objective justification for indirect discrimination in Hill and Stapleton . This concerned practice which established a reward system to maintain staff motivation, commitment and morale. 14. In her submission, Ms. Honan for the Applicants asserts that while it is acceptable that the motivation of staff is a valid objective, the requirement of need could not have been satisfied before the Labour Court where both the Applicant’s grade and the Comparators’ grade were assimilated into that of Clerical Officer Grade with effect from 1995, (R. G.2 para 10.1 in the grounding Affidavit). 15. Applicants’ Counsel further submitted that a correct application of the principle of proportionality would have to take into account the fact that the pay practice in the present case adversely impacted on approximately 6,000 female staff while allegedly motivating about two hundred staff in the paper grade area at the time of the claim. In Sirdar, the Advocate General stated that the principal of proportionality requires that derogations remain within the limits of what is “appropriate and necessary”. He asked whether the policy, in that case, was strictly necessary or whether it did not go beyond what would be adequate to retain effectiveness. 16. In the Applicants’ submission the Labour Court erred in law in failing to apply the above principles. 4.3.3 The third issue, relates to current objective justification. This refers to a reason existing at the date of the determination. In the present case the motivational policy relied on as justification did not exist at the time of the Labour Court’s determination since the Claimant and Comparator grades had been merged into the Clerical Officer grade with effect from 1995 pursuant to the Department of Finance Circular 33/97. It is submitted that the Labour Court erred in law in accepting as justification a policy which no longer existed at the time of the determination. 4.3.4 The fourth issue relates to findings of primary fact. The Labour Court had found as a fact that the Paperkeeper grade had no promotional outlet and relied on this finding both in relation to its conclusion as to “grounds other than sex” and in relation to objective justification. (See page 3 of Determination 99/2). It was submitted to the Labour Court (RG2 of the Grounding Affidavit herein) that the Paperkeeper grade had a promotional outlet to the Clerical Officer grade as had the Clerical Assistant grade. On this basis it is submitted that the finding of fact that the Comparator grade had no promotional outlet, which finding was critical to the Labour Courts determination, should be set aside. 4.3.5 It was finally submitted that the High Court has jurisdiction to refer any question of law relating to the correct interpretation to the European Court of Justice for Preliminary Ruling under Article 177 of the Treaty of Rome. 5. RESPONDENTS’ SUBMISSION 5.1 Ms. Barrington, Barrister at law, for the Respondents submits that Section 8 (3) of the 1974 Act, which provides for an appeal on a point of law, was considered in Brides -v- Minister for Agriculture, Food and Forestry (1998) 4 IR 250 at 274. There Budd J. held:- “Accordingly, the facts as found by the Labour Court are binding on this Court whether its facts are supported by credible evidence and this Court should be slow to disregard the inferences drawn by the Labour Court from its findings of fact unless the inferences drawn are wholly unwarranted on the findings of fact made.” 5.2 The fundamental issue in the Appeal is the inferences drawn by the Labour Court from its findings of fact. 17. The entitlement to equality for women employed in like work with men provided for in Section 2 (1) is subject to Section 2 (3) which provides that nothing in the Act should prevent an employer from paying to his employees who are employed in like work in the same place with different rates of remuneration on grounds other than sex. 5.3 Section (5) provides that any arrears of remuneration is limited. 5.4 Where the Court were to find that the Appellants had established an error on a point of law, the proper course to be adopted would be to remit the matter to the Labour Court for rehearing as in Flynn -v- Primark (1999) ELR and Nathan -v- Bailey Gibson Limited (1998) 2 IR 163. 18. The Respondents submissions of 4th March, 1999 exhibited in the Affidavit of Ms. Rosaleen Glakin points out that eleven of the twenty six Applicants were paid more than their comparators on the 11th November, 1991 which was the date of the referral of the claim. Four of these were paid in excess of the maximum of the Paperkeeper scale. Only nine of the twenty six received less remuneration than the minimum Paperkeepers scale. 5.5 In the circumstances it is submitted that the only relief sought which may be properly granted is to set aside the Labour Court Determination 99/2 and remit the matter to the Labour Court. 5.6 The Labour Court accepted that the fact that the grade of Paperkeeper was promotional grade constituted an objective justification for the difference in pay. That difference corresponded to a real need on the part of the Respondents and was appropriate and necessary to that end. Moreover, the Labour Court had correctly analysed the Appellant case in the context of a claim for indirect discrimination and, accordingly, had applied to the principles applicable thereto. 5.7 Indirect discrimination is viewed as existing “where an apparently neutral provision, criterion or practice, disadvantages a substantially higher proportion of the members of one sex unless that provision is appropriate and necessary and can be justified by objective facts unrelated to sex” as defined in Counsel Directive 97/80/EC of the 15th December, 1997. 19. While the 1994 Act does not define either direct or indirect discrimination the latter as defined by the late Hamilton C. J. in Nathan -v- Bailey Gibson (1998) 2 IR 162 at 177 as a practice or requirement with “which the proportion of persons of the other sex, or, as the case may be, of a different marital status but of the same sex, able to comply is substantially higher”. 20. Following the reasoning in Bilka Kaufhaus (1986) ECR 1607 it is for the National Court, which has sole jurisdiction as to make findings of fact, to determine whether and to what extent the grounds put forward by an employer to explain the adoption of a pay practice which applies independently of a workers sex but in fact affects far more women than men, may be regarded as objectively justified economic grounds. If the National Court finds that the measures chosen by the employer correspond to a real need on the part of the undertaking or are appropriate with a view to achieving the objectives pursued and are necessary to that end, the fact that the measures affect a far greater number of women than men is not significant to show that they constitute an infringement of Article 119. 21. This reason is implied in this jurisdiction in Flynn -v- Primark , Nathan -v- Bailey Gibson and Conlon -v- University of Limerick (1999) 2 ILRM 131 . In Conlon the High Court held that the Labour Court’s acceptance of objective justification proffered by the University of Limerick was fundamentally correct and would not be overturned on the basis of “semantics”. 22. In the Respondents submission the test outlined in Bilka Kaufhaus was complied with in that the measures chosen by the employer corresponded to a real need and were appropriate with a view to achieving the objectives pursued and were necessary to that end. 23. The Respondents further submit that insofar as the Appellants are entitled to bring a claim in respect for a difference in pay which did exist, then the Respondents are entitled to rely on an objective justification which was valid at that time. 24. In relation to the determination of the Labour Court that the Paperkeeper grade was one from which there was no further promotional outlet, this was not evidence proffered by the Respondents. Moreover, the Labour Court’s conclusion was not based on this determination nor on the undergoing fact. 25. It was submitted that in relation to a factual error in the Labour Court’s determination which was the subject of the Appeal in Flynn -v- Primark , Laffoy J.’s decision should be followed:- “While the statement in the Labour Court determination highlighted by the Applicants in the submission is not accurate, in my view the Applicants have not established that in consequence the determination of the Labour Court is based on an unsustainable finding of fact and is wrong in law on that account. (At 99)”. 26. In her final submission on behalf of the Respondents, Ms. Barrington submits that no reference to the European Court is necessary. The discretion regarding referral is set out in Brides at 259. The legal principles are clear and are set out in Bilka Kaufhaus where the European Court of Justice stated at paragraph 35:- “It is for the National Court, which has sole jurisdiction to make findings of fact, to determine what extent the grounds put forward by an employer to explain the adoption of a pay practice which applies independently of a workers sex but in fact affects more women than men may be regarded as objectively justified ecomonic grounds.” 6. DECISION . 27. Facts found by the Labour Court are binding on this Court where those facts are supported by creditable evidence. Inferences drawn by the Labour Court from its findings of fact will only be disturbed where they are wholly unwarranted on the findings of fact made. This is clear from the dictum of Kenny J. in Mara -v- Hummingbird (1982) ILRM 421 at 426 and applied in Brides -v- Minister for Agriculture (1998) 4 IR 250 at 254. 28. However, it seems to me that the basis for the determination of the Labour Court was the acceptance of a fact that the grade of Paperkeeper was a promotional grade from which there was no further promotional outlets. This appears clear from the Labour Court’s consideration of direct discrimination where it believed it to be common case that it is possible to gain promotion from the grade of Clerical Assistant while it is not possible to gain promotion from the grade of Paperkeeper. In its very comprehensive consideration of indirect discrimination quoted, in extenso , at 3.4 above the Court concluded:- “The Court, accordingly, finds as a fact that the differences in remuneration arising from these measures correspond to a real need on the part of the Respondents and were appropriate and necessary to that end.” 29. It is submitted by the Respondents (see 5.6 above) that the acceptance by the Labour Court as a fact that the Paperkeeper grade was a grade from which there was no further promotional outlets was not evidence proffered by the Respondents. The Claimants, at 4.3.4 above submitted to the Labour Court the Paperkeeper grade had a promotional outlet to the Clerical Officer grade. It seems to me that the Court’s conclusion was, indeed, based on a misunderstanding which was not a matter of “semantics” as in Conlon -v- University of Limerick . 30. This Court is concerned with the question whether or not the Labour Court had erred in law in reaching its decision. (See Brides -v- Minister for Agriculture (1998) IR 250). 31. In order to establish discrimination the relevant comparator must not alone be real and have a tangible connection with the type of work performed by the Applicants (see Defrenn -v- Sabera (case 43/75) (1976) ECR 455 ) but the nature of the contrast must be comparable. 32. If there was no evidential basis for the misunderstanding then, in that sense, the Labour Court would appear to have erred in law in reaching its decision. 33. In the circumstances the matter should be remitted to the Labour Court for rehearing in terms of paragraph (c) of the endorsement of claim. © 2001 Irish High Court BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII