Fixed Term Workers, Discrimination, Objective Grounds and Appeal to High Court

The recent High Court case of An Post v Finbarr and Deirdre Wade [2013] IEHC 404 concerned an appeal from a Labour Court decision determining that the respondent’s right to equal treatment had been contravened by the exclusion of fixed term workers from a voluntary early retirement scheme.BackgroundThe appellant (An Post) in this case contended that the Labour Court erred in law and they sought a declaration in respect of the Labour Court’s determination that(i) The respondents’ right to equal treatment in respect of their employment conditions wascontravened in circumstances where voluntary severance/voluntary early retirement schemeswhich were available to permanent employees were not applicable to the respondents byvirtue of the fact that they were fixed-term workers;(ii) the appellant could not rely on its need to incentivise permanent employees to leaveemployment voluntarily, in circumstances where those permanent employees currently enjoysecurity of tenure and cannot be made compulsorily redundant.The appellant appealed the decision on a point of law against a decision of the Labour Court pursuant to section 15(6) of the Protection of Employees (Fixed-Term Work) Act 2003 (“the 2003 Act”) .The respondents in this case were fixed term workers and employed by the appellant on a series of fixed-term contracts the last of which ended on the 30th September 2011. The first named respondent was continuously employed by the appellant from the 6th October 2008, until the 306 September 2011, and the second named respondent was similarly employed from the 20th October 2008, to the 30th September 2011.The appellant sought expressions of interest in a voluntary severance/voluntary early retirement scheme (“VSA/ER scheme”) by notice dated the 20th August, 2010. The respondents sought to apply under VSI which was available to those having more than one year but less than five years service reckonable for pension. The scheme however was restricted to permanent employees of the appellant who were paid enhanced redundancy payments. The respondents were excluded from the scheme and they received statutory redundancy payments only. The respondents claim that they should have been treated in an identical manner to comparable permanent employees for redundancy purposes which would have entitled them to avail of the terms of the VSI scheme.The Labour Relations Commission found that the appellant was in breach of section 6(l) of the 2003 Act and each respondent was awarded the terms of the VSI scheme i.e. the first respondent was awarded €10,784.63 and the second respondent was awarded €11,011.67. The appellant subsequently appealed the decision to the Labour Court who dismissed the appeal and affirmed the decision of the Rights Commissioner that the respondents had been treated less favourably than their comparators and that such treatment had not been objectively justified.ComparatorsThe appellant argued that the respondents were not treated differently to the comparator as he circumstances between them were not the same and therefore there could have been no discrimination. The appellant noted that although the respondents and their two named comparators were engaged in the same or similar work and were both employed by the appellant, the respondents claim an entitlement pursuant to the appellant’s VSl scheme whereas the two named comparators had expressed an interest in availing of the VS2 scheme.The appellant accepted that the High Court in UCC v Bushin that an ex gratia redundancy payment represented a “condition of employment” for the purposes of section 6 of the 2003 Act. The appellant argued in the present case that the payments made tothe respondents’ two named comparators were not enhanced redundancy payments since neither comparator was, as a matter of law, entitled to a statutory redundancy payment.Objective grounds for less favourable treatmentThe appellant argued that the provisions of the VSA/ER schemes were justified by the legitimate objective pursued. The appellant had to reduce staffing levels to meet the challenges facing its business. Rather than make compulsory redundancies, the appellant considered the VS schemes. It further argued that permanent staff on such schemes receive lump-sum payments-not because they are permanent staff but because the appellant encouraged and incentivised those individuals to voluntarily forfeit their positions. The scheme did not apply to fixed-term workers, such as the respondents as their employment terminated at an agreed date.The appellant submitted that certain information regarding the comparators was not considered by the Labour Court and referred to the cases of Castleisland Cattle Breeding Society Ltd. v. Minister for Social and Family Affairs [2004] 4 IR 150 and NUI Cork v. Aherne [2005] IESC 40.DiscriminationThe respondent argued had they been permanent employees they would have been eligible for payments under the VSI scheme but as they were fixed-term workers they were excluded and eligible for statutory payments only. The respondent argued that it was a condition of employment which was only available to permanent employees and temporary workers were discriminated against as they could not access it.Absence of Justification on Objective GroundsThe respondents argued that three elements must be established in order to justify less favourable treatment namely;(i) The impugned treatment must be for the purpose of achieving a legitimate objective;(ii) Such treatment must be appropriate and necessary for achieving that objective; and(iii)The treatment cannot be based on considerations of the status of the employer e.g. asfixed-term employees.The respondents noted that the legitimate objective cited by the appellant was the need to incentivise permanent workers toleave employment however they argued that the principle of proportionality had not been satisfied. The respondents referred to the cases of Konstantinos Adeneler and Others v Ellinikos Organismos Galaktos (case c-212l04), Yolanda Del Ceruo Alonso v Osakidetza-Servicio Vasco de Salud (case-C307/05) and Rosa Marla Gavieiro(C-444/09) Ana Maria Iglesias Torres (C-456/09)v Conselleria de Educaci1n e Ordenacihn (Jniversitaria de la Xunta de Galicia (cases C- 444109 and C-456109).DecisionThe High Court considered its function and role on an appeal on a point of law and noted“The Court may only intervene where it finds that the Tribunal based its decision on an identifiable error oflaw or an unsustainable finding of fact”.The Court also noted that it could consider whether certain matters ought or ought not to have been considered or taken into account by the Labour Court in determining the facts (NUI Corkv’ Ahern [2005] IESC 40). Justice Hedigan then considered Section 6 and Section 7 of the 2003 Act and stated:“The appellant contends that the workers in question were excluded from the scheme not because they were fixed-term workers but because of the need to incentivise permanent staff to leave early positions in which they could remain until 65 years of age. The scheme was to compensate them for the years of service they would forgo. Did this exclusion treat the respondents in a less favourable manner than the permanent staff that are accepted as the true comparators? Clearly it did. The scheme would have resulted in a better payment to them had the scheme applied and the appellant itself makes the case that they were excluded because of their status as fixed-term workers”.In respect of Section 7, Justice Hedigan noted that the objective of trying to reduce staff was legitimate however the default position was one of non discrimination and no less favourable treatment.In refusing the appeal Justice Hedigan concluded:“The scheme could have allowed for the application to fixed term workers so as to buy out any remaining years of their contracts. This was argued at the hearing, seems eminently sensible and a fair solution and no argument was raised against it.In my view, this answers the question addressed. The means chosen by An Post was not the minimum unfavourable treatment required in order to achieve the legitimate objective. As it went beyond what was necessary, it failed the applicable test”