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Retirement Age, Fixed Term Contracts and Discrimination -One Year’s Salary awarded

In the recent equality tribunal decision of Michael McPhillips v ISS Facility Services (DEC-2013-042) the complainant argued that he was subjected to discriminatory dismissal by the respondent on the grounds of age contrary to Section 6 of the Act of the Employment Equality Acts (“the Acts”). He also made a claim of victimisation.1. Summary of the Complainant’s SubmissionThe complainant submits that he was employed by the respondent as an external grounds operative for over eleven years. In a letter dated 25 May 2009 he was told that he had to retire when he reached 65 years on 8 June 2010. He objected to this on the grounds that it was discriminatory in terms of the EU Directive 2000/78/EC.1. The complainant stated that he was informed that to continue his employment he would have to sign a yearly contract. He wrote to the respondent on 29 May 2009 confirming that unless it was against the law to employ him he objected to having to leave his employment and accepting the offer of a yearly contract if still available. When the complainant turned 66 in June 2010 he was informed by the respondent that the contract was not to be renewed. The complainant contended that the respondent terminated his contract on the ground of age and that there were no objective and reasonable grounds for the termination of the complainant’s employment.2. Summary of the Respondent’s SubmissionThe respondent stated that on 25 May 2009 the company wrote to the complainant stating that his 65th birthday was approaching on 8 June 2009, that the respondent had a normal retirement age of 65 as per his contract of employment and asked him if he wished to avail of early retirement or would like the respondent to organise some retirement course for him. If not the respondent would assume that he wished to work to 5 June and retire on 8 June, 2009 his 65th birthday.The respondent further stated that on 29 May 2009 the complainant wrote to his site manager outlining that it was his request to stay on working despite his approaching retirement age. On 4 June 2009 the respondent wrote to the complainant stating that they accepted his decision to stay in his current employment and confirmed that they had enclosed two copies of a fixed term contract. On 31 May 2010 the respondent wrote to the complainant stating that this was notice of termination of his fixed term contract which was to expire on 7 June 2010. The respondent contends that, as per the company policy the retirement age is 65 years but following his request the company had issued him with a one year fixed term contract which was due to finish.The respondent’s HR Director confirmed that in certain circumstances it operates a policy of retirement at age 65 years but that it was not a universal policy given that employees may transfer under TUPE when already over 65. He confirmed that approximately 50 people over 66 years of age are employed by it.3. Conclusions of Equality OfficerThe Equality Officer referred to Section 6(1) of the Employment Equality Acts which provides that discrimination shall be taken to occur where ” 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 in terms of subsection (2)…”. Section 6(2) (f) of the Acts defines the discriminatory ground of age as follows “as between any two persons…that they are of different ages…”.The Equality Officer noted that the evidence of the respondent’s witnesses was that “fixed term contracts” are not renewed for anyone over 65 years of age while fixed term contracts are renewed for younger employees. In the case of Donnellan v The Minister for Justice, Equality and Law Reform and Others,6 McKechnie J. held that the termination of an employee’s employment solely on reaching a particular age (in that case sixty years old) constituted direct discrimination on grounds of age contrary to the Acts.The respondent relied on the exemption provided at section 6(3) (c) of the Acts which provides:“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”The Equality Officer noted that the first issue to be addressed was whether the contract under which the complainant was employed was actually a fixed term contract and referred to the case of UPM Kymmene Corporation v. BWG Limited7 in relation to the construction of a contract where Justice Laffoy stated:”…..The basic rules of construction which the court must apply in interpreting the documents which contain the parties’ agreements are not in dispute. The court’s task is to ascertain the intention of the parties and the intention must be ascertained from the language they have used, considered in light of the surrounding circumstances and the object of the contract………….54.The Equality Officer noted that the respondent’s letter of 4 June 2009 enclosing copy of contract to be signed by the complainant clearly confirmed to the complainant that all his responsibilities, terms and conditions related to his position of External Grounds Operative will remain the same as per his contract of employment prior to his 65th birthday. He further noted that the complainant for the full period of his employment with the respondent was employed on a continuous successive permanent contract and that exception to the principle of equal treatment provided by Section 6(3) (c) of the Acts did not apply in the present case and that the complainant’s employment did not terminate due to the expiry of a fixed term contract of employment but was terminated because he was over 65 years of age and was coming up to his 66th birthday.The Equality Officer also took into account that notwithstanding the respondent’s submission that the complainant’s retirement age as per his contract of employment was 65 years of age, the respondent was unable to submit any evidence to this effect. The respondent was also unable to furnish any evidence that the complainant’s terms and conditions with his previous employer included a retirement at age 65 years, or indeed at any age, at the time of his transfer.The Equality Officer noted that the respondent must then demonstrate that the approach it adopted was “objectively and reasonably justified by a legitimate aim … and the means of achieving that aim are appropriate and necessary”. The respondent noted that, were it to set out arguments in respect of authorities provided through caselaw in relation to retirement age and objective justifications, it would weaken its argument.4. DecisionThe Equality Officer concluded that the complainant was discriminatorily dismissed in terms of Section 6(2) (f) of the Acts but did not accept that the complainant was victimised. He ordered the respondent to pay the complainant €22000 (roughly equivalent to one year’s salary) for the effects of discriminatory dismissal which was not subject to tax.

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