Case Number: DEC-E2012-048- Full Case Report. Equality Tribunal

CourtEquality Tribunal
Date01 April 2012
Docket NumberDEC-E2012-048- Full Case Report


Decision DEC - E2012- 048


Davy Byrne & Aidan O'Hanlon
(Represented by Mary Honan, B.L. instructed by O'Mara Geraghty McCourt, Solicitors)
(Represented by Rosemary Mallon, B.L. instructed by Arthur Cox Solicitors)

File reference: EE/2008/887 & EE/2008/888
Date of issue: 26 April 2012

Headnotes: Employment Equality Acts-sections 6, 8,9,86 - age- - conditions of employment - collective agreement -time limits - misconceived.

1. Dispute

1.1This dispute concerns complaints by Mr. Davy Byrne and Mr. Aidan O'Hanlon (hereinafter "the complainants") that each of them was subjected to discriminatory treatment by Diageo Ireland (hereinafter the respondent) on the grounds of age in terms of Section 6 of the Act of the Employment Equality Acts in relation to conditions of employment and in relation to a collective agreement. Claims in relation to victimisation were withdrawn by the complainants at the hearing of the matter.

1.2 The complainants referred complaints under the Employment Equality Acts to the Equality Tribunal on 23 December 2008. In accordance with his powers under the Acts the Director delegated the complaint to the undersigned - Deirdre Sweeney, Equality Officer, for investigation, decision and for the exercise of other relevant functions of the Director under Part VII of the Acts. My investigation of the complaint commenced on 7 June 2011 the date the complaint was delegated to me. Submissions were received on behalf of both parties. As required by section 79(1) of the Acts and as part of my investigation, I proceeded to hearing on 28 September 2011. At the hearing I requested further submissions from both parties dealing with certain legal issues raised by the claims and a further hearing was scheduled for 25 November 2011. Further submissions on behalf of both the complainants and respondents were received and exchanged. Following subsequent correspondence it was agreed with the parties that a further hearing was unnecessary.

2. Summary of the Complainants' Submissions

2.1 Each of the complainants was employed by Dundalk Packaging, a division of the Respondent Company. Mr Byrne was employed as a brewhouse operative from September 1976 until June 2001. Mr. O'Hanlon was employed as a tank station operative from September 1975 until June 2001.

2.2 Each of the complainants availed of a redundancy package arising out of the closure of Dundalk Packaging in 2001.
The terms of this package varied depending on the age of the employee. One set of arrangements applied to those employees who were aged 45 by 31 December 2002 (otherwise known as "the K2 arrangements"). Another set of arrangements devised in consultation with the Labour Relations Commission applied to all other employees including the two complainants. This group of employees received a defined, service-based lump sum and a deferred pension which they will receive at normal retirement age. They also received a beer allowance which terminated in December 2007 and VHI, medical and death in service benefits which terminated in December 2010. This is in contrast to those employees to whom the K2 arrangements applied who continue to receive those benefits under the normal arrangements.

2.3 The complainants contend that they have been discriminated against on grounds of age contrary to the Employment Equality Acts. They submit that the Equality Officer should find their claims well founded and make the following orders:
- A decision that the complainants have been discriminated against
- An order for compensation for the effects of the discrimination
- An order extending the K2 benefits to the complainants backdated to the date they signed the redundancy agreements.

3. Summary of the Respondent's Submissions

3.1 The respondent accepts that the complainants were employed by Dundalk Packaging, a subsidiary within the Diageo Group, which ceased its operation in 2001. The respondent submits that the claims were lodged with the Equality Tribunal on 23 December 2008 over seven years after the complainants ceased employment with Dundalk Packaging on 1 July 2001. The respondent raised a number of preliminary issues.

3.2 The respondent submits that these claims are out of time in terms of section 77(5) of the Acts as the disputed agreement is dated 25 May 2001. In addition the respondent submits that the Equality Officer does not have jurisdiction to hear this claim on the grounds that the complainants are not employees for the purposes of this legislation. The respondent submits that the definition of employee under Section 2 of the Acts must be read in conjunction with the time limits set out in the Act for bringing a claim. Under Section 77(5) of the Act it is clear that a claim must be brought within 6 months (and in certain cases within 12 months) from the date of the alleged act of discrimination. Therefore the respondent submits that the Act only refers to former employees in this context i.e. it allows former employees to claim about discrimination while at work or at the time of the termination of the contract of employment but only up to 12 months after the date of termination of the contract of employment. The complainants in this case have not been employed by the respondent for a period of approximately 10 years. The respondent submits that the complainants are clearly not "employees" for the purposes of the Act and their claims must fail. The respondent submits that the complainants cannot complain about their conditions of employment with the respondent as quite simply they are not employees and have no conditions of employment and that has been the case for the last 10 years. The respondent relies on the case of A Healthcare Provider v A Claimant where the Labour Court considered the definition of worker in the Industrial Relations Acts and held that the claimant in that case was not a worker as defined by those Acts. The respondent also relies on Employment Appeals Tribunal jurisprudence where employees who refuse the offer of alternative employment can succeed in a claim for redundancy but in the particular circumstances their claims under the Minimum Notice and Terms of Employment Act must fail. In all the circumstances the respondent submits that the Equality Officer does not have the jurisdiction in relation to the claims made by the complainants in these proceedings.

3.3 Notwithstanding the above arguments the respondent states that the complainants were employed by Dundalk Packaging which was part of the Diageo Group. Mr Byrne commenced employment on 27 September 1976 and Mr O'Hanlon commenced on 1 October 1976. The closure of Dundalk Packaging was announced in July 2000. At this time some individuals had already signed up to avail of 'K2 severance terms'. K2 was a change plan/productivity agreement which had been accepted by the employees in Dundalk Packaging in April 2000 prior to the closure announcement and had provided for reduction in headcount and changes to work practices. Those leaving under this change plan were eligible to what were known as "K2 terms". That agreement continued to be honoured and the availability of the K2 severance terms was extended to other employees aged 50 years or over impacted by the closure.

3.4 Following the announcement of the closure, plant management and the relevant trade unions (SIPTU, TEEU, ATGWU and AEEU) entered into negotiations on redundancy terms and other elements of a closure deal.
A set of proposals dated 28 May 2001 was ultimately agreed with the intervention of the Labour Relations Commission. These proposals were accepted by the Trade Unions representing the workforce at Dundalk Packaging and all employees then received the payments they were entitled to. Approximately 150 employees were made redundant with effect from June 2001. The complainants were notified of the applicable severance terms to their employment in accordance with the LRC agreement. The complainants' employments terminated on 1 July 2001.
3.5 Under the LRC agreement it was agreed that the 'K2 terms' would be extended to those who reached the age of 45-49 by 31 December 2002.
It was further agreed that a number of options would be made available for those in that particular age group as follows:
Option 1 - a lump sum, plus either a deferred pension at 62 or 65 or an actuarially reduced pension at 50
Option 2 - a lump sum plus a non-actuarially reduced pension at aged 50 and an additional €60,000 pension funding provided by the Company
Option 3 - a lump sum plus an enhanced pension at aged 50 and an additional €100000 pension funding provided by the Company
For those who were aged 50 or over by 2002 and in receipt of a pension their medical and VHI arrangements continued as normal.
For deferred pensioners, aged between 45 and 49 in December 2002 they received full VHI and medical benefit and their Beer Allowance until eligible for a pension at 50 and thereafter. Prior to the closure of the site in 2001 all employees who were left employment and who were eligible to receive an immediate pension were entitled to receive medical benefit and a beer allocation into their retirement.

3.6 Upon redundancy all employees of Dundalk Packaging except those eligible for the K2 terms, received a lump sum payment based on service and a deferred pension at retirement age. The lump sum payments were based on service (i.e. six...

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