Case Number: DEC-E2013-010- Full Case Report. Equality Tribunal

CourtEquality Tribunal
Judgment Date01 February 2013
Docket NumberDEC-E2013-010- Full Case Report
EMPLOYMENT EQUALITY ACTS 1998-2012 Decision - DEC-E2013-010

PARTIES Patrick McCabe, Terry O'Sullivan, Charles Maher, Philip Blanche, Richard Nolan, John Judge, Anthony Guider, John Fearn, Richard Regan, Brendan Mulvey and Michael Butler
(Represented by Cliona Kimber B.L., instructed by Bowler Geraghty & Co. Solicitors)
v SR Technics Ireland Ltd.
(Represented by IBEC)

File Reference: EE/2009/588 - 597 & 626
Date of Issue: 21 February 2013

Keywords - Employment equality - Age discrimination - Redundancy - Ex-gratia severance payment - Compromise agreement - Waiver - Lack of Consideration -Discriminatory treatment or unequal remuneration - Prima facie case - Employment Equality Acts 1998 to 2008 ss. 6, 8, 29, 30, 34 (3), 85A.

1. Dispute

This dispute involves claims by Messrs Patrick McCabe, Terry O'Sullivan, Charles Maher, Philip Blanche, Richard Nolan, John Judge, Anthony Guider, John Fearn, Richard Regan, Brendan Mulvey and Michael Butler, all at the material time aged upwards of 61 years, (hereinafter "the complainants") that they were discriminated against by SR Technics Ireland Ltd (hereinafter "the respondent") on grounds of age within the meaning of sections 6 (2) of the Employment Equality Acts, 1998 - 2008 (hereinafter "the Acts") in relation to conditions of employment contrary to section 8 of the Acts by not affording to the complainants the same treatment in relation to payment of an ex-gratia severance grant on redundancy as were afforded to employees of a different age.

Alternatively the complainants claim that they were denied the same rate of remuneration (the ex-gratia severance payment) as named employees of a different age employed to do like work contrary to sections 29 and 30 of the Acts. The complainants are seeking the application to them of the ex-gratia severance payment given to all employees under the age of 61 years.

The complainants referred complaints under the Acts to the Equality Tribunal on 10 August 2009 and (in one case) on 18 August 2009. A written submission was made on behalf of the complainants on 14 April 2010. A written submission on behalf of the respondent was made on 12 July 2010. Further submissions were received from the complainants on 20 December 2012. An oral hearing was held on Tuesday 8 January 2013.

2. Background

The complainants were employed by the respondent as Grade 1, 2 or 3 clerks.

On 12 February 2009 the respondent informed trade union representatives that it had decided to cease its Dublin operations. This entailed the redundancy of all 1,135 employees other than approximately 100 employees engaged in particular activities who were transferred to another operator. This decision came as a complete surprise to both management and employees in the Dublin base.

On 10 March 2009 the respondent issued details of the severance package which it intended to provide. The package which it valued at 48.6 million euro comprised three elements:

a) Statutory redundancy 25.9
b) Payment in lieu of statutory notice 7.7
c) Ex-gratia element 15.0

Statutory redundancy payments were calculated as follows (for staff with greater than 2 years service):
* Two weeks pay for every year of service, (capped at €600 per week), and
* One additional week (capped per above)

Statutory notice entitlement - payment in lieu of notice

This element varied according to length of service as follows:

13 to 104 weeks 1 week
2 to 5 years 2 weeks
5 to 10 years 4 weeks
10 to 15 years 6 weeks
15 years plus 8 weeks

For the purposes of payment calculation, an employee's average weekly gross earnings were used.

Ex-gratia element.

The ex-gratia element comprised an apportionment of the total amount of €15m on the basis of years of service and basic salary. A factor of 0.84 weeks per year of service was derived. The payment was calculated by multiplying weekly basic salary by number of years' service and multiplying the product by 0.84. However staff aged 61 years and over who were members of the SRT Defined Benefit Pension Fund did not receive the ex-gratia payment because under the terms of the SRT Defined Benefit Pension Scheme they were entitled to an immediate full pension. Twenty two persons, including the eleven complainants, fell into this category. They received their statutory redundancy payments and payments in lieu of notice, but not the ex-gratia element. By contrast, 25 employees aged 61 and over who were members of another pension scheme, the Irish Airlines (General Employees) Superannuation Scheme (IASS) were not entitled to a pension until age 65. They received the ex-gratia payment as well as their statutory redundancy payments and payments in lieu of notice.

The difference in entitlements between the complainants and those who received the ex-gratia payments can be illustrated in the following example:

Without ex-gratia With ex-gratia
Basic Salary €37,143 €37,143
Basic Weekly Salary €714 €714
Weekly Average Gross Earnings €973 €973
Years of Service 35 35
Statutory redundancy
Number of weeks 71 71
Weekly salary applied €600 €600
Statutory redundancy payment €42,600 €42,600
Statutory notice
Number of weeks 8 8
Weekly average gross earnings €973 €973
Statutory notice payment €7,784 €7,784

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