Age Discrimination In Irish Employment Law
Breda O’Malley, Partner in Employment and Commercial Law in Hayes solicitors, presented on the Issue of Age Discrimination at the Industrial Law Society (ILS) Spring Conference in London on Saturday 22 May 2010.
The following is an extract from Breda’s Paper to the ILS
Introduction
Discrimination on age grounds is sometimes considered unimportant, acceptable, silent, normal and not deserving the title “discrimination”, especially when compared with the socio-political opprobrium visited on issues of discrimination on the grounds of race or sex. Age discrimination is prevalent in all West European countries.
It is a very interesting time to consider the question of ageing, employment and the law; this is due to major changes occurring in the profile of the population in developed countries. Europe is ageing by virtue of falling birth-rates and an increase in the number of older people. The problem is particularly acute in Ireland and the UK.
The assumption that older workers may be judged by reference to their age is to ignore a central feature of age as a human characteristic; it affects each of us differently. There are older workers who are fit, healthy and able. Research has shown that there are such considerable individual variations in age-related performance losses that it is really more meaningful to look at differences between individuals, which are far greater than differences between age groups.
Age discrimination can have a profound impact on the individual in the labour market and repercussions on their quality of life in general.
Even if this was not a human rights issues, it is clearly a socio-economic issue. Society has a vested interest in helping older workers to stay in work for longer. Society will require people to take responsibility for financing their own old age, especially as people are living longer. Age discrimination law is just one way in which this can be achieved. Thus older people will be needed by society as a valuable source of labour in Europe and to help redress the wage earner to pensioner ratio.
Interestingly, an employee is generally considered to be “older” from the age of 50 although I note that Age Concern in England found that some employers define an older worker as a woman over 35 and a man over 42.
Age discrimination is a major factor in the low participation of older workers in the labour market; there is no doubt that it is those over 50 who are hardest hit, they are more likely than any other group to encounter ageism. Once a worker who is 50 or older becomes unemployed, it is much more difficult for him to re-enter the workforce.
European Legislative Framework on Age and Age Discrimination
Council Directive 2000/78/EC Establishing a General Framework for Equal Treatment in Employment and Education (the “Framework Directive”) (adopted in 2000) requires Member States of the EU to ban direct discrimination, indirect discrimination and harassment in employment on the ground of age. The Employment Equality Act 1998 in Ireland was a model for the Framework Directive.
The Framework Directive upholds the universal right supported by the United Nations, the European Convention for the Protection of Human Rights and Fundamental Freedoms and the International Labour Organisation which prohibits inequality of treatment as a principal to be actively implemented in their spheres of influence.
The Community Charter of the Fundamental Social Rights of Workers recognises the importance of combating every form of discrimination including the need to take appropriate action for the social and economic inclusion of elderly people. The Employment Guidelines for 2000 agreed by the European Council at Helsinki in 1999 stressed the need to foster a labour market favourable to social integration by formulating a coherent set of policies aimed at combating discrimination against certain categories of people and the Guidelines emphasise the need to pay particular attention to supporting older workers in order to increase their participation in the labour force.
It is generally accepted that employment and occupation are key elements in guaranteeing equal opportunities for all and contributes strongly to the full participation of citizens in economic, cultural and social life and to realising their full potential. The Framework Directive provides, with limited exceptions, that any direct or indirect discrimination based on age shall be prohibited throughout the European Community.
The Framework Directive applies to employment, self-employment and occupation at all levels from selection criteria in recruitment through to promotion, the employment relationship itself including working conditions and pay, dismissals and the basis for termination; access and participation in vocational guidance, training and work experience; membership and involvement in a staff or employer’s association or organisation or a professional or trade association, including the benefits provided by any such organisation.
The Framework Directive leaves it to each Member State to apply the Framework Directive locally by that member state defining rules consistent with it.
The Framework Directive laid down minimum standards and requirements. Each Member State had the option of introducing or maintaining more favourable provisions. Also, the implementation of the Framework Directive did not allow for any regression of the status quo then prevailing in each Member State.
Despite the fact that the Framework Directive requires all Member States to outlaw age discrimination in employment, it treats age differently to the other grounds of discrimination, like gender, race etc.:
1. It provides that the ban on age discrimination is without prejudice to Member States laying down retirement ages in a particular member state;
2. Each Member State has an opportunity to justify direct discrimination on the age ground if the state is pursuing a legitimate aim in its social or employment policy.
This meant that European countries who legislated for age discrimination for the first time in transposing the Framework Directive generally included provisions allowing justification of direct discrimination. Ireland already had legislation in place since the Employment Equality Act 1998, which prohibited discrimination on grounds of age and which discrimination was permitted without any justification of the discrimination on age grounds.
3. It leaves a choice to Member States whether to apply the Framework Directive to the armed forces or not on grounds of age. This is despite the fact that physical attributes could increasingly diminish in importance, even for the army, making this exception more meaningless.
There is a concern that the EU Framework Directive provisions on age discrimination may have created an open-ended possibility for Member States to justify age discrimination. However, it could be read in another light and guidance from the three examples given under the Framework Directive can provide hope:
1. The first example of the differences in treatment that can be justified by Member States is the setting of special conditions for access to employment and training, including dismissal and pay for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection. The tenor of this example indicates that Member States can make special provisions and take positive action for the benefit of each of these three groups of people.
2. The second example is the fixing of minimum conditions of age, professional experience or seniority and service for access to employment or to certain advantages linked to employment. These appear to favour older employees. Professional experience requirements and seniority requirements are more likely to be met by older rather than younger employees in most sectors.
3. The third and final example is the fixing of maximum ages for recruitment which is based on the training requirements of the post, or the need for a reasonable period of employment prior to retirement. This allows employers to take into account the time or cost of training a recruit and the need for a reasonable period of time prior to retirement in which the recruit will be effective in the job.
The Framework Directive provides that direct discrimination on grounds of age shall occur in the workplace where one person is treated less favourably than another is, has or would be treated in a comparable situation. It could be direct age discrimination if a worker was asked questions about whether they were caring for an elderly parent or if an older applicant was asked if s/he is caring for a spouse of a similar age. Alternatively, if an interview panel says things like “we were looking for a younger person…” that could also be evidence of direct discrimination.
The Framework Directive provides that indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would, in the case of age, put persons having a particular age, at a particular disadvantage compared with other persons. An older applicant could possibly bring a charge of indirect age discrimination against an employer, who insists on an academic degree of recent origin as a requirement for a post. One example could be the requirement of a nursing degree as most holders of this relatively new degree are young nurses.
While on the one hand the Framework Directive may well present a seemingly open-ended possibility to justify direct age discrimination, the European Court of Justice’s (ECJ) role in claims of age discrimination that comes before it for adjudication is to ensure that the Framework Directive does not become an ageist charter for Member States. The ECJ will be able to test national law adopted on foot of the Framework Directive against whether any such measures taken which appear to infringe the conditional ban on age discrimination:
(a) are objectively and reasonably justified;
(b) whether their aim is legitimate; and
(c) whether the means of achieving the aim are appropriate and necessary.
The burden of proving objective justification is on the employer (or trustee in a pension scheme).
Substantial case law has built up on what is and what is not objective justification. Most of the difficulty centres around what is a legitimate objective. The ECJ has made it clear that a decision about whether a particular practice is justified is a decision for national courts rather than the ECJ, and that a decision must be made on a case-by-case basis looking at all the circumstances of the case. It is not possible therefore, to state with any certainty what will constitute objective justification. However, the following matters have not been successful in decided cases in establishing objective justification of age discrimination measures:
• the cost to an employer;
• where the discrimination is historical and not relevant at the current time;
• compliance with legislation;
• industrial relations harmony;
• claims not backed by solid evidence; and
• different collective bargaining processes.
In essence, a court or tribunal must balance the discriminatory effect of the practice on the people concerned, including how many people are affected, and the severity of the damage caused, against the reasonable needs of the party imposing the requirement. The greater the detriment, the more cogent the justification needs to be. Any analysis will be thorough and critical and it is not enough for an employer (or a trustee, in a pension scheme) to show that it believed that its reasons were adequate.
A weakness in the Framework Directive is that it does not harmonise national laws across the EU in respect of age and employment. Thus, each Member States’ law on age discrimination will be different depending on the extent to which they rely on the exception of allowing genuine occupational requirements in its own member state to justify age discrimination. A Member State may adopt laws to the effect that a person of a particular age is required for a post, on the grounds of physiology or authenticity for the purpose of entertainment. Irish employment equality legislation permits this.
Also it depends on the extent to which a particular member state legislates for exceptional justifications on the age ground.
Scope of Discrimination Law in Ireland
Arising from the Irish Employment Equality Acts 1998 – 2004, an Irish based employer shall not discriminate against an employee or prospective employee (and a provider of agency work shall not discriminate against an agency worker) in relation to:
(a) access to employment,
(b) conditions of employment,
(c) training or experience for or in relation to employment,
(d) promotion or re-grading, or
(e) classification of post.
Workers in Ireland enjoy rights not to be discriminated against and treated less favourably;
(i) either directly on account of age;
(ii) indirectly on account of a provision, practice or requirement which puts people of a particular age at a disadvantage and which cannot be objectively justified;
(iii) by association; and/or
(iv) by imputation.
The Irish legislation provides that discrimination shall be taken to occur where a person who is associated with another person:
(i) is treated, by virtue of that association, less favourably than a person who is not so associated would be treated in a comparable situation, and
(ii) similar treatment of that other person on the grounds of age would in itself constitute discrimination.
When identifying a comparator for the purposes of proving discrimination in the workplace, one must identify an individual (not necessarily a named person) who does “like work” and the legislation states that another person shall be regarded as employed to do like work if:
(a) they both perform the same work under the same or similar conditions, or each is interchangeable with the other in relation to the work,
(b) the work performed by one is of a similar nature as to that performed by the other and any differences between the work performed or other conditions under which it is performed by each are of small importance to the work as a whole or occur with such irregularity as not to be significant to the work as a whole, or
(c) the work performed by one is equal in value to the work performed by the other having regard to such matters as skill, physical or mental requirements, responsibility and working condition.
In Ireland, the age ground applies only in relation to people over the age of 16 years (above the maximum age at which a person is statutorily obliged to attend school). An employer may set a minimum age, not exceeding 18 years, for recruitment to a post.
Offering a fixed term contract to a person over the compulsory retirement age for that does not constitute discrimination on the age ground.
Irish-based employees can avail of the protection of the unfair dismissals legislation only up to the normal retiring age for employees in their employment so employees remaining on in work after that are vulnerable without the on-going protection from unfair dismissal, although they can avail of the employment equality legislation if they believe their dismissal has arisen on one of the nine banned grounds of discrimination, such as age, gender, sexual orientation etc.
Remedies Available to Victims of Age Discrimination
People who succeed in making a claim for discrimination on the grounds of age before the Equality Tribunal can receive an Order from the Tribunal which can be for a monetary award, directing that the Claimant is to receive equal pay or treatment, and/or that the employer is required to take a specified course of action to alter the employer’s discriminatory practices, processes etc. The Claimant may be entitled to compensation of up to two years pay or up to €12,697 if the claimant is not an employee (e.g. an applicant for work). In equal pay claims which are based on age discrimination, the Claimant may be entitled to equal pay and up to three years arrears of pay from the date of the claim.
Case Law in Ireland on Age Discrimination
The Equality Tribunal and civil courts are influenced by the judgments of the European Court of Justice (“ECJ”) and also by the decisions of the UK Courts. The issues which have arisen in the ECJ and the UK Courts have only very recently been considered by the Irish Courts and Tribunals.
Ireland has a single enforcement body - the Equality Authority - which has the power, independently of aggrieved individuals, to investigate discrimination under the Irish legislation. This power of the Equality Authority is a proactive dimension to Irish equality law. We have seen this in operation in the case involving Ryanair which advertised to recruit a “young dynamic professional” for the position of Director of Regulatory Affairs in Ryanair in an advertisement placed by Ryanair in one of the national newspapers. This was challenged by the Equality Authority and was upheld as age discrimination by Ryanair.
In the same case, the Equality Officer ordered Ryanair to carry out a comprehensive review of its equal opportunities policies with the help of independent expert advice and to include the three missing grounds protected by the Irish employment equality legislation in its Employee Guide immediately.
In Ireland, the largest group of age discrimination cases have been those connected with access to employment, promotion, re-grading and working conditions.
Access to Employment
Access to employment continues to be a fertile area for discrimination claims on grounds of age. Of the cases that come before the Equality Tribunal, more fail than succeed. Certain issues continue to recur, such as the appropriateness of questions asked at interview or in application forms. The Equality Tribunal often finds that there has been discrimination in relation to an inappropriate question but that this, while leading to a finding of discrimination in that regard, does not necessarily lead to a finding of discrimination in relation to the actual selection for recruitment on the age ground. The level of compensation awarded in these cases can be extremely low even relative to the monetary ceiling of €12,640 permitted under the equality legislation.
For example in the case of The Salesforce.com Company (2007), the applicant was asked his date of birth at interview. The recruiting company argued that this was done for a non-discriminatory reason; to assess the applicant’s proficiency in spoken German. The company argued that the establishment of one single fact – a question asked at interview – was not sufficient to shift the burden of proof to the company to disprove discrimination. The Equality Officer determined that the question was discriminatory but nonetheless found that the complainant would not have succeeded at interview even if the question about his age had not been asked. Minimal compensation of €1,000 was awarded.
In a secondary school case which involved access to employment, the Equality Officer found the general lack of transparency in the selection process and the absence of interview notes contributed to a finding of discrimination on grounds of age. The marking system was also criticised where the respondents had not applied a formal marking system, agreed in advance, when ranking the candidates. One slightly unusual and interesting feature of this decision was the consideration of what was deemed to be a discriminatory question at interview as to why the applicant was applying for a job of school principal at this time of her life. The Equality Officer referred to the ECJ Schumacker Case (1995) stating that such a question “could have had a different significance for each of the candidates depending on the particular stage of their careers at which they found themselves”. This approach demonstrates that a question which proves to be discriminatory in relation to a particular candidate will not be justifiable simply because all candidates are being asked the same questions.
An interesting twist on the discriminatory question and its effect on a recruitment decision arose in the Irish case of Cunningham v BMS Sales Limited (2007). The applicant was asked for his age and date of birth on a registration form for a recruitment firm. He completed the form, omitting his date of birth and giving an incorrect age. When pressed subsequently about his age, Mr Cunningham said he did not believe it was relevant to the job he was applying for. The recruitment agent persisted in asking for further details stating that he would not in fact put Mr Cunningham forward for the position in question without that information. Mr Cunningham had put his age at 37 when in fact he was 47 at the time. The agency, in its defence during the equality hearing, said that the company had refused to take the complainant’s application further because he had lied in the recruitment process. The agent considered that the provision of incorrect or misleading information of any nature was sufficient to justify their decision as responsible recruiters not to progress the complainant’s application for employment. The Equality Officer found that this refusal established a case of discrimination on the age ground. Compensation of €5,000 was awarded in this case.
Younger People Claiming Age Discrimination
The majority of age discrimination cases claim less favourable treatment of an older person by comparison with someone younger. In 2009, there was an exception to this in a case involving an Irish charity and two of its staff. Ms Fortune was a psychotherapist in her 20s. She claimed that her employers had harassed her, denied her promotion and constructively dismissed her because of her age. The alleged harassment consisted of questions about her training and experience as well as comments about her lack of “life experience” and referring to her as a “little girl” in front of clients. The cumulative effect of the harassment and the failure of the respondent to deal effectively with her complaints on this account over a period of 2 years were found to contribute to constructive dismissal of the complainant and an award of €35,000 was made to her.
Compulsory Retirement in Ireland
Irish Courts and Tribunals are obliged to interpret and apply EU law where applicable, in cases that come before them for adjudication. Irish Courts and Tribunals have been faced with a difficulty in relation to compulsory retirement ages in Ireland. This is because the provisions of the Employment Equality Act 1998 provide that Irish based employers can set the retirement age(s) applicable to its respective workforce without having to justify the particular choice of retirement age. This appears to directly conflict with the prohibition on age discrimination in the Framework Directive and, if read without further qualification, conflicts with the stated position of the ECJ on age discrimination cases which have come before it. The very fact that the Irish legislation sets no minimum retirement age would appear to be in itself an invitation to discriminate without any threshold of reasonableness.
It has already been acknowledged by the Irish Labour Court that: “The Court of Justice [ECJ] appears to have held that a Member State cannot introduce a mandatory retirement age unless there is objective and reasonable justification for so doing. It would appear axiomatic that an individual employer would be similarly circumscribed in applying a contractual retirement age.”
In that case the Labour Court accepted the Irish Employment Equality legislation appeared to conflict with the EU law position in that regard.
The High Court in Ireland recently considered the question of compulsory retirement in An Garda Siochana. This arose where the retirement age of 65 for Assistant Commissioner rank within the police force had been reduced to 60 some years earlier. In that case, the policeman who was compelled to retire at age 60 contested the relevant regulation. He claimed that the compulsory retirement age at 60 was in breach of the Framework Directive and the employment equality legislation in Ireland.
The High Court Judge considered the objective within An Garda Siochana of the compulsory retirement at age 60 and considered that the arguments put forward by the relevant Government Department and the Garda Commissioner were valid. The main objective put forward for a retirement age of 60 was to create promotional opportunities for less senior police officers in a pyramidical structure. This was judged to be a legitimate aim. The Judge also referred to the aim of renewing personnel in the organisation at the higher levels in an orderly manner. It is not clear how the age limit of 60 conforms with the principle of EU law which requires any exception to the ban on age discrimination to be proportionate. It is arguable whether financial security in the form of an adequate pension can counterbalance the potential loss of self-realisation resulting from compulsory retirement at age 60.
Pensions
Pension schemes are inherently age discriminatory, since they aim to provide benefits on and from a particular age. The Irish Pensions Act 1990 (as amended) provides for equality on grounds of age in relation to pension schemes; similar to employment equality legislation in Ireland. However, the exception for discrimination on grounds of age in relation to pensions are only permitted if they are objectively justifiable, whereas this additional hurdle is absent from the Irish employment equality legislation.
It applies to trustees of pension schemes, as well as employers. Trustees can therefore be required to take action to remedy any age discrimination under a scheme.
Occupational pension schemes contain many provisions which violate principals of non-discrimination. The Irish Pensions Act 1990 (as amended) provides that it shall not constitute discrimination on the age ground for a pension scheme to fix age or length of service (or a combination of both) as conditions or criteria for:
(i) admission to an occupational benefit scheme;
(ii) entitlement to benefits;
(iii) accrual of benefits in a defined benefits scheme or level of contributions in a defined contribution scheme;
subject to the very specific requirement that to do so in the context of the relevant employment, is appropriate and necessary by reference to a legitimate objective of the employer. The following matters are expressly permitted as justifying a difference in treatment under the Irish Pensions legislation:
• legitimate employment policy;
• labour market objective; and / or
• a vocational training objective.
The pension legislation also provides that criteria as to age may also be used in actuarial calculations. It also provides that the fixing of different ages for retirement or entitlement to benefits does not infringe the principal of equal pension treatment.
While the Irish employment equality legislation provides for a blanket carve out for compulsory retirement ages, the Irish pensions legislation does not. Ironically, in practice, most pension schemes operate as if there is a general exemption from the ban on age discrimination for compulsory retirement ages. It is seriously in question whether the Irish blanket carve out for compulsory retirement ages is compatible with the EU Framework Directive.
If the compulsory retirement age exception in Irish equality law is not upheld as permissible under European Community Law, the implications for the operation of pensions are enormous. If people cannot be forced to retire at a particular age, when the occupational pension scheme provides for a drawdown of the pension at 62, 65, or whatever prescribed age, and not later, how is the relationship between continuing employment and pensions to be managed? The following are just some of the unanswered questions that arise in this context:
(i) If there is no further payment into a pension scheme permitted beyond 65, is this age discrimination?
(ii) Is the prohibition of payment of benefits to an employee who has not reached a specified retirement age, discriminatory on grounds of age?
We can expect these matters to be addressed in the ECJ and Irish Equality Tribunal in the coming years.
In conclusion, age discrimination has the potential to have a massive impact on the employment relationship and pension schemes. It may be ultimately that the employment relationship and pension schemes will have to move away from a normal retirement age, if that is deemed incompatible with age discrimination laws, towards more flexible arrangements and retirement provisions which allow for people to continue to pay into a pension scheme for more years and to determine for themselves the age at which they will drawdown a pension.
25 May 2010