High Court of Ireland Decisions

1. This is an appeal on a point of law from a determination of the Labour Court made on 7th November, 1997. That determination was the sequel to a decision of this Court (Barron J.) of 12th January, 1997 in an appeal by and against the same parties from a determination of the Labour Court made on 5th February, 1996.

2. The genesis of both appeals is a claim by 550 sales and clerical assistants employed by the Respondent in its stores and offices in Dublin, three of whom are the first three named Applicants and all of whom are represented by the fourth named Applicant trade union, for equal pay with a group of eleven named comparators who work as storemen in one of the Respondent's stores in Dublin. The group whom the Applicants represent are predominantly female and the comparator group is exclusively male. The claim was initiated in December 1991.

3. In summary, the history of the claim is as follows:-

4. Before considering the grounds on which the Applicants contend that the Labour Court in its second determination erred in law, I propose considering in depth, first, the basis on which Barron J. found that the Labour Court had applied the wrong principle in its first determination and, secondly, the basis on which the Labour Court approached the issues before it on its reconsideration of them and the reasoning of the second determination.

5. In broad terms, throughout the course of the dispute, the Respondent has rejected the equal pay claim on the basis that there is a two-fold justification for the differential. First, between 1974 and 1979 the comparator group, which was in a position to flex considerable industrial relations "muscle", negotiated five uniquely advantageous flexibility and productivity agreements. Secondly, the Applicant group's pay rates, which are all unisex rates now, and the comparator group's rates are negotiated by different trade unions and via very different industrial relations channels.

6. In its first determination the Labour Court stated as follows:-

7. In his judgment on the appeal against that determination, having outlined the principles established by a number of cases decided by the European Court of Justice on the interpretation of Article 119 of the EEC Treaty (the State's obligations under which are implemented by the Act of 1974), Barron J. summarised the effect of the case law as follows:-

8. Having stated that matters of fact in issue are matters to be submitted to the Labour Court, not the High Court, whose function is to determine as a matter of law whether the Labour Court has applied the correct legal principles, Barron J. went on to say:-

9. Barron J. then quoted the passage from the first determination of the Labour Court, which I have quoted earlier, and went on to analyse it in the following passage:-

10. Having expressed the view that the Labour Court applied the wrong principle, Barron J. concluded as follows:-

11. The judgment of Barron J. was not appealed. It dealt comprehensively with the relevant case law and the principles to be deduced from the case law. In my view, it would be otiose to attempt to cover the same ground in this judgment.

12. It is clear from its express terms that, in formulating its second determination, the Labour Court had due regard to the principles enunciated in the judgment of Barron J. and was astute in following the guidance he had given. It stated that it was satisfied, having considered the evidence and the submissions put forward by both parties to the dispute, that the Respondent is justified in paying different rates to the Applicants and the comparators and that the justification is objectively based on economic grounds.

13. The Labour Court considered the differences from an historic perspective and pointed out that the existing differences arose in the first instance because the comparator group was able to exert considerable industrial pressure on the Respondent in the period 1974 to 1979 to achieve increases in pay. Five industrial relations agreements were entered into in that period, which included agreement to proposals made by the Respondent for the removal of uneconomic and unproductive practices in return for which increases in pay were granted by the Respondent. The Labour Court made the following finding:-

14. The Labour Court also found that the workers in the comparator group had particular negotiating leverage because they were a relatively small group employed in a highly competitive sector. Conceding to their demands achieved industrial harmony, without disrupting the overall competitiveness of the Company, since it was only a small group within the company. It was the series of productivity agreements negotiated with the comparator group (the storemen) during the 1970's which resulted in those workers passing out the maximum point of the sales assistants and clerical assistants pay scale, which by then, the Labour Court noted, was a unisex scale. Continuing from an historical perspective, the Labour Court pointed out that the group which the Applicants represent, sales assistants and clerical assistants, had also benefited from productivity agreements. Both groups, that is to say, the group represented by the Applicants and the comparator group, had negotiated increased payments in return for productivity "without any sex-based ingredient in the negotiating process".

15. On the Applicants' submission that, even if the changes in work practices were objectively justifiable reasons in the 1970's for the differences in pay, they occurred so long ago as to be no longer relevant, the Labour Court stated as follows:-

16. Having referred to the principles laid down by the European Court of Justice in case 170/84 Bilka-Kaufhaus GmbH -v- Weber von Hartz (1986) ECR 1607, the Labour Court stated it was satisfied that, in accordance with those principles, the measures taken by the Respondent in the 1970's corresponded to a real need on the part of the Respondent, were appropriate with a view to achieving economic viability of the Respondent and were necessary and "that they continue today to be necessary to that end".

17. The Labour Court went on to deal in its second determination with the argument which had been advanced by the Applicants in reliance on case C-127/92 Enderby -v- Frenchay Health Authority (1993) ECR 1-5535. In distinguishing the Enderby case, where the parties in dispute were represented by the same trade union, albeit by different groups within the union, on the facts, the Labour Court highlighted the differences in the bargaining processes employed by the two groups - the group represented by the Applicants and the comparator group and stated as follows:-

18. The Labour Court concluded that the two bargaining processes are simply not comparable; that they are so different "as to make any analogy with the rationale of the Enderby judgment quite unjustified".

19. The Applicants have identified five bases on which they contend the Labour Court erred in law in its second determination. I will deal with each basis in turn.

20. It was contended that an unsustainable finding of fact underlies the entire rationale and approach by the Labour Court in its second determination. In putting the current differences between the Applicants' and the comparators' rates of pay into historical perspective, the Labour Court narrated the Respondent's history of industrial relations difficulties "with a unionised group, which included those workers which now are the comparators". It was submitted that the evidence before the Labour Court and, in particular, Appendix 8 to the Equality Officer's recommendation made it clear that all the persons who had been chosen as comparators were not parties to the five productivity agreements entered into between 1974 and 1979, because some of the comparators entered into employment with the Respondent subsequent to 1979 and one of the comparators, Noel Kelly, had entered into employment with the Respondent just three years prior to the Equality Officer's investigation.

21. The Respondent acknowledged that there was an incorrect statement in the second determination, in that all of the comparators were not in the unionised group which was in dispute with the Respondent between 1974 and 1979, some of the comparators having only entered into employment with the Respondent subsequently. However, it was submitted that the Labour Courts conclusion was not "based on an unsustainable finding of fact so as to require it to be corrected" (cf. the judgment of Hamilton C.J. in the Supreme Court in Henry Denny & Sons (Ireland) Limited -v- Minister for Social Welfare (1998) 1I.R. 34 at p.37. The Applicants had not raised the issue of Mr. Kelly's recent employment with the Respondent before the Labour Court. That some of the comparators had commenced employment with the Respondent after the conclusion of the five productivity agreements was simply not in issue before the Labour Court. The Labour Court was not focused on the identity of the individual comparators. Its focus was on the group.

22. In my view, the entire rationale and approach of the Labour Court is not premised on all of the persons who are now the comparators having participated in the five productivity agreements entered into between 1974 and 1979. The underlying rationale is that in that period one group of workers in the employment of the Respondent, comprising storemen in the Mary Street premises and in the Dublin Port and Docks area, through the five productivity agreements, achieved better rates of pay than another group, comprising the sales assistants and the clerical assistants. The resulting differential was objectively justifiable on economic grounds at the time it was achieved and it continues to be so justified. The Labour Court identified the reason why one group did better than the other and investigated whether there was historically objective justification on economic grounds for the differential between the two groups and whether there continues to be and is currently objective justification on economic grounds for the differential between the two groups. The focus of the Labour Court's comparison was between one group and another group, not between the individual members of one group and the individual members of the other group. While the statement in the Labour Court determination highlighted by the Applicants in this submission is not accurate, in my view, the Applicants have not established that in consequence the determination of the Labour Court is based on an unsustainable finding of fact and is wrong in law on that account. In short, the Labour Court was not required to make and made no finding of fact in relation to members of the comparator group who entered employment with the Respondent after the conclusion of the productivity agreements.

23. It was submitted that the Labour Court applied an incorrect legal principle and posed for itself the wrong question. It should have examined, as it was required to do by the judgment of Barron J., whether the difference in pay is currently objectively justified on economic grounds, is necessary to the Respondent and is proportionate. It should have asked itself whether at the date of the hearing before it there currently existed factors which constituted objective justification. The approach adopted, identifying alleged changes in work practices achieved in the 1970's and considering whether such changes continued to be applied and to generate benefits for the company was not a permissible approach, particularly when the increases in pay were achieved so long ago by an all-male group in a position to exert considerable industrial relations pressure.

24. The Respondent characterised this submission as an attempt to reorder the facts. It was submitted that it was logical to take an historical perspective, identify when and how the differences evolved and whether they were discriminatory on the grounds of sex and then consider whether the factors which gave rise to the differences were still current. The Labour Court's finding, it was submitted, was that it was the negotiating leverage of the storemen group which was significant, not the maleness of the group. The point was made on behalf of the Respondent that that group constituted valid comparators only because its members were all male.

25. It seems to me that the Labour Court did precisely what it was enjoined to do by Barron J. in his judgment. It found that there was a reason unconnected with sex for the difference in remuneration between the Applicants' group and the comparator group. That reason was rooted in history: between 1974 and 1979 the comparator group traded the removal of inflexible, uneconomic and unproductive work practices for increases in pay and in so doing its pay scale passed out the pay scale of the sales assistants and the clerical assistants, who did not have the same negotiating leverage. Moreover, the Labour Court found that the reason still subsisted at the date of its second determination, in that the flexible and productive work practices introduced between 1974 and 1979 continue to be applied and continue to generate economic benefits for the company. The Labour Court found not only that the pay differential between the two groups was historically objectively justifiable on economic grounds but also that it continues to be and is currently objectively justified on economic grounds, in that it would be economically disadvantageous to the Respondent to revert back to the old work practices and, in any event, the extra pay could not be removed from the comparator group without serious industrial relations consequences.

26. The Applicants submitted that the Labour Court erred in law in accepting that the five productivity agreements entered into between 1974 and 1979 could, as a matter of law, constitute objective justification on economic grounds for the difference in pay. The effect of the five productivity agreements was summarised in Appendix 4 to the Respondent's first submission to the Labour Court. It was submitted that when one analyses the effect of the agreements it can be seen that the benefits which accrued to the Respondent from them fall into two categories, namely:-

27. It was submitted that, as a matter of law, additional work could never constitute objective justification where the additional work formed part of the job description prior to the date of the claim. In support of this proposition the Applicants relied on the following passage from the judgment of Barron J. delivered on 30th July, 1996 in C&D Foods Limited -v- Dympna Cunnion & Ors ., (unreported):-

28. In the instant case, it was submitted, the Equality Officer made an objective finding that the work carried out by the Applicants is equal in value to the work carried out by the comparators. However, in determining whether there was objective justification for the pay differential, the Labour Court accepted the Respondent's subjective evaluation of the comparators' work. Changes in work practices, it was submitted, could never constitute objective justification for pay differential between those of the comparators, for example, Mr. Kelly, whose employment had commenced since the implementation of the flexibility agreement and who had never agreed to make any changes in their work practices. This was not a situation in which the employer could make a "red circling" argument - that the comparators were paid on a special basis because of special circumstances. Mr. Kelly was obviously paid the same rate as the other storemen because that was the grade rate for the job, which is a higher rate than the going rate for the work.

29. The Respondent characterised the Applicants' submission as an attempt to deconstruct the second determination and to reduce it to parts which are less than the sum of the whole. The true test of objective justification, it was submitted, is whether the explanation proffered is based on real, on genuine, factors or whether it merely masks discrimination based on sex. In the instant case, it was submitted that the Labour Court found as a matter of fact that the productivity agreements were not covert forms of sexual discrimination. They were genuine factors. It was reiterated that the position of Mr. Kelly was not raised as an issue before the Labour Court.

30. In my view, it is not to be inferred from its second determination that the Labour Court accepted the Respondent's subjective evaluation of the comparators' work. The Labour Court focused on the comparators as a group which traded the removal of demarcation and restrictive work practices and uneconomic and unproductive work practices for increases in pay, which outstripped increases in pay for productivity achieved by the group which the Applicants represent. In my view, the rationale of the finding of objective justification on economic grounds is not that the Respondent subjectively puts a higher value on the work of the comparator group than it puts on the work of the group which the Applicants represent. Rather, the rationale is that the increased pay awarded to the storemen as a group between 1974 and 1979 for relinquishment of inflexible, uneconomic and unproductive work practices was historically objectively justifiable in economic terms and the continued adherence to changed work practices currently objectively justifies in economic terms the pay differential between the rates applicable to the comparator group and the group of which the Applicants form part. In simple terms what the Labour Court found was not that the Respondent believed that the storemen's work was worth more than the work of the sales and clerical assistants, but that historically the storemen had more to bargain with than the sales and clerical assistants, so that the Respondent had to pay them a higher price, in terms of additional pay, to achieve flexibility and productivity and the differential has had to be maintained down to present times to maintain that flexibility and productivity. In essence, on this submission, I do not accept the Applicants' interpretation of Labour Court's reasoning.

31. In relation to the position of Mr. Kelly, which was not raised as an issue before the Labour Court, I repeat what I stated in relation to Ground 1. The thrust of the Labour Court determination was to compare two groups. It was not invited to and did not focus on the position of individuals within the comparator group. In my view, the Applicants have not laid any foundation for a challenge to the Labour Court determination on the ground that, as a matter of law, productivity agreements which predated the commencement of the employment of an individual member of the comparator group could never constitute objective justification.

32. The Applicants submitted that the Labour Court erred in law in accepting as part of the objective justification the ground that the additional pay awarded to the comparator group between 1974 and 1979 could not be removed from the work-force without serious industrial consequences. It was submitted that, if prima facie discrimination is established, such a ground could never legally constitute objective justification for the preservation of a pay differential. If it were an acceptable objectively justified ground, then it could justify the continuation of almost every pay differential. Such justification, it was submitted, is as it were, "the other side of the coin" of the justification rejected by the European Court of Justice in case C-243/95, Hill -v- Revenue Commissioners , reported in

33. It was submitted on behalf of the Respondent that this submission does not do justice to the determination of the Labour Court. Where, as in the instant case, the pay differential is based on grounds other than sex for an employer to contend that it cannot be removed is a relevant present factor. This submission was characterised as an attempt to isolate a sentence in a judgment and rely on it.

34. In my view, this submission distorts the reasoning in the Labour Court's second determination. At the time of the second determination the pay differential was in place for approximately 18 years. The Labour Court found that the evolution of the differential was objectively justified on economic grounds and identified the economic factors which had come into play at its inception: the necessity of reaching agreement with a group of workers who had particular negotiating leverage to remove bad work practices the continuance of which would have had serious negative economic consequences for the Respondent's business. The Labour Court's conclusion that currently there is objective economic justification for the continuance of the differential was not solely based on the proposition that the extra pay could not be removed from the comparator group without serious industrial consequences. The Labour Court examined the current position and found that the good work practices introduced in return for the extra pay were still applied. It also found that to revert to the old bad practices would be economically disadvantageous to the Respondent. It was in that context that it stated that the extra pay which was the price the company paid for the relinquishment of the bad work practices in the 1970's could not now be removed without serious industrial consequences. On this submission, also, I do not accept the Applicants' interpretation of the Labour Court's reasoning.

35. The Applicants submitted that, in the absence of any other objective justification, on the authority of the Enderby case, the difference in negotiation procedures alone cannot constitute objective justification. As I have rejected the other grounds of alleged error and accepted that the Labour Court did not err in law in finding objective justification, strictly speaking, this submission does not arise. It is common case that, in accordance with the jurisprudence of the European Court of Justice, although a difference in bargaining procedures is a factor to be taken into account, it cannot per se be determinative. In Enderby, in paragraphs 22 and 23 of the judgment of the Court, which are partly quoted in the judgment of Barron J., it was stated as follows:-

36. As will be clear from the passages from its second determination which I have quoted earlier, the Labour Court distinguished the instant case from the Enderby case on the facts. In the instant case it is not a case of two groups with the same employer and the same trade union being treated differently; in the instant case there were different trade unions and wholly different negotiating procedures. I have no doubt that the Labour Court correctly identified the significant factual distinction between the Enderby case and the instant case. However, it is not necessary for this Court to express any view on the Labour Court's conclusion that the bargaining processes which the two groups in the instant case follow are so different from each other "as to make any analogy with the rationale of the Enderby judgment quite unjustified", because it was acknowledged on behalf of the Respondent that a difference in negotiating procedures cannot of itself constitute objective justification on economic grounds.

37. Finally, the Respondent raised a technical defence to this appeal. While the special summons was issued on 3rd December, 1997, within the time limited by Order 106, Rule 4 of the Rules of the Superior Courts, 1986, the summons was not served on the Respondent until 11th February, 1998 and it was served with a covering letter indicating that a new return date had been obtained for 19th February, 1998 instead of the original return date appearing on the face of the summons, 18th December, 1997. The Respondent was not served with any affidavit verifying the Applicants' claim at the time of service of the summons or before the return date of 19th February, 1998, the verifying affidavit having been sworn on 4th March, 1998. I reject the argument that this appeal is not properly before the Court. The summons was issued within the time limit prescribed by law. If there has been a technical breach of the Rules, and it is not clear to me that there has, I deem the service on the Respondent to be good. Notwithstanding that the Applicants' claim dates back to 1991, the Respondent could not, in my view, be prejudiced by the failure to swear the verifying affidavit until 4th March, 1998.

38. It follows from what I have said earlier that the Respondent's substantive defence succeeds. The appeal is dismissed.