Supreme Court of Ireland Decisions

1. The respondent was employed as a security guard by the appellant (hereafter ‘the bank’) from 21 July 1981 to 4 February 1992, on which latter date he was dismissed for what was alleged to be gross misconduct. He made a claim to the Employment Appeals Tribunal established under the Unfair Dismissals Act 1977 (hereafter ‘the 1977 Act’) that he had been unfairly dismissed. The tribunal ruled in his favour and ordered his re-engagement by the bank. The bank appealed from that determination to the Circuit Court.

2. At the hearing in the Circuit Court, it was submitted on behalf of the bank that the respondent was employed ‘by or under the State’ within the meaning of s. 2(1)(h) of the 1977 Act and that, accordingly, the provisions of the 1977 Act were not applicable to his employment. Having heard submissions from counsel on behalf of the bank and the respondent, the President of the Circuit Court acceded to an application by the bank for a case stated to this Court. The question on which the opinion of the court is requested is as follows:-

3. Is the respondent a person employed by or under the State within the meaning of s. 2(1)(h) of the Unfair Dismissals Act 1977?

4. Mr. Hugh O’Neill SC, on behalf of the bank, submitted that the bank was an integral part of the government of the State performing essential functions of government. He pointed to the fact that the preamble to the Central Bank Act 1942 (hereafter ‘the 1942 Act’) describes the bank as ‘the principal currency authority in the State’ and provides in s.6 (1) that the ‘general function and duty’ of the bank is:-

5. Mr. O’Neill said that, following the abolition of consolidated bank notes, the bank was now the sole currency authority in the State.

6. Mr. O’Neill referred to the decision of the former Supreme Court in McLoughlin v. Minister for Social Welfare [1958] IR 1, in which the former Supreme Court held that an assistant solicitor in the Chief State Solicitor’s office, although not a civil servant of the government, was a civil servant of the State. That judgment had been applied by Blayney J in Murphy v. Minister for Social Welfare [1987] IR 295 when he held that an ordinary member of the Labour Court was also in the civil service of the State. Similarly, the employees of the bank, although not civil servants of the government, were civil servants of the State and were properly described as employed ‘by or under the State’.

7. Mr. O’Neill further submitted that since s. 23(3) of the 1942 Act provided that the Civil Service Regulation Acts 1924 and 1926 were not to apply to directors of the bank, it was clear that the intention of the legislature was that those provisions should apply to the other employees of the bank, including the respondent. He said that a similar inference could be drawn from the provisions of paragraph 1 of the Schedule to the Civil Service Regulation Act 1924, as adapted, removing from the ambit of the Act offices such as that of governor of the bank.

8. On behalf of the respondent, Mr. Ercus Stewart SC submitted that the bank was a separate corporate entity created by statute which did not form any part of government. He referred to the provisions of s. 15(2) of the Central Bank Act 1989 under which the bank were empowered to appoint such officers and servants as it from time to time considered necessary for the due performance of its statutory function and which also provided that the officers and servants so appointed were to hold office upon such terms and subject to such conditions as it might appoint. He submitted that it was clearly not the intention of the Oireachtas that the bank’s employees should be in the same position as civil servants in respect of whom a self contained code providing for their recruitment, remuneration and dismissal had been provided under the relevant legislation, such as the Civil Service Regulation Act 1956.

9. Mr. Stewart further submitted that the bank had itself recognised that this was the position by including in the terms of employment of the respondent the following at paragraph 14:-

10. Mr. Stewart also submitted that, as a body created by statute and carrying out admittedly important public functions, the bank was in a similar legal position to bodies such as Telecom Éireann and An Post, the employees of which had been recognised as being entitled to rely on the provisions of the 1977 Act, citing in support the decision of Barron J in Loftus and Healy v. An Bord Telecom High Court (Barron J) 13 February 1987 and the decision of the Employment Appeals Tribunal in the case of Hayes v. B & I Line, 21 December 1979.

11. In considering these submissions, it should be said at the outset that this Court is not concerned with whether the bank might have been in any way estopped from contending that the respondent was not entitled to make a claim under the 1977 Act, having regard to the apparent acceptance by the bank in his terms of employment that the legislation was applicable to the post which he held. That would be a matter which would fall to be determined (if at all) by the learned President of the Circuit Court at the hearing of the appeal before him. The Employment Appeals Tribunal is, moreover, a creature of statute and it may be that, in the case of any of the classes of employment which are expressly excluded from the ambit of the 1977 Act, it is not open to the employer and employee by agreement to confer on the tribunal, and the Circuit Court on appeal, a jurisdiction which is expressly excluded by the statute itself. Again, however, it is not necessary for this Court to decide that issue: we are solely concerned with the question posed for determination by the case stated, i.e. as to whether the respondent is a person employed ‘by or under the State’ within the meaning of s. 2(1)(h) of the 1977 Act.

12. The bank, when it was established in 1942, took over the currency functions which had been the responsibility since 1927 under the Currency Act of that year of the Currency Commission. As a result of the 1942 Act and subsequent legislation, the bank is the only body in this country with authority to issue currency, the exchequer and other government accounts are entrusted to it and (in the words of s. 6 of the 1942 Act) it has the general function of taking such steps as it considers appropriate and advisable ‘towards safeguarding the integrity of the currency’. It is beyond argument that the bank thus discharges functions which are of central importance in the government of a modern state.

13. The bank is also (by virtue of s. 5 of the 1942 Act) a body corporate with perpetual succession, an official seal, and power to sue and be sued in its corporate name and to hold and dispose of land. It is conducted and managed by a board of directors consisting of a governor who is appointed by the President on the advice of the government and six directors who are appointed by the Minister for Finance.

14. This Act shall not apply in relation to any of the following persons...

15. There was annexed to the case stated a schedule of posts in various Departments of State and in the Offices of Public Works and of the Revenue Commissioners which were designated for the purpose of the Industrial Relations Act 1969 and to whom, accordingly, the 1977 Act applied. No posts in the bank were so designated, although it was pointed out in the course of argument that, in the case of the Department of Transport and Power (as it was then called) the post of airport security officer at Shannon was so designated.

16. It should also be noted that certain other classes of employment in the public service are also excluded from the ambit of the 1977 Act, including members of the defence forces and the Garda Siochána and officers of local authorities, health boards, vocational education committees and committees of agriculture.

17. If the exclusion in s. 2(1)(h) was of persons ‘employed by the State’, the claim by the respondent that he was not excluded would be almost irresistible: it is clear that he is not employed by the State, but by the bank. It is urged on behalf of the bank, however, that the expression ‘a person employed by or under the State’ brings within its scope persons such as the respondent who could not be regarded as directly employed by the State but who are employed by a body which performs functions essential to the operation of the State.

18. In support of their respective positions, Mr. O’Neill and Mr. Stewart both invoked the decision of the former Supreme Court in McLoughlin v. Minister for Social Welfare [1958] IR 1. In that case, an assistant solicitor employed in the Chief State Solicitor’s office claimed that he was not an ‘employed contributor’ for the purposes of the Social Welfare Act 1952, since he did not come within the only relevant class of employment, i.e. ‘employment in the civil service of the government’. His claim failed in the High Court, but succeeded in the Supreme Court. However, the decisions of the majority in that court (Kingsmill Moore and Ó Dálaigh JJ) made it clear that, although he was not employed in the ‘civil service of the government’, he was employed in the ‘civil service of the State’. Kingsmill Moore J explained the meaning of the expression ‘civil service’ as follows (at pp. 14-15):-

19. It was argued for Mr. McLoughlin first, that he was not a civil servant, and secondly that, if a civil servant, he was not a civil servant in the service of the government. The words ‘civil service’ and ‘civil servant’, though in frequent use on the lips of politicians and members of the general public, are not terms of legal art. The British Royal Commission on the Civil Service which reported in 1931 stated that ‘there is nowhere any authoritative or exhaustive definition of the civil service’. The phrase seemed to have been first used to describe the non-combatant service of the East India Company, and was well established in English political language by the middle of the nineteenth century.

20. Though it may be difficult to frame an exact definition, it does not seem in any way impossible to reach an approximation to the meaning of the words sufficient to meet the requirements of the present case. In Britain civil servants were servants of the Crown, that is to say servants of the King in his politic capacity, but not all servants of the Crown were civil servants. Those who used the strong arm - military, naval and police forces – were excluded from the conception, for the service was civil, not combatant, and so also, by tradition, were judges and holders of political offices. Civil servants were paid out of monies voted by parliament and, if permanent, had the benefit of the Superannuation Acts. In theory, as servants of the King, they held their positions at pleasure but in practice they were treated as holding during good behaviour.

21. The conception may have been a little vague in its connotation, a little ragged around the edges of its denotation, but, as the civil service and its regulation fell within the scope of the prerogative, any inconvenient difficulties could be set right by an order in council.

22. The bulk of British civil servants working in Ireland were taken into the service of Saorstát Éireann and the phrase, with the ideas attached to it, was assimilated into Irish political life. Soon it made its appearance in the Irish statute book, and, after the passing of our present Constitution, in statutes of the Republic. Borderline cases have been dealt with by special legislation. Persons have been deemed to be civil servants for one purpose and deemed not to be civil servants for another. But, if we substitute ‘State’ for ‘King’ the summary which I have already given corresponds to the present conception of civil servant in Ireland.

23. Having said that he had no doubt that the plaintiff in that case was a civil servant, Kingsmill Moore J went on (at p. 16):-

24. Assuming then that Mr. McLoughlin is a civil servant, is he a civil servant employed in the civil service of the government? The expression, ‘civil service of the government’, unless given a restrictive interpretation is a contradiction in terms. The status of a civil servant is that of a servant of the State. He may indeed be assigned to serve in any civil department of the State, or in the service of any organ of the State, including the government, and the power of so assigning him may be conferred by law on the government; but he is still a servant of the State. If, however, his service happens to be in one of the departments of the government he may conveniently be described as being also a servant of the government.

25. The learned judge then went on to consider the consequences for the plaintiff’s status of the fact that he was a member of the staff of the Attorney General, who was the holder of one of the specific organs of State created by the Constitution and who was not a member of the government. That led him to the conclusion that the plaintiff, although properly described as ‘a civil servant of the State’, was not employed in the ‘civil service of the government’.

26. It has been seen that Kingsmill Moore J said that, where a civil servant is assigned to one of the departments of the government, he may conveniently be described as being also ‘a servant of the government’. It had been held by the High Court of Saorstát Éireann in Carolan v. Minister for Defence [1927] IR 62 that members of the defence forces and the Minister for Defence were fellow servants in the employment of the government. However, in Byrne v. Ireland [1972] IR 241 Walsh J indicated that this might be a somewhat inexact description, saying (at pp. 286-287):-

27. It may be that the somewhat different nuances which emerge from these decisions reflect the fact that the consequences of the State or ‘Ireland’ being treated as a juristic entity took some time to emerge in the evolving jurisprudence of the courts. Indeed, it was not until 1949, in Comyn v. Attorney General [1950] IR 142, that the principle was unequivocally asserted, Maguire CJ saying (at p. 165):

28. Under our Constitution the State is a juristic person with a capacity to hold property. In the opinion of this Court, the State cannot be regarded as a government department.

29. The officials and other employees in the [Department of Posts and Telegraphs] are not the employees of the Minister for Posts and Telegraphs, and he cannot be made liable in damages for the tortious acts committed by these employees, even though they may have been appointed by him to their particular employment. Both they and the minister are persons employed by or under the State and in my view it makes no difference if, being civil servants, they are civil servants in the service of the government or are civil servants in the service of the State – a distinction which was adverted to in McLoughlin v. Minister for Social Welfare. [emphasis added].

30. Thus, civil servants who are part of the staff of discrete organs of state such as the President, the Attorney General and the Auditor and Comptroller General, are properly regarded as civil servants ‘employed by the State’. Civil servants who are employed in the various departments of state are not properly regarded as employees of the minister responsible for the particular department. Nor are they appropriately described as civil servants employed by the government: apart from any other considerations, the government, in Professor Kelly’s phrase, lacks the ‘well rounded persona’ available to the individual ministers. (See Kelly on The Irish Constitution, 3rd ed. at p. 225). They do, however, clearly fall within the second limb of Walsh J’s classification as ‘persons employed. . . under the State’.

31. To which of these categories does the respondent belong? The answer is clear: he belongs to neither. He is not a member of the staff of any of the organs of state created by the Constitution and accorded a role in the constitutional order separate and distinct from the three organs of government, legislative, executive and judicial, such as the Attorney General. He is not a civil servant in any of the departments responsible to the individual ministers who constitute the government and hence is not a ‘civil servant of the government’ and thus a person ‘employed. . . under the State’. He is employed by a body which has been created by statute, the powers of which, however essential they may be to the functioning of the State, can be removed from them at any stage by the Oireachtas. He is thus in no different position from those employed in a vast range of what have come to be called ‘semi-state bodies’, the employees of which may, by specific legislative provision, be deemed to be civil servants but who, in the absence of any such provision, are not to be so regarded.

32. Since the respondent is not a person ‘employed by or under the State’, it follows that the provisions of the 1977 Act are applicable to him. That conclusion is not disturbed by the fact that it was thought necessary or desirable in the 1942 Act to provide expressly that the provisions of the Civil Service Regulation Act 1924 were not to apply to directors of the bank. The directors are not employed by the bank; they are appointed to their positions by the Minister for Finance and their remuneration, allowances and conditions of service are to be determined by him or her. It was understandable that, in these circumstances, it was considered appropriate to provide that they should not be subject (as they otherwise might have been) to the provisions of the 1924 Act.

33. As in the case of two other categories of employment in the public service excluded from the ambit of the 1977 Act – the defence forces and the Garda Siochána – the civil service is the subject of detailed legislation dealing with the terms and conditions of employment of civil servants, and, in particular, with the circumstances in which they may be suspended or removed from the offices which they hold. It would be an anomalous state of affairs if a person in the position of the plaintiff were to be similarly excluded from the ambit of the Act, although his terms and conditions of employment are not subject to any form of statutory regulation and are solely governed by the terms of any contract entered into between him and the bank. If that was indeed the intention of the Oireachtas when they excluded from the ambit of the Act persons employed ‘by or under the State’, so be it. However, for the reasons which I have given in this judgment, I am satisfied that, in the light of the authorities to which I have referred, the respondent is not a person ‘employed by or under the State’ within the meaning of s.2(1)(h) of the 1977 Act.

34. I would answer the question posed by the case stated in the negative.