Case 1 - Unfair Selection for Redundancy - Pregnancy Related
Determination no. EDA095 ADE08/22
Industrial Relations Acts, 1946 to 1990
Section 83, Employment Equality Acts, 1998 to 2007
Parties:
Intrium Justitia
(Represented by Niall Beirne B.L instructed by Irish Business and Employers' Confederation)
and
Kerrie McGarvey
(Represented by Diarmuid Fawcett B.L. instructed by Bowman McCabe Solicitors)
Division:
Chairman: Mr McGee
Employer Member: Mr Doherty
Worker Member: Mr Nash
Subject:
1. Appeal under Section 83 of The Employment Equality Acts, 1998-2007.
Background:
2. A Labour Court hearing took place on 20th January, 2009. The following is the Court's
Determination
Determination:
Subject:
Appeal by the Respondent of Equality Officer’s Decision No. DEC-E2008-041.
Note:
The parties are referred to in this Determination as the designations used at first instance: the
worker is referred to as the “Complainant” and the employer as the “Respondent”.
Background:
The Complainant, a UK National, commenced employment with the Respondent, a multinational
credit management firm, in its Liverpool office in November 2003.
She was seconded to Ireland in 2005 and, in January 2006 was appointed in a permanent
capacity to the Finance Department of the Respondent’s Dublin Office.
Redundancies arose later in 2006 as a result of merging 3 production systems into one. People
in the departments identified for downsizing were told that their jobs were at risk and the
Company used its “Managing Redeployment and Redundancy Policy” in order to select staff
(one in each of the 3 departments for redundancy). This involved the use of a matrix developed
by the Respondent’s HR Department in the UK.
The matrix involved ten criteria as follows:
1. Skills and experience in current role
2. Occupational qualification
3. Completion of performance skills training courses
4. Cooperativeness
5. Commitment and using own initiative
6. Disciplinary warnings
7. Un-authorised absence
8. Punctuality
9. Future potential
10. Sickness absence
In effect, however, only 5 of the criteria came into play, as all candidates scored the same on the
other 5. The five were:
1.
2.
3.
4.
5.
Skills and experience in current role
Occupational qualification
Cooperativeness
Commitment and using own initiative
Future potential
In addition, 3 weightings were used. These were:
1. To be considered (Score 1)
2. Important (Score 2)
3. Vital (Score 3)
This weighting depended on the importance of the stated criteria to the job. (Determined by the
HR Department in UK).
There were also 5 scoring classes, but only 3 were used:
1. Poor (Score 1)
2. Satisfactory (Score 2)
3. Good (Score 3)
These referred to the individual’s performance under each stated criteria, as assessed by the
manager in each Department. The matrix was then calculated on each criterion for each
individual by multiplying the weighting score by the overall of the criteria in respect of each
individual and the lowest scoring person would be the one selected for redundancy.
Staff in the Finance Department were told on 3rd August 2006 that they were “at risk” and the
matrix and policy was explained to them. On 10th August 2006, the complainant was informed
by Mr Ridout and Ms Ward (personnel officers in Dublin) that she was the chosen person for
redundancy as the lowest scoring individual on the matrix. Her response was “I knew it”. She did
not engage with Mr Ridout or Ms Ward about how the scoring had produced the result it did,
but left in some distress. She was informed that she could appeal but did not, and left the
Company on 25th August 2006. She was paid until September 2006 and received statutory
redundancy entitlement (based on her total service back to 2003). She was seven months’
pregnant at the time.
On 13th September 2006, the Complainant referred a claim to the Equality Tribunal that she had
been discriminated against on the grounds of gender and family status in terms of Section 6(2)
of the Employment Equality Acts 1998-2007 and contrary to Section 8 of the Acts. A hearing of
the Equality Tribunal took place on 11th April 2008. In his decision dated 25th July, 2008, the
Equality Officer found:
“I find that the respondent did discriminate against the complainant on the grounds of gender
and family status and that discriminatory dismissal took place in terms of Section 6(2) of the
Employment Equality Acts, 1998-2008. In accordance with Section 8(2) of those acts I award the
complainant €30,000 in compensation for the discriminatory treatment suffered. As this award
does not include any element for remuneration, it is not subject to tax”.
On 1st September 2008, the Respondent Organisation appealed against the decision of the
Equality Officer. A Labour Court hearing took place on 20th January 2009.
Respondent’s Case:
1. The Complainant was selected for redundancy on the basis of our external and nondiscriminatory matrix, as evaluated by the Finance Director.
2. The Complainant did not avail of an appeal mechanism available to her under this system.
3. If the Complainant is claiming that the Financial Director was biased against her from the
beginning, that is an industrial relations matter and nothing to do with discrimination on the
grounds of gender or family status. Other staff in the Department are female with children
and flexibility has always been extended to them. Childcare or family responsibilities did not
come into consideration under the redundancy matrix.
4. Cost savings was a negligible factor in deciding who would be made redundant. Some would
have been more expensive than the claimant and some less so.
5. In the case of Winston’s Jewellers v Anne Mason (Det. 0203) the Labour Court accepted that
a genuine redundancy situation existed and no discrimination occurred when a female
employee was notified of redundancy while absent due to a pregnancy–related illness prior
to commencement of maternity leave.
6. In the case of Gillespie & Ors v Northern Health Board & Social Services Board (1996IRLR214)
the ECJ stated:
“it is well settled that discrimination involves the application of a different set of rules to
comparable situations or the application of the same rule to different situations”.
To treat the complainant more favourably because of pregnancy could, in itself, amount to
discrimination.
7. The ECJ cases quoted by the Equality Officer, “Dekker”, “Webb v Emo Air Cargo” and “Brown
v Rentokil” have no application.
In the “Dekker” case, the ECJ states that the decision (not to employ a female worker
because she was pregnant) must be based on the fact of the pregnancy and also, there must
be a casual link between the pregnancy and the adverse treatment. The pregnancy alone is
not sufficient, and the fundamental reason for her selection was not the Complainant’s
pregnancy.
Similarly, in the “Webb/Emo” case, the Complainant was dismissed on account of her
pregnancy. In the instant case the pregnancy was not a factor. In the case above the ECJ
accepted that the dismissal of a pregnant woman is permitted in exceptional circumstances
(such as the insert one) not connected to the pregnancy.
The “Brown/Rentokil” case is not relevant as it concerns the dismissal of a pregnant woman
who was absent from work due to a pregnancy-related condition.
Complainant’s Case:
1. The selection matrix should have been completed by the Complainant’s line manager, but
was inappropriately completed by the Financial Director, who was biased against her ab
initio. No evidence such as notes, minutes or appraisals were used, as prescribed, and the
use of the matrix was a sham, the object of which was to achieve the dismissal of the clearly
pregnant complainant.
2. Had the Complainant not been selected for redundancy, the Respondent would have had to
pay for her maternity leave and for a replacement, a considerable economic cost.
3. In the case of “Brown v Stockton-on-Tees [1998] IRLR 263, in the UK House of Lords, Lord
Griffiths stated
“Mrs Brown was selected for dismissal on the ground of redundancy because she needed
maternity leave to give birth, and if that is not a reason connected with her pregnancy I do
not know what is… I have no doubt that it is often considerable inconvenience to an
employer to have to make the necessary arrangements to keep a woman’s job open for her
whilst she is absent from work in order to have a baby, but this is the price that has to be
paid as a part of the social and legal recognition of the equal status of women in the
workplace”
This speaks for itself in the instant case.
4.
Regarding the three ECJ cases quoted by the Equality Officer, the Complainant would point
out:
In the case of “Dekker v Stichting Vormingscentrum [1992) ICR 325, the Respondent has
stated, “there must be some relationship between the pregnancy and the selection for
redundancy”.
It is obvious that the relationship is financial - either greater costs or cost-saving dependant
on whether the Complainant was retained in employment or not. EU Directive No. 92/85
provides that women who are pregnant are to be afforded special protection in
employment and cannot be dismissed save in exceptional circumstances unrelated to their
pregnancy.
In the case of “Webb v Emo Air Cargo (UK) [1994] ICR770, 798, it is clear that the special
protection against the dismissal allows for no exception during that period save in
exceptional cases not connected with the previous conditions. Others, who were not
pregnant could have been chosen for redundancy.
In “Brown v Rentokil Ltd” [1998] ECJ ICR 790 the Respondent fails to mention the succeeding
sentence of the judgement to that quoted by it i.e. “such a dismissal can affect only women
and therefore constitutes direct discrimination on grounds of sex”.
5. Given all of the above it is clear that the burden of proof is on the Respondent, which has
clearly failed to discharge it.
The Evidence:
Mr Mark Ridout: (The Respondent’s Finance Manager) gave evidence. He said that he joined the
Company late in 2005 as a consultant and became Finance Manager in Ireland in 2006. He had
been acquainted with the Complainant in the UK offices. When a vacancy came up in the
Finance Department in Ireland and she applied, he agreed that he thought her to be light on
experience and qualifications. A senior Accounts Manager had described her to him as
“disruptive” and “on the phone, chatting a lot”. He alleged that when asked would she be
flexible enough for the position, she told him that he should not be asking her that and
intimated that she might take legal action. Despite his reservations however, an offer of
employment had already been made by the Company to the Complainant.
In August 2006, owing to the merging of 3 Divisions, there had to be one redundancy from each
of 3 Departments including Finance. He evaluated the staff (who had already been told they
were “at risk”) using the matrix designed by the UK office. The criteria took no negative account
of issues such as flexibility or family status and was neutral and objective. The Complainant
scored lower than the other staff in the Department, using the matrix, and she was told this on
10th August. Her response was to say, “I knew it” and to leave rapidly without waiting for an
explanation of how the result had been arrived at. He agreed that the Complainant was upset
and angry. She was told that she had the option of an appeal to another level of management,
but she did not avail of this.
He agreed that she had done well on some of her work, notably one project, but she had not
taken exams for which she was studying and this told against her. He was aware that she had
children and was obviously aware that she was pregnant at the time of the redundancies, but
this did not influence him in any way, he simply used the matrix as it was set out.
When asked why he, as Head of Department, filled in the matrix and performed the selection
procedure, rather than the Line Manager, Mr Ridout testified that this could not happen as the
Line Manager herself was one of the seven employees to whom the matrix was applied – she
was also under consideration when choosing the person to be made redundant. In effect, the
witness was the Complainant’s line manager.
While agreeing that he was predisposed against the appointment of the Complainant to the
position in the Dublin Office, the witness totally denied any bias against her at the time of the
redundancy selection.
In reply to a question, it was the witness’s view that for him to be influenced by her pregnancy
and to have discriminated positively in her favour would have been repugnant to him and just
plain wrong.
He denied that having to pay maternity benefit to the complainant and having to replace her
during that period was a cost factor influencing his decision. She probably would not have been
replaced and the saving in cost to the Company of her being made redundant on statutory terms
and paying her maternity benefit was only €5,350.
He agreed that no disciplinary action had been taken or threatened against the Complainant
regarding the allegations of her “being disruptive” or “using the phone a lot” but said that there
had been complaints from colleagues.
He defended the selection matrix as one regularly used in the Company and designed in the UK
office. He had no comment on the fact, that the weightings were multiplied, rather than added
together, to produce the score, or that it was subjective. It had been designed by the HR
Department in the UK with best practice in mind.
Ms Niamh Ward (The Respondent’s HR Manager), gave evidence that she was Personnel Officer
at the time of the redundancies. She confirmed being at the meetings involving the complainant
on 3rd and 10th August 2006. She confirmed that the Complainant, when told of her
redundancy, said, “I knew it would be me” and that she was upset and left the meeting quickly.
She confirmed that the Complainant did not appeal to a Ms Goggins (as was her right). The
witness had no role in the completion of the selection matrix. She also confirmed that the
Complainant’s line manager was among those reviewed by the Finance Manager. The final
decisions on redundancies were reviewed by the HR Department in the UK.
She testified that the staffing of the Department now was more or less as it had been after the
redundancy.
The Complainant’s evidence:
She joined the Company in the UK in 2003. It was her view that she was asked several times
about her level of commitment when she had to take family-related time off (she had two
children before the 2006 pregnancy). She agreed that she objected to the matter being raised,
pointing out that she had been flexible and knew this was a requirement. She denied
threatening anybody with legal action on the matter. She applied for the transfer to Dublin as it
suited her family circumstances. 10 days after she started in Dublin, the Finance Manager had
said to her “I could have done with you staying late last night”. Another Manager had asked her
“how are you coping with being a working mother”? There were never any complaints about her
in-office behaviour or of her being disruptive. She couldn’t use the phone in the beginning and
her line manager had to get an outside line for her.
She had given good service and completed a difficult project, for which she was praised. She
herself paid for a home study course, but was not in a position to fully commit to it owing to
other responsibilities, mainly family. She had not claimed the money for the uncompleted
course of study from the Company.
In early May 2006, she told the Company by e-mail of upcoming hospital appointments related
to her pregnancy.
All staff were shocked by news of the redundancies.
She confirmed the events of August 3rd and 10th 2006. She was very upset. She did not appeal
because it was to a member of management and she did not think she would succeed. She felt
her pregnancy and family status were at all times an issue with Mr Ridout. Her family status was
why he did not wish to hire her in the first place. The process clearly said that her line Manager
(a Ms O’Reilly) should complete the selection matrix, not the Department Head.
The Facts Established:
1. The Complainant was pregnant and known to so be at the time of her selection for
redundancy.
2. Previous remarks had been made to her about her family status.
3. The basis for the matrix and its method of calculation is unclear to the Court. There is,
for instance, no explanation as to why the scoring classes should be multiplied by the
weighting (rather than added together), or how the categories, weightings and criteria
were decided. It does, undoubtedly depend in the final analysis on subjective decisions
by the person using the matrix.
4. The rules around the selection matrix specify the line manager as the appropriate
person to complete the matrix. This did not happen in the case of the Finance
Department, as the line Manager was included in the list of “at risk” employees.
5. The Complainant did not avail of an opportunity to appeal her selection for redundancy
to another level of management.
The Law Applicable:
It is settled law that special protection against dismissal exists during pregnancy. Only the most
exceptional circumstances not connected with the condition of pregnancy allow for any
deviation from this. It is equally settled law that the dismissal of a pregnant woman (which can,
obviously, only apply to women) raises a prima facie case of discrimination on the gender
ground. Once such a case has been raised, the burden of proof shifts and it is for the respondent
employer to prove that discriminatory treatment on the stated grounds did not take place.
Findings of the Court:
While it was an admitted fact that the Finance Manager was inherently biased against the initial
employment of the Complainant, that cannot in itself amount to a presumption of
discrimination against her.
What must be considered, as per the quoted authorities on dismissal of an employee who was
pregnant and, therefore, in a period of special protection (as per the “Dekker”, “Webb v Emo Air
Cargo” and “Brown v Rentokil” cases already referred to) is whether there were exceptional
circumstances justifying her selection, from a named group of employees, for redundancy.
The Court has found the matrix to be unsatisfactory. It is complex, opaque, subjective and open
to manipulation in order to achieve a particular result. The Court also finds the completion of
the matrix by the Finance Manager rather than the line Manager as specified to be significant,
given the evidence addressed concerning the Complainant’s family status and her perceived
consequent flexibility or lack of it. When combined with a pregnancy that, at seven months,
would have been obvious, there is, in the Court’s view, and given the evidence of the parties, a
failure to satisfactorily discharge the burden of proof.
The Respondent put to the Court the case of “Winston’s Jewellers v Mason” (Labour Court
Determination No. EED032) as evidence that a pregnant employee can be dismissed without
discrimination occurring. That case may be distinguished from the instant one on the basis that
a small business was in extreme financial difficulty, and the Complainant in the case was made
redundant on the well-established principle of last-in, first-out. In the instant case, the
respondent had a level of control over who was let go on a much more subjective basis, which,
in itself, suggests that there were less discriminatory alternatives available to the respondent.
Finally, the Court notes that the Complainant chose not to appeal on the ground that she felt
there would be no point. It is the view of the Court that she should have used the procedure and
exercised this function, at which stage she could have argued her case.
In all of the circumstances, the Court finds that the respondent discriminated against the
Complainant on the grounds of gender and family status, and also agrees that a discriminatory
dismissal occurred in terms of Section 6(2) of the Acts. The Court agrees with the Decision of the
Equality Officer in this area but taking all of the circumstances of the case as outlined into
account, varies the award of compensation to €20,000.
The Court so determines.
Signed on behalf of the Labour Court:
Raymond McGee
27th March 2009
AH Deputy Chairman