Substantial budgetary cuts, a shortfall in public finances – does this sound all too familiar?
But are the cuts fair?
A recent case in Ireland has raised this question. Although it relates to changes made by the Irish Government, it is still relevant to UK schools who, despite the outcome of Brexit, are still influenced by laws and regulations made in Europe.
The case in question arose following the Irish Government’s decision, as part of its 2011 Budget, to adopt a salary arrangement by which newly recruited public servant salaries (including teachers) as of 1 January 2011 were reduced by 10% at each point of the pay scale compared to those recruited before that date (‘New Salary Scale’). The measure was adopted in order to meet the need to achieve a medium-term reduction in the cost of the public service.
In 2011, Mr Horgan and Ms Keegan qualified as school teachers. As of that autumn, they commenced employment as teachers in an Irish State primary school. Mr Horgan and Ms Keegan challenged this New Salary Scale before the Equality Tribunal in Ireland, claiming a difference in treatment on grounds of age. Approximately 70% of teachers who commenced employment in 2011 were 25 years of age or under. Therefore, at the time of their recruitment, the teachers who commenced employment in that year, including Mr Horgan and Ms Keegan, were generally younger than teachers recruited before that year.
The Equality Tribunal dismissed their action and Mr Horgan and Ms Keegan appealed to the Irish Labour Court. The Irish Labour Court observed that the factor determining which salary scale teachers are placed on is the year in which they commenced employment and that all teachers recruited after 1 January 2011, irrespective of their age at the date of recruitment, were placed on the New Salary Scale and remained on that scale.
The Irish Labour Court decided to stay proceedings and referred the matter to the highest Court in Europe – the Court of Justice of the EU (‘CJEU’) to decide whether or not the New Salary Scale amounts to indirect discrimination on the grounds of age.
In answer, the CJEU highlighted the legal principle of equal treatment means that there must be no direct or indirect discrimination whatsoever on the grounds of age, and that it would be necessary to establish whether teachers recruited after 1 January 2011 were treated differently from those recruited before that date on account of their age.
The CJEU decided that as the only relevant criteria at the point the teachers were recruited was the date of recruitment and not the age of the teacher, it cannot be considered that the new rules establish a difference of treatment on grounds of age. It was therefore decided that the New Salary Scale does not constitute indirect discrimination on the grounds of age.
This outcome is somewhat surprising as it is exactly when a neutral criterion has an adverse impact on a particular group that there may be, subject to justification, indirect discrimination, and it seems to us that a greater proportion of younger teachers were affected by the New Salary Scale.
The Irish Labour Court will now make a final determination and are likely to go with the CJEU finding. The case is a reminder however to think carefully when you are making pay cuts and reviewing salary scales to assess whether such cuts are likely to detriment a particular group over others.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.
This post was written by Claire Berry, Employment Lawyer at Price Bailey Legal Services. If you need further information on the above, please feel free to get in touch with Claire using the contact form below.