THE SUPREME COURT
[Record No. 212 & 222/14]
Clarke C.J.
MacMenamin J.
Baker J.
IN THE MATTER OF THE EMPLOYMENT EQUALITY ACTS, 1998 TO 2015
MARGARET KENNY, PATRICIA QUINN, NUALA CONDON, EILEEN NORTON, URSULA ENNIS, LORETA BARRETT, JOANNE HEALY, KATHLEEN COYNE, SHARON FITZPATRICK, BREDA FITZPATRICK, SANDRA HENNELLY, MARIAN TROY, ANTOINETTE FITZPATRICK AND HELENA GATLEY
APPELLANTS/RESPONDENTS
AND
THE DEPARTMENT OF JUSTICE, EQUALITY AND LAW REFORM, THE DEPARTMENT OF FINANCE AND THE COMMISSIONER OF AN GARDA SÍOCHÁNA
RESPONDENTS/APPELLANTS
Judgment of Mr. Justice John MacMenamin dated the 10th day of December, 2018
Introduction
1. This is an appeal against a ruling and order in the High Court (McCarthy J.) on a question of costs. The ruling was made on the 24th February, 2014, three weeks after McCarthy J. delivered the principal judgment in this case on the 13th January, 2014. ([2014] IEHC 11; ("the principal judgment"). Before the High Court was an appeal on points of law from a decision of the Labour Court. That appeal was brought by the 14 persons named as the "appellants/respondents" in this appeal. For convenience, and to avoid confusion arising from appeals to the High Court, and then to this Court on this Article 64 appeal, the 14 women will be referred to as "the claimants". The Department of Justice and other named State appellants ("the State appellants") now appeal the High Court costs order, submitting that the High Court judge erred in awarding the claimants two-thirds of their costs of the High Court proceedings, including the costs of the reference to the Court of Justice of the European Union ("CJEU") pursuant to Article 267 of the Treaty on the Functioning of the European Union ("TFEU"). The State appellants, although appealing the costs order, do not appeal any finding or conclusion made by the High Court judge in his principal judgment. The claimants have filed a cross-appeal, contending they should have been awarded the full costs of the proceedings.
The Origins of the Case
2. In 2002 and 2005, the claimants brought claims against the State appellants to the Labour Court under the Employment Equality Act, 1998, as amended by the Equality Act, 2004 ("the Equality Act"). In order to understand what is in issue, it is necessary to go into the background in some detail.
3. The claimants were, at the relevant time, female clerical officers employed by the Department of Justice & Equality. They were assigned to clerical duties with An Garda Síochana. Their claim was for equal pay with members of An Garda Síochana whose remuneration was higher. A number of these clerical posts were reserved for members of the force. These were known as "designated posts". There were other posts, which could either be filled by members of An Garda Síochana, by civilians if they were available, or by gardaí who were engaged in normal policing, but who might also undertake clerical and administrative duties. The claimants' case was that the pay-differential between themselves and members of An Garda Síochana who did clerical work constituted indirect gender discrimination. McCarthy J. remarked in his principal judgment that the thrust of the claimants' case was that they were seeking remuneration at a level comparable with the entire Garda force, although this point had not been stated explicitly.
4. The two claims were heard by an Equality Officer of the then Equality Tribunal in October 2005. The Equality Officer issued a decision on the 22nd November 2005 (DEC-E2005-057). The Equality Officer found that seven of the claimants were entitled to succeed in their claim for indirect discrimination, but dismissed the claims of the other seven. The reasons for this decision are not now material. The State appellants appealed the Equality Officer's decision to the Labour Court. The appeal was against so much of the decision as upheld the seven successful claimants. The claimants' trade union, in turn, cross-appealed so much of the Equality Officer's decision which dismissed the balance of the complaints.
5. The appeal to the Labour Court was heard on the 24th October, 2006, and the 22nd May, 2007. McCarthy J. describes what occurred at the hearing. At the outset, the Labour Court did not, as would have been necessary under the equality legislation, address the "comparator" or "like work" issues; that is, both the identity of the gardaí who were on higher remuneration who had been chosen by the claimants as comparators, and the nature of their work. Instead, the Labour Court, with the agreement of the parties, decided to deal first with a preliminary issue, which was whether there was objective justification for what appeared to be a prima facie case of indirect pay discrimination on the grounds of gender. For the purposes of its hearing, therefore, the Labour Court proceeded on the assumption that the claimants and the chosen comparators were statistically representative, and were engaged in "like work" within the meaning of s.7(1) of the Equality Act. As the Court of Justice pointed out in its subsequent judgment in an Article 267 of the TFEU reference by McCarthy J., this procedure was flawed.
6. Proceeding as just described, the Labour Court placed the onus on the State appellants to prove justification. The State appellants contended that the allocation of garda officers to clerical posts was objectively justified so as to meet the operative needs of the force, and that in filling that need it was appropriate to pay police officers assigned to such posts the rate applicable to their rank as members of An Garda Síochana. In making this submission in the Labour Court, the State appellants apparently sought to re-open the question of comparators, claiming then that they had been drawn from too narrow a class.
7. In its decision of the 27th July, 2007 ([2008] E.L.R. 140), the Labour Court allowed the State appellants' appeal against the Equality Officer's determination, and disallowed the claimants' cross-appeal. It held there was objective justification for the disparity in pay, and that the deployment of officers of An Garda Síochana in certain clerical posts met either operational needs, or the need to continue the then ongoing process of "civilianisation" in accordance with an agreement made with the relevant industrial relations representative-bodies. It determined that the fact that the garda holders of the posts were paid at rates corresponding to the rates of pay for other members of An Garda Síochana met these objectives, since it would have been manifestly unfair to reduce the pay of An Garda Síochana officers assigned to clerical posts to the same level as the civilian employees. It held that, having regard to the small number of designated posts, the maintenance of industrial relations agreements, pending completion of civilianisation, was a relevant matter, to be measured in a manner proportionate to the general operational needs of An Garda Síochana. While the claim did give rise to a presumption of unlawful "indirect discrimination", the Labour Court held that the State appellants had rebutted the presumption by showing that the impugned practice of paying female clerical officers less than male gardaí performing clerical duties was objectively justified on grounds other than gender, and that the named comparators were not, in fact, representative of the generality of clerical/administrative posts in which gardaí were deployed. The determination also concluded that the State appellants had justified the difference in pay on objective grounds, referring to the interests of good industrial relations as amongst the factors it also took into consideration in reaching its conclusion.
8. What is set out in the claimants' grounds of appeal is an important factor in determining the costs issue. They sought an order that the High Court set aside the determination, and a declaration that it was based on errors in law.
9. The grounds of appeal to the High Court alleged error by reason of the conclusions that:
(i) the failure to pay the claimants equal pay with their named comparators was justified on grounds other than gender;
(ii) the failure to pay the claimants equal pay with their named comparators was justified on objective grounds;
(iii) the operational needs for members of An Garda Síochana to discharge the duties of certain clerical posts constituted an objective ground for the failure to pay the claimants at the same rate as their named comparators when that operational need did not apply to the clerical post held by the named comparators; and
(iv) the stated operational needs to extend the process of civilianisation in a manner, and at a pace, which attracted the agreement of the bodies representing members of An Garda Síochana, constituted an objective ground for the failure to pay the claimants equal pay with their named comparators.
10. The appeal to the High Court first came before McCarthy J. on the 1st May 2009, and the 27th July 2011. Having heard submissions, the High Court judge was satisfied that the appeal raised important questions of European law. He decided that he would refer issues to the CJEU pursuant to Article 267 of the TFEU. As recorded at para. 14 of the principal judgment, these questions were: "(1) In circumstances where there is prima facie indirect gender discrimination in pay, in breach of Article 141 EC… and Council Directive [75/117], in order to establish objective justification, does the employer have to provide:
(a) Justification in respect of the deployment of the comparators in the posts occupied by them;
(b) Justification of the payment of a higher rate of pay to the comparators; or
(c) Justification of the payment of a lower rate of pay to the claimants?
(2) In circumstances where there is prima facie indirect gender discrimination in pay, in order to establish objective justification, does the employer have to provide justification in respect of:
(3) If the answer to Question 2(b) is in the affirmative, is objective justification established notwithstanding that such justification does not apply to the chosen comparators?
(4) Did the Labour Court, as a matter of Community Law, err in accepting that the "interests of good industrial relations" could be taken into account in the determination of whether the employer could objectively justify the difference in pay?
(5) In circumstances where there is prima facie indirect gender discrimination in pay, can objective justification be established by reliance on the industrial relations concerns of the [respondent]? Should such concerns have any relevance to an analysis of objective justification?"
11. The parties appeared before the CJEU, which, having received submissions, delivered its decision on the 28th February, 2013. ( Margaret Kenny and Ors v. Minister for Justice, Equality and Law Reform and Ors (Case C-427/11)). The CJEU answered the questions to the effect that Article 141 EC, and Council Directive 75/117/EEC of the 10 February 1975, on the approximation of the laws of member states relating to the application of the principle of equal pay for men and women, must be interpreted with regard to the following: first, that employees performed the same work, or work to which equal value could be attributed if, taking account of a number of factors such as the nature of the work, the training requirements and the working conditions, those persons could be considered to be in a comparable situation, which was a matter for the national court to ascertain. (These can be described as the "like work"/comparator issues); second, that, in relation to indirect pay discrimination, it was for the employer to establish objective justification for the difference in pay between the workers who considered that they have been discriminated against and the comparators; third, that the employer's justification for the difference in pay, in brief, must relate to the comparators selected by a valid statistical process, and not by purely fortuitous or short-term phenomena, and which, in general, appeared to be significant and had been taken into account by the referring court in establishing that difference. Put simply, I interpret this as meaning that the comparators have to be truly representative. Finally, the CJEU held that the interests of good industrial relations might be taken into consideration by the national court as being one factor, amongst others, in its assessment of whether differences between the pay of two groups of workers were due to objective factors unrelated to any discrimination on grounds of sex, and were compatible with the principle of proportionality.
12. When the matter again came before the High Court on its return from Luxembourg, McCarthy J. commented that, contrary to what was submitted on behalf of the claimants, he could not see that the CJEU had decided that the choice of comparators made in this instance by the claimants was either valid or lawful. (At para. 17 of the principal judgment).
13. But, having referred to the judgment of the CJEU, the judge set out a careful summary of the legal procedure to be followed thenceforward (At para. 24):
(i) All issues arising in a claim of indirect gender discrimination must be determined by the use of the same comparators;
(ii) Such comparators are valid comparators only if they cover enough individuals, do not illustrate purely fortuitous or short term phenomena, and in general appear to be significant;
(iii) Valid comparators could not be based upon groups formed or individuals chosen in an arbitrary manner, or on an artificial or unrepresentative basis: the choices must be made from the whole cohort of persons with whom claimants sought parity;
(iv) One could not simply discard a succession of persons or classes in a cohort in order to arrive, by a process of elimination, at classes within the whole group whose members were performing the same work;
(v) The comparators must be in an equivalent situation to the claimants; and
(vi) The comparators must constitute a relatively large number of employees who did the same work as the claimants but were paid at a higher rate; that is to say, a relatively large number of men, or enough of them.
14. McCarthy J. pointed out that the comparators should be drawn from the generality of members of An Garda Síochana engaged in clerical posts. He observed the CJEU had concluded that, under certain circumstances, industrial relations issues might be taken into account by a national court as one factor among others in its assessment of whether differences between the pay of two groups of workers were due to objective factors unrelated to any discriminatory grounds of sex, and were compatible with the principle of proportionality.
15. Coming now to a second important factor on the costs issue, at all relevant stages of the High Court hearing, the State appellants' case was that the claimants' appeal should be dismissed, and that the Labour Court's decision be upheld in its entirety. McCarthy J. declined to accede to this submission. He held, rather, that the claim should be remitted to the Labour Court for rehearing, adding that industrial relations considerations could be a factor, but could not, of themselves, be a sole basis for justifying a pay differential.
16. What is clear is that both the CJEU, and McCarthy J., applying the findings of the CJEU, concluded that the procedure which had been adopted by the Labour Court was in error. It can be said that the outcome of the CJEU hearing was not entirely what the claimants might have hoped for either, in that there was a finding that the comparators they had chosen were unrepresentative. Nonetheless, following the hearing, McCarthy J.'s orders were that:
1. The appeal be allowed and the determination of the Labour Court be set aside;
2. The matter be remitted to the Labour Court for rehearing in accordance with the approach set out in his judgment; and
3. The respondents should pay to the claimants the costs of the proceedings, to be taxed at two thirds of the otherwise applicable costs of the High Court and the Court of Justice.
17. The State appellants have not appealed the first two of these three orders. They criticise only the third, made on the costs issue. Bearing in mind again, the State appellants' stance that the Labour Court was correct, one cannot avoid the sense of a certain incongruity in the State appellants' approach, in that the factors which were considered by the judge in his award of costs were closely connected to the earlier orders which the judge made for the disposition of the appeal, and which have not been challenged.
Consideration
18. Counsel for the Minister relies on the judge's findings, or, more accurately, those which are said to favour her client. But the issue of costs must be decided in accordance with the jurisprudence. The general rule is that costs follow the event, unless the court otherwise orders. (Rules of the Superior Courts 1986, Order 99, Rule 1(3) and (4)). This raises two discrete issues:
19. As she earlier submitted before McCarthy J., counsel for the State appellants contends that this Court should, as it were, look "under the surface" in order to see the "reality" of what happened. In that first ground of appeal, the claimants had asserted that the Labour Court had erred in holding that the failure to award equal pay was justified on grounds other than gender. The State appellants submit that this ground of appeal concerned a matter not decided by the Labour Court at all. That may be technically true, as the Labour Court had treated the case as one of "indirect discrimination", and consequently made no finding as to whether the requirements of objective justification under s.19(5) of the Employment Equality Act, 1998 had been satisfied. The State appellants' case is that the other grounds of operational needs and civilianisation, justified on an objective basis, were decided in their favour by the decision of the CJEU. The State appellants say that it was the claimants who chose the wrong comparators, and that it was they, the State appellants, who succeeded on the issue that industrial relations considerations could be a factor amongst others that could be taken into consideration. Counsel submits that, notwithstanding the matter being remitted to the Labour Court by the High Court, the directions given by McCarthy J. leave it no option but to allow the appeal from the decision of the Equality Tribunal, once the Labour Court has gone through the process of choosing comparators drawn from the generality of all those engaged in clerical work for, or as, members of An Garda Síochana. I return to this particular submission later.
20. Counsel submits that McCarthy J. did not give any indication as to how he arrived at his decision to award the claimants two thirds of their taxed costs. I will deal with this point immediately; the submission is incorrect. As can be seen from the transcript of the costs hearing, the judge's concerns were apparent during the course of argument on the costs issue, though he did not, of course, prejudge the matter. Ultimately, he identified three core issues: first, the class of comparators; second, whether the Labour Court had addressed the issue of comparison; and third, the weight to be attached to the industrial relations issue. In the course of argument on the costs issue, he had expressed his reservations as to the Labour Court procedure. This view, and his reservations, were plainly reflected in the orders which he made.
The Case Law
21. It is necessary to emphasise that, in hearing an appeal against the exercise of a discretion, an appellate court should be slow to interfere with the decision of the High Court. ( Ryanair Limited v. Aer Rianta CPT (Unreported, Supreme Court, 26th October, 2001, per Keane C.J.); Mangan v. Independent Newspapers (Ireland) Ltd. [2003] 1 IR 442; and O'Connor v. Nenagh Urban District Council [2002] IESC 42).
22. It is well established that the discretion as to the award of costs has to be exercised judicially, in that the decision must be on a reasoned basis, clearly explained, and rationally connected to the facts of the case. (See the judgment of this Court, Godsil v. Ireland [2015] IESC 103; [2015] 4 IR 535, at para. 23). But this principle must be seen in the context of the type of application involved. There will be occasions when the judge's views are obvious from observations which he or she makes even during a submission on costs. High Court judges must frequently deal with extensive lists on short matters such as motion for judgment. In many such situations, one can readily infer that judges are following the general principle now described. The obligation to state reasons comes into focus particularly when a judge is contemplating a departure from the general principle.
23. In Godsil , at para. 23, McKechnie J., speaking for this Court, said:
"The general rule is that costs follow the event unless the court otherwise orders: O. 99, r. 1(3) and (4) of the Rules of the Superior Courts 1986. This applies to both the original action and to appeals to this Court (Grimes v. Punchestown Developments Co. Ltd [2002] 4 IR 515 and S.P.U.C. v. Coogan (No.2) [1990] 1 I.R. 273)."
He continued: "Although acknowledged as being discretionary, a court which is minded to disapply this rule can only do so on a reasoned basis, clearly explained, and one rationally connected to the facts of the case to include the conduct of the participants: in effect, the discretion so vested is not at large but must be exercised judicially (Dunne v. The Minister for the Environment [2007] IESC 60, [2008] 2 IR 775 at pp. 783 and 784). The "overarching test" in this regard, as described by Laffoy J. in Fyffes plc v. DCC [2006] IEHC 32,[2009] 2 IR 417 at para. 16, p. 679, is justice related. It is only when justice demands should the general rule be departed from. On all occasions when such is asserted the onus is on the party who so claims." (Emphasis added)
24. To my mind, therefore, the primary point of reference on the costs issue is not whether the State appellants' submissions found favour on certain issues which might, possibly, have a bearing on a rehearing, but whether there were "events" which should guide the manner in which the judge's discretion on costs should have been exercised. The nature of an "event" was explained by Clarke J. in Veolia Water UK Plc. and Ors v. Fingal County Council (No. 2) [2006] IEHC 240; [2007] 2 IR 81, as follows: "In the ordinary way, if the moving party required to bring either the proceedings as a whole (where the costs of the litigation as a whole are under consideration) or a particular interlocutory application (where those costs are involved) in order to secure a substantive or procedural entitlement, which could not be obtained without the hearing concerned, then that party will be regarded as having succeeded even if not successful on every point." (At para. 12).
25. In fact, applying the Godsil/Veolia approaches, there can be no serious question but that such "events", or series of events, did occur. Having failed in their claim before the Labour Court, the claimants appealed to the High Court. They asserted that the Labour Court had erred in law in rejecting their claims. The State appellants' consistent position in standing over the Labour Court decision is not immaterial. Following referral to the CJEU, the High Court, in fact, allowed the claimants' appeal on a point of law. The High Court set aside the decision of the Labour Court on the basis of error, and remitted the matter back. The High Court delivered a judgment setting out detailed advice to the Labour Court on the applicable procedure law. The respondents did not appeal any of these decisions which, in the true sense, were the "events".
26. The original core finding of the Labour Court was that the practice of reserving the posts at issue for members of An Garda Síochana was justified on the objective grounds described earlier. That no longer stands. The conclusion was arrived at through an erroneous procedure, even if followed for the best of intentions, that is, to save time. Even the very fact of this reversal could itself be characterised as an "event". If the claimants had not appealed to the High Court, the matter would have concluded with the rejection of the entire claim in accordance with the Labour Court's decision. Instead, the matter has now been remitted, and remains to be determined, on the correct procedural basis as set out by the High Court, having received guidance from the CJEU.
27. I reject the submission that the Labour Court now has no option but to allow the appeal from the decision of the Equality Tribunal, once the process of choosing comparators in accordance with the directions of the High Court has been completed. This is surmise, and not an appropriate factor for consideration in this costs application. The Labour Court's function was to determine the claim before it on the correct basis, as now laid down by the High Court and the CJEU; that function cannot be pre-empted by any other person or body: Barry and Ors v. Minister for Agriculture and Food [2015] IESC 63. This Court cannot surmise what will happen in the future. It is certainly not an appropriate consideration on this appeal.
28. Each of the claimants is a " party ", coming within the category considered by McKechnie J. in Godsil (At para. 20), as being:
"A party who institutes proceedings in order to establish rights or assert entitlements, which are neither conceded nor compromised, [who] is entitled to an expectation that he will, if successful, not have to suffer costs in so doing."
29. In MD v. ND [2015] IESC 66; [2016] 2 I.R. 438, Clarke J., having addressed his earlier judgment in the High Court in Veolia , went on to state: "It is clear, therefore, that the proper application of the Veolia principles does not involve the court in simply determining that an otherwise successful party was unsuccessful on one or more points raised. It is necessary, in order to depart from the principle that costs follow the event, that it be "clear" that the raising of those additional unmeritorious points actually and materially increased the costs of the case." (At para. 9).
30. It is true the High Court refused to declare that the Labour Court had erred in law in rejecting the claimants' claim for redress. This is not the essential point. What is material from the costs point of view is that the claimants nonetheless obtained the relief which it sought in its substance , since the High Court expressly granted an order allowing the appeal on a point of law, at para. 1 of the Order. These "events" are, therefore, determinative.
Decision
31. I would hold the High Court decision on costs did follow the "events". In judging whether or not a High Court judge has departed from principles, an appeal court must carefully determine the extent , if at all, to which it is said there has been a departure from a lawful exercise of discretion. I am unable to discern any substantial departure from a lawful exercise of discretion. The State appellants face the difficulty that they are appealing only on the costs issue, where there was no appeal in relation to any other part of the judgment on which the costs determination in large part hinges. I am not persuaded that the High Court judge erred in the exercise of his discretion. For an error to be shown, there would have to be something much more obvious: a substantial departure from the accepted principles guiding such determinations. This has not been established. I would dismiss the appeal.
32. It has been frankly conceded that the claimants' cross-appeal on costs was a reaction to the State appellants' appeal. Just as the State appellants have no reasonable claim that the trial judge erred in his discretion, neither have the claimants. I would dismiss this appeal also.
